Most employment relationships in California are deemed to be at-will, a label that means an employer can discharge an employee at any time and for virtually any reason. Nevertheless, the right is not absolute. If a terminable-at-will employee is discharged for illegal reasons, the discharge is deemed wrongful, creating a cause of action for damages.
This article discusses what makes wrongful termination in California, exceptions to at-will employment, legal basis for claims, remedies available, and how to proceed with a lawsuit.
What Is Wrongful Termination?
Wrongful termination occurs when an employee is fired in violation of a state or federal law, public policy, or the terms of an employment agreement. It is a legal cause of action that allows employees to seek compensation for lost wages, emotional distress, and sometimes punitive damages.
A termination may be wrongful if it is based on:
- Discrimination
- Retaliation
- Violation of public policy
- Breach of contract
- Fraud or misrepresentation
- Refusal to commit an illegal act
California provides some of the strongest worker protections in the United States, and wrongful termination lawsuits are a powerful tool for enforcing those rights.
At-Will Employment and Its Exceptions
California is an at-will employment state under California Labor Code § 2922, meaning employers may terminate workers for any reason, no reason, or even a reason that seems unfair—so long as it is not illegal.
However, there are major exceptions:
1. Discrimination
It is illegal to fire someone because of a protected characteristic under the California Fair Employment and Housing Act (FEHA) or Title VII of the Civil Rights Act. Protected categories include:
- Race or ethnicity
- Sex or gender identity
- Sexual orientation
- Religion
- National origin
- Age (40+)
- Disability (physical or mental)
- Pregnancy
- Marital status
- Genetic information
- Military or veteran status
2. Retaliation
Employers may not retaliate against employees for exercising their legal rights, such as:
- Filing a workers’ compensation claim
- Reporting harassment or discrimination
- Complaining about unsafe working conditions
- Taking family or medical leave under the FMLA or CFRA
- Acting as a whistleblower
Termination for these reasons is illegal and gives rise to a wrongful termination claim.
3. Violation of Public Policy
Firing someone for reasons that violate public policy is unlawful. Examples include:
- Terminating an employee for refusing to engage in illegal activity
- Retaliating against an employee for serving jury duty
- Firing a worker for taking time off to vote
- Dismissing an employee who reported a crime or cooperated in a legal investigation
4. Breach of Contract
If an employee has a written contract guaranteeing job security or specific termination procedures, firing them in breach of that contract is wrongful. Even implied contracts, based on employer promises or policies, may create enforceable rights.
5. Constructive Discharge
In some cases, the employee is not directly fired but is forced to resign due to intolerable working conditions. This is called constructive discharge, and it can form the basis of a wrongful termination claim if the resignation was essentially coerced by unlawful employer conduct.
Signs You May Have Been Wrongfully Terminated
Wrongful termination is not always obvious. Here are some signs that your firing may have been unlawful:
- You were fired shortly after complaining about harassment or discrimination
- You were terminated while on medical leave
- You were let go after reporting safety violations
- You were dismissed without progressive discipline, in contrast to company policy
- A less qualified person outside your protected category was hired to replace you
- You were fired without explanation after requesting a workplace accommodation
Each case is unique, and proving wrongful termination requires careful documentation and legal analysis.
Filing a Wrongful Termination Claim
The process depends on the nature of the claim. For discrimination or retaliation cases under state or federal law, employees must first file an administrative complaint before suing.
Step 1: File a Complaint
- With the California Civil Rights Department (CRD) for FEHA violations
- With the Equal Employment Opportunity Commission (EEOC) for federal discrimination claims
These agencies will investigate and may issue a right-to-sue letter, which is required before pursuing a lawsuit in court.
Step 2: File a Lawsuit
Once cleared to sue, a former employee may file a civil lawsuit in state or federal court seeking:
- Lost wages and benefits
- Compensation for emotional distress
- Reinstatement (in rare cases)
- Attorney’s fees and court costs
- Punitive damages (in cases of egregious misconduct)
Step 3: Settlement or Trial
Many wrongful termination claims are resolved through settlement negotiations or mediation. If a fair resolution cannot be reached, the case proceeds to trial.
Statute of Limitations
Time limits apply to wrongful termination claims:
- FEHA claims: File with the CRD within 3 years of the violation
- EEOC claims: Typically within 300 days of the discriminatory act
- Public policy claims: Usually 2 years
- Breach of contract: 2 to 4 years, depending on the type of contract
Missing the deadline can result in the permanent loss of your right to sue.
Employer Defenses
Employers often claim the termination was:
- Based on legitimate business needs
- Due to poor performance
- Part of a layoff or downsizing
- Not motivated by any protected activity
To succeed, the employee must provide credible evidence showing that the employer’s stated reason was false or a pretext for illegal motives.
About the Author
Neil Bhartia
Neil Bhartia isn’t your typical, stuffy attorney that you see on TV. While some have their sights exclusively on money and treat their clients like a number, Neil takes a personal interest in every single client he has. As an empath, Neil understands that people that seek legal help are typically in an involuntary, and stressful situation, and he goes out of his way to diffuse the stress and educate clients on each every detail of the legal process.
