California’s Labor Code recognizes at-will employment, or employment which may be terminated by employee or employer at any time for any reason.  Of course, this broad definition of at-will employment is subject to numerous exceptions and restrictions stemming from both state and federal laws – noncompliance with which can lead to a wrongful termination lawsuit.  Contrary to what common myths about at-will employment might lead you to believe, there are right (and wrong) ways to fire employees, with which California employers and business owners must familiarize themselves.

Work Ethics carved with woodForms and Documents for Terminating Employees in California

As an employer in California, you are not permitted to spontaneously terminate one of your employees.  On the contrary, state and federal laws both require you to provide the employee with various notices and documents in advance, as described below.

Under California law, you must provide the following (where applicable):

  • A 27-page brochure titled “For Your Benefit: California’s Programs for the Unemployed” (DE 2320).  This brochure is produced by the Employment Development Department (EDD).  The brochure must be supplied on or prior to the date of termination.
  • A short form titled “Notice to Employee as to Change in Relationship.”  This is required by EDD.  This form simply notes the date of the termination/layoff.
  • If you have 20 employees or more, you must provide all (eligible) employees to be terminated with a single-sheet form titled “Notice to Terminating Employees: Health Insurance Premium Payment (HIPP) Program” (DHCS 9061). This form is supplied by the Department of Health Care Services (DHCS).

Under federal law, you must also provide the following (where applicable):

  • A Certificate of Group Health Plan Coverage, if the employee was covered by a group plan at the time of his or her termination.  This is a requirement of the Health Insurance Portability and Accountability Act (HIPPA).
  • If you have 20 or more employees, you must provide a Consolidated Omnibus Budget Reconciliation Act form (COBRA notice and election form) to (1) any employees covered by a group plan, and (2) the dependents of employees who are covered by a group plan.  This form must be provided no later than the day before termination.

Please note that the requirements described above are not exhaustive and do not account for all  documentation and notification requirements.  Our employment lawyers will sit down with you to review your records and determine precisely which standards you need to follow to mitigate your risk of exposure to fines and litigation.

How to Avoid a Wrongful Termination Lawsuit

Providing mandatory forms and notices is an important part of the termination process.  However, proper documentation isn’t the only factor which employers must bear in mind.  In order to avoid a workplace discrimination lawsuit, employers must also consider the circumstances of the termination itself.

The freedoms normally afforded by the at-will employment system are heavily restricted by various laws establishing protected classes of employees.  Some key pieces of federal and California legislation establishing protected classes include:

Collectively, these acts prohibit discrimination against the following classes of employees (provided other necessary criteria are in place, such as meeting a minimum number of employees):

  • Employees belonging to minority groups
  • Employees from foreign countries
  • Employees over age 40
  • Employees who practice a religion
  • Employees who identify as gay, lesbian, or bisexual
  • Employees who are pregnant, nursing, or have related medical needs

Of course, this does not mean that employers can never terminate the aforementioned employees – simply that employers who do plan to terminate members of protected classes must be extremely careful.  The workplace discrimination lawyers of Bellatrix PC defend businesses facing lawsuits related to sex discrimination, race discrimination, and more.

Even in cases where an employee does not belong to a protected class, wrongful termination lawsuits can still arise for other violations, such as terminating an employee:

  • Because he or she reported illegal activity or a safety violation to a regulatory agency like OSHA or the DLSE.  This can lead to a whistleblower lawsuit.
  • In retaliation for alleging sexual harassment, wage law violations, or other misconduct by the company, coworkers, or upper management.
  • Based on the results of a drug test which was not authorized by law.
  • In a way that violates privacy.
  • In a way that constitutes libel, slander, or defamation.

Regardless of the circumstances at hand, or the class an employee may or may not belong to, all employers should:

  • Keep detailed and accurate records of policy violations, disciplinary actions, employee misconduct, etc.
  • Prepare clear, unambiguous employee handbooks and employment contracts whose terms are enforceable and which follow all state and federal laws.
  • Subject all employees to consistent, uniform standards.

At Bellatrix PC, our employment law attorneys bring years of experience and practical knowledge to each and every termination matter we handle on behalf of employers.  Whether you need to revise your company’s standing termination policies, wish to make legal preparations in anticipation of a future termination, or have questions about handling large-scale layoffs and reductions in force (RIFs), we are prepared to counsel you with regard to your rights, responsibilities, and legal recourse.  We work with corporations, partnerships, and limited liability companies across a broad spectrum of industries.

If you have any questions or concerns about how to terminate an employee in California, the knowledgeable employment attorneys of Bellatrix PC can help.  To set up a private consultation, call us today at (800) 449-8992.

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