Is At-Will Employment A Myth?

California law provides for at-will employment unless there is an agreement to the contrary. As a result, an employer may believe it is free to terminate an employee at any time and for any reason or no reason.

The reality is far more complicated. A variety of limitations and exceptions to at-will employment have built up over time. An employer who decides to fire a worker should not have a false sense of security that the at-will doctrine will protect it against a wrongful termination lawsuit.

Implied Agreement

At-will employment can be negated by an implied agreement to not discharge an employee without good cause. Written or verbal representations by the employer of continued employment, other statements by the employer that create an expectation of job security, or the establishment of a progressive disciplinary policy can create such an implied agreement.

Discrimination

An employer may not dismiss an employee because of his or her race, gender, age, religion, ethnicity, national origin, disability, or sexual orientation. Because the protected characteristics are so numerous, one or more of them are likely to apply to most employees. Thus, an employee frequently will be in a position to at least claim that a termination is based on illegal discrimination.

Public Policy

An employer may not dismiss an employee in violation of a fundamental and substantial public policy. Such cases generally involve terminations based on an employee:

• Refusing to break the law at the request of the employer;
• Performing a legal obligation;
• Exercising a constitutional or statutory right or privilege (e.g., seeking a reasonable accommodation for a disability; taking lawful medical, pregnancy, or family leave; filing a workers’ compensation claim); or
• Complaining about or reporting a legal violation (e.g., employment discrimination, sexual or racial harassment, wage or overtime violations, workplace safety violations).

Burden of Proof

The at-will doctrine is further undermined by how the burden of proof is allocated in wrongful termination lawsuits. The employee has the initial burden of establishing that (1) he or she is in a class protected by the “discrimination” or “public policy” principles discussed above, and (2) there is some causal connection between his or her protected status and the employment termination (e.g., the termination occurred shortly after the employee filed a workers’ compensation claim or complained about employment law violations). If the employee satisfies that burden, then the burden shifts to the employer to put forward a legitimate nondiscriminatory reason for the termination.

In light of these limitations, “at-will employment” often may be more a myth than a reality. An employer therefore must follow carefully designed employment practices to lessen the risk that it will be successfully sued by a terminated employee.