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At-Will Employment: Explanation and Rules for Termination

At-Will Employment: Explanation and Rules for Termination

California is an at-will state, but what does that actually mean? The definition can be spun depending on which side of the employment agreement a person is on, but the most common way of explaining what it means to be at-will is that each party to the agreement has more freedom to terminate the employment relationship to seek better opportunities from a different source. Whether that means an employer is searching for an employee who is a better fit for the company culture, or an employee is seeking employment with another company that better suits his or her individual needs, at-will employment is a common answer to the age-old problem of being stuck in a non-productive rut.

Benefits of At-Will Employment

While many people argue that an at will employment relationship only benefits employers, in many ways the agreement provides equal benefits for employees. For example, under an at-will contract an employee is not obligated to give an employer notice before leaving for another opportunity. Furthermore, neither party needs to give a reason for terminating the employment relationship. In a good economy where highly skilled employees are at a premium, they are free to leave a position that they believe is not a good fit for a better opportunity without facing potential penalties and legal issues.

The Importance of a Well-Crafted Agreement

Despite being an at-will state, California law still requires employers to be clear that their intent is to create such a relationship with their employees. Employment contracts should contain clear language that outlines the nature of the employment relationship so that employees know exactly what to expect. This clarity also should extend to offer letters and any agreements made during the course of employment, verbal or written. Failure to clearly outline the nature of an at-will relationship can lead to lawsuits for wrongful termination. 

Wrongful termination occurs when an employer fires an employee for an unlawful reason such as discrimination, breach of contract, or wage and hour violations. In order to defend against such lawsuits, an employer will need to show not only that the reason for the termination was non-discriminatory and fair under wage and hour laws, but also that it was not in violation of the employment contract between the parties. Breach of contract actions under California law can lead to protracted litigation if an employer has not made its intent for an at-will relationship clear as the law allows for implied contracts in addition to written employment contracts. In order to defend against a wrongful termination action, an employer will need to show that the reason for ending the employment relationship was within the bounds of the contract. 

Questions?

If your company wants to ensure that the contracts between it and employees is clear, call the professionals at Garcia & Gurney. Our attorneys have years of experience with California’s employment laws and can help your company protect itself from litigation, or represent you in current litigation if necessary.

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Garcia & Gurney, ALC
7041 Koll Center Parkway, Suite 240
Pleasanton, CA, 94566 USA
925-468-0400