A persistent misconception among American workers is that employers can only terminate them for good cause.
This misconception arises, in part, because in other countries such as Mexico and the Philippines, termination can only be for just cause. In the Philippines, an employer must provide two written notices and a hearing once the employer provides grounds for just cause termination.
In the rest of the world, just cause termination is the norm. In the UK, employers must show they have a valid reason for the termination, act reasonably, apply rules consistently and investigate the situation fully. In France, an employer must show réelle et sérieuse just cause. Canada has no at-will termination, and Japan and the Republic of South Africa require employers to have just cause to dismiss non-probationary employees.
By contrast in the United States, only union members, highly compensated executives with employment contracts and civil service employees have the benefit of just cause termination. In every state except Montana, employment is at will.
Recently, New York City enacted a just cause requirement for fast-food workers, and in 2019 Philadelphia enacted a just cause law for parking attendants. The New York City Council and New York state are considering bills to extend just cause to all industries, while pending legislation in Illinois would bar at-will termination.
The 1994 federal Uniformed Services Employment and Reemployment Rights Act provides limited just cause safeguards to service members returning to work from deployment.
Those longstanding laws provide evidence that ending at-will employment can work without being a heavy burden on businesses, said Kate Andrias, a law professor at Columbia University. Employer groups vigorously oppose these laws.
In California, Labor Code 2922 states that employment “may be terminated at the will of either party on notice to the other.”
There are limited exceptions to the at-will doctrine. The most common are discrimination based on race, religion, national origin, gender identity and sexual orientation, age (over 40), disability and retaliation for reporting a violation of state or federal law to a supervisor or government agency or refusing to commit an unlawful act.
The laws prohibiting discrimination and retaliation for reporting discrimination or harassment are enforced by the California Civil Rights Department and the Equal Employment Opportunity Commission. Claims can be filed with CCRD within three years and with EEOC within 300 days.
Laws against retaliation for reporting a violation of state or federal law or refusing to engage in an unlawful act are enforced by the state labor commission, and claims can be filed with the agency within one year. The worker can instead file a wrongful termination in violation of public policy claim in court within two years.
Terminating workers for joining with one or more coworkers to report wages, hours or working conditions to a supervisor, discussing pay or working conditions with coworkers or organizing a union is unlawful. This law is enforced by the National Labor Relations Board and claims can be filed with this agency within six months.
It is also possible to imply a just cause requirement for long-term employees with good work records and assurances of continued employment as long as the employee performs well. This claim can only be filed in court and is hard to prove because the employer has a strong incentive to deny any job assurance statements.
An adverse action such as a salary reduction, reduced hours, negative performance reviews, denial of promotions and raises, an unfavorable work assignment or demotion because an employee engaged in a protected activity also constitutes unlawful retaliation.
Retaliation cases are prevalent. After surveying 1,000 workers in California and conducting focus groups in six different languages, a 2022 report from the National Employment Law Project (NELP) found that nearly two in five workers have experienced workplace violations. Of those who took the risk of coming forward, more than half experienced some form of retaliation.
Unfortunately, workers who file claims face unfair and onerous hurdles in proving retaliation.
Senate Bill 497, also known as the Equal Pay and Anti-Retaliation Act, is sponsored by the California Coalition for Worker Power, NELP and Equal Rights Advocates. It is working its way through the state Legislature and will make it easier for workers to surmount the hurdles of proving retaliation. At present, workers who file retaliation claims for a violation of the laws the labor commission enforces, including the Equal Pay Act, must show they engaged in a protected activity, that there was a negative action and the protected activity caused the negative action.
As a consequence of at-will employment, employers rarely provide reasons for the adverse action despite the fact that employers are the ones in sole possession of evidence of their reasons. As a result, workers have difficulty proving their cases.
SB 497 solves this problem by creating a rebuttable presumption that retaliation occurred if the adverse action takes place within 90 days of the protected activity. As in existing law, the employer still has the opportunity to rebut the presumption by providing a legitimate reason for the negative action, and the burden of proof remains on the worker to prove that the employer’s reason is not credible.
Rebuttable presumptions for retaliation already exist in other Labor Code sections, such as immigration-related retaliation provisions that include threats of deportation and retaliation for use of paid sick leave.
The bill would also strengthen the Labor Code’s Whistleblower Protection Act by providing financial relief to whistleblowers. Existing law requires that certain employers pay a penalty of up to $10,000 to the state. The bill would ensure the money goes directly to the worker and will apply to all employers.
Until the United States joins the rest of the world in abolishing at-will termination, we need SB 497 to ensure that workers do not face unfair hurdles in proving their retaliation cases and that the labor commission can act decisively to punish retaliation.
San José Spotlight columnist Ruth Silver Taube is supervising attorney of the Workers’ Rights Clinic at the Katharine & George Alexander Community Law Center, supervising attorney of the Santa Clara County’s Office of Labor Standards Enforcement Legal Advice Line and a member of Santa Clara County’s Fair Workplace Collaborative. Her columns appear every second Thursday of the month. Contact her at [email protected].