At-Will Employment

What Is At-Will Employment?

At-will employment is the default employment relationship in California where either the employer or employee may terminate the employment at any time, for any lawful reason (or no reason at all), with or without advance notice. This principle gives both parties flexibility but is subject to significant exceptions under California law.

Understanding at-will employment and its limitations is essential for California employers to avoid wrongful termination claims while maintaining flexibility in employment decisions.

California At-Will Doctrine

Legal Foundation

California Labor Code Section 2922 establishes the at-will presumption:

"An employment, having no specified term, may be terminated at the will of either party on notice to the other."

This means:

• Employment without a fixed term is presumed at-will
• Either party can end employment
• No cause for termination is required
• No advance notice is required (for most positions)

What At-Will Means in Practice

Party	Rights Under At-Will
Employer	May terminate for any lawful reason or no reason
Employer	May change job duties, compensation, benefits
Employer	May modify working conditions
Employee	May resign at any time
Employee	May accept other employment
Employee	No obligation to provide notice (in most cases)

Exceptions to At-Will Employment

While at-will is the default, California recognizes significant exceptions that can limit termination rights:

Statutory Exceptions

California law prohibits termination based on protected characteristics or activities:

Discrimination Cannot terminate based on:

Protected Category	Law
Race, color, national origin	FEHA, Title VII
Sex, gender, gender identity	FEHA, Title VII
Sexual orientation	FEHA
Religion, creed	FEHA, Title VII
Age (40+)	FEHA, ADEA
Disability, medical condition	FEHA, ADA
Pregnancy, childbirth	FEHA, PDA
Marital status	FEHA
Military/veteran status	FEHA, USERRA
Genetic information	FEHA, GINA
Reproductive health decisions	Labor Code 1101

Retaliation Cannot terminate for:

• Filing a wage claim or complaint
• Reporting safety violations
• Filing a workers' compensation claim
• Taking protected leave (CFRA, FMLA, pregnancy disability)
• Reporting discrimination or harassment
• Whistleblowing (reporting illegal activity)
• Engaging in union activity
• Refusing to participate in illegal conduct
• Jury duty service
• Voting

Protected Activity Cannot terminate for:

• Off-duty lawful conduct
• Political activities and affiliations
• Refusing to take a lie detector test
• Certain social media activities
• Discussing wages with coworkers

Implied Contract Exception

At-will employment may be modified by an implied contract created through:

Employer Conduct

Conduct	Potential Implication
Long-term employment	Reasonable job security expectation
Regular promotions and raises	Continued employment expectation
Assurances of job security	Promise of continued employment
Progressive discipline practice	Termination only after process

Written Materials

• Employee handbooks without clear at-will language
• Policy manuals suggesting termination only for cause
• Offer letters implying permanent employment
• Promotion letters with job security suggestions

Verbal Statements

• Supervisor promises of long-term employment
• Statements like "You'll always have a job here"
• Assurances that performance alone determines employment

Implied Covenant of Good Faith Exception

California recognizes an implied covenant of good faith and fair dealing that may limit at-will employment in some circumstances:

• Cannot terminate to deprive employee of earned benefits
• Cannot fire employee just before commission becomes due
• Cannot terminate to avoid paying earned bonuses

Public Policy Exception

Termination violates public policy when the employee is fired for:

• Refusing to violate a law
• Performing a statutory obligation
• Exercising a statutory right
• Reporting statutory violations

Examples include:

• Refusing to commit perjury
• Reporting environmental violations
• Exercising right to workers' compensation
• Taking mandated safety actions

Protecting At-Will Status

California employers should take these steps to preserve at-will employment:

Clear Written Statements

Include at-will language in all employment documents:

Employee Handbook

Employment with [Company] is at-will. This means either you or
the Company may terminate the employment relationship at any time,
with or without cause, and with or without notice.

No representative of the Company has authority to enter into any
agreement for employment for any specified period of time or to
make any agreement contrary to the foregoing. Only [specified
position, e.g., CEO] may modify the at-will employment
relationship, and only in a written document signed by that person.

Job Applications Include at-will acknowledgment in application materials.

Offer Letters

This offer does not constitute a contract of employment for any
specific duration. Your employment is at-will, meaning either
you or the Company may end the relationship at any time.

Acknowledgment Forms Require signed acknowledgment of at-will status.

Consistent Communication

Do	Don't
Use "at-will" terminology	Use "permanent employee"
Reference termination rights	Promise job security
Maintain flexibility language	Guarantee continued employment
Train managers on at-will	Allow supervisors to make promises

Policy Design

Progressive Discipline If you use progressive discipline:

• State it's a guideline, not a contract
• Reserve right to skip steps
• Include at-will reminder
• Maintain discretion

Example language:

While the Company generally follows a progressive discipline
process, the Company reserves the right to skip steps, combine
steps, or take whatever disciplinary action it deems appropriate
under the circumstances, up to and including immediate termination.
This progressive discipline policy does not alter the at-will
employment relationship.

Performance Reviews Avoid language that implies continued employment:

• Don't suggest guaranteed future employment
• Include at-will reminder in review forms
• Document performance issues thoroughly

Manager Training

Train supervisors to:

• Understand at-will employment
• Avoid making job security promises
• Document performance issues
• Consult HR before termination
• Follow company procedures

When At-Will Employment May Not Apply

Employment Contracts

Written contracts may establish employment for a specific term:

Contract Type	Effect on At-Will
Fixed-term agreement	Limits termination to cause
Union contract	Governed by CBA terms
Executive agreement	May require cause for termination
Commission agreement	May affect timing of termination

Collective Bargaining Agreements

Unionized employees typically have:

• "Just cause" termination standard
• Grievance procedures
• Arbitration rights
• Seniority protections

Government Employment

Public sector employees may have:

• Civil service protections
• Due process rights
• Tenure (for some positions)
• Pre-termination hearing rights

Best Practices for Termination

Even with at-will employment, California employers should:

Before Termination

1. Document performance issues

   • Maintain contemporaneous records
   • Provide written warnings when appropriate
   • Give opportunity to improve

2. Review the personnel file

   • Check for any contrary promises
   • Review disciplinary history
   • Verify consistency with similar situations

3. Consider timing

   • Avoid termination during protected leave
   • Don't terminate after complaints
   • Document legitimate business reasons

4. Consult HR/Legal

   • Review for potential discrimination claims
   • Check for retaliation concerns
   • Ensure compliance with policies

During Termination

1. Be prepared

   • Have final paycheck ready (required for involuntary terminations)
   • Prepare final documentation
   • Arrange return of company property

2. Conduct meeting professionally

   • Have witness present
   • Be direct but respectful
   • Avoid excessive explanation
   • Don't debate the decision

3. Provide required notices

   • Final pay (immediately for involuntary termination)
   • COBRA/Cal-COBRA information
   • EDD pamphlet
   • Change in relationship notice

After Termination

1. Document the termination

   • Record reason in personnel file
   • Note witnesses present
   • Maintain consistency in documentation

2. Handle reference requests carefully

   • Verify identity of requestor
   • Provide only authorized information
   • Consider neutral reference policy

At-Will Statement Samples

Comprehensive Statement

ACKNOWLEDGMENT OF AT-WILL EMPLOYMENT STATUS

I understand and acknowledge that:

1. My employment with [Company] is at-will. This means that either
   I or the Company may terminate my employment at any time, for any
   reason or no reason, with or without cause, and with or without
   prior notice.

2. No manager, supervisor, or representative of the Company has the
   authority to enter into any agreement for employment for a
   specified period of time or to make any promises contrary to the
   foregoing.

3. Only the [President/CEO] of the Company has the authority to
   modify the at-will employment relationship, and any such
   modification must be in writing and signed by the [President/CEO].

4. Nothing in the Employee Handbook, personnel policies, practices,
   or procedures, or any other document creates or is intended to
   create a promise or contract of continued employment or a
   guarantee of specific treatment.

5. The Company may change my position, duties, compensation, benefits,
   work location, or other terms and conditions of employment at any
   time.

I have carefully read this acknowledgment, I understand it, and I
agree to abide by its terms.

Employee Signature: ______________________ Date: _____________
Employee Printed Name: _____________________________________

Application Language

I understand that if hired, my employment is at-will. This means
that either I or [Company] may terminate the employment at any time,
with or without cause or advance notice.

Offer Letter Language

This letter is not a contract of employment for any specific period.
Your employment with [Company] is at-will, and either party may
terminate the employment relationship at any time.

Common Mistakes

Language Errors

Mistake	Problem	Better Approach
"Permanent employee"	Implies not at-will	"Regular full-time employee"
"We value loyalty"	May imply job security	Focus on current relationship
"Your job is secure"	Creates implied contract	Avoid such statements
"Annual reviews"	May imply yearly employment	"Performance discussions"

Practical Errors

Mistake	Problem	Solution
No written at-will statement	Creates ambiguity	Include in all documents
Manager promises	Creates implied contract	Train supervisors
Inconsistent enforcement	Suggests other basis needed	Document all terminations
Retaliatory timing	Suggests illegal motive	Consider timing carefully

At-will employment provides important flexibility for California employers, but it must be properly documented and implemented within the boundaries of California's employee protections. Regular review through your workplace audit process helps ensure your at-will practices remain compliant.