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At-Will Employment

“You’re fired.” Millions of people have watched the television show The Apprentice to hear Donald Trump say those words. Trump fires contestants because they have failed various competitions; however, because California is an at-will employment state, employers may fire an employee for any reason or no reason what-so-ever, right? The answer is “yes” and “no.”

California Labor Code Section 2922 says that, “An employment, having no specified term, may be terminated at the will of either party on notice to the other,” which means that employment is at-will and may be terminated at any time by the employer or the employee for any legal reason or no reason at all unless the parties have agreed otherwise. However, there are numerous federal, state, and court-created exceptions to that rule for most employers.

Federal exceptions include (among many others) the Civil Rights Acts of 1866, 1871, 1964, and 1991 (employees may not be fired because of their race, color, religion, sex, or national origin); the Age Discrimination in Employment Act (employees may not be fired because of being age 40 or older); the Americans with Disabilities Act (employees may not be fired because of a disability); the Uniformed Services Employment and Reemployment Rights Act (employees may not be fired because of military service); and the Family and Medical Leave Act (employees may not be fired for taking a leave of absence to care for their own serious illness or that of a parent, spouse, or child).

California exceptions include (among many others) the prohibition of firing employees for filing a claim with the Labor Commissioner, a complaint with the Occupational Safety and Health Administration, or a complaint with the Department of Fair Employment and Housing; serving on a jury; taking time off as a result of being a victim of domestic violence; disclosing how much they are paid or other working conditions; or because of being in a state-protected characteristic (ancestry, gender, sexual orientation, marital status, medical condition, pregnancy, or union activity).

California court-created exceptions include (among others) the prohibition to terminate an employee at-will when there is a written, oral, or implied contract that the employee will not be terminated except for cause; or when there is a progressive discipline policy in place that states that employees will receive warnings prior to termination.

What can employers do to keep from getting successfully sued for wrongful termination?
• Set clear expectations of performance, provide plenty of feedback, give employees the opportunity to improve, and document the entire process.
• Ensure that disciplinary actions are based on objective criteria and are consistently enforced.
• Conduct a prompt, fair, and thorough investigation of allegations of misconduct.
• Ensure terminations are in accordance with company policies and procedures and are conducted for business-necessity purposes.

In sum, employers may fire employees for any reason or no reason, except for the above reasons. Carefully review your reason for termination before saying “you’re fired.”

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Disclaimer: The information and resources provided herein are not a substitute for experienced legal counsel and does not constitute legal advice or attempt to address the numerous factual issues that inevitably arise in any employment-related dispute. Although this information attempts to cover some major recent developments, it is not all-inclusive, and any recommendations are based upon HR best practices and procedures. We recommend you consult an attorney for legal guidance.

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