Bartz Law Group

Employee Rights Advocates

Exceptions to California’s At-Will Employment Rule

employment rule

The “at-will” employment rule states that employers can terminate the services of employees at any time, for any reason or none. According to a California employment attorney, California’s Labor Code presumes that all employment contracts are “at-will” except when an employment contract states otherwise, or when an exception to the rule (at-will) applies.

The exceptions to the at-will employment rule allow wrongfully terminated employees to sue their employers as specified under California wrongful termination laws. Not many people can have the courage to sue their employers for wrongful termination and that’s where the assistance of a California employment lawyer comes in. The lawyer will assess your case to establish whether or not you have a claim before recommending an appropriate solution.

What are the Exceptions to the At-Will Employment Rule?

The exceptions to the at-will employment rule in California are:

  • Implied contract;
  • The implied covenant of good faith and fair dealings;
  • Public policy; and

1. The Implied Contract Exception

Under this exception, an employer cannot terminate an employee if an implied contract between an employer and employee exists even if there’s no written instrument to prove that relationship. Consequently, it’s hard to prove the existence of an implied contract and the onus of proof is on the terminated employee.

Implied contracts are presumed to exist if a company’s or employer’s policies state that a worker cannot be discharged except for good cause or if a company has rules that govern employee termination. Discharging an employee whose terms of engagement are based on an implied employment contract is considered a breach of contract.

2. The Implied Covenant of Good Faith Exception

The implied covenant of good faith and fair dealing is an implied and binding understanding that the parties to an employment contract (employer and employee) will transact honestly, fairly and in good faith. This covenant aims to stabilize the power imbalance that typically exists between employees and employers.

3. The “Public Policy” Exception

The public policy exception states that an employer cannot discharge an employee if a discharge would contravene the doctrine of public policy. But what is the meaning of public policy in the employment context? The public policy exception bars an employer from firing employees in disregard of the labor statutes of the state. For instance, an employee should not be discharged for filing a compensation claim for work-related injuries. Firing an employee in disregard of the public policy exception is considered wrongful termination. Employees can sue their employers for wrongful termination if they were fired because of:

  • Refusing to violate a certain law,
  • Performing their legal obligations;
  • Exercising their legal rights; or
  • Whistleblowing.

To sustain a wrongful termination claim under the public policy exception, the discharged employee must prove the following facts:

  • The policy or law that they refused to violate is legally defined in law, a constitutional provision, or an ethical rule;
  • The policy should be beneficial to the public;
  • The policy should be fundamental and substantial; and

Constructive Termination

This occurs when the working conditions become unbearable and an employee is left with no option but to resign. Sometimes an employer can make the working conditions intolerable to force employees to quit/resign. In such cases, the ex-employees can sue their former employer.

Although employers can discharge employees at any time and for any reason, or none, the exceptions to California’s at-will rule allow employees to sue their employers for terminating their services without good course.