Guz v. Bechtel National, Inc
In Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, the employer disbanded a unit with six employees, found other positions for the two youngest employees, and laid off the others, including the plaintiff, without offering the plaintiff one of several open positions. (Id. at p. 330.)
The court concluded that any purported inference of age discrimination based on the layoffs was undermined by the small size of the unit and other facts: the pattern of layoffs was capable of supporting contradictory inferences regarding the employer's motives, and the open positions were filled by employees with qualifications that equaled or exceeded the plaintiff's qualifications. (Id. at pp. 367-368.)
In this context, the Guz court cited with approval several cases in which the sample was deemed too small to support a reliable inference of discrimination. (E.g., Fallis v. Kerr-McGee Corp. (10th Cir. 1991) 944 F.2d 743, 745-746 sample of 51 employees; Sengupta v. Morrison-Knudsen Co., Inc. (9th Cir. 1986) 804 F.2d 1072, 1076 sample of 28 employees; Simpson v. Midland-Ross Corp. (6th Cir. 1987) 823 F.2d 937, 942-944 sample of 17 persons.)
In Guz v. Bechtel National, Inc. (Guz) (2000) 24 Cal 4th 317, 349-350, the Supreme Court held that "disclaimer language in an employee handbook or policy manual does not necessarily mean an employee is employed at will.
But even if a handbook disclaimer is not controlling citation in every case, neither can such a provision be ignored in determining whether the parties' conduct was intended, and reasonably understood, to create binding limits on an employer's statutory right to terminate the relationship at will." (Guz, supra, 2 Cal.4th at p. 340.)
The court then went on to note that "the more clear, prominent, complete, consistent, and all-encompassing the disclaimer language set forth in handbooks, policy manuals, and memoranda disseminated to employees, the greater the likelihood that workers could not form any reasonable contrary understanding .... we do not foreclose the possibility an employer could promulgate a disclaimer clause which established beyond contrary inference that the employer intended employment to be at-will." (Guz, supra, 2 Cal.4th at p. 317, fn. 11.)
The Guz court ultimately concluded, however, that "at-will" language used in that case was ambiguous (providing employees could be terminated "at the option of" the employer) and there was a question of fact whether the employer had "breached a contractual obligation to follow certain procedural policies in the termination process." ( Id. at 348.)
The Supreme Court in Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334, held that mere longevity of service, "even where marked with tangible indicia that the employer approves of the employee's work" such as raises and promotions, should not by itself guarantee future employment.
The court observed that to hold otherwise "would discourage the retention and promotion of employees." (Guz, supra, 24 Cal.4th at pp. 341-342.)
In Guz the Supreme Court held that a company president's testimony that he understood the company only terminated workers with good reason was insufficient as a matter of law to permit a finding of an implied agreement requiring cause for termination.
The court stated that the "brief and vague statement" by a single company official flew in the face of the general at-will disclaimer in the company's written policies. (Guz, supra, 24 Cal.4th at p. 345.)