Law Review: Employers may fire ‘at will’ employees
In a court ruling favorable to employers, the California Supreme Court ruled last week that employers may fire “at will” employees without any reason, even if the employee has performed satisfactorily for a number of years.
The Bechtel Corporation eliminated a work unit, and as a consequence 49-year-old John Guz was let go. Two younger employees in his six-unit work force were transferred to another Bechtel office. Smell an age discrimination claim?
Guz had worked for Bechtel Corporation for 22 years, had favorable reviews and had been promoted several times. Bechtel’s personnel policy included the usual “at will” language that made all employees “at will” employees, meaning they could quit or be fired with or without cause.
Guz sued Bechtel alleging age discrimination, breach of the implied covenant of good faith and fair dealing (which is included in every contract) and breach of an “implied contract.”
Guz claimed that given his long-term well-regarded service for Bechtel, he had an implied contract (not an actual contract) that he would not be fired unless there was a good reason.
Bechtel claimed that no reason was necessary. The company had the “absolute right” to eliminate Guz’s work unit.
Guz also claimed he was discriminated against because he was 49 years old (sounds young to me). He cited evidence that he and the other older worker in his six-person unit were terminated while two of the younger workers were relocated.
The California Supreme Court issued a unanimous decision that Guz could not successfully sue for wrongful termination based on an “implied contract” that he would only be fired for good cause.
The little bit of good news for employees is that the high court continues to recognize that under the right circumstances, an employee may claim there is an implied contract that the employee may not be fired without cause.
This court decision makes it more difficult to prove that claim. Twenty-two years of excellent work performance alone is not sufficient. Bechtel may fire employees to reduce its work force – a legitimate purpose.
The Bechtel personnel manual “at will” language was key to the case.
The court also ruled against Guz on his age discrimination case, requiring workers to show significant evidence of actual discrimination, which is considered a high standard, difficult for employees to meet.
The decision is binding on all private employers in the absence of a union agreement or employment contract.
(Jim Porter is an attorney with Porter/Simon, with offices in Truckee and Reno. He is a mediator and was the Governor’s appointee to the Bipartisan McPherson Commission and the California Fair Political Practices Commission. He may be reached at firstname.lastname@example.org or at the firm’s web site http://www.portersimon.com.)
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