In California, a wrongful termination lawsuit is a legal action in which a worker claims he or she was fired or laid off for an illegal reason. This generally means a violation of federal or state law, or public policy. The most common claims are that the firing amounted to
- wrongful termination in violation of an implied contract,
- wrongful termination against public policy,
- termination for whistleblower activities,
- termination for exercising rights under the Fair Employment and Housing Act or for protected political activities,
- termination for filing a workers compensation claim or reporting a work injury,
- termination for exercising rights under California employee leave laws, and
- WARN Act violations (in cases involving mass layoffs).
The damages a worker may recover for a wrongful discharge lawsuit in California depend on the type of suit. But generally, they will include one or more of the following categories of wrongful termination damages:
- Lost wages and benefits;
- Back pay and wages;
- Compensation for emotional distress / pain and suffering arising from the loss of your job;
- Attorney’s fees; and/or
- Punitive damages designed to punish willful wrongdoing by the employer.
Below, our California labor and employment lawyers answer the following frequently asked questions about California wrongful termination laws:
- 1. What are the grounds for a wrongful termination lawsuit in California?
- 2. How do I bring a wrongful termination lawsuit in California?
- 3. What damages can I recover?
If you have further questions after reading this article, we invite you to contact us at Shouse Law Group.
1. What are the grounds for a wrongful termination lawsuit in California?
The most common bases for lawsuits under California wrongful termination laws are:
1.1. Exceptions to “at-will” employment
Most employment relationships in California are “at will employees”--which means an employee can be dismissed at any time, for any reason.1
But California labor law has carved out a number of exceptions to the general rule of at-will employment. These include:
- An “implied contract” not to terminate employment without good cause;2
- A breach by the employer of an implied covenant of good faith and fair dealing;3
- Wrongful termination in violation of public policy (for example, terminating an employee because s/he refused to help an employer violate the law, or performed a legal duty);4 and
For most fired employees, the most helpful of these exceptions to at-will employment are the implied contract and public policy theories of wrongful discharge.
An “implied contract” is an agreement that is understood by both parties, even if they have not signed a written document memorializing this.
An employer may create an implied contract not to terminate an employee without good cause by issuing an employee handbook listing specific reasons why employees may be fired, and/or by telling an employee in person that his/her job is safe as long as s/he doesn’t do certain things.
Wrongful termination in violation of public policy typically happens when an employee is fired for refusing to cooperate with an employer in committing acts that are against the law or considered socially undesirable.
For example, if an employee is fired for refusing to help an employer violate criminal fraud laws, s/he will have a valid case for public policy wrongful termination.
1.2. Whistleblower protection
One common form of wrongful termination in violation of public policy is so-called “whistleblower” retaliation. Whistleblower termination occurs when an employer fires an employee for reporting a potential violation of law by the employer to a government or law enforcement agency.
California’s main whistleblower protection law is Labor Code 1102.5 LC. This law provides that employers may not retaliate against (including by wrongfully firing) any employee who reports a suspected violation of law by the employer to a government or law enforcement agency, or to a supervisor or other employee who has the authority to investigate or correct the violation.6
Other statutes provide more specific forms of whistleblower protection.
For example, the whistleblower protections of the Sarbanes-Oxley Act of 2002 (a federal law designed to protect investors from fraudulent accounting by public companies) give employees of publicly-traded companies the right to sue for wrongful termination if their employer fires them for reporting suspected securities fraud to the federal government or a supervisor.7
Another important whistleblower law is the “qui tam” section of the California False Claims Act. California’s qui tam law allows an employee to sue their employer on behalf of the state government. This applies if the employer has committed fraud or embezzlement with respect to government funds.
If an employer then terminates or otherwise retaliates against an employee for bringing a qui tam suit, the employee has the right to sue for wrongful discharge/qui tam retaliation.8
1.3. Wrongful discharge under the Fair Employment and Housing Act
California’s Fair Employment and Housing Act--the main state law prohibiting workplace harassment and employment discrimination--makes it illegal for employers to retaliate against employees who
- Oppose harassment or discrimination,
- File a complaint about harassment or discrimination, or
- Testify or assist in any investigation or lawsuit over harassment or discrimination.9
1.4. Wrongful constructive termination
Under California “wrongful constructive termination” / “constructive discharge” laws, it is possible for employees to sue their employers for wrongful termination even if they are not actually fired from a job. Constructive termination means that an employer makes working conditions so intolerable for an employee that s/he has no choice but to resign.10
An employee may be able to sue for wrongful constructive termination if:
- His/her employer intentionally created or knowingly permitted working conditions that were so intolerable that a reasonable employer would expect a reasonable employee to resign because of them; and
- The employer would not have been within his/her rights to terminate the employee outright (because of an implied oral contract, or because termination would have been against public policy).11
In addition, several California workplace retaliation laws--including laws against whistleblower retaliation and FEHA retaliation--prohibit employers from retaliating against employees in ways other than termination or constructive termination.
1.5. Political activities
California employees are sometimes able to sue their employers for wrongful termination if they lose their job due to protected political activities or speech.
The First Amendment to the U.S. Constitution does not apply to terminations by private employers.12 But California labor law also provides that employers cannot control or direct their employees’ political activities or speech. Thus, an employee who is fired for political activity has the right to sue for wrongful discharge.13
California employees also have grounds for a wrongful termination lawsuit if they are fired for joining a labor union or participating in union activities.14
1.6. WARN Act
Another variation on wrongful termination is the failure of an employer to comply with California’s Worker Retraining and Notification (WARN) Act.
California’s WARN Act requires employers to provide employees with sixty (60) days notice before conducting a mass layoff of fifty (50) or more employees, or closing or relocating a facility. It applies to all employers with at least seventy-five (75) employees.
If the employer fails to provide 60-days notice, employees may sue for wages and benefits for the amount of time by which the notice fell short of 60 days.15
2. How do I bring a wrongful termination lawsuit in California?
If you lose your job and think you may have a wrongful termination claim against your former employer, we recommend that you take the following two steps immediately:
- Contact an experienced California wrongful termination lawyer to discuss creating an attorney-client relationship; and
- Gather and preserve all available evidence related to your case.
Gathering evidence, of course, consists of obtaining and preserving all written documents your employer has given you related to your termination and your job performance prior to termination (for example, your termination letter, copies of all past performance reviews).
You may need to request some of these documents from your employer if you have not saved them yourself. (If your employer does not respond to these requests, an attorney can help you make them more forcefully.)
But oral conversations may also be important evidence in a wrongful discharge lawsuit. Conversations about your termination itself, conversations about your job performance, and any conversation that led you to form certain expectations about your job security are all potentially relevant under California law.
Therefore, it is important to write down and store in a secure place your recollections of all conversations with supervisors or other employees that may be relevant to your termination. These written records should note that the date, place and all participants for all of these conversations.
A California employment attorney can play an important role in the gathering of evidence for a lawsuit. S/he can help you determine what evidence will be important as the case proceeds.
2.1. How long do I have to file a wrongful discharge suit in California?
For most claims in California, you need to file a lawsuit within the “statute of limitations” time period set forth by California law.
The statute of limitations for a wrongful termination lawsuit depends on what kind of claim you are bringing. The following table sets out the different deadlines under California law:
|Type of Wrongful Termination Lawsuit||Statute of Limitations|
|Implied oral contract (breach of contract)||Two (2) years16|
|Public policy||Two (2) years17|
|Whistleblower under Labor Code 1102.5||Three (3) years18|
|Whistleblower under Sarbanes-Oxley Act||180 days (to file complaint with US Department of Labor)19|
|Fair Employment and Housing Act||Three (3) years (to file complaint with California Dep’t of Fair Employment and Housing)20|
|WARN Act||Three (3) years21|
With all of the cases listed above, the clock begins running on the date you are terminated or otherwise retaliated against.
3. What damages can I recover?
There are several different types of damages that are typically awarded to plaintiffs under California wrongful termination law. These are:
- Lost wages and benefits. These are the back pay that an employee could reasonably have expected to earn (both before and after his/her lawsuit is concluded) had s/he not been wrongfully terminated, plus the value of any employee benefits s/he could reasonably have been expected to receive in the same period.22 This amount of unpaid wages will be reduced, however, by the amount of wages and benefits that you actually earned, or could have earned, from substantially similar employment.23
- Damages for emotional distress/pain and suffering arising from your unlawful discharge.24 This can include compensation for physical pain, mental suffering, loss of enjoyment of life, grief, anxiety, or humiliation arising from the traumatic experience of losing your job unfairly.25
- Attorney’s fees. In some cases, successful plaintiffs can collect attorney’s fees from the employer-defendant. This is only possible for a few types of wrongful termination cases, such as under the Fair Employment and Housing Act and Sarbanes-Oxley.26
- Punitive damages. In a few cases, an employee can receive punitive damages. Punitive damages are designed to punish the employer for its behavior and do not need to be related to any economic or non-economic loss you suffered. Punitive damages are only awarded in cases where the employer is found to be guilty of oppression, fraud or malice.27
Which kind of damages you may sue for depends on the basis for your illegal discharge lawsuit. For example, wrongful discharge in violation of an implied contract usually leads only to compensation for lost wages and benefits. But an unlawful discharge in violation of public policy claim can support compensation for lost wages and benefits and emotional distress.28
We have local employment law offices in and around Los Angeles, San Diego, Orange County, Riverside, San Bernardino, Ventura, San Jose, Oakland, the San Francisco Bay area, and several nearby cities.
Work in Nevada? See our article on Nevada wrongful termination laws.
- Labor Code 2922 — Termination at will upon notice; employment for a specified term. (“An employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month.”)
- See Foley v. Interactive Data Corp. (California Supreme Court, 1988) 47 Cal.3d 654.
- See, e.g., Labor Code 1102.5 LC — Employer or person acting on behalf of employer; prohibition of disclosure of information by employee to government or law enforcement agency; suspected violation or noncompliance to federal or state law; retaliation; civil penalties. (“(c) An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation.”)
- See Lazar v. Superior Court (1996) 12 Cal. 4th 631.
- Labor Code 1102.5 LC — Employer or person acting on behalf of employer; prohibition of disclosure of information by employee to government or law enforcement agency; suspected violation or noncompliance to federal or state law; retaliation; civil penalties.
- 18 United States Code (“U.S.C.”) 1514A — Sarbanes-Oxley whistleblower protections.
- Government Code 12652 – 12653 GC — California qui tam law.
- Government Code 12940 GC — FEHA-protected activities. Discrimination is unlawful based on various characteristics / protected classes, some of which include national origin, sexual orientation, medical condition, gender identity, genetic information, marital status, and veteran status.
- See, e.g., Brady v. Elixir Industries (1987) 196 C.A.3d 1299.
- Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1251-52.
- See Grinzi v. San Diego Hospice Corp. (2004) 120 Cal.App.4th 72, 77.
- Labor Code 1101 – 1102 LC [employees’ right to free political speech]; Ali v. L.A. Focus Publication (2003) 112 Cal.App.4th 1477.
- Labor Code 923 LC — Right to join union; Escamilla v. Marshburn Brothers (1975) 48 Cal.App.3d 472.
- Labor Code 1400 – 1402 LC [California WARN Act].
- Code of Civil Procedure 339 CCP — Two years; oral contract; certificate, abstract or guaranty of title; title insurance policy; sheriff; coroner; rescission of oral contract. (“Within two years: 1. An action upon a contract, obligation or liability not founded upon an instrument of writing [such as an implied oral contract under employment law], except as provided in Section 2725 of the Commercial Code or subdivision 2 of Section 337 of this code; . . . .”)
- Code of Civil Procedure 335.1 CCP — Two years; actions for assault, battery, or injury to, or for death of, individual caused by wrongful act or neglect. (“Within two years: An action for assault, battery, or injury to, or for the death of, an individual caused by the wrongful act or neglect of another.”) See also Prue v. Brady Company/San Diego, Inc. (2015) 242 Cal.App.4th 1367, 1382. (“Contrary to Brady’s assertion and the trial court’s conclusion, Prue’s common law tort cause of action for unlawful discharge in violation of public policy is not barred by FEHA’s one-year statute of limitations. Instead, Code of Civil Procedure section 335.1 applies, providing a two-year statute of limitations for tort actions based on injuries to plaintiffs caused by the wrongful act or neglect of others. Effective January 1, 2003, Code of Civil Procedure section 335.1 replaced Code of Civil Procedure former section 340, which provided a one-year statute of limitations for personal injury actions. (Stats. 2002, ch. 448, § 1.)”)
- Minor v. Fedex Office & Print Services, Inc. (N.D. Cal. 2016) 182 F.Supp.3d 966, 988. (“California’s statute of limitations for “[a]n action upon a liability created by statute, other than a penalty or forfeiture” is three years. See Cal. Civ. Proc. Code § 338(a). Therefore, actions commenced under § 1102.5 [whistleblower termination law] must be brought within three years.”)
- 18 U.S.C. 1514A — Sarbanes-Oxley whistleblower protections. (“(b) Enforcement Action. (1) In general.—A person who alleges discharge or other discrimination by any person in violation of subsection (a) may seek relief under subsection (c), by— (A) filing a complaint with the Secretary of Labor. (D)Statute of limitations.— An action under paragraph (1) shall be commenced not later than 180 days after the date on which the violation occurs, or after the date on which the employee became aware of the violation.”)
- Government Code 12960 GC — Procedure for prevention and elimination of unlawful employment practices; application of article; complaints; limitations. (“(d) No complaint may be filed after the expiration of three years from the date upon which the alleged unlawful practice or refusal to cooperate occurred . . .”); California Assembly Bill 9 (2019).
- Code of Civil Procedure 338(a) CCP — Three years. (“Within three years: (a) An action upon a liability created by statute, other than a penalty or forfeiture.”)
- See Judicial Council of California Civil Jury Instructions (“CACI”) 2406 — Breach of Employment Contract —Unspecified Term—Damages. (“If you find that [name of defendant] [discharged/demoted] [name of plaintiff] in breach of an employment contract, then you must decide the amount of damages, if any, that [name of plaintiff] has proved [he/she] is entitled to recover. To make that decision, you must: 1. Decide the amount that [name of plaintiff] would have earned from [name of defendant] up to today, including any benefits and pay increases; [and] 2. Add the present cash value of any future wages and benefits that [he/she] would have earned after today for the length of time the employment with [name of defendant] was reasonably certain to continue; [and] 3. [Describe any other contract damages that were allegedly caused by defendant’s conduct.]”)
- See CACI 2407 — Affirmative Defense—Employee’s Duty to Mitigate Damages. (“[Name of defendant] claims that if [name of plaintiff] is entitled to any damages, they should be reduced by the amount that [he/she] could have earned from other employment. To succeed, [name of defendant] must prove all of the following:1. That employment substantially similar to [name of plaintiff]’s former job was available to [him/her]; 2. That [name of plaintiff] failed to make reasonable efforts to seek [and retain] this employment; and 3. The amount that [name of plaintiff] could have earned from this employment.”)
- See CACI 2433 — Wrongful Discharge in Violation of Public Policy—Damages. (“If you ﬁnd that [name of defendant] [discharged/constructively discharged] [name of plaintiff] in violation of public policy, then you must decide the amount of damages that [name of plaintiff] has proven [he/she] is entitled to recover, if any. To make that decision, you must: 1. Decide the amount that [name of plaintiff] would have earned up to today, including any beneﬁts and pay increases; [and] 2. Add the present cash value of any future wages and beneﬁts that [he/she] would have earned for the length of time the employment with [name of defendant] was reasonably certain to continue; [and] 3. [Add damages for [describe any other damages that were allegedly caused by defendant’s conduct, e.g., “emotional distress”] if you ﬁnd that [name of defendant]’s conduct was a substantial factor in causing that harm.]”)
- See CACI 3905A — Physical Pain, Mental Suffering, and Emotional Distress (Noneconomic Damage). (“[Insert number, e.g., “1.”] [Past] [and] [future] [physical pain/mental suffering/loss of enjoyment of life/disfigurement/physical impairment/ inconvenience/grief/anxiety/humiliation/emotional distress/[insert other damages]].”)
- Government Code 12965(b); 18 U.S.C. 1514A(c)(2)(C) — Sarbanes-Oxley whistleblower protections.
- Civil Code 3294 — Exemplary damages; when allowable; definitions. (“(a) In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.”)
- See endnotes 22 and 24 above.