Is California an At-Will Employment State? What Does That Mean?

Most people have heard the phrase “at-will employment” or have been told that they are an “at-will employee.”  Many people are, however, unsure of the exact meaning of the phrase.  Does at-will employment mean that an employee can be terminated at any time for any reason?  Are there no restrictions on how, when, and for what reason an employee can be fired?  Read on for a discussion of how at-will employment works in California, and reach out to a dedicated California wrongful termination lawyer for help with an employment-related matter.

At-will employment means an employee can quit or be fired at any time

California’s Labor Code presumes that employees are employed at-will.  Generally, at-will employees can be terminated by their employer at any time, for just about any reason (with certain exceptions) or no reason at all.  An employer can fire an employee for cause or without any cause.  Employees can, in turn, quit at any time without penalty.

Exceptions to at-will: Unions, contracts, public sector jobs

While there is a presumption that employment is at-will in California, there are exceptions.  Exceptions include:

• Employees protected by unions and covered by collective bargaining agreements, particularly if those agreements contain “just cause” provisions
• Public sector employees are often protected by civil service laws or by agreements between their union and the government agency which sets grounds for termination
• Any employment contract setting grounds for termination or resignation is enforceable under the principles of contract law
• Employers who have said or done things that overcome the presumption of at-will employment, setting enforceable grounds or conditions for termination

Courts have found that the presumption of at-will employment can be overcome where a company’s policies or statements imply a presumption that employees will not be terminated without cause.  For example, if a company has strict policies about discipline (e.g., several written warnings and other sanctions must precede termination) that set expectations for employees, then a court may find employees can rely on those policies for protection against termination and may sue an employer for violating those policies.

Limits on at-will termination: Discrimination, retaliation, wrongful termination

Even with at-will employment, there are still some limitations under California state law and federal law on what an employer may do.  For example, employers may not violate anti-discrimination laws by terminating someone based on their race, religion, gender, or other protected class, or because they complained about discrimination against them because of their protected class. Employers must be careful to avoid violating statutes protecting whistleblowers, family and medical leave, or some other public policy. 

It is good practice for employers to document the cause for terminating employees, even if they are at-will employees, to avoid even the appearance of wrongful termination.  California workers have many grounds to claim foul play if they are terminated without cause, so it pays to be overly cautious.

If you are a San Francisco employer or an employee needing personal assistance with a claim of wrongful termination, retaliation, or workplace discrimination, contact the Richard Koss Bay Area employment law attorneys at 650-722-7046 on the San Francisco Peninsula, or 925-757-1700 in the East Bay.