Nearly every state in the U.S. recognizes the at-will employment doctrine, except for Montana. However, a new law taking effect in California on January 1, 2024, erodes the at-will doctrine even more, and when coupled with the ever increasing list of protected activities that employers may not rely upon for employment decisions (which in 2024 will include the right to smoke marijuana), it raises the question of whether California is still practically an at-will state?
1. The employment “at-will” doctrine
Under California law, it is presumed that all employment is terminable at-will. California Labor Code section 2922 provides: “An employment, having no specified term, may be terminated at the will of either party on notice to the other.” The at-will doctrine means that the employment relationship can be terminated by either party at any time, with or without cause, and with or without advanced notice.
Generally, California law recognizes that employers and employees may, at any time, and for any legal reason, terminate the employment relationship. However, as explained below, the at-will doctrine in California has so many exceptions, and with the passage of SB 497, it is hard to argue that California is an at-will employment state.
California law has gradually added new protected categories and protected activities that prohibit employers from taking any adverse employment actions for those protected reasons. Overtime, California has added to the list of protected categories and protected activities, limiting the at-will doctrine.
2. Protected Categories
California law protects various categories of employees, including:
- Race (including protective hairstyles, such as braids, locks, and twists)
- National origin
- Physical or mental disability
- Medical condition
- Genetic information
- Marital/domestic partner status
- Sex (including pregnancy, childbirth, breastfeeding, or related medical conditions)
- Gender expression
- Gender identity, including transgender identification
- Age with respect to persons 40 years of age or older
- Sexual orientation
- Military/veteran status
3. Protected Activities
The DLSE defines “protected activity” as engaging in or exercising of a right that is protected by law. It provides some examples as:
- Filing or threatening to file a claim or complaint with the Labor Commissioner.
- Taking time off from work to serve on a jury or appear as a witness in court.
- Disclosing or discussing wages.
- Using or attempting to use sick leave to attend to the illness of a child, parent, spouse, domestic partner, or child of the domestic partner of the employee.
- Engaging in political activity of the employee’s choice.
- For complaining about safety or health conditions or practices.
Protected activities under California law include:
- Filing a claim with the Labor Commissioner
- Whistleblowing (Labor Code whistleblowing statute)
- Seeking information or cooperating with the Employment Development Department (EDD)
- Being a juror, witness, or election officer
- Protection for victims of certain felonies, crimes, and abuse
- Protection for certain healthcare employees who refuse to participate in abortions
- Labor organization activities
- Protection for political affiliations
- Certain school visits for parents
- Protections for firefighters, reserve peace officers, and emergency rescue personnel to perform emergency duties
- Disclosing wages or other working conditions
- Having to make family support payments and wage garnishments
- Health insurance coverage issues
- Employees entering rehabilitation programs
- New for 2024 – AB 2188 protects the employee’s right to use cannabis off duty.
And yes, just to avoid any confusion, the California government protects the right to wear pants. Government Code specifically addresses employees’ right to wear pants to work in California. Section 12947.5 states:
(a) It shall be an unlawful employment practice for an employer to refuse to permit an employee to wear pants on account of the sex of the employee.
(b) Nothing in this section shall prohibit an employer from requiring employees in a particular occupation to wear a uniform.
4. SB 497 – Rebuttable presumption of retaliation starting January 1, 2024
Starting on January 1, 2024, SB 497 creates a rebuttable presumption of retaliation if an employer takes an adverse employment action (such as discharged, threatened with discharge, demoted, suspended, or retaliated against) against an employee within 90 days of that employee engaging in protected conduct. Employers may rebut this presumption, but the burden is on the employer that it had a legitimate reason for terminating the employee. In addition, employers may not retaliate against an employee because the employee’s family member has or is perceived to have engaged in conduct prohibited under this law. Violations of the new law carries a civil penalty up to $10,000 per employee and reasonable attorney’s fees.
5. Steps to preserve the at-will status
Even though the at-will doctrine has been severely limited under California law, employers should still take steps to preserve an employee’s at-will status. Written policies published by the company is the best way to preserve the at-will status. For example, offer letters to employees should clearly set forth that the employee is being hired as an at-will employee, and that employment may be terminated by either party with or without notice at any time. In addition, employers should ensure that the employee handbook has a clear and compliant at-will policy that can only be changed in writing signed by the company owner, CEO, or president.