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Rand L. Stephens & Richard Koss

Wrongful Termination & Implied Contracts in CA

termination letter

Employers in California generally have the right to keep employees or let them go as they see fit. If an employee is protected by an employment agreement, then the employer must adhere to the terms of the agreement. But what happens if you’ve been with a company for ten years, with nothing but high marks, your company never fires anyone unless they make a big mistake, and you are suddenly terminated for no reason? Do you have any potential legal claims, or are you out of luck?

Read on to learn about the concept of “implied contracts” in California employment law. If you believe you’ve been wrongfully terminated for any reason, call a savvy California wrongful termination and retaliation lawyer for advice and assistance.

California and “At-Will” Employment

California is an “at-will” employment state. In an at-will state, employers employ workers at their will, with no obligation other than those specified by specific laws. Under most circumstances, unless you have an employment contract, your employer can fire you for almost any reason they want, or for no reason at all. They do not need to prove any sort of wrongdoing or negligence, or even that they needed to terminate you for business reasons; they can simply fire whomever they want.

There are certain limitations, of course. Employers cannot fire workers for illegal reasons, such as for discriminatory purposes (i.e., firing someone because of their race, gender, or sexual orientation) or in retaliation for exercising a protected right, such as complaining about harassment or other unlawful conduct in the workplace.

On the other hand, employment based on a contract stands in contrast to at-will employment. If you and your employer signed an employment agreement, that agreement creates legally enforceable conditions of your employment. Your contract might state, for example, that you will be employed for a set number of years, or that you can only be terminated “for cause.” If your employer tries to fire you in violation of your employment agreement, you could have grounds for a lawsuit based on breach of contract.

What Is an Implied Contract?

Most contracts are explicit. They are dictated either orally or, preferably, in writing. Your employment agreement laying out your compensation and the conditions for termination, for example, is a contract. Under certain circumstances, however, a contract can be implied.

California law recognizes “implied contracts” in the employment space. An implied contract is an agreement formed by the conduct of the parties, rather than drafted in explicit terms. If you and your employer have an implied employment contract, then it might be a breach for your employer to terminate you without demonstrating cause. If you are fired in violation of an implied contract, you might have grounds to sue based on claims of breach of contract.

Proving an Implied Contract for Employment

An implied contract is created by your employer’s behavior. In order to prove that your job was subject to an implied contract for employment, you’ll need to provide evidence demonstrating that you and your employer had an implied understanding that your job was secure and that you could not be terminated without proper cause.

In looking for an implied contract, California courts will look at all of the circumstances surrounding the employer-employee relationship. The court may consider evidence including:

  • Company policies and procedures
  • The length of time you worked for that employer
  • Conversations between you and your employer, especially any actions or words indicating that you could rely on the promise of continued employment
  • Practices of the industry in which you were working

If you show, for example, employee manuals that list out specific reasons why employees may be let go or employees may be let go only after numerous warnings, conversations about your work in which your employer said they expect you’ll be at the company a long time or that they can’t imagine any reason to let you go, and other evidence showing that you had good reason to believe you wouldn’t be fired any time soon, you may be able to convince the court of an implied contract.

It’s important to keep in mind, however, that implied contracts generally still allow termination for cause. If you violated company policies or made a big mistake on the job, your employer can likely let you go, even if you could demonstrate an implied contract for employment.

If you are a San Francisco employee or employer in need of advice or representation concerning equal pay violations, retaliation, whistleblower protections, workplace discrimination, or other California labor law issues, contact the Bay Area employment law attorney Richard Koss at 650-722-7046 on the San Francisco Peninsula, or 925-757-1700 in the East Bay.

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