What Qualifies as Wrongful Termination in California?
Wrongful termination is one of the most misunderstood phrases in California employment law. People either assume they have a claim when they don’t, or – far more often – they walk away from a legitimate one because someone told them “California is an at-will state.” Both assumptions are costly.
At-will employment is real. California Labor Code Section 2922 does establish that either party can end an employment relationship at any time, for any reason. But that rule has a critical qualifier: the reason cannot be illegal. Courts have spent decades defining what that means, and the list of illegal reasons is considerably longer than most people realize.
Discrimination Based on a Protected Characteristic
California’s Fair Employment and Housing Act – Government Code Section 12940 and beyond – prohibits employers from firing someone because of who they are. The protected categories under California law include:
- Race, color, ancestry, or national origin
- Sex, gender, gender identity, and gender expression
- Pregnancy, childbirth, or related medical conditions
- Age (40 and over)
- Physical or mental disability
- Sexual orientation
- Religion or religious creed
- Marital status
- Medical condition, including cancer history
- Military or veteran status
California’s protections are meaningfully broader than federal law. Title VII covers a shorter list; the ADEA only applies to employers with 20 or more employees. FEHA applies to employers with five or more employees and covers more characteristics.
One clarification worth making: you don’t need to prove that a protected characteristic was the only reason for your termination. Under California’s “substantial motivating factor” standard, you need to show it was a real and meaningful reason – even if other factors also contributed. That distinction matters when employers give mixed-motive explanations.
Retaliation for a Protected Activity
A large share of wrongful termination cases have nothing to do with who the employee is – they’re about what the employee did. California law prohibits firing someone for exercising a legal right or fulfilling a legal duty. Common protected activities include:
- Reporting or complaining about workplace illegal harassment or discrimination
- Filing a workers’ compensation claim after an injury
- Taking leave under the FMLA, CFRA, or California’s Pregnancy Disability Leave law
- Reporting unpaid wages or overtime violations
- Blowing the whistle on illegal activity – to a supervisor, HR, or a government agency
- Refusing to participate in conduct the employee reasonably believes is unlawful including employer’s illegal activities
- Testifying or cooperating in an investigation relating a co-workers’ illegal harassment or discrimination or termination or legal proceeding
Please note that this is not a complete list of all protected activities that you can engage in while being protected by California law from retaliation.
California Labor Code Section 1102.5 provides some of the strongest whistleblower protections in the country. Government Code Section 12940(h) independently prohibits retaliation for opposing discriminatory practices. The legislature has been intentional about building walls around these activities.
What makes retaliation cases compelling is often the timing. When a shortly after a termination follows, that proximity becomes something employers must explain. In practice, many can’t do it credibly.
However, there “is no requirement that an employer’s retaliatory acts constitute one swift blow, rather than a series of subtle, yet damaging, injuries.” McRae v. Department of Corrections & Rehabilitation, (2006) 142 Cal.App.4th 377, 388. You may find yourself being pushed out of your job with a series of events over a longer period of time. You should contact us to discuss whether you have a true case of retaliation.
As you can see, there are multiple exceptions and caveats in the law that may serve you. This is why it is important to work with an experienced attorney that specializes in wrongful termination cases.
Violation of Public Policy - The Tameny Claim
In 1980, the California Supreme Court decided Tameny v. Atlantic Richfield Co. The court held that an employee fired for refusing to participate in an illegal price-fixing scheme could bring a tort claim against their employer – not just a contract action. The basis: the termination violated a fundamental public policy of the state.
The significance of this is hard to overstate. Tort claims open the door to damages that contract claims don’t – including punitive damages when the employer’s conduct was malicious or oppressive. And the range of public policies that qualify is broad: an employee fired for serving on a jury, for reporting a crime to law enforcement, for refusing to falsify documents, or for exercising a statutory right can all potentially bring Tameny claims.
The public policy must be “fundamental, substantial, and well-established at the time of the discharge.” That standard excludes some claims, but in practice it encompasses a lot.
Breach of an Implied Employment Contract
Most employees never sign a formal employment agreement, and they assume that means contracts don’t apply to them. That’s incorrect. California recognizes implied contracts created through an employer’s conduct, policies, and representations over time.
If an employee handbook states that employees will only be terminated for good cause, that language may create a contractual obligation – even if no one ever called it a contract.
Implied contract claims require detailed factual records and careful analysis. But they arise in situations employers don’t anticipate.
The Implied Covenant of Good Faith and Fair Dealing
Every contract in California – including employment contracts – contains an implied promise that neither party will act to deprive the other of the benefits of the agreement. A termination timed specifically to deny an employee compensation they’ve earned can violate this covenant.
For example: a salesperson is fired days before a substantial commission payment comes due, or stock options vest after completing the work that earned it. The implied covenant and breach of contract theories of liability exists to address that kind of bad faith.
What Doesn't Qualify
Being direct about this is part of our job: not every painful firing is an illegal one. An employer who terminates someone because of a personality conflict, a reorganization, wanting to hire someone different, or simply making a poor management decision has not necessarily broken the law. Unfair is not the same as unlawful.
However, keep in mind that often employers use reasons that appear valid on their face as actual pretexts for unlawful conduct.
For example: the Company may have never underwent a true reorganization requiring elimination of your position. Rather, it hired different individuals to perform your work under a different title.
Employees deserve honest evaluations of their situations. The value of consulting with an employment attorney early is getting that honest assessment before deciding whether to move forward and making an informed choice about the best course of action in light of your goals.
Patterns That Suggest a Wrongful Termination
Certain fact patterns appear repeatedly in cases that turn out to have merit:
Suspicious timing. A termination that closely follows a complaint, a leave request, a workers’ comp filing, or whistleblower disclosure invites scrutiny. Courts and juries notice the sequence.
A stated reason that contradicts the record. Years of positive performance reviews followed by a termination for “performance issues” is not a story that holds together easily.
A reason that changed. When an employer offers one explanation at the time of termination and a different explanation in litigation, the inconsistency is itself evidence.
Disparate treatment. If similarly-situated employees outside your protected class were treated differently – given warnings, given chances to improve, retained during layoffs – that comparison becomes central to the case.
Please note that this is not a complete list of patterns.
Deadlines Matter More Than Most People Realize
Even if you have years to file a case, you should act fast because the longer you wait the more difficult it may be to obtain the evidence you need. Witnesses may no longer be available and documents and evidence may be lost, erased, or disposed of. Employer generally does not have a duty to preserve evidence for years without any notice to do so.
California wrongful termination claims have strict filing deadlines that vary by the theory of the claim. For FEHA-based discrimination and retaliation claims, you generally have three years from the unlawful act to file a complaint with the California Civil Rights Department, and then one year from receiving a right-to-sue notice to file in court. Tameny claims are subject to a two-year statute of limitations. Implied contract claims carry two-year (oral) or four-year (written) limitations periods.
None of these deadlines bend because a case is strong, or because an employee was focused on finding a new job. If you believe your termination was unlawful, time is one of the most important factors to manage.
For a full breakdown of your legal options after a termination, visit our wrongful termination practice attorney page.
Ready to Talk About Your Case?
Employee Rights Attorney Group offers confidential consultations – no fees unless we win. If you believe your termination was unlawful, the sooner you speak with an attorney the better your position. Call us at (310) 300-3435 or contact us online.
