An employment contract changes the landscape of how and when your job can be terminated. Everything your employer does must follow the terms set forth in the contract. Shegerian Conniff has handled many wrongful termination cases and understands the importance of a contract or collective bargaining agreement when it comes to being laid off or fired from your job.

We’re here to help you understand your rights as an employee and better understand what your employer can and cannot do. Knowing this is key to knowing if you have a valid wrongful termination complaint.

California Is an At-Will Employment State

If you’re not under a contract, California’s default employment rule is known as “at-will employment.” To break that down, an employer has the right to terminate your employment for any legal reason. We say “legal reason” as the employment discrimination laws come first.

In the U.S., it is illegal to fire someone due to their:

• Age (40 or older)
• Color
• Disability
• Gender
• Genetic information
• Race
• Religion
• Sexual (Pregnancy and sexual orientation)
• Veteran status

It’s also illegal to fire an employee who reports his or her employer in retaliation for reporting a violation. Whistleblowers are protected. Protections are also in place to protect workers who take time off for family medical leave. New moms have the right to pump milk in a private area that’s equipped with a seat, refrigerator access, table, and outlet.

At-will employment may allow you to quit and your employer to fire you at any given moment, but an employment contract changes that. With a contract in place, you cannot quit without meeting the rules listed in the contract. Your employer cannot fire you without following the rules.

Understanding the Differences When There’s an Employment Contract

Employment contracts lay out the rules regarding your job and the details regarding pay, working hours, taking time off, or leaving for another position. It also sets out rules that your employer must follow regarding everything from time off to terminations. 

Contracts might be a standard employment contract or a collective bargaining agreement that’s negotiated by your union representatives and voted on by the union workers. Both provide the same protections and are legally-binding contracts.

When you have a valid employment contract, you cannot lose your job unless your employer follows the rules listed in the contract. For example, you’ve missed work and didn’t call in. The contract says you get a day’s suspension without pay when you don’t call in, but your employer fires you. They didn’t follow the contract, so the termination is illegal.

Protections That Employment Contracts Typically Include

Employment contracts vary from one company to the next, but they usually contain the following protections.

• Compensation: How much you’ll be paid and when and how those payments are made.
• Dispute Resolution: If someone believes they’ve been discriminated against or is being harassed or another employee witnesses it and wants to file a complaint, how are complaints filed and how are disputes handled?
• Employment Benefits: What benefits are provided and when do they go into effect? Benefits usually include paid time off, retirement plans like 401k, sick/personal days, health, dental, and vision insurance and optional benefits like life insurance.
• Grounds for Termination: What reasons must apply or be met in order for your job to be terminated. Often this includes misconduct, poor performance, or a workplace violation like employment discrimination or harassment.
• Job Duties and Responsibilities: What does your job entail? Exact work duties are usually listed to prevent you from being overloaded with work you’re not qualified to do.
• NDAs and Confidentiality: California’s laws on NDAs are different to some other states. NDAs are not enforceable if they’re to protect the company after a discrimination or harassment complaint is filed. They’re enforceable if they’re protecting trade secrets.
• Non-Compete Clauses: Non-compete clauses are only allowed in California If someone sells their business and the new owner is preventing loss of business or to protect trade secrets.
• Notice Periods; How much notice do you have to give if you plan to leave your role? How much time does your employer have to give you if you’re being terminated?
• Term of Employment: Is this a fixed role with a set employment period during which your job is protected or is there a “for cause” provision allowing for the employer to terminate the position if the rules listed in the provision are met:

How Employment Contracts Impact Wrongful Termination Cases?

When you have an employment contract, how does it help with a wrongful termination complaint?

• Burden Is on the Employer: With at-will employment, the employee must prove that the termination was the result of an illegal reason as per the “for cause” section of a contract. When there’s a contract, the employer has to prove that the termination met the terms of the contract.
• “For Cause” Is Clearly Defined: The “for cause” portion of an employment contract spells out what would lead to a termination. 
• Procedural Requirements Are Laid Out: If you are going to be terminated, the rules spell out what must happen. If the contract says you must be given oral warnings for the first two violations, and a written notice for the third, you have a complaint if you were never given those notices.
• Responsibility for Legal Fees: Some employment clauses include terms where the employer must cover your legal fees if you have a successful breach of contract claim.

What if There’s No Written Contract but Protections Were Implied?

There’s another aspect to wrongful  terminations that extend beyond a written contract. If you were told that all employees receive a month’s notice in case of terminations, you have every reason to believe that you get the month to prepare. If that doesn’t happen, implied employment contracts can help you. 

Implied contracts are harder to prove. However, if every employee was told the same thing, you’d have a stronger case. Information in a company handbook can also help prove implied contracts.

Steps You Should Take

Employees:

If you’re an employee, you need to do the following to protect yourself from wrongful termination.

• Read over contracts very carefully before signing them. (Even better, consult with an employment law attorney first.)
• Keep a copy of your offer letter, employment contract or bargaining agreement, and employee handbook.
• Get any promises that aren’t in the contract in writing (signed and dated).

Employers:

• Make sure your employment contract clearly defines the terms for employees to follow. (Have an employment law practice draft it for you.)
• Ensure your handbook and any terms in the employment contract match.
• Review and update your policies regularly, especially as California employment laws change.
• Consult with an attorney to make sure your contract is enforceable and won’t put you in jeopardy of being unable to fulfill promises that you make.

When it comes to Los Angeles employment law matters, employment contracts are the best evidence you can have in your favor. With the rules of termination clearly laid out, you have proof that your employer was in the wrong.  If you’re the employer, you know that you’ve drawn up clear steps for your management and HR teams to follow when it comes to terminations.

That doesn’t mean that implied contracts or lack of contracts don’t offer protection from wrongful termination. Get a free consultation with the attorneys at Shegerian Conniff to discuss your situation and determine if you have a valid discrimination complaint.