California is at-will employment, which means that the employer or employee can terminate the employment relationship at any time, with or without cause, reason, or notice.
But the presumption at will can be denied by express or implicit agreements to the contrary. Also, an employer cannot fire an employee for discriminatory or retaliatory reasons. As a result of these exceptions, employers are often subject to claims by laid off employees.
An employer can adopt several strategies to keep the deal at will and protect itself against wrongful termination lawsuits. Here are some key recommendations:
Include repeated statements at will
Job applications, offer letters, employee handbooks, performance appraisals, and other employment-related materials should clearly and prominently state the policy at will. The policy must be reformulated along with any provision that may be construed as incompatible with an at-will agreement. For example, any list of reasons in an employee handbook for why an employee may be fired must be accompanied by a disclaimer that the list is not exclusive and that employment always remains at will. It’s hard to repeat politics at will too many times.
DO NOT guarantee job security
An employer must train its managers not to inadvertently make verbal statements to employees that may be construed as contradictory to at-will employment, such as:
“If you continue to do good work like this, you can look forward to a long and successful association with the Company,” or
“As long as you do a good job, you will always have a home here.”
DO NOT have probationary periods or permanent employees
The use of a “probation” period for new hires possibly creates an inference that an employee can only be fired for good cause after they have successfully completed the period. Instead, an initial phase of employment should be called the “introduction”, “orientation” or “training” period. Additionally, employees who complete the introductory period should be referred to as “regular” rather than “permanent” employees.
DO NOT have a progressive discipline program
Arguably, a progressive discipline policy creates an implicit contract between employer and employee, requiring the employer to follow all steps of the policy before terminating an employee. The practical result is that the employee can no longer be summarily dismissed, as would be permissible with at-will employment.
Be aware of the laws against discrimination
An employer must take special care before firing someone who is a member of a protected class (e.g., on the basis of race, age, ethnicity, or disability), or whose termination could be seen as retaliation for a protected act (e.g. . Eg murmur). In such cases, an employer must be prepared to establish good cause for termination, without prejudice to the general presumption of status at will.
There are many pitfalls for the unwary when trying to maintain an employment-at-will policy. Accordingly, an employer should have a competent professional regularly review their documents and work practices. And because of the risk of wrongful termination claims, an employer should consult with legal counsel before firing employees.