At Will Employment California,
Can My Boss Fire Me At Anytime?

16 Feb 2017

At Will Employment California law provides that your employer can terminate you at any time, for any legal reason, so long as you are not employed under a contract for a specified term. In other words, pursuant to Labor Code section 2922, your employer can fire you at its own will for almost any reason, and at any time of its choosing. Likewise, the law provides that you, as an employee, can also quit your job at any time, and for any reason. Therefore, by way of example, your employer can fire you because he/she: simply doesn’t like you, thinks you are chatty, is in a bad mood, and/or was upset that you didn’t make coffee in the morning. No fair treatment or warning is necessary. No objective evaluations or preferential reassignments required. Your employer can act peremptorily, arbitrarily or inconsistently, and without good cause when terminating you. So long as your employer did not fire you for an unlawful reason, your employer was likely within its right to do so.

The At Will Rule Also Extends to Demotions and Pay cuts

The employer’s right to terminate “at-will” also includes the right to make prospective changes to the terms of employment agreement as well. This means that your employer can demote you, and cut your pay at any time, and for any lawful reason. The pay cut, however, must be prospective and not retroactive (they cannot cut your prior earnings).

The At Will Presumption

Pursuant to Labor Code § 2922, there is a rebuttable presumption baked into the law that an employment with no specified term may be terminated at the will of either the employer or employee. Employment for a specified term is defined as employment for a period greater than a month. At trial, therefore, it is the burden of the employee to present evidence to prove that the employment was not at-will.

What Evidence Will Defeat The Presumption?

To overcome the at-will presumption, a claimant must present evidence of an employment contract (express or implied) providing a fixed term (i.e. agreement providing 6 months, etc., of employment). Alternatively, a claimant can present evidence that an express or implied employment agreement provided that the employer could only terminate an employee for cause. Absent such evidence, the presumption of an at will relationship will prevail, thereby allowing the employer to discharge an employee at any time, with or without notice, and for any lawful reason. It is therefore very important that you review any and all documents that you signed during your employment (i.e. employee handbook, policies, etc). If you cannot find these documents you can request them, and your employer is legally obligated to provide them to you. If your employer made written promises (through emails, text message, or other correspondence) to you, it is crucial that you review and retain those records as well.

Promises of a Bonus Dependent Upon Continued Employment

Even if your employer promised you a bonus for working a specified length of time of continued employment (I.E. Bonus provided after 6 months of employment), they may still fire you, and it will not affect the at will status. But if you were terminated without cause before completing all the terms of the bonus agreement, you may recover at a pro-rata portion of the bonus previously promised to you. (Schachter v. Citigroup, Inc. (2009) 47 C4th 610, 622, 101 CR3d 2, 12.)

Voluntary Resignation: On the other hand, if you voluntarily resigned before the completion date of the bonus agreement you are not entitled to receive any share of the bonus. (Schachter v. Citigroup, Inc. (2009) 47 C4th 610, 622, 101 CR3d 2, 12.)

Stock Options: An at-will employee that is terminated does not have rights to stock options that were not fully vested at the time of termination, and that were dependent on the continuation of employment. (Oracle Corp. v. Falotti (9th Cir. 2003) 319 F3d 1106, 1111). The same result holds true for at-will employees who voluntarily resign prior to their stock options vesting. (Schachter v. Citigroup, Inc., supra, 47 C4th at 621-622, 101 CR3d at 12).