Termination Laws in California: What Every Employee and Employer Should Know

No matter your position in the workplace— whether a manager or new hire—you could find yourself asking: “Can I be fired for this?”

Or maybe you’re an employer wondering, “Is this termination legally sound?” California termination laws are intricate, offering protections, limitations, and rights you may not know you have… or should be respecting.

This MJB Law Group article is your roadmap to understanding what’s legal, what’s not, and how to navigate the often bumpy terrain of employment separation in California. Whether you’re letting someone go or being shown the door of wrongful termination, read on. Let’s clear up the confusion.

California Termination Laws

California termination laws govern the complex relationship between employers and employees. These laws dictate when, how, and why employment can legally end—and what rights both sides have when it does.

California is an at-will employment state, meaning employers can terminate workers at any time and for almost any reason. But—and here’s the twist—that doesn’t mean employers can ignore state and federal protections. If you’ve been fired for a discriminatory or retaliatory reason, your rights under California termination laws may have been violated.

At-Will Employment in California

At its core, California operates under the principle of “at-will” employment. This means either the employer or employee can terminate the employment relationship at any time—without notice and without needing a reason.

However, just because a firing doesn’t need a reason doesn’t mean any reason will fly. That’s where exceptions kick in.

Exceptions to At-Will Employment

Even in an at-will state, there are boundaries. You can’t be fired for:

• Discriminatory reasons (race, gender, age, etc.)
• Reporting illegal activity (whistleblowing)
• Exercising your legal rights (taking family leave, filing a complaint)

Additionally, contractual employees or union members may have protections laid out in agreements that override at-will norms.

Why Understanding Termination Law Matters

Legal Grounds for Termination

Employers need valid, legal justifications for letting someone go—especially if they want to stay out of court.

Performance-Based Terminations

Chronic tardiness? Missed deadlines? If you’re underperforming, that’s typically grounds for legal termination—assuming the employer has documented the issues and given opportunities to improve.

Layoffs and Downsizing

Business changes—like downsizing or department eliminations—can legally warrant layoffs. Still, employers must ensure that protected classes (e.g., older workers) aren’t disproportionately affected.

Contractual Obligations and Clauses

If you have a contract, termination terms are likely written into it. Breaching these terms can have legal repercussions.

Illegal Termination: What It Means

Just because you’re told, “We’re going in a different direction,” doesn’t mean the reason is lawful.

Wrongful Termination Defined

Wrongful termination occurs when an employee is fired for an illegal reason—such as discrimination, retaliation, or whistleblowing.

Examples of Unlawful Firing

• Being fired after announcing a pregnancy
• Termination after filing a sexual harassment complaint
• Dismissal based on race or religion

Legal Recourse for Victims

If you’ve been wrongfully terminated, you can file a claim with the California Department of Fair Employment and Housing (DFEH) or consult an employment attorney to pursue damages.

Protected Employee Rights

California workers are surrounded by a legal safety net that shields them from unfair treatment.

Discrimination and Retaliation Protections

Employers cannot fire you based on your:

• Race
• Sex
• National origin
• Sexual orientation
• Age
• Disability

Nor can they retaliate if you:

• File complaints
• Refuse illegal orders
• Support co-workers’ claims

Whistleblower Safeguards

If you report company wrongdoing, the law stands by you. Employers cannot legally retaliate for whistleblowing—even if the allegations turn out to be incorrect (as long as they were made in good faith).

Leaves of Absence (FMLA, CFRA, etc.)

Employees taking protected leave—like parental or medical leave—cannot be terminated simply for being away from work.

Termination and Discrimination Laws

Unfortunately, not all terminations are based on merit or conduct.

Race, Gender, and Age Discrimination

Letting someone go because they’re “too old” or “don’t fit in with the team” can disguise underlying discrimination. Be wary of euphemisms.

Disability and Pregnancy-Related Terminations

Employers must provide reasonable accommodations. Firing someone who requires such accommodations is often illegal.

Religious and National Origin Discrimination

Your right to observe religious practices or speak a native language is protected. Termination on these grounds violates state and federal law.

Notice and Final Paycheck Requirements

Timing matters when employment ends.

Is Advance Notice Required?

Generally, no. However, mass layoffs under the WARN Act require 60 days’ notice for large employers.

Timeframe for Final Wages

• If terminated: final paycheck is due immediately
• If resigned: final paycheck is due within 72 hours (or immediately if 72+ hours’ notice was given)

Penalties for Delayed Payments

Delayed final wages can result in “waiting time penalties”—up to 30 days’ worth of pay.

Severance Pay and Agreements

Are Employers Required to Offer Severance?

Not unless it’s in the employment contract. Still, some companies offer severance to avoid legal backlash.

Common Clauses in Severance Agreements

• Non-disparagement
• Waiver of legal claims
• Non-compete restrictions

Should You Sign a Severance Agreement?

Always read the fine print. Better yet, consult a lawyer before signing anything that waives your rights.

Termination Documentation and Record-Keeping

If it’s not documented, it’s disputable.

Importance of Written Records

Employers should track infractions, performance reviews, and verbal warnings to defend against legal claims.

Access to Personnel Files

California employees have the right to inspect and copy their personnel records upon request.

Exit Interviews and Legal Use of Statements

Exit interviews help companies identify issues. However, employees should be cautious—what you say can be used later in legal proceedings.

Termination During a Probationary Period

Starting a new job doesn’t make you bulletproof.

Legal vs. Illegal Reasons

You can be fired for not meeting expectations—but not for protected reasons (like your gender or disability).

Documentation Standards

Even during probation, employers should document their reasons.

Best Practices for Employers

Use the probation period wisely: offer feedback, set clear expectations, and keep thorough records.

Constructive Termination

Sometimes people quit—but not by choice.

Definition and Legal Tests

Constructive termination happens when an employer makes working conditions so unbearable that an employee has no choice but to resign.

Hostile Work Environment Cases

Bullying, harassment, and demotion can all lead to a valid constructive discharge claim.

Proving Constructive Discharge

Courts will examine whether a reasonable person would feel compelled to quit under the same conditions.

Unemployment Benefits After Termination

Getting fired doesn’t always mean you’re left empty-handed.

Eligibility Requirements

Most employees are eligible for benefits unless fired for “misconduct.”

Disqualification Scenarios

Being let go for theft, dishonesty, or willful neglect may disqualify you.

Filing a Claim: What You Need

• Separation details
• W-2s or pay stubs
• Reason for termination

Union and Collective Bargaining Termination Rights

Rights Under a Union Contract

Most contracts outline termination procedures, just cause standards, and grievance rights.

Grievance Procedures

Disputing a termination? Your union rep can file a grievance and push for arbitration.

How to Challenge a Termination

Follow your union’s internal process, then escalate to the NLRB if needed.

Termination and Immigration Status

Undocumented workers still have rights.

Protections for Undocumented Workers

You cannot be fired solely for your immigration status.

Employer Retaliation and ICE Threats

It’s illegal for employers to call ICE in retaliation for a workplace complaint.

Reporting Labor Violations Safely

Workers can report violations anonymously through the Labor Commissioner’s Office.

Retaliation After Complaints or Claims

Retaliation for Filing a Complaint

Employees who report unsafe working conditions, discrimination, or harassment are protected.

What the Law Says About Workplace Retaliation

California law strictly prohibits retaliatory actions—including termination.

Steps to Protect Yourself

Document everything. Keep records of complaints, emails, and witness names.

Termination and Wage Theft

When your job ends, so should your wage disputes.

What Is Wage Theft?

This includes unpaid overtime, denied breaks, or withheld commissions.

How It Can Relate to Termination

Sometimes, employers terminate employees to avoid paying back wages—this is illegal.

Filing a Claim with the Labor Commissioner

You can submit a wage claim online or in person—no attorney needed, but legal guidance can help.

Employer Defenses in Termination Cases

Employers aren’t always in the wrong.

Legitimate Business Reasons

If the firing was for genuine economic or performance reasons, it may be legal.

Performance and Conduct Issues

Employers should show documentation of poor performance or misconduct.

Documentation and Consistency

Treating employees consistently and keeping accurate records is key to a valid defense.

Filing a Wrongful Termination Lawsuit

Ready to take legal action?

Statute of Limitations

You generally have 2-3 years to file, depending on the claim type.

What Evidence Is Needed

• Emails
• Witness testimony
• Written warnings
• Employment contracts

Possible Outcomes and Settlements

You could receive back pay, reinstatement, punitive damages, or a settlement agreement.

Tips for Employees Facing Termination

It’s not the end—it’s the beginning of knowing your rights.

Know Your Rights Before You Leave

You’re entitled to a final paycheck, COBRA benefits, and possibly unemployment.

How to Request a Service Letter

Ask your employer for a written statement explaining your separation.

When to Contact an Attorney

If you sense discrimination, retaliation, or unfair treatment—call a lawyer at MJB Law Group before signing anything.

MJB Law Group: Expert Legal Guidance on California Employment Laws

When you’re facing wrongful termination, retaliation, or wage theft, having the right law firm in your corner is everything. MJB Law Group is a boutique litigation law firm in California that focuses on employment and personal injury law.

We go head-to-head with corporations and insurance companies to ensure individuals receive the justice they deserve. With years of experience, a compassionate approach, and a fierce dedication to client advocacy, we’re not just your attorneys… we’re your legal allies.

Choose MJB Law Group to level the playing field and get the representation you deserve. Contact us.

Conclusion

Navigating California termination laws can feel like walking a legal tightrope. Whether you’re an employee protecting your rights or an employer aiming to stay compliant, understanding the rules is key to avoiding pitfalls and ensuring justice.

And if the road gets rocky, remember—you don’t have to walk it alone. MJB Law Group stands ready to advocate, advise, and fight for your rights at every turn.