Aug 11, 2006
In This Issue
California employers may be aware that pursuant to California Labor Code section 2922, there is a presumption of at-will employment in the State of California, provided there is no express or implied agreement to the contrary. Recently, the California Supreme Court attempted to stem the tide of decisions that have chipped away at the at-will presumption by finding that the term “at-will” truly means “at-will.”
In Dore v. Arnold Worldwide, Inc., Case No. S124494 (August 3, 2006), plaintiff employee Brook Dore brought suit against his former employer Arnold Worldwide, Inc. alleging breach of contract, breach of the implied covenant of good faith and fair dealing, intentional infliction of emotional distress, fraud, and negligent misrepresentation. Mr. Dore argued that Arnold Worldwide, Inc. induced him to leave his prior employer in Colorado and relocate to Los Angeles, only to terminate him without cause. Mr. Dore relied on representations Arnold Worldwide, Inc. made during the interview process about the company needing a long-term employee to play a critical role in growing the agency, and that Arnold Worldwide, Inc. treated its employees like family. Mr. Dore asserted that such representations created an implied contract not to terminate except for cause, despite an offer letter noting that Mr. Dore’s employment was at-will. While the trial court granted the employer’s motion for summary judgment, the Court of Appeals reversed.
In agreeing with the trial court, the California Supreme Court held that the use of the term “at-will” normally conveys an intent that either party may end employment at any time without cause; the mere fact that Arnold Worldwide, Inc. failed to discuss cause in the offer letter while explaining the at-will relationship was insufficient to alter the at-will classification. In a nutshell: “at-will” truly means “at-will.”
Employers may now feel more comfortable relying on offer letters or employment agreements that specifically acknowledge the existence of an “at-will” relationship even if there is no discussion respecting “cause,” per se. However, the best scenario for employers remains a clear, concise definition of at-will employment that incorporates not only the fact that either the employer or the employee may terminate an individual’s employment at any time with or without notice, but also that such termination may be with or without cause.
Employers should undertake a review of their employment agreements and offer letters and consult with counsel to ensure the clarity and force of any at-will provision, as well as a review for other unintended alterations to the employment relationship.
Jay J. Wang Mr. Wang’s practice focuses on employment litigation that includes civil claims involving wrongful termination, harassment, unpaid wages, discrimination, trade secrets and workplace violence claims. He is also involved in counseling his clients as to human resources issues ranging from family leave practices, workplace investigations, and disciplinary write-ups.
Esra A. HudsonPartner
Andrew L. SatenbergPartner
© 2013 Manatt, Phelps & Phillips, LLP. All rights reserved.