As an employee in California, it is important to be aware of labor laws and employee rights. Implied employment contracts may be tricky to navigate and may lead to cases of wrongful termination. Here’s what employees need to know about implied employment contracts and wrongful termination in California.

An implied employment contract is an unwritten contract of employment between an employee and employer, created through words or behavior. Employers may not fire employees under an implied employment contract without good cause. If an employer fires an employee without good cause, the employee may be able to sue for wrongful termination.

What is an Implied Employment Contract?

An implied employment contract in California is an unwritten contract of employment between an employee and employer. Instead of a written agreement, the contract is created through words or behavior, like a verbal agreement. With an implied contract, an employer may not terminate an employee without good cause, which differs from at-will employment. The employer cannot arbitrarily fire an employee.

Termination with At-Will Employment Versus Implied Employment Contract

With an at-will employment agreement, the employee or employer may terminate the employment at any time for any lawful reason, or no reason at all. Termination does not require good cause and can be completely arbitrary, as long as it is lawful.

An implied employment contract is an exception from the standard at-will employment practice in California. An implied employment contract requires the employer to have good cause for termination.

Related: At-Will Employment in California

Wrongful Termination

If the employer terminates an employee under an implied employment contract without good cause, then the employee can sue the employer for wrongful termination.

In order to prove that an implied employment agreement existed between the employee and employer, the employee should establish that:

  • The employee worked for the employer for a long time
  • The employer suggested that the employee’s job was secure
  • The employer had a handbook that clearly outlined possible causes of termination and other general policies
  • Industry practices generally enter implied employment contracts

If the employee can generally establish the fact pattern listed above, they may be able to prove they were in an implied employment contract. If the employee was fired without good cause, they may be able to sue for wrongful termination.

Related: How to File a Wrongful Termination Lawsuit in California

FAQs

What is an implied employment contract?

An implied employment contract is an unwritten contract of employment between an employee and employer, created through words or behavior. Employers may not fire employees under an implied employment contract without good cause.

How does an implied employment contract differ from at-will employment?

An at-will employment agreement is generally a written contract and the employee or employer may terminate the employment at any time for any lawful reason, or none at all. It does not require good cause. However, an implied employment contract is an unwritten, verbal contract and requires the employer to have good cause for termination.

How do I establish that I had an implied employment contract?

In order to establish that an employee had an implied employment contract with the employer, the employee must establish the following: that the employee worked for the employer for a long time, the employer suggested that the employee’s job was secure, the employer had a handbook that clearly outlined general policies, and industry practices generally enter implied employment contracts.

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