Do it right: terminating employees means paying careful attention to employment law.

• Author: Goodkin, Olivia
• Position: EMPLOYMENT LAW

The general rule in California is that employment is "at will," meaning that employees may be terminated for any reason with or without prior notice. But if that is the case, then why are there so many wrongful termination lawsuits? This article explains some of the exceptions to the at-will policy and how to prevent wrongful termination suits.

The first category of exceptions to the at-will rule concern violations of public policy. This means that a company may not terminate an employee if doing so violates a statute. The statutes most commonly at issue are those that prohibit discrimination on the basis of sex, race, national origin, disability and other protected categories. At-will employment does not give license to employers to discriminate or retaliate on an otherwise impermissible basis.

Employers also are liable when they retaliate against employees for exposing their company's violations of law or for exercising their rights under the law.

For instance, an employer cannot terminate an employee for "blowing the whistle" on illegal conduct of the company. The company also cannot terminate or retaliate against an employee for exercising a legal right, such as voting.

Breach of contract claims comprise the second category of exceptions to the at-will presumption.

Employment contracts may be written or oral, but there are many circumstances in which the parties have not signed a contract--or decided orally that there is a contract with specified terms.

Nevertheless, a court could find that there is an "implied-in-fact" contract.

An employment contract can be implied in fact when the employee has enjoyed longevity at the company and the employer has, over the course of many years, made statements or undertaken acts that suggest the employee will only be terminated for cause.

"Cause" usually means a serious breach of performance or obvious grounds for termination, such as theft or dishonesty.

Statements that support a finding of an implied contract include promises about promotions and future ownership interests in the company. Sometimes employer statements like, "You are like family" or "You have a future here," coupled with raises and promotions, form the beginnings of an implied contract claim.

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Implied contracts are determined on a case-by-case basis after examining a combination of factors, such as longevity, promotions, raises, assurances, actions or communications by the employer.

An employer can protect...