Wrongful Termination

Wrongful termination is the official term for when a person is fired for an illegal reason. Although California employers have a great deal of discretion in deciding who they may hire or fire, there is also an extensive list of factors that may constitute wrongful termination. Under these circumstances, the employee in question is protected and may be entitled to damages if the court determines that they were wrongfully terminated. Stop Unpaid Wages has extensive experience all over California trying precisely these types of cases.

What is Wrongful Termination?

Wrongful termination is a form of retaliation that can be inflicted on employees by their employers. This is an actionable offense under both federal and state wage and hour laws. Section 15(a)(3) of the Fair Labor Standards Act (FLSA) explicitly prohibits an employer from terminating an employee if they have filed a complaint. This complaint can be in writing or made orally, usually to the Wage and Hour Division (WHD) of the Department of Labor (the DOL).

The state law that prohibits this is California Labor Code, Section 98.6 LC. Much like Section 15(a)(3) of the FLSA, an employee filing a complaint about a labor law violation (most frequently unpaid wages) is protected. Section 98.6 LC is also referred to as the “whistleblower statute” because it protects whistleblowers under California wage and hour laws.

If the employee has been wrongfully terminated, they have every right to sue their employer in civil court. This can be done on the federal level, under FLSA, or on the state level, under the Labor Code. Furthermore, if this termination was inflicted upon the employee as retaliation for filing an unpaid wages complaint, then the termination itself is grounds for a labor lawsuit. This occurs independently of the unpaid wages case. Even if the court eventually dismisses the claims of unpaid wages made by the employee, the fact that they were unlawfully terminated constitutes an actionable offense and may result in financial compensation being owed to the employee.

What is an “Employee” Under California Law?

Under California labor law, only an “employee” is legally allowed to file a lawsuit and/or claim wrongful termination. This is because wrongful termination is, legally speaking, a violation of the employment contract.

Consequently, it is important that we define exactly what an employee is under California labor law. A worker is considered an employee if they operate under the direction, supervision, and/or control of an employer. This is considered to be distinctly different from what are known as “independent contractors”. These independent contractors provide a company or employer with a product and/or service, but they do so with a tremendous degree of freedom in how they operate. In other words, an independent contractor is someone who works with the company but determines the specifics of how they deliver the good and/or service. They are not under the direct supervision of the company. The greater the degree of control that the employer has, the more likely the person in question is an “employee” and not an “independent contractor”.

It is hypothetically possible that an independent contractor would have a claim against a business if they somehow violated the implicit or explicit terms of their employment agreement, but this violation would not be wrongful termination in the true sense of the phrase. Wrongful termination only occurs when the aggrieved party is a legally-recognized employee of said company.

When Can My Employer Fire Me?

Despite the fact that California is an at-will employment state, this still limits the reasons for which an employee may lawfully fire an employee. One of the most frequent legal grounds for a wrongful termination claim and/or lawsuit occurs when the employer in question has “discriminatory intent” in terminating the employee. This means that they had some unlawful reasons for the firing.

Under the Labor Code of California, Section 98.6, it is illegal to terminate an employee as retaliation for claiming unpaid wages, reporting another wage and hour violation, or filing a lawsuit to claim backpay. Any employee that does any of these actions is considered a “whistleblower” and is protected under California law. There are also other forms of retaliation that are prohibited by this specific labor law, including the demotion of the employee, reduction of their scheduled work hours, and/or the act of transferring them to a lesser department. Any of these actions would be considered retaliation and would be grounds for a retaliation lawsuit.

Furthermore, according to both federal and state wage and hour laws, employers in the state of California are not legally allowed to terminate an employee for any of these following reasons:

Race and/or ethnicity
Ancestry
Religion or creed
Nationality and/or ethnicity
Mental and/or emotional disability
Medical condition and/or physical disability (protected under FEHA and ADA)
Genetic information
Age
Gender, sex, and/or gender identity
Marital status
Sexual orientation
Language discrimination
Military service and/or veteran status
Political affiliation and/or activity
Jury duty
Family Medical Leave (protected under FMLA and/or CFRA)
Pregnancy
Retaliation for whistleblowing

These various reasons are not considered to be lawful, legal, and/or legitimate grounds for termination. They are by and large explicitly delineated in the most important anti-discrimination labor law: “The Fair Employment and Housing Act” (also known as FEHA). This is a state of California law that applies to employers who have five (5) or more employees.

FEHA was essentially created to protect vulnerable classes of employees from wrongful termination and/or harassment. This means that an employer may also not harass an employee on the basis of any of these reasons. The employer in question is also not legally allowed to foster what is known as a “hostile work environment” by harassing on the basis of any of these reasons. This means that under California labor laws, there is an implicit expectation that employers maintain a workplace environment that has some minimum level of safety and protection for its employees.

What is “At-Will Employment” in the State of California?

However, beyond these specific discriminatory reasons, an employer in California has every right to terminate their working relationship with an employee. They do not even have to provide a reason or justification for doing so. This is known as the “at-will employment” doctrine and is explicitly codified in California Labor Code, Section 2292.

This is the most common defense that an employer may make for wrongfully terminating an employee. Essentially, California is an “at-will” employment state. This means that an employer may fire a worker at any time and for any reason. This termination does not have to be justified by the employer so long as the employer does not fire the worker for an illegal reason. All employment in the state of California is legally presumed to be at-will employment unless there is some specifically designated contractual agreement that precludes the employer’s ability to fire the employee. Employees who are part of a union are also somewhat protected from this at-will employment clause.

This at-will employment arrangement also means that the employee is free to terminate the working relationship at any time whatsoever. Neither party, including employee or employer, is legally obligated to continue the working relationship if they do not want to. Both parties may end the working relationship at any time for seemingly arbitrary reasons, as long as those reasons are not illegal. As a result, this occasionally leads to some highly confusing legal scenarios that are best handled by attorneys with particular experience in wage and hour laws.

However, despite California being an “at-will” state, retaliation is not protected under the wage and hour laws. It is an illegal reason for termination and if the employer in question acted in a retaliatory fashion, then you likely have a very strong wrongful termination case. Furthermore, if there is an employment contract that is in place, then this considerably limits the employer’s ability to fire the employee.

If an employer hires someone for some specific period of time but does not explicitly delineate the terms and conditions of termination, then there are effectively only three legitimate reasons that an employer may fire an employee for. The first is if the employee in question willfully fails in fulfilling one or more of their employment duties. The second is if the employee neglects one or more of their employment duties. The third is if the employee is unable to perform one or more of their employment duties.

Any one of these three reasons is legally considered to be legitimate.

As such, they are protected under California wage and hour laws in regards to lawful employee termination. However, it is possible that the employer may have fired the employee for both a legitimate reason and an illegitimate reason. This is known as a “mixed-motive case”. In these situations, a skilled legal team will be able to differentiate between these two sets of motives and effectively make a case that the illegitimate reasons are grounds for a wrongful termination lawsuit.

Public Policy Exception

There are various exceptions to these at-will employment laws. The first is the public policy exception and it is activated if the employee in question refused to violate a statute or law, refused to commit perjury, and/or refused to conspire with the employer to discriminate against a potential employee due to their ethnicity, race, religion, age, sexual orientation, and/or gender. If any of these caveats are violated, then it is grounds for a wrongful termination lawsuit under the public policy exception to at-will employment.

This public policy exception also applies in cases where the aggrieved employee filed a worker’s compensation claim. California Labor Code, Section 132(a), explicitly prohibits an employer from terminating and/or discriminating against an employee for filing a worker’s compensation claim. If the court rules that this violation did in fact occur, then the employee in question may be entitled to financial compensation for backpay as well as damages for emotional distress and the reinstatement of their job.

This public policy exception also extends to company whistleblowers. However, this extension only applies when the employee in question voices legitimate concerns about health and safety, state or federal statute violations, any kind of illegal activity, and/or business practices that are considered unethical. These may include anti-trust violations, price gouging, and other unscrupulous actions on the part of the employer.

The vast majority of states, including California, have adopted this public policy exception.

Implied Contract Exception

One of the primary challenges in building a wrongful termination case is defining the exact terms of the employment contract. Essentially, in order for wrongful termination to have legally occurred, violation of said contract must have also occurred. This is complicated by the fact that the state of California recognizes both explicit employment agreements (written contracts) and implicit employment agreements (verbal agreements).

California labor law defines an “implied employment contract” as an agreement between the employee and their employer that is not in writing. Instead, this contract is formed via the behavior of both parties. This is legally binding and includes promises that were made verbally.

In the context of California labor laws, this implied contract essentially means that the employer may not terminate the employee without some compelling or justifiable cause.

An implied employment contract is an exception to at-will employment in California and the termination of said implied contract would be grounds for a wrongful termination suit.

This implied contract may exist if the employer in question made explicit statements about the security of the job that the employee accepted. In this scenario, the employer stated that the employee in question would have a permanent position at the company if he or she did something or fulfilled some caveat. Absent a written agreement, an implied contract would be considered legally binding.

Beyond this verbal promise of some position or title, a substantially more common kind of implied contract is usually found in the employee handbook. If the employer in question notifies their employees that their rights and duties are found in the company’s written handbook, then the employer has entered into an implied contract that they will not terminate the employee so long as they follow said expectations and fulfill said duties. Passing out employee handbooks immediately exposes the employer to legal liability and needing a justifiable cause to terminate an employee. This implied contract results in an implied legal duty not to terminate employment without some explicitly defined transgression. In other words, the handbook effectively serves as the implied contract of employment.

These implied contracts are subject to considerable interpretation by the civil courts. To determine if an implied contract of employment applies in a given case, then the court must examine all the underlying circumstances of the case in question. This means that retaining a skilled attorney is necessary in these cases.

Most states have adopted this exception of implied contracts, including California.

Covenant of Good Faith Exception

Another grounds for a wrongful termination lawsuit is when the termination of employment occurs even if there’s a “covenant of good faith”. In legal terminology, a covenant simply means “agreement”. This covenant of good faith is quite similar to the implied contract exception, although it extends a bit further.

This covenant of good faith exists between the employer and employee when the job duties are being fulfilled properly by the employee in question. If the employer terminates the employment, then the covenant of good faith exception has been violated. In legal terminology, “good faith” means that an agent or party in a given case is acting without malicious intent and is considering the best interests of the other party in question. This termination is also considered to be a violation of the good faith caveat.

Consider an employee who has worked for a company for many years and is set to enter retirement with full benefits. Several weeks before this employee’s retirement the company then terminates him or her. The company did not have a lawful reason but instead did so to avoid paying these full benefits. In this case, this would be considered a violation of the covenant of good faith.

There are only a few states that have accepted the covenant in good faith doctrine. Thankfully, California is one of them.

Written Employment Contract Exception

This exception is basically the exact opposite of the implied contract doctrine. It is activated when the employment agreement between the employer and employee is explicit. This means that the agreement in question is written and is a legally binding contract.

This written contract exception usually applies to company executives and/or upper management. If the employer offers a term of employment to a hired employee based on some written employment contract, then both employee and employer must abide by the terms of said contract. If the employee in question violates any of these terms, then the employer has every right to terminate this term of employment.

If, on the other hand, the employer terminates the employee in violation of any of these employment contract terms, then the employee in question will have a valid and strong wrongful termination case.

This written contract exception is applicable in all 50 states.

What Is Constructive Discharge?

The final exception to the at-will law is known as “constructive discharge”. This occurs when the employer willfully creates a work environment that is so hostile and toxic that the employee in question has no choice but to quit. This constructive discharge may apply in cases where there is an implied contract or in cases where there is a written employment contract.

Under the constructive discharge exception, the employer in question does not specifically terminate the employee. Despite this fact, however, the resignation of said employee is still considered a case of wrongful termination. The creation of intolerable working conditions is what makes the employer legally liable for a wrongful termination lawsuit. Creation of said conditions can be either active or passive. In other words, the employer may explicitly create a hostile working environment or they may simply allow such an environment to develop by not controlling the workplace conditions.

Both of these scenarios, either passive or active, are considered actionable. In cases where the hostile work environment was actively created, then a skilled labor lawyer could make the case that the employer in question acted maliciously. If the court agrees that there was malicious intent, then the damages awarded will be considerably higher.

The constructive discharge exception does not apply, however, if the employee was aware of the intolerable working conditions before beginning their term of employment. If the employee in question was aware of the hostile work environment but accepted the term position anyways, then a wrongful termination lawsuit will not apply. It has to be proven that the constructive discharge was in retaliation for some complaint made by the employee.

What Are The Damages for A Wrongful Termination Lawsuit?

There are various damages that you may be able to receive as a result of a wrongful termination lawsuit. Depending on the specifics of the case, the employer in question may decide to offer you a settlement before it even goes to trial. Whether or not you accept this settlement is dependent on how much you wish to receive in damages and how strong the evidence is that you were in fact wrongfully terminated.

Because wrongful termination is a type of unpaid wages lawsuit, the damages in question will include backpay. This backpay consists of any lost wages as well as employee benefits that were discontinued due to the wrongful termination. Remember that benefits are considered to be a type of income, and as such are included in an unpaid wages lawsuit.

This backpay can be objectively calculated and verified. As such, it is also referred to as “liquidated damages”. However, you may also be entitled to financial compensation for pain, suffering, and/or emotional distress. The calculation of these damages is not as straightforward as unpaid wages and will depend on the skill and experience of your legal team.

If the case is ruled in your favor, then the court may also require that your former employer reimburse you for your attorney’s fees and court costs. Finally, the court may also impose “punitive damages” on your former employer. These are not designed to compensate you but instead, act as a corrective and/or punishment to ensure that the employer in question does not continue with said illegal behavior.

Find An Employment Attorney Near Me

Being wrongfully terminated can turn your whole world upside down. If you feel that you have been unfairly targeted or retaliated against anywhere in California, then Stop Unpaid Wages can help you build an effective case. Reach out to our wrongful termination attorney at 424-781-8411.