Layoffs and Wrongful Termination in California

There are fewer worse feelings than arriving at work one day and finding out you no longer have a job. Although these situations happen in many unavoidable or legal circumstances, there are many others in which you may have a right to file a complaint.

Understanding the difference between these situations can help you understand your rights and options better. This will also determine what your next steps should be and how a California employment law attorney can help.


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In this article, our experienced attorneys explain what it means to be laid off in California and how it differs from being terminated. We also explain how wrongful termination occurs and your rights in such a situation.

What does it mean to be laid off?

Layoffs are also often referred to as “reductions in force” or “downsizing”. They refer to situations where an employee is dismissed from employment due to economic conditions or business necessity. Once an employee is laid off, all their accrued wages/salaries and benefits immediately become payable.

Since the start of COVID-19, California has been experiencing a higher number of layoffs than usual. According to news reports, millions of workers in California, and tens of millions around the US, have already been laid off from their jobs.


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Here’s the legal reasoning behind layoffs.

Employment in California is generally presumed to be “at-will”. This means that employers and workers may terminate their employment relationship at any time, for any lawful reason or for no reason at all.

An employer is generally free to decide who they want to hire or fire, and can base this on any consideration, including economic ones. So, an employer may choose to let certain employees go if keeping them on would mean that the company goes out of business. Malmstrom v. Kaiser Aluminum & Chem. Corp. (1986) 187 CA3d 299, 321, 231 CR 820, 832.

However, there are some restrictions to this general principle. Most notably, an employer cannot fire any worker for reasons that are illegal or in breach of contract (including a collective bargaining agreement). Illegal reasons include firing workers on discriminatory, retaliatory or other grounds that are in breach of statute.


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One of the legal restrictions to layoffs is under California’s Worker Adjustment and Retraining Notification (WARN Act). Under this Act, the right of employers to lay workers off for reasons bordering on business necessity is curtailed. Employers who plan to lay 50 or more employees off within a 30-day period must give them a 60-day notice before taking such actions.

The Act applies to employers who have 75 or more employees who have worked with them for at least 6 months out of the previous 12 months. If your employer has failed to give you notice of a layoff where the provisions of the WARN Act apply, you may be entitled to file a complaint.

In addition, where there are internal procedures and policies governing layoffs, an employer is expected to follow these. Failure to do so may give aggrieved workers a right to sue.

However, apart from these, a layoff is generally legal and well within the rights of your employer. If you believe there are circumstances that may modify the situation, contact our California employment law attorney for guidance at once.

What is the difference between a layoff and being terminated?

The major difference between a layoff and termination boils down to the circumstances in which they occur and the reasons underlying the action.

Layoffs typically occur in situations where finances are tight for an employer or because of difficult economic conditions. Due to these circumstances, they eliminate certain positions and let certain workers go, purely for reasons of business necessity.

Termination, on the other hand, typically occurs in entirely different circumstances. As we mentioned earlier, an employer may terminate a worker at any time, for any lawful reason, or for no reason. Where the employer takes the decision to fire a worker, without economic considerations, the action may be referred to as a termination.

Termination may be for any reason including for reasons of poor performance, lack of job fit, restructuring or even for misconduct. Regardless, there are two major types of termination. These are termination without cause and termination for cause.

Termination without cause is the type that occurs when an employer chooses to let a worker go for lawful reasons that have little to do with the worker. Reductions in workforce and restructuring are examples of termination without cause.

When termination is for cause, it presupposes an express or implied contract that the employer will not terminate an employee except for good cause. Sometimes, it may also involve reasons such as misconduct on the part of the employee.

What amounts to good cause may be explained under the employment contract, and also exclude outside interpretations. But even in this situation, an employer cannot terminate any employee for reasons that are illegal. For instance, an employer cannot fire an employer because of their age and then try to claim it was for economic reasons. Martin v. Lockheed Missiles & Space Co., Inc. (1994) 29 CA4th 1718, 1732-1733, 35 CR2d 181, 188-189.

Determining when termination occurred illegally can often be tricky, as employers who act illegally often try to hide their wrongdoing. Our California wrongful termination attorneys can help you understand when your rights have been breached and what to do about it.

What to do when you have been fired unfairly?

It is important to understand the difference between being fired unfairly and losing your job for reasons that are illegal or are in breach of contract.

Being fired in situations that feel unfair can be painful and difficult to deal with. However, even if these situations do not feel good, they may not necessarily be illegal. For instance, if you worked very hard to help your employer’s business expand, but they choose to fire you during a restructuring, this can be tough. But it will not be illegal unless your employer has acted illegally or in breach of your employment contract.

If you were fired in unfair situations that are also illegal or in breach of contract, then you may have a right to seek justice. Otherwise, there’s little you can do about your employer’s actions.

The key to understanding your rights in these situations is knowing what those rights entail and how they apply in your situation. In the next section, you will learn about when you can sue your employer for terminating your employment.

How do you define wrongful termination in CA?

Wrongful termination is what occurs when an employer fires a worker in circumstances or for reasons that violate the employee’s rights. The violation may be a breach of rights provided under the law or it may relate to employee rights under the contract of employment.

Wrongful termination in breach of contract can occur in several situations. These include:

  • Breach of an implied contract not to discharge an employee without good cause
  • Breach of an implied covenant of good faith and fair dealing. This is implied in every employment contract and means that neither employer nor employee will do anything in bad faith that deprives the other of benefits of the contract.
  • Breach of a specific term in a written employment contract, such as a requirement to provide notice or to only terminate the employee for certain reasons
  • Termination of an employee in breach of specific workplace policies or procedures. For instance, if the employer provides for investigation procedures for allegations of misconduct and fails to follow these procedures, the aggrieved employee may sue.

For termination in breach of statute or provisions of law, there are much wider circumstances in which a wrongful termination can occur. These include:

  • Wrongful termination in breach of public policy, such as firing an employee because they refused to carry out unlawful instructions
  • Termination for reasons that are discriminatory. This includes termination on account of age, sex, pregnancy, medical condition or history, gender and several other protected characteristics under the FEHA and federal laws.
  • Termination in retaliation for undertaking protected activity. This includes terminating an employee because they reported a workplace violation or tried to exercise their employee rights.
  • Firing an employee for insisting on their wage and hour rights or terminating employees to avoid complying with relevant wage and hour laws

These are just some of the situations in which wrongful termination may occur. If you have been terminated for reasons bordering on any of these, you may have a right to proceed against your employer.

Once you suspect an illegality has occurred with respect to your termination, speak to an attorney immediately. Our experienced California wrongful termination attorneys can provide legal guidance and representation to help you enforce your rights.

Contact our wrongful termination attorney for help

Determining when wrongful termination has occurred is rarely straightforward. To understand your rights in the situation and your options for compensation, you will require skilled legal help.

Our employment law attorneys at Eldessouky Law have successfully helped employees throughout California enforce their employment rights. We can also help you enforce your rights. Call 714-409-8991 for a free, no-obligation consultation to speak with our attorneys today.

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