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What California employers need to know about at-will employment

On Behalf of | Jun 26, 2023 | Business Law

Navigating the world of employment law can be complex for California employers. One concept that often causes confusion is “at-will” employment.

This term refers to a legal doctrine that allows an employer or an employee to terminate the employment relationship at any time, for any reason or no reason, as long as the reason is not illegal.

Establishing at-will employment

To establish an at-will employment relationship, employers often include an at-will clause in their employment contracts or employee handbooks. This clause clearly states that either the employer or the employee can terminate the employment relationship at any time, with or without cause or notice.

Exceptions to at-will employment

Despite the at-will doctrine, there are several important exceptions that employers should be aware of. For example, employers cannot terminate an employee for a discriminatory reason, such as the employee’s race, gender, religion, age, disability or sexual orientation. Employers also cannot terminate an employee in retaliation for exercising their legal rights, such as filing a workers’ compensation claim or reporting a workplace violation.

Furthermore, employers cannot fire an employee for refusing to commit an illegal act, such as lying to a government agency. Additionally, employers should honor any contractual agreements that limit their ability to terminate an employee at will, such as employment contracts or collective bargaining agreements. The California Labor Commissioner enforces laws preventing unjust termination in these cases and a select few additional situations.

Implications of wrongful termination

If an employer violates one of these exceptions, it could lead to a wrongful termination lawsuit. Employees who win these lawsuits could recover damages, including back pay, front pay, emotional distress damages and possibly even punitive damages.

While at-will employment provides flexibility for California employers, it is not without its limitations. Employers should ensure they fully understand the parameters and exceptions of at-will employment and always treat their employees fairly and lawfully.


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