If you own or manage a business in the state of California, it’s essential to stay compliant with state and federal laws regarding employee termination and separation. And if you’re a worker, it’s also vital to know your rights when ending employment. Here are some of the most important questions about the process that both sides need to pay attention to.
Yes. This means that either the employer or the employee can end the relationship at any time for nearly any reason (with or without cause), without notice.
However, there are some scenarios where “at will” status does not apply:
When workers are terminated based on fraudulent misrepresentations
Unless a contract stipulates otherwise, workers are not required to give notice to employers before leaving. This is a courtesy and not mandatory. Giving advance notice may be beneficial, though, if the employee would like references from the employer or may want to be hired back in the future.
In California, workers must be given:
Wrongful termination is unfair dismissal. Usually, this falls into one of three categories:
A separation agreement is a legally binding contract between an employer and an employee who is about to be terminated. Often, this is because of downsizing or business acquisition, and a severance package is involved.
The employee agrees to certain aspects of the agreement (within the bounds of the law — see below) in order to receive their severance pay. It should be noted that severance is generally not required unless it is part of an employment contract or negotiated as part of corporate restructuring during a merger or acquisition.
A waiver of claims (aka release of claims) is the meat of most separation agreements. It states that the employee gives up the right to make claims later against the employer, such as suing them after the fact for something they believed was unlawful.
In California, certain workplace rights cannot be waived in a separation agreement, including:
In California, workers must be given five days to review a separation agreement and cannot be forced to sign it on the spot.
Some aspects of separation agreements may not be legal in the state of California, which has particularly strong protections for workers. Non-disparagement clauses mean terminated employees may not speak ill of their previous employer. These clauses are generally considered allowable.
However, non-disparagement clauses do not forbid the employee from talking about unlawful acts in the workplace, such as harassment or discrimination. This was strengthened by the Silenced No More Act (Senate Bill No. 331), which was approved by the governor in 2021.
In other states, non-compete and non-solicitation agreements are common elements of separation agreements too. A non-compete clause says that the employee can’t work for a competitor of their former employer for a predetermined amount of time after termination.
A non-solicitation agreement means the employee cannot solicit business from the former employer’s clients, nor can they poach employees to come work with them at a new company.
California regards non-compete and non-solicitation clauses as being too punitive for workers and, therefore, does not enforce them, except under narrow circumstances, usually involving the sale of a business.
Furthermore, companies headquartered outside of California with California employees do not get a choice of law should the state where they are based have laws more favorable to them in this regard. They must abide by California law, not the laws of the other state.
No, even if it is not stipulated in a separation agreement, employees may not share certain information with other entities once they leave their job. This includes things like financial data, client lists, private legal history, manufacturing formulas, and trade secrets. Employees who are not sure about what constitutes proprietary information should discuss this with the employer prior to their termination.
Employers must pay terminated employees within a specified period according to these rules:
As you can see from the questions above, terminating a job or being discharged can get quite complicated and involve a number of federal and state laws. Not all employers obey the law when it comes to firing workers or paying them after they quit. This is why many workers in California choose to work with an employment lawyer, like Employee Law Group.
An employment attorney can make sure your rights are upheld. They can assist with things like:
Do you have questions about a separation agreement or the details of your job termination? If you’re in the Los Angeles area, reach out to Employee Law Group for your free initial consultation by contacting us online or calling the office at 310-407-7358.
