My partner and I are arguing about whether or not we can fire one of our employees for consistently being five minutes late to work. My partner says that we don’t have good cause, but I’ve heard California is an “at-will” state. Can’t I terminate the employee for any reason?
You are correct that the basic rule in California is that employment is terminable “at will,” meaning either an employee or employer can end the employment at any time without cause. However, there are three main exceptions to at-will employment: 1) exceptions by statute; 2) exceptions because of public policy; and 3) contractual exceptions.
There are many statutes at the state and federal level that can limit your right to terminate employees. Some statutes prohibit discriminatory termination based on race, color, national origin, ancestry, genetic information, sex (including pregnancy), age, disability, marital status, sexual orientation, protected medical conditions, religion, citizenship or union involvement.
Other laws offer retaliation and whistle-blower protections, which prevent employers from terminating an employee who reports unsafe working conditions, work-related injuries or illegal activities.
Numerous leave of absence laws prohibit termination due to an employee going on leave related to pregnancy, disability, work-related injuries, jury duty, voting, military service and more.
The public policy exception applies to protect employees from termination when an employer acts against the public interest, such as by breaking the law. The situation must be “public” meaning it benefits the public, not just an individual’s interests. The benefit must also relate to a substantial and fundamental public interest.
The contractual exception arises when an agreement between the employer and employee allows for termination only for good cause. “Good cause” is usually defined as a fair and honest decision made in good faith by the employer. Some employment agreements require an informal hearing or meeting where the decision is discussed with the employee and/or other representative.
If an employee is terminated for an insignificant reason, or for reasons unrelated to the business, or if the decision is simply pretextual, then the termination lacks “good cause.”
In your situation, if the employee has an agreement that requires termination be for good cause, then it does matter why you are terminating the employee. Being consistently five minutes late might be “good cause” if you can show that it’s an ongoing, well-documented problem that has continued despite corrective action or notice.
Seek competent employment law counsel if you are ever concerned about whether you can terminate an employee. Wrongful termination claims can be disastrous for your company.
Mary Luros is a business law attorney with Hudson & Luros LLP in Napa, and can be reached at firstname.lastname@example.org. The information provided here is not legal advice, nor does it form an attorney-client relationship with the author. The author makes no representations as to the reliability or accuracy of the above information.