Breach of Implied Contract Not to Termination Without Good Cause
An at-will employment presumption that applies to most employees in the private sector in California, can be refuted by proving the existence of a so-called implied contract or implied covenant not to terminate an employee without good cause. In order to make this type of wrongful termination claim, two elements need to be proven. First, the claimant must prove the existence of implied contract. Secondly, he must show that the reason for his termination did not amount to "good cause" within the meaning of the law.
1. Establishing Existence of Implied Contract Not To Terminate Without Good Cause
To determine whether an implied contract exists, the court evaluates the parties’ acts and conduct “interpreted in the light of the subject matter and the surrounding circumstances” to determine the existence of the agreement. Courts consider a variety of factors in the analysis (1) the employer’s personnel policies and practices; (2) the employee’s length of service; (3) actions or communications by the employer reflecting assurances of continued employment; (4) practices in the industry in which the employee is engaged; and (5) whether the employee gave independent consideration for the employer’s promise (i.e. covenant not to compete or promise not to disclose confidential information. No single factor, or particular combination of the factors necessarily establishes that an employee had a right to be discharged only for good cause. Rather, each case turns on its own facts and the court must seek to enforce the actual understanding of the parties. This means that little details such as a single e-mail or a single conversation making a promise in so many words to provide employment for a long time or as long as business goes well, etc... can make a big difference to proving a case.
2. Showing Absence of Good Cause
Good cause, when not defined by the employer, is "fair and honest reasons, regulated by good faith on the part of the employer, that are not trivial, arbitrary or capricious, unrelated to business needs or goals, or pretextual; in short, a reasoned conclusion supported by substantial evidence gather through an adequate investigation that includes notice to the claimed misconduct and a chance for the employee to respond."
Although inherently vague, this definition allows claimant to attack the termination as being without good cause in several ways. For example, an argument can be made that no investigation was conduct, or the investigation was very poorly conducted (only some witnesses were interviewed, the investigator was not qualified to conduct the investigation, the investigator was biased, etc.). An employee can also attack "good cause" termination by showing that he didn't have an opportunity to present his side of the story or appeal the employer's decision to terminate. Finally, the employee can also argue that the evidence upon which he was terminated was not "substantial", i.e. based on rumors or one person's words against his word without any corroborating evidence of misconduct. And of course, evidence of discrimination or retaliation in the termination will usually defeat the employer's argument that there was good cause for termination.
1. Establishing Existence of Implied Contract Not To Terminate Without Good Cause
To determine whether an implied contract exists, the court evaluates the parties’ acts and conduct “interpreted in the light of the subject matter and the surrounding circumstances” to determine the existence of the agreement. Courts consider a variety of factors in the analysis (1) the employer’s personnel policies and practices; (2) the employee’s length of service; (3) actions or communications by the employer reflecting assurances of continued employment; (4) practices in the industry in which the employee is engaged; and (5) whether the employee gave independent consideration for the employer’s promise (i.e. covenant not to compete or promise not to disclose confidential information. No single factor, or particular combination of the factors necessarily establishes that an employee had a right to be discharged only for good cause. Rather, each case turns on its own facts and the court must seek to enforce the actual understanding of the parties. This means that little details such as a single e-mail or a single conversation making a promise in so many words to provide employment for a long time or as long as business goes well, etc... can make a big difference to proving a case.
2. Showing Absence of Good Cause
Good cause, when not defined by the employer, is "fair and honest reasons, regulated by good faith on the part of the employer, that are not trivial, arbitrary or capricious, unrelated to business needs or goals, or pretextual; in short, a reasoned conclusion supported by substantial evidence gather through an adequate investigation that includes notice to the claimed misconduct and a chance for the employee to respond."
Although inherently vague, this definition allows claimant to attack the termination as being without good cause in several ways. For example, an argument can be made that no investigation was conduct, or the investigation was very poorly conducted (only some witnesses were interviewed, the investigator was not qualified to conduct the investigation, the investigator was biased, etc.). An employee can also attack "good cause" termination by showing that he didn't have an opportunity to present his side of the story or appeal the employer's decision to terminate. Finally, the employee can also argue that the evidence upon which he was terminated was not "substantial", i.e. based on rumors or one person's words against his word without any corroborating evidence of misconduct. And of course, evidence of discrimination or retaliation in the termination will usually defeat the employer's argument that there was good cause for termination.