Although California is an at-will state, meaning employees can be fired without reason at any time, there are still situations in which an employee can file a wrongful termination lawsuit against his or her former employer. Laws protecting employees from wrongful termination are covered in the California Fair Employment and Housing Act.
It is illegal for a California employer to fire an employee for reasons that are discriminatory, such as for the person's age, race, sexual orientation, disability, relation, national origin or sex.
If an employee has an implied contract—even an informal one—and the employee's firing violates that implied contract, then the employee may be able to file a wrongful termination lawsuit. For example, if the implied contract says the employee will not be fired for at least a year and the employee is fired sooner, he may be eligible to file a claim against the employer. Factors involved in an implied contract include promises of job security, any employee handbook, employment policies and job performance evaluations.
Violation of Public Policy
California employers cannot fire an employee if that termination is contrary to public policy. For example, an employer cannot fire an employee for refusing to commit an illegal act or for filing a workers compensation claim.
It is illegal for a California employer to fire an employee for reporting illegal or unethical activities to an appropriate government agency or to an authority within the employee's organization. It is also illegal to fire an employee for backing or confirming a coworker's claim or reports of illegal or unethical activity.
Although retaliation is usually thought of as only termination, it can actually include being passed over for a promotion or training opportunity, being demoted, being denied a raise or other privilege or facing suspension or other consequences.
A whistleblower is an employee who reports the illegal activities of an organization. Activities reported can include a violation of state or federal law, violation of or noncompliance with a local, state or federal regulation, or unsafe working conditions.
Whistleblower laws protect whistleblowers from retaliation by the organization being reported on. Also protected are employees who refuse to participate in any activity that would result in a violation of federal or state statutes. Under California whistleblower laws, an employer can neither retaliate against an employee for reporting illegal behavior, nor prevent the employee from being a whistleblower.
If an employer retaliates against a whistleblower, the employer may be required to reinstate the employee's employment and benefits, and pay missed wages.
Qui Tam lawsuits are those filed by whistleblowers on behalf of the government.
The Sarbanes-Oxley Act is a whistleblower protection for whistleblowers who are employed by publicly traded companies. Sarbanes-Oxley prohibits retaliation in the form of termination, demotion, suspension, harassment or other discrimination against such employees. The provision protects any employee who reports activity that he or she reasonably believes is illegal, even if courts later find that no laws were broken.
Employees who file a claim under Sarbanes-Oxley must file a complaint with the Department of Labor within 90 days of the retaliation. Failure to do so could result in the claim being dismissed.
California's Worker Adjustment and Retraining Notification (WARN) laws require covered employers to provide 60 days' notification to employees and officials in advance of any plant closing or mass layoff. Although there are federal WARN statutes in place, California's statutes expand the businesses affected by the laws.
Under California labor law, there is no guarantee of an employee receiving severance pay. Severance pay—also known as separation pay—is compensation given to an employee when employment is terminated. Employers are not required to provide severance unless there is a contract stating they must do so.