Landmark California Cases on At-Will Employment Law

At-Will Employment Case Law: "An employment, having no specified term, may be terminated at the will of either party on notice to the other." (Lab. Code, 2922.) Absent a contract overcoming the presumption of Labor Code section 2922, "the employee can be fired with or without good cause." (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 665.) The employer's right to discharge at-will employees is, however, limited by public policy. Although an at-will employee may be discharged "for no reason, or for an arbitrary or irrational reason, there can be no right to terminate for an unlawful reason or a purpose that contravenes fundamental public policy." (Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1094, overruled in part on other grounds by Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 80, fn. 6.) When an employee is discharged in violation of "fundamental principles of public policy," he or she "may maintain a tort action and recover damages traditionally available in such actions." (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 170.) The California Supreme court has recognized four sources of public policy to support a claim for the wrongful termination of an at-will employee: "the employee (1) refused to violate a statute; (2) performed a statutory obligation; (3) exercised a constitutional or statutory right or privilege; or (4) reported a statutory violation for the public's benefit." (Green v. Ralee Engineering Co., supra, 19 Cal.4th at p. 76.) The court explained: "Judicial policymaking is unnecessary if one recognizes that courts in wrongful discharge actions may not declare public policy without a basis in either constitutional or statutory provisions. A public policy exception carefully tethered to fundamental policies that are delineated in constitutional or statutory provisions strikes the proper balance among the interests of employers, employees and the public. The employer is bound, at a minimum, to know the fundamental public polices sic of the state and nation as expressed in their constitutions and statutes; so limited, the public policy exceptions presents no impediment to employers that operate within the bounds of law." (Gantt v. Sentry Insurance, supra, 1 Cal.4th at p. 1095.) " 'In some cases, the evidence will establish that the employer had 'mixed motives' for its employment decision. . . . In a mixed motive case, both legitimate and illegitimate factors contribute to the employment decision.' 'Once the employee establishes . . . that an illegitimate factor played a motivating or substantial role in an employment decision, the burden falls to the employer to prove by a preponderance of the evidence that it would have made the same decision even if it had not taken the illegitimate factor into account.' " (Grant-Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 1361, 1379.)