This article discusses California law and the limits on employers’ abilities to fire an employee.
Every day employees get fired by their employers. Sometimes it is for poor work ethic, lack of skill, or some other reason.
In California, firing an employee is legal for the most part. As an “at-will” state, both the employer and employee can end the working relationship at any time and without notice.
However, when an employer fires an employee for the wrong reasons—illegal reasons—you have the right to file a wrongful termination claim.
Should I file wrongful termination claim in California?
RECOMMENDED READING: CALIFORNIA TERMINATION LAWS
Learn about California Termination Laws
Wrongful termination occurs when an employer discharges an employee for the sole purpose of “getting even.” Typically, a retaliatory discharge occurs shortly after an employee reports wrongdoing. Wrongdoing can be anything from reporting an incident of sexual harassment to HR to filing an employment discrimination complaint under the Fair Employment and Housing Act (FEHA).
Chapter 1: What Is Wrongful Termination?
Employees who have been terminated for discriminatory reasons, for exercising their legal rights, or in violation of an employment contract may have a wrongful termination claim.
Even though California is an “at-will” state, meaning that an employer or employee can end the working agreement at any time without notice, California state and federal laws explicitly prohibit employers from firing employees for a number of reasons, which are illegal.
Discharge of an employee for an unlawful reason is a wrongful termination.
The laws setting forth anti-discrimination practices are found under Title VII of the federal Civil Rights Act of 1964, the California Fair Employment and Housing Act (FEHA), the Age and Discrimination Act (ADEA), the Equal Pay Act, the Americans with Disabilities Act (ADA), the California Family Rights Act, and the Healthy Workplaces, Healthy Family Act.
Discrimination claims are handled by both the California Department of Fair Employment and Housing (DFEH) and the federal Equal Employment Opportunity Commission (EEOC).
Federal Discrimination Based on a Protected Class Category
Under federal law, an employee cannot be fired for the following –
- Age (40 or older)
- Sex (including pregnancy, gender identity, and sexual orientation)
- Physical disability
- Mental disability
- Religion or religious practices
- National origin
- Political affiliation
California Employment Discrimination
California has some of the most comprehensive and protective laws for employees in the nation. In California an employee cannot be fired for:
- Race, color
- Ancestry, national origin
- Religion, creed
- Age (over 40)
- Disability, mental and physical
- Sex, gender (including pregnancy, childbirth, breastfeeding or related medical conditions)
- Sexual orientation
- Gender identity, gender expression
- Medical condition
- Genetic information
- Marital status
- Military and veteran status
Harassment and Retaliation
The Fair Employment and Housing Act (FEHA) makes it illegal for employers to discriminate against an employee or retaliate against them because they have asserted their rights under the law. Learn more about FEHA here.
Examples of retaliation include:
- Reporting unlawful activities
- Claiming workers’ comp
- Workplace health and safety complaints
- Complaining about unpaid wages or overtime
- Reporting Labor Code violations, such as failure to provide meal or rest breaks
- Against health care workers for reporting patient safety concerns
- OSHA retaliation
Taking Protected Time Off
The California Family Rights Act (CFRA) requires employers with 50 or more employees to provide eligible employees with up to 12 weeks of job-protected leave in a 12-month period for the birth of a child, for placement of a child in the employee’s family for adoption or foster care, for the serious health condition of the employee’s child, parent, or spouse, and for the employee’s own serious health condition. Learn more about paternity
RECOMMENDED READING: PATERNITY LAWS IN CALIFORNIA
Is there a version of maternity leave in California for fathers?
California paternity leave law is complex. While our state has long been on the cutting edge of parental leave — California was the first U.S. state to pass a paid family leave program — navigating the paternity leave process can be confusing and challenging. That is why we recommend reading our blog focuing on paternity laws in California.
Under the Healthy Workplaces, Healthy Family Act, eligible employees may take paid sick leave for the following reasons:
- Diagnosis, care or treatment of the employee’s or a covered family member’s existing health condition;
- Preventive care for the employee or a covered family member; and
- For an employee who is a victim of domestic violence, sexual assault or stalking to obtain legal, medical or social services.
- Employees may accrue and use up to 24 hours (or three days) of paid sick leave per year. Total accrual, including carryover of unused accrued time, may not exceed 48 hours (or six days) per year.
Chapter 2: Who Qualifies as An Employee in California?
Understanding who falls into the employee category, as opposed to an independent contractor, can be confusing. But the distinction is a very important one because only an employee may file a wrongful termination claim in the state of California.
Fortunately, the California Labor Code and recent case law spell out the differences between an employee and an independent contractor.
An employee typically works at the company’s place of business, has set hours, performs work that is part of the company’s regular business, receives training and direction from the company, receives an hourly wage or salary, and the company has control over how the work is performed.
Under both federal and state law, employees get offered a variety of protections, including federal and state anti-discrimination laws. These protections provide the grounds for an employee to file a wrongful termination claim.
In contrast with an employee, California defines an independent contractor as “any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.”
An independent contractor is hired to do a specific job with a specific result and has full control over how the work will be completed.
The California Supreme Court recently expanded the definition of “employee” making it more difficult for employers to claim that the person doing work for them is an independent contractor.
- It does not control how the individual performs the work;
- The individual provides a service that is not part of the employer’s usual business and;
- The individual customarily engages in an established business, trade, or profession that is independent of the employer’s business.
Independent contractors may not file a wrongful termination claim.
Chapter 3: Does It Matter That You Are An “At Will” Employee?
Most California Employees Are “At-Will” Employees
This means that employers do not need to provide justification for their decision to terminate employment and employees are free to leave their job at any time.
“At-Will” Employment Is Not an Excuse for Unlawful Termination
Employers cannot break anti-discrimination laws or retaliate against an “at-will” employee for asserting their legal rights.
Employees who are fired for discriminatory reasons, for exercising their legal rights, or in violation of an employment contract may have a wrongful termination claim.
Under the California Fair Employment and Housing Act, there are clearly defined situations where an employer may have illegally terminated employment.
Termination on the basis of any of the following would be considered unlawful:
- Age discrimination
- Criminal conviction discrimination
- Disability discrimination
- Ethnicity discrimination
- Family responsibility discrimination
- Gender/sex discrimination
- Hostile work environment
- Medical condition discrimination
- Military status discrimination
- National origin discrimination
- Pregnancy discrimination
- Race discrimination
- Religious discrimination
- Sex-stereotyping discrimination
- Sexual harassment
- Sexual Orientation Discrimination
- Transgender discrimination
- Political affiliation
- Constructive termination – hostile work environment
- Retaliation for workplace health and safety complaints
- Retaliation for complaining about unpaid wages or overtime
- Retaliation for reporting Labor Code violations, such as failure to provide meal or rest breaks
- Retaliation against health care workers for reporting patient safety concerns
- OSHA retaliation
Even though most employment agreements are presumed to be “at-will”, some employment arrangements are clearly defined within a contract.
The contract will spell out the terms of employment such as duration of employment and the protection from termination “without cause”.
This means that an employer cannot fire an employee without a good reason. This is different than “at-will” employment, which allows an employer to fire an employee for any legal reason, whether it’s a good reason or not.
Having a contract may provide grounds to file a claim but it does not guarantee that the employee will win their case.
If an employee has either a written on implied contract with an employer and is terminated before the end of the agreed-upon time, they have the right to seek compensation for their losses based on a wrongful termination or breach of contract.
If an employer breaks an employment contract, an employee is entitled to what they should have received under its terms.
Chapter 4: Unique Types of Wrongful Termination Cases
Not all termination cases are clear cut. Sometimes there may be an argument for both wrongful and lawful termination within the same claim. This is known as a mixed-motive termination. In other cases, an employee may have resigned before being fired because the workplace became so intolerable that the employee had no other choice but to resign. This is known as constructive discharge.
In both of these instances, you may have a claim for wrongful termination.
A mixed-motive termination is when the employer has both unlawful motives as well as a legitimate reason for firing the employee. When an unlawful reason is a substantial motivating factor in the decision, the termination is wrongful.
If the employer was motivated by any unlawful factors in deciding to terminate an employee, even in part, then the employee may have a valid legal claim for damages.
The plaintiff has to prove that discrimination was a substantial factor motivating his or her termination. The employer then has the burden to prove that they had legitimate, nondiscriminatory reasons to terminate employment.
If the employer can prove that it would have made the same termination decision for lawful reasons, then the plaintiff cannot be awarded damages, back pay, or an order of reinstatement. Where appropriate, the plaintiff may be entitled to declaratory or injunctive relief.
This is meant to deter employers from acting unlawfully, even if discrimination only played a small or minor role in the decision. The plaintiff may also be eligible for an award of reasonable attorney’s fees and costs.
RECOMMENDED READING: CONSTRUCTIVE DISCHARGE IN CALIFORNIA
When does quitting become considered constructive discharge?
In many of these agreements, if the employer acts without good cause to force a contract employee to resign, that individual may have a claim for constructive discharge. California is an “at-will” employment state, your employer can terminate you for any reason, and with or without cause or advance notification. Likewise, at-will employees can quit their jobs at any time without explanation or advance notice. There are exceptions to these general rules, such as where the employer’s acts were motivated by discrimination.
An employee is protected from unreasonably harsh working conditions in excess of those faced by other co-workers. However, the employee is not guaranteed a working environment free of stress. Intolerable working conditions must be extreme or part of a continuous pattern. The working conditions must be so intolerable that any reasonable employee would resign instead of working there.
To prove constructive discharge in California, an employee must prove two things:
- The working conditions were unusually intolerable and a reasonable employee would feel compelled to resign;
- The employer either intended to force the employee to quit, or had knowledge of the conditions and did nothing about it.
Chapter 5: Steps to Take When You Have Been Terminated in California
Being fired is a scary and stressful time for an employee. It is easy to get lost in the chaos of emotions and fears surrounding the termination.
Fortunately, there are clear processes in place to help navigate the legal system and to secure employee rights.
As soon as the employee is terminated and if they believe that it was unlawful in any way, they should start to gather any and all information and evidence that can help prove that. Items such as documents, files, emails, text messages, video, eye witness accounts, etc. that can support the claim of wrongful termination are important at this stage.
The terminated employee should inquire about the reasons for their termination, find out who made the decision to fire them and request to view their personnel file. It is also helpful to write down their account of the events and situation. This will help add context to the evidence gathered and also will act as a memory aid if the case goes to trial.
This information will be a required part of filing a claim or lawsuit for wrongful termination.
Get Legal Advice
An employee should always seek legal advice if they are being harassed, discriminated against, or mistreated at work and believe that this behavior is going to result in their imminent termination. If they have already been terminated, seek legal advice immediately.
File A Claim or Lawsuit
Depending on the specifics of the case, an employee can either file a claim with the appropriate governmental agency or skip the claim and move to file a lawsuit. Either way, an attorney should be consulted. Also, it is important to remember that there is a statute of limitations for filing a wrongful termination claim and adhering to this timeframe is crucial.
Federal Law Discrimination
If an employee has been discriminated against at work because of their race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information and want to file a federal lawsuit, they are required to file a claim with the Equal Employment and Opportunity Commission (EEOC) before filing a lawsuit.
File the claim as soon as possible because there are time limits; the minimum is usually 180 days. After filing the claim, a Notice of Right to Sue will be sent out.
Once this is received, the lawsuit must be filed within 90 days. If the lawsuit is not filed within that time period, the employee could be barred from moving forward with their lawsuit.
California Employment Discrimination
To proceed in court, a complaint must first be filed in order to secure a right-to-sue notice. This notice allows you to move right into the lawsuit process without having the DFEH investigate the claim of wrongful termination. Be aware that when filing a lawsuit for employment discrimination in state court:
- DFEH will not investigate the complaint;
- It is advised to have an attorney help file the lawsuit;
- There is a limit of one year from the date of the right-to-sue notice to file the lawsuit; and
- The DFEH will not file your complaint with EEOC.
Chapter 6: Damages in Wrongful Termination Claims
The loss of a job can be devastating for both you and your family. Losing wages and benefits and incurring emotional stress are not to be taken lightly. In cases where wrongful termination has been proven, an employee may receive damages in the form of compensatory damages, punitive damages, job reinstatement, and legal fees and costs.
Settling Outside of Court
Most wrongful termination cases are settled outside of court. However, some employers are reluctant to settle outside of court and will wait for their employees to file a lawsuit. Settling outside of court will usually result in a smaller settlement, but attorney fees, costs, and expenses will also be less than going to trial.
Find out how to get the most out of your wrongful termination settlement here.
Attorney and court fees will reduce the amount of any settlement that the employee will actually see.
A clear idea about the total loss of income and benefits (from the date of the wrongful termination) as well as the non-economic damages caused by the termination will play a huge role in the settlement decision-making process.
What Is A Wrongful Termination Case Worth?
The short answer is that it depends on several factors. The damages in each case depend on the legal basis for the wrongful termination and the specific facts of the case.
Winning a case usually results in compensatory damages—including lost wages, loss of benefits, and oftentimes damages for emotional distress/loss of professional reputation. If the case is based on discrimination, punitive damages are likely to be awarded. The individual case will dictate whether reinstatement makes sense, although this is rare.
If the employee wins their case in court, the employer will have to pay their legal fees.
Compensatory damages become awarded to a plaintiff “to make him whole again”. Lost wages and benefits include back pay and the value of any benefits that the employer would have paid (such as healthcare) to the terminated employee.
This calculation starts from the date of termination. In cases where reinstatement is not an option, future lost wages may also become awarded. The calculation for future lost wages starts from the date of the court verdict and continues for as long as the employee job would have become expected to continue.
A terminated employee has an obligation to mitigate their damages. This means that they have a responsibility to try to limit the damages suffered by seeking new employment in order to make up some of the financial loss that resulted from the termination. A court will consider this when calculating compensatory damages.
Even if the employee did not find or take a new job, the court will look at how much could have been earned had they done so.
Non-economic damages are still considered a type of compensatory damages but they include subjective losses that do not have a dollar amount attached to them. The most common types of non-economic damages in a wrongful termination case are emotional distress and loss of professional reputation.
In order to be awarded non-economic damages, an employee must prove that the wrongful termination, and not some other event in their life, caused the emotional or professional harm that they suffered.
Punitive damages often are not part of a settlement outside of court. Unlike compensatory damages, which are based on a plaintiff’s losses, punitive damages are based on the reprehensibility of the defendant’s behavior and conduct. These damages are meant to punish the defendant and are in addition to the other damages awarded.
Although some kinds of legal claims impose caps on punitive damages, awards of punitive damages result in a significantly higher overall award amounts for a victim of wrongful termination.
If an employee wins their case, reinstatement is an available remedy. This is usually undesirable in wrongful termination lawsuits because of the hostility between the parties. In this case, front pay, which is the amount of money the employee would have made until finding a new job, will be awarded.
This will be included with the other compensatory damages.
If a plaintiff is reinstated, they will be reinstated at the same level of seniority they would have had if not for the wrongful termination, plus back pay, interest on the back pay, compensation as a result of damages due to the discrimination, and potentially punitive damages.
The employer will also be required to pay litigation costs and reasonable attorney’s fees.
If the employee wins their case in court, the employer will usually have to pay all of the reasonable attorney fees, costs, and expenses that the employee incurred.