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At Will Employment Is Key in Breach of Employment Contract Lawsuits

  • By: Robert Klein

As a Los Angeles based business litigation attorney representing small to medium sized companies, I often need to address lawsuits brought by former employees.  In these lawsuits the fired employee usually claims they were unfairly fired because they did nothing wrong or their boss had it out for them.

The issue is often whether the company was required to provide them some sort of hearing or whether the firing was based upon some form of discrimination and merely a pretext.

In California there is something called at-will employment.  Labor Code section 2922 provides, in pertinent part: “An employment, having no specified term, may be terminated at the will of either party on notice to the other.” This statute creates a presumption of at-will employment which may be overcome ‘by evidence that despite the absence of a specified term, the parties agreed that the employer’s power to terminate would be limited in some way, e.g., by a requirement that termination be based only on “good cause.”

If the employee can overcome the presumption the employment was not at-will but there was an implied agreement only to terminate the employment for good cause, the next issue is what duty does the employer have to investigate the alleged wrongdoing.

California cases have held jury need not decide whether the terminated employee actually engaged in the illicit activity, but whether at the time the decision to terminate his employment was made, the employer acted in good faith and following an investigation that was appropriate under the circumstances, had reasonable grounds for believing the plaintiff engaged in the wrongful behavior.

If the terminated employee claims they were wrongfully fired in violation of public policy, they would need to prove the firing violated some constitutional right or right guaranteed by statute.  An example would be the employee was fired because of their race or national origin, the employee complained about being a victim of sexual harassment, or the employee refused to lie in an investigation against the employer.  These are a few examples of a firing that would be wrongful in that it is against public policy.

Robert Klein

About the Author Attorney Robert Klein is a former CPA and known for
finding creative solutions to complex business lawsuits.