When can a wrongful termination lawsuit be brought against an employer in the state of California?

The following are the most common reasons for wrongful termination lawsuits in California:

  • Exceptions to “at-will” employment
  • Whistleblower protection
  • Wrongful discharge under the Fair Employment and Housing Act
  • Wrongful constructive termination
  • Political activities
  • WARN Act wrongful termination
  • Taking leave
  • Wage and hour complaints

Exceptions to “at-will” employment

We are frequently asked the following question: Can you be fired without cause in California? Answer: Of course it is possible. However, being fired for the wrong reasons can result in wrongful termination in certain circumstances.

Generally speaking, employment relationships in California are “at will.” This is the default position. Employees with the right to dismissal can be fired at any time and for any reason. In a nutshell, they are not required to be fired “for cause.”

However, California labor law has created a number of exceptions to the general rule of employment at will. These include:

  • An “implied contract” not to terminate employment without good cause.
  • A breach by the employer of an implied covenant of good faith and fair dealing (such as deliberate lies, interference, evasiveness, inaction, non-communication, or obstruction).
  • Wrongful termination in violation of public policy. For example, terminating an employee because s/he refused to help an employer violate the law, or performed a legal duty.
  • Fraud/misrepresentation.

Among the exceptions to at-will employment are the implied contract and public policy theories of wrongful firing, which are most beneficial to the vast majority of terminated employees.

Implied contract

When two parties come to an agreement that they understand, even if they do not sign a written contract to document it, this is referred to as a “implied contract.”

An employer can make an implicit contract with an employee not to terminate them without good reason by doing the following:

  • Issuing an employee handbook listing specific reasons why employees may be fired, and/or
  • Telling an employee in person that his/her job is safe as long as s/he does not do certain things.

Public policy

The most common instance of wrongful termination in violation of public policy occurs when an employee is fired for refusing to comply with an employer’s directive to break the law. For example, if an employee is fired for refusing to assist his or her employer in violating criminal fraud laws, he or she will have a valid claim for wrongful termination on the basis of public policy.

Whistleblower protection

One type of wrongful termination that occurs frequently and in violation of public policy is what is known as “whistleblower” retaliation. Whistleblower termination occurs when an employer terminates an employee for informing a government agency or law enforcement agency about a potential violation of the law by the employer.

Labor Code 1102.5 LC is the state’s primary whistleblower protection law. This law states that employers are prohibited from retaliating against any employee who reports a suspected violation of the law by the employer to:

  • A government or law enforcement agency, or
  • A supervisor or other employee who has the authority to investigate or correct the violation.

Sarbanes-Oxley Act and Qui Tam

Various other statutes provide more specific forms of protection for whistleblowers.

Specifically, the Sarbanes-Oxley Act of 2002 was enacted to safeguard investors from fraudulent accounting practices by public listed companies. In the event that their employer dismisses them for reporting suspected securities fraud to the federal government or to a supervisor, they may file a claim for wrongful termination against their company.

Another important whistleblower law is the “qui tam” section of the California False Claims Act, which allows individuals to sue on their own behalf. According to California’s qui tam law, an employee may bring a lawsuit against their employer on behalf of the state. This applies if the employer has engaged in fraud or embezzlement in the course of administering government funds.

A qui tam employee who is fired or otherwise retaliated against by his or her employer may file a claim for wrongful termination or qui tam retaliation against the employer in civil court.

Wrongful discharge under the Fair Employment and Housing Act

The Fair Employment and Housing Act of California—the primary state legislation against workplace harassment and employment discrimination—makes it unlawful for employers to retaliate against employees who do any of the following:

  • Oppose harassment or discrimination,
  • File a complaint about harassment (including sexual harassment) or discrimination, or
  • Testify or assist in any investigation or lawsuit over harassment or discrimination.

Employers are not allowed to fire employees based on their position in a protected class, which includes:

  • Race
  • Color
  • National origin
  • Ancestry
  • Sex
  • Pregnancy
  • Religion
  • Age (if over 40)
  • Disability
  • Genetic information
  • Marital status
  • Sexual orientation
  • Gender identity (including transgender or non-binary)
  • AIDS/HIV positive status
  • Medical condition
  • Political activities or affiliations
  • Military or veteran status
  • Victims of domestic violence, assault or stalking
  • Citizenship status

It is important to note that some cities may have additional protected classes. In some cities, such as San Francisco, certain height and weight categories are protected.

Also keep in mind that employers are not allowed to terminate new mothers for pumping breast milk at work or requesting lactation accommodations.

It is also important to understand that companies are not allowed to terminate employees for engaging in lawful conduct during their off-hours and while away from the office.

Wrongful constructive termination

California’s wrongful constructive termination / constructive discharge laws allow employees to file a wrongful termination lawsuit against their employers even if they have not been fired in the traditional sense. When an employer makes working conditions so unbearable that an employee has no choice but to quit, this is referred to as constructive termination.

An employee may file a claim for wrongful constructive termination if any of the following conditions are met:

  • The employer intentionally created – or knowingly permitted – working conditions that were so intolerable that a reasonable employer would expect a reasonable employee to resign because of them; and
  • The employer would not have been within his/her rights to terminate the employee outright (due to an implied oral contract or because termination would have been against public policy).

It is important to note that California’s anti-retaliation laws prohibit employers from retaliating against employees in ways other than termination or constructive termination, among other things.

Political activities

Employees in California may be allowed to file a wrongful termination lawsuit against their employers if they are fired as a result of their participation in protected political activity or speech.

The First Amendment to the United States Constitution does not apply to private-sector terminations under any circumstances. California labor law, on the other hand, stipulates that employers are not permitted to control or direct their employees’ political actions or expression. A terminated employee who engages in political action has the ability to file a wrongful termination lawsuit against his or her employer.

Employees in California who are fired as a result of their union membership or participation in union activities may be able to file a wrongful termination lawsuit against their employer.


Another type of wrongful termination is when an employer fails to comply with the Worker Retraining and Notification (WARN) Act of California, which is another variant on the theme.

A mass layoff involving fifty (50) or more employees, as well as the closure or relocation of a plant, are all subject to California’s WARN Act, which compels businesses to give employees sixty (60) days’ notice. Employers having at least seventy-five (75) employees are subject to the provisions of this section.

If an employer fails to provide 60-days’ notice, employees may be able to claim for back wages and benefits for the period during which the notice fell short of the required 60-days.

Taking leave

Employers who terminate covered employees for inquiring about or taking family medical leave, which they are legally entitled to, are guilty of wrongful termination under the law. When an employer fires a worker, it is considered that the employee was wrongfully terminated:

  • Within 30 days after the workers request to use paid sick leave; or
  • Within 90 days of returning from FMLA leave.

The employer would therefore be on the hook for demonstrating that the termination was due to something other than leave-taking.

It should be noted that employers are not permitted to dismiss employees for participating on a jury. Employers are also prohibited from firing employees who take time off work to seek assistance after becoming a victim of a specific crime.

Wage and hour complaints

Employers who terminate employees who file a claim with the Department of Industrial Relations about wage and hour violations are committing wrongful termination. Complaints regarding underpaid overtime wages and unpaid rest or lunch breaks are just a few examples.

Employment Law Attorneys in California

It can be tough to understand your legal rights at work on a regular basis. In fact, you may not even be aware that your rights are being violated if you are not familiar with the laws that are in place to protect you. When it comes to protecting employees, California has some of the strictest laws in the United States.

The attorneys at Potter Handy, LLP can evaluate your case and assist you in understanding your employment rights in California.