In California, employment contracts law is a bit complex because one can enter into it by implying, by writing, or verbally. Legal problems come up when either the employer or employee is not performing some or all duties in accordance with the contract.
Understanding the different types of contracts can give employers all the knowledge they need to detect breaches and keep themselves on the right side of the law. The best way to avoid dire legal implications is to work closely with San Francisco employment lawyers, and consult on all matters regarding the recruitment and firing of all your staff.
Is California an “At-Will” Employment State?
California is one of the numerous at-will employment states in America. This means that you as the employer can fire an employee with or without notice, for a reason, or no reason at all. However, there are exceptions to this rule.
Union employees can challenge unfair termination because the collective bargaining agreement covers them. But, non-union employees can also be in employment contracts that limit your right to fire workers at will, which often rob employers of this right.
Unionized or not, at-will employees cannot be dismissed from work for unlawful reasons, such as their protected status, i.e., sexual orientation, gender, or race. You are also forbidden from firing an employee for opposing an unlawful practice at the workplace.
What Happens When I Fire an Employee Without “Cause”?
Despite being an “at-will” employment state, employers need to consult a San Francisco contract lawyer before making decisions on firing employees. It is not unlawful to dismiss a worker that hasn’t engaged in acts of embezzlement, fraud, theft, or gotten a felony conviction.
However, there are implications to firing for no cause. You might be obligated to pay them for some months, depending on what is provided in the contract. Some contracts also protect employees that leave employment for diminished pay or diminished scope of responsibilities.
Paying vest stock or severance to an employee that is no longer providing value to your organization can have financial implications on your business. So, any time you hire new staff, do not forget to involve a San Francisco contract lawyer that will ensure the terms protect you as well.
What is Considered a Breach in Written Employment Contracts?
Written contracts are great because they eliminate room for misunderstandings. They are also easy to enforce because of the clarity in terms of employment. Breaches and their implications usually depend on the magnitude of the employer or employee’s actions.
Major breaches occur when either party has no justifiable reasons for their complete failure to perform a promise or condition. An example is when an employee is discharged, or they decide to quit, and file for employment insurance benefits or lose out on them respectively.
Minor breaches can be forgiven or condoned because they are less serious. In most instances, they give the non-breaching party no reason to believe that the contract has been terminated. A San Francisco contract lawyer can advise you on the most appropriate actions to take in case of a breach.
What is Needed to Ascertain an Implied Contract in California?
Issues on implied contracts usually crop up after an employee is fired. The employer might have believed that the employee was working at will, but the employee might argue otherwise. Your statements and actions might have led an employee to believe that they could only be fired for a good cause, and not at will.
In deciding whether you and an employee entered into an implied contract, the court might look into the following:
The Employee’s Tenure
A long-term employee that received positive performance evaluations, regular pay rise, and promotions is more likely to be in an implied contract.
Employer’s Policies
Policies such as progressive discipline policies and clauses indicating that employees become “permanent” upon completion of probation, can limit your right to fire.
Job Security Assurances
Telling an employee that they can have their job as long as they perform well or that they cannot be fired without cause, limits you from terminating their employment.
Are There Lawful Ways to Terminate Employment Contracts?
Termination of employment doesn’t always come with punitive legal implications in California. If the employer dies or becomes incapacitated, the employee can be dismissed by being given notice. This happens when the employee’s power is not tied with the subject matter of the employment relationship.
Employment contracts that had no specified term can be terminated at any time, and by any party. However, the party that decides to end the non-time-bound contract must notify the other of their decision. Remember that this does not apply where employment was agreed upon for a period longer than a month.
Breaches can also end an employment contract. It can come in the form of:
- Deliberate breach of duty within the course of employment
- Habitual neglect of duties
- Incapacity to perform employment duties
Employers can also breach their responsibilities to their employees willfully or unintentionally. When this happens, an employee has every right to stop working in the firm.
What are the Exact Damages for Violating the Terms of an Employment Contract?
The provisions for employment contract breach are provided in the California contract law. This section of the law provides guidance on how much an aggrieved party can collect when the other party fails to meet its end of the bargain.
Usually, the damages are measured in terms of the detriment that was a proximate cause of a specific breach. The aggrieved party is mandated to receive an amount that can compensate them for these losses. However, the damages might not be awarded if the origin and nature of the breach cannot be clearly ascertained.
Attorneys with 50 Years Combined Experience in Civil Litigation
Misunderstandings are common in human relationships, including employer-employee engagements. And the law protects you as much as it protects workers in California. So, if you are having any employment-related issues in your firm, it is best to seek legal counsel.
Working with top employment lawyers in the Bay Area is an excellent way to protect your rights. Talk to us today to benefit from our rich experience.
