Q. We are a small company with fewer than 10 employees. We would like to terminate an employee who is pulling down workplace morale. What are the risks?
A. California law provides that, unless shown otherwise, employment is an at-will relationship and can be terminated with or without cause and with or without notice. A California employee’s at-will status can be modified, however, by oral or written statements.
Adequate contract disclaimers and at-will statements in documents given to employees (e.g., handbooks, policies, etc.) are critical to minimize the risk that such materials may be alleged to have created an express or implied employment contract.
California law also recognizes that certain discharges may violate public policy. This type of claim is generally brought by a whistle-blower or some other person asserting a legally protected right, or by a person who has refused to commit an illegal act or who has reported such conduct. These include claims based on state or federal laws (e.g., the Fair Employment and Housing Act), constitutional provisions or regulations.
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