San Francisco Employment Law Firm Blog

Under California law, an employee is presumed to be "at-will" employee unless agreed otherwise. Cal. Labor Code section 2922. "At will" means that an employee can be terminated for any reason, no reason, or arbitrary reason, as long as it's not an unlawful reason (such as discriminatory or retaliatory discharge, to name a few).

There is a number of laws and ways in which the presumption of at-will employment can be defeated, as might be necessary in order to prove a wrongful termination claim. Some of those laws are stronger and more definite while others are more vague and are not applied by all courts equally in California. Below is a number of the more compelling ways to defeat at-will employment presumption.

An express agreement that employment is other than at-will of course defeats the at-will employment presumption. Thus, most union employees are not at-will employees as their contract with the employer - the collective bargaining agreements - almost always provides that an employee can be only terminated for good/just cause. Additionally, personnel manuals that list specified grounds for discharge are evidence of an implied-in-fact contact to terminate only for good cause.

Likewise, an employment agreement for a specific term is inconsistent with employment at-will, and thus defeats that presumption. Chyten v. Lawrence & Howell, Inc. (1993). Similarly, although not always, the employer's written policies or procedures, contained in its personnel manuals, may rebut the presumption of at-will employment. Pomona College v. Superior Court (1996).

The presumption of at-will employment is not a defense to termination in violation of public policy (terminating an employee for exercising one of the enumerated important, fundamental rights which were established to benefit the public in general). When an employee is terminated in violation of public policy, the at-will employment presumption has little, if any, relevance. Foley v. Interactive Data Corp. (1988).

Evidence of only salary increases, longevity and promotion is sufficient to create a triable issue of whether implied agreement not to terminate by for good cause existed. In one case, the court considered an employee six-year work history at a company, including a promotion after two years, grade and salary increases during that time and compliments about the high quality of her work to establish that the above evidence was sufficient to potentially defeat the at-will presumption.

Posted by Arkady Itkin | Permalink | Email This Post

Posted In: At-Will Employment

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In the absence of an agreement otherwise a worker in California is generally presumed to be an "at-will" employee. This means that an employee can be terminated for any reason, no reason or arbitrary reason as long as it's not an illegal reason (such as discrimination, harassment, retaliation, etc.) Once an employee establishes that he/she might have been terminated for unlawful reason, an employer will be required to defend its termination by demonstrating "just cause." Employers covered by collective bargaining agreements are also typically required to demonstrate "just cause" for any disciplinary action involving a covered employee. Thus, it is important to understand the "just case" term of art. In determining whether the employer had just cause for terminating an employee, the following questions should be asked:

* Did employer's action violate any statute or policy?
* Did the company investigate to determine whether the employee actually violated the rule for which he was disciplined or terminated?
* What the company's investigation fair and objective?
* During the investigation, did the company obtain substantial evidence or proof that the employee was guilty?
* Has the company applied its own rules and discipline, as outlined in employee handbook or similar materials, fairly and consistently to all employees?
* Is the degree of discipline reasonable proportional to the seriousness of the proven offense or violation in light of the gravity of that offense as compared to overall performance, track record and length of service of that employee?
* Has the employee been honestly informed of the reasons for discipline or termination?

Generally, especially in the context of unionized employee covered by CBA (collective bargaining agreements), just cause for termination is something more serious than a minor misconduct or isolated incidents of negligence, as there is both semantic and legal difference between "cause" (which can be any cause) and "good cause."

Posted by Arkady Itkin | Permalink | Email This Post

Posted In: At-Will Employment , Investigation at Workplace , Just Cause Termination , Wrongful Termination

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The main distinction between an employee or at-will employee and an independent contractor is that the independent contractor is responsible to the principal solely for the result of the work that is the subject of the contract between the parties. Independent contractor is responsible to principal only for result and not manner or means by which it is accomplished. Generally, whether a worker is an employee or independent contractor is a question of fact that depends on the trier of fact's evaluation of several factors, most notably whether the employer has the right to control not only the result but also the means by which the work is accomplished. Ali v. L.A. Focus Publication 112 Cal.App.4th 1477 (2003).

Labor Code section 2750.5 sets forth a number of factors that may prove that such an individual is working as an independent contractor, Among these factors are: (1) the individual worker has the right to control and discretion as to the manner of performance of the service contract in that the result of the work and not the means by which it is accomplished is the primary factor bargained for; (2) the workers is customarily engaged in an independently established business; (3) the worker's independent contractor's status is bona fide and not a subterfuge to avoid employee status; and (4) if the worker was performing work for which a contractor's license is required, he or she should have held such a license.

No matter what the status of the worker is, employers often wish to include "at will" language in service contracts. However, such language should be removed from a contract with an independent contractor, as language describing a relationship as "at-will" generally goes to show that an employment relationship was created because an employer can end a working relationship at any time and for any or no reason.

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Posted In: At-Will Employment , Independent Contractors

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California workplace operates under the basic presumption that in the absence of agreement otherwise, a worker is an at-will employee. This means that an employee can be terminated for any reason, arbitrary reason, or no reason, but not for illegal reason such as discrimination, harassment, and retaliation. This presumption is codified in California Labor Code section 2922, which provides that an employment, having no specified term, may be terminated at the will of either party on notice to the other.

This presumption of at-will employment may be superseded by an express or implied contract limiting the employer's right to discharge employee. The landmark California Supreme Court case on the issue of existence of implied employment contract is Foley v. Interactive Data Corporation (1988). In that case, the Court stated the general principle that courts seek to enforce the actual understanding of the parties to a contract, and in so doing may inquire into the parties' conduct to determine if it demonstrates an implied contract. The Court further noted that in the employment context, several factors may be considered to determine whether implied employment contract existed, including (1) personal policies or practices of the employer; (2) the employee's longevity of service; (3) actions or communications by the employer reflecting assurances of continued employment; and (4) the practices of the industry in which the employee is engaged.

The Foley court, considering the above factors, came to the conclusion that there was an implied contract to not terminate employment where the employee, who worked for his employer for over 6 years, received excellent performance evaluations and promotions, was told that if he was going to do a good job, his future was secure, and where the employer admitted that it did not normally fire employee without cause.

These factors, however, don't have much weight if the employee actually signed a written form, stating that he understands that he is an at will employee and may be terminated at any time with or without cause.

Posted by Arkady Itkin | Permalink | Email This Post

Posted In: At-Will Employment , Contract Claims , Employment Contracts , Wrongful Termination

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