California is an “at-will” employment state. As an employer, this means you can terminate an employee at any time, for any reason. In fact, you can terminate an employee for no reason at all. However, there are some state and federal restrictions when it comes to firing employees. If the reasoning behind your decision to terminate an employee is an unlawful reason, you could find yourself defending against a lawsuit for wrongful termination.
Lawful reasons for terminating an employee
At-will employment rules give you plenty of leeway for ending the employer-employee relationship. Some lawful reasons why you may choose to fire an employee include:
- Poor performance
- Frequent absences
- Falsifying time reports
As long as the reason is lawful, you should be able to avoid claims of wrongful termination. However, you could find yourself in legal hot water if you terminate an employee for an illegal reason.
Unlawful reasons for terminating an employee
It is unlawful to terminate an employee for:
- Being a member of a protected class: You cannot fire an employee based on a discriminatory purpose. Employees are protected from termination based on their race, religion, gender, age, and any other protected characteristic found in state and federal employment laws.
- Reporting workplace problems: The law encourages employees to report problems in the workplace. You cannot fire an employee for complaining about sexual harassment or discrimination, reporting a workplace injury, or engaging in protected activities covered by whistleblower laws.
- Reasons not outlined in an employment contract: The exception to the at-will employment rule is when you enter into an employment contract. Usually, these types of contracts state that an employee may only be fired “for cause.” You cannot just dismiss an employee who has signed a contract. You must have a reason, as outlined by the terms of the contract.
There are numerous other situations where termination may implicate employment law protections. You should work closely with legal counsel before you decide to terminate any employee. Doing so can save you the expense and headache of a future lawsuit.