Losing a job can feel unfair, especially when the employer gives little explanation or the stated reason does not seem credible. Yet under California law, an unfair termination and an unlawful termination are not necessarily the same thing.
California generally follows the at-will employment rule. That means an employer can usually terminate an employee without having to prove good cause, unless an agreement limits that right. What an employer cannot do is fire someone for an unlawful reason.
At Jafari Law Group, our wrongful termination lawyers evaluate claims by looking beyond the explanation given at termination. Timing, workplace complaints, performance history, emails, disciplinary records, wage practices, and the employer’s conduct before and after the termination can all help show what actually happened.
What Is Wrongful Termination in California?
California Labor Code section 2922 establishes a presumption of at-will employment when employment does not have a specified term. In general, an at-will employee can be terminated at any time, with or without cause.
That rule has limits.
California courts recognize a claim for wrongful termination in violation of public policy when an employer terminates an employee for a reason that violates a fundamental public policy established by constitutional or statutory law. The California Judicial Council identifies the basic elements as an employer-employee relationship, termination, a termination substantially motivated by a violation of public policy, and resulting harm.
A wrongful termination California claim may arise when an employee is fired because the employee:
- Reported conduct the employee reasonably believed was illegal.
- Refused to participate in unlawful conduct.
- Complained about discrimination, harassment, or certain workplace violations.
- Exercised legally protected leave or workplace rights.
- Sought wages or other compensation protected by law.
- Belonged to a protected category and was terminated because of that protected characteristic.
- Participated in certain investigations or legal proceedings.
The facts surrounding the termination matter. An employer rarely states in a termination letter that it is firing someone because the employee reported unlawful conduct. These cases are often proven through circumstantial evidence.
What Does Not Automatically Count as Wrongful Termination?
Employees sometimes use “wrongful termination” to describe any firing they believe was unjustified. California law uses the concept more narrowly.
An employer may make a poor business decision without necessarily violating the law. An employer may also fire an at-will employee because of a personality conflict, dissatisfaction with performance, a restructuring, a change in management, or another reason that seems arbitrary, provided the true reason is not prohibited by law.
Even a false or exaggerated explanation for a termination does not automatically create a legal claim.
That does not mean the employer’s explanation is irrelevant. A reason that changes over time or conflicts with the employee’s documented performance history may become evidence that the stated reason was a pretext for an unlawful one.
Consider an employee who receives positive evaluations for several years. The employee reports suspected wage violations to management. Two weeks later, the employer suddenly claims that the employee has longstanding performance problems and terminates employment.
The short timing, previous evaluations, internal complaint, and newly asserted performance concerns may all warrant closer review.
Retaliation and Whistleblower Terminations
Retaliation is one of the more common issues we examine in wrongful termination cases.
California Labor Code section 1102.5 protects employees in several whistleblower situations. Among other protections, the statute prohibits retaliation against an employee who reports information the employee reasonably believes reveals a violation of state or federal law or a violation or noncompliance with a local, state, or federal rule or regulation. It also protects an employee who refuses to participate in conduct that would result in such a violation.
The report does not always have to be made to a government agency. Depending on the circumstances, reporting suspected unlawful conduct internally to someone with authority to investigate or correct it can qualify for protection.
Timing can become significant. A firing shortly after a protected complaint may support an inference of retaliation, but timing alone does not resolve the case. Courts consider the full factual record.
Discrimination Can Also Lead to a Wrongful Termination Claim
California’s Fair Employment and Housing Act, commonly called FEHA, prohibits covered employers from discriminating against employees based on protected characteristics.
Those protections include characteristics such as race, religion, sex, disability, national origin, sexual orientation, and other categories protected by California law. California’s Civil Rights Department states that the employment discrimination provisions of FEHA generally apply to employers with five or more employees.
A termination may therefore lead to discrimination claims, wrongful termination claims, or both, depending on the circumstances.
Evidence may include discriminatory comments, different treatment of similarly situated workers, sudden discipline after disclosure of a disability or pregnancy, inconsistent explanations for termination, or departures from the employer’s normal procedures.
What About Constructive Discharge?
An employer does not always expressly fire the employee.
California recognizes constructive discharge in limited circumstances. A resignation can be treated as the legal equivalent of a termination when the employer intentionally creates or knowingly permits working conditions that are so intolerable or aggravated that a reasonable person in the employee’s position would feel compelled to resign.
The standard is demanding. An unpleasant workplace, difficult supervisor, unfair criticism, or ordinary workplace conflict will not necessarily meet it.
Employees considering resignation because of unlawful workplace conduct should consider obtaining legal advice before leaving. The timing and wording of a resignation can later become important evidence.
How a California Severance Agreement Affects a Potential Claim
A termination is often followed by an offer of severance.
A California severance agreement may provide money or other benefits in exchange for a release of legal claims. Employees should understand what they are giving up before signing.
Under Government Code section 12964.5, an employer offering an agreement related to separation from employment must notify the employee of the right to consult an attorney and generally provide a reasonable period of at least five business days to do so. An employee may choose to sign sooner when that decision is knowing and voluntary and is not improperly induced by the employer.
California law also restricts provisions that prevent employees from disclosing information about unlawful acts in the workplace. At the same time, the law permits otherwise valid general releases in separation agreements and allows confidentiality concerning the amount paid under a severance agreement.
This makes the wording of a severance agreement important.
An employee who believes a termination may have been unlawful should consider having the agreement reviewed before signing it. Once a valid release has been executed, the employee may lose the ability to pursue claims covered by that release.
A severance offer can sometimes be negotiated as well. Relevant factors can include the strength of potential legal claims, unpaid compensation, length of service, compensation level, disputed bonuses or commissions, benefits, restrictive provisions, and the scope of the proposed release.
Does a PAGA Claim in California Have Anything to Do With Wrongful Termination?
Sometimes, but the two are not the same.
The California Private Attorneys General Act, or PAGA, allows an aggrieved employee to pursue certain civil penalties arising from Labor Code violations on behalf of the state and other affected employees. A PAGA claim California employees bring is therefore different from a claim seeking damages because an individual was unlawfully fired.
The two issues may arise in the same employment dispute.
Suppose an employee discovers that workers are routinely denied legally required compensation, raises concerns with management, and is then fired. The employee may potentially have individual wage claims, a retaliation or wrongful termination claim, and, if statutory requirements are satisfied, a PAGA claim relating to Labor Code violations.
California substantially revised PAGA in 2024, and the statute has continued to receive legislative and regulatory attention. Under the current version of Labor Code section 2699, an employee generally must have personally suffered each Labor Code violation alleged to pursue penalties for that violation, subject to a statutory exception involving qualifying nonprofit legal aid organizations. The law also contains provisions that can reduce penalties when employers take specified compliance or cure measures.
For qualifying PAGA recoveries under the current statute, 65 percent of civil penalties generally goes to the Labor and Workforce Development Agency and 35 percent to aggrieved employees. A court must approve a settlement of a filed PAGA action.
PAGA also has procedural requirements that should be evaluated promptly. Employees should not assume that filing an ordinary wage complaint or discussing a termination with human resources preserves PAGA rights.
What Is a Wrongful Termination Case Worth?
There is no standard settlement amount for wrongful termination in California.
A case involving a highly compensated employee who remains unemployed for a substantial period can look very different from one involving an employee who quickly finds a comparable position. A case supported by documents, witnesses, and strong evidence of retaliation may also be evaluated differently from one that depends mainly on conflicting recollections.
Potential recovery depends on the legal claims and the evidence.
Lost compensation is often an important part of the analysis. California’s civil jury instructions provide for consideration of past and future lost earnings in appropriate wrongful discharge cases, including wages, benefits, and pay increases the employee would otherwise have earned.
Depending on the claims, available remedies can potentially include lost wages and benefits, future economic losses, emotional distress damages, statutory penalties, attorney’s fees and costs, and, in appropriate cases meeting the legal requirements, punitive damages.
Not every remedy is available in every case.
The employee also has a duty to mitigate certain damages. That generally means making reasonable efforts to obtain comparable employment rather than allowing lost wages to accumulate without attempting to find work. The Judicial Council’s wrongful-discharge damages instructions specifically recognize mitigation as an issue that may need to be considered.
For that reason, estimating case value requires more than multiplying salary by the number of months since termination.
Evidence That Can Affect the Strength and Value of a Claim
Employees who suspect an unlawful termination should preserve evidence they already lawfully possess.
Useful material can include termination notices, performance evaluations, disciplinary records, emails, text messages, pay records, commission plans, employee handbooks, written complaints, responses from human resources, accommodation requests, leave documents, and the names of potential witnesses.
Employees should not take confidential company information, trade secrets, privileged communications, or documents they have no legal right to possess.
A written chronology can also help. Record when important events occurred, who participated, what was said, when complaints were made, and how the employer responded. Memories can become less reliable as time passes.
Do Not Assume You Have Years to Decide What to Do
Different employment claims have different filing deadlines.
For California FEHA employment claims, the Civil Rights Department states that a complaint generally must be filed within three years of the alleged discriminatory act. Employees who want to proceed directly to court with a FEHA claim must still obtain a right-to-sue notice from CRD before filing their lawsuit.
Other claims can have different and sometimes much shorter deadlines. PAGA also has its own notice and procedural requirements.
Waiting to seek advice can create problems even before a statutory deadline expires. Witnesses leave companies, electronic records can become harder to locate, and an employee may sign a severance agreement without understanding how broadly the release is written.
What Should You Do After a Suspected Wrongful Termination?
Do not delete emails, text messages, performance reviews, or other documents relating to the events surrounding your termination. Keep copies of documents you are legally entitled to possess.
Write down what happened while the events are still fresh. Keep records of your efforts to find replacement employment and the compensation associated with any new position.
If your employer offers severance, review the agreement carefully before signing. Pay particular attention to the release of claims, confidentiality terms, nondisparagement provisions, payment terms, and any provisions dealing with existing disputes.
Most importantly, consider having the facts reviewed before concluding that you either definitely have a case or definitely do not. Employment disputes often turn on facts that may not appear significant until they are considered alongside California’s retaliation, discrimination, whistleblower, wage, and termination laws.
Speak With Jafari Law Group About a California Wrongful Termination
If you believe you were fired because you reported unlawful conduct, exercised a protected right, opposed discrimination or harassment, raised wage concerns, or for another prohibited reason, Jafari Law Group can review the circumstances surrounding your termination.
We also review California severance agreements and employment disputes involving wage claims and PAGA issues. Because deadlines and procedural requirements vary depending on the claims involved, seeking legal advice early can help preserve available options.