Implied-in-Fact Promise Not To Be Discharged

In the context of employment law in California, an implied promise not to be discharged can play a significant role, particularly in cases of wrongful termination. This concept revolves around the idea that even in the absence of a formal written contract, an employer’s actions, policies, or statements can create an implied contract or promise that an employee will not be terminated without just cause.

1. Nature of Implied Promises

• Source: Implied promises often stem from company policies, practices, oral statements by management, or even the employee handbook.
• Recognition by Courts: California courts have recognized that these implied promises can create enforceable expectations, even in at-will employment situations.

2. Legal Framework in California

• At-Will Employment: California generally follows the at-will employment doctrine, meaning either the employer or employee can terminate the employment relationship at any time, for any lawful reason.
• Exceptions: One major exception to this doctrine is the presence of an implied contract not to be discharged except for cause.
• Case Law: Landmark cases like Foley v. Interactive Data Corp. have established the criteria for when an implied contract is formed.

3. Identifying Implied Promises

• Criteria: Courts look at the duration of employment, promotions, commendations, assurances of continued employment, and the practices of the industry.
• Employee Handbooks: Often scrutinized to determine if they contain language that could be construed as creating an implied promise.

4. Legal Consequences

• Wrongful Termination Claims: Employees may claim wrongful termination if they believe their dismissal violated an implied promise.
• Damages: Successful claims can lead to reinstatement, back pay, and possibly damages for emotional distress.

5. Challenges and Problems

• Proof: The burden of proof lies with the employee to show that an implied promise existed.
• Subjectivity: Determining what constitutes an implied promise can be highly subjective and varies significantly from case to case.
• Employer Defenses: Employers often argue that any statements or policies were not intended to create a contractual obligation.

6. Examples

• Case Example 1: An employee with a long tenure, regular promotions, and no history of disciplinary actions might argue that these factors created an implied promise of continued employment.
• Case Example 2: If an employer verbally assures an employee of job security during a meeting, this might be seen as creating an implied promise.

7. Recommendations for Employers

• Clear Policies: Employers should ensure that their policies and handbooks clearly state the at-will nature of employment.
• Training: Managers should be trained on how to avoid making statements that could be construed as creating an implied contract.

8. Implications for Employees

• Awareness: Employees should be aware of the implications of their employer’s policies and any statements made regarding job security.
• Documentation: Keeping records of any assurances or promises made can be crucial in a legal dispute.

Conclusion

In California, the concept of an implied promise not to be discharged adds a layer of complexity to employment law, particularly in wrongful termination cases. Both employers and employees must navigate this area carefully, with an understanding of how such promises are interpreted by courts and the potential legal ramifications involved.

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Additional Information

An implied promise not to be discharged in the context of wrongful termination in the state of California relates to the doctrine of “implied employment contracts.” This legal concept is essential in understanding wrongful termination claims based on implied promises. Let’s explore this in detail:

1. Implied Promise Not to Be Discharged:
2. An implied promise not to be discharged arises when the circumstances surrounding an employment relationship suggest that the employer has made an implicit commitment not to terminate an employee without good cause. While California is an “at-will” employment state by default, this means that employers can generally terminate employees for any reason, except when there’s an implied promise or contractual agreement to the contrary.
3. Implied Employment Contracts in California:
4. In California, implied employment contracts can be established through various means, including:a. Oral Statements: If an employer makes oral assurances of job security or promises not to terminate without good cause and an employee relies on these statements, an implied contract may be formed.Example: An employer verbally assures an employee that they will have job security as long as their performance remains satisfactory. The employee takes this assurance as an implied promise not to be discharged without good cause.b. Employee Handbooks and Policies: Employee handbooks, policy manuals, or written materials provided by the employer can sometimes create an implied contract if they contain provisions suggesting job security or specific procedures for termination.Example: An employee handbook states that terminations will only occur after a progressive disciplinary process, implying job security unless certain conditions are met.c. Past Practices: If an employer has consistently followed specific termination procedures or practices in the past, employees may come to reasonably expect those practices to continue, creating an implied promise.Example: An employer has never terminated an employee without first providing a written warning and an opportunity to improve. Employees may infer that this is the company’s policy, creating an implied contract.
5. Legal Consequences:
6. When an implied promise not to be discharged is established, wrongful termination can occur if the employer fails to follow the implied terms. The legal consequences may include:a. Breach of Contract Lawsuit: Employees who believe they were wrongfully terminated can file a breach of contract lawsuit against their employer, seeking damages, including lost wages and benefits.b. Reinstatement: In some cases, a court may order the employer to reinstate the terminated employee to their former position.c. Attorney’s Fees and Costs: Prevailing employees in breach of contract cases may be entitled to recover attorney’s fees and legal costs.
7. Problems That Could Arise:a. Ambiguity:
8. Implied promises can be subjective and open to interpretation. Employers may argue that no such promise was made, leading to disputes over whether an implied contract exists.Example: An employee alleges that their supervisor made verbal assurances of job security, but the employer claims these assurances were merely expressions of goodwill, not binding promises.b. Documentation: The lack of written documentation of any implied promise can make it challenging to prove the existence of an implied contract.Example: An employee alleges an implied promise based on an oral assurance from their supervisor, but there are no witnesses or written records of this assurance.c. Changing Circumstances: Employers may argue that circumstances have changed, justifying a termination that may not have been necessary when the implied promise was formed.Example: An employer asserts that deteriorating business conditions required layoffs, justifying the termination of employees with implied job security.

Conclusion

In summary, an implied promise not to be discharged in California can create legal obligations for employers, and violations can lead to wrongful termination claims. However, these claims can be complex and fact-specific, often requiring careful consideration of the circumstances, evidence, and legal arguments involved. Employees who believe they have an implied promise should seek legal counsel to assess the viability of their claims and protect their rights.

Call 310-312-1100 Now to schedule a time to discuss your matter with Attorney John Michael Jensen.

2403. Breach of Employment Contract—Unspecified Term—Implied-in-Fact Promise Not to Discharge Without Good Cause

An employer promises to [discharge/demote] an employee only for good cause if it is reasonable for an employee to conclude, from the employer’s words or conduct, that the employee will be [discharged/demoted] only for good cause.

In deciding whether [name of defendant] promised to [discharge/demote] [name of plaintiff] only for good cause, you may consider, among other factors, the following:

• [Name of defendant]’s personnel policies [and/or] practices;
• [Name of plaintiff]’s length of service;
• Any raises, commendations, positive evaluations, and promotions received by [name of plaintiff]; [and]
• Whether [name of defendant] said or did anything to assure [name of plaintiff] of continued employment; [and]
• [Insert other relevant factor(s).]

Length of service, raises, and promotions by themselves are not enough to imply such a promise, although they are factors for you to consider.

New September 2003; Revised April 2009, June 2013, May 2020

Directions for Use

This instruction should be read when an employee is basing the claim of wrongful discharge on an implied covenant not to terminate except for good cause. Only those factors that apply to the facts of the particular case should be read.

In certain cases, it may be necessary to instruct the jury that if it finds there is an at-will provision in an express written agreement, there may not be an implied

agreement to the contrary. (See Faigin v. Signature Group Holdings, Inc. (2012) 211 Cal.App.4th 726, 739 [150 Cal.Rptr.3d 123] [there cannot be a valid express contract and an implied contract, each embracing the same subject, but requiring different results].)

Sources and Authority

• Express and Implied Contracts. Civil Code sections 1619–1621.
• “Labor Code section 2922 establishes a statutory presumption of at-will employment. However, an employer and an employee are free to depart from the statutory presumption and specify that the employee will be terminated only for good cause, either by an express, or an implied, contractual agreement.”

(Stillwell v. The Salvation Army (2008) 167 Cal.App.4th 360, 380 [84 Cal.Rptr.3d 111], internal citations omitted.)

• “[M]ost cases applying California law . . . have held that an at-will provision in an express written agreement, signed by the employee, cannot be overcome by proof of an implied contrary understanding.” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 340 fn. 10 [100 Cal.Rptr.2d 352, 8 P.3d 1089], original italics.)
• “Where there is no express agreement, the issue is whether other evidence of the parties’ conduct has a ‘tendency in reason’ to demonstrate the existence of an actual mutual understanding on particular terms and conditions of employment. If such evidence logically permits conflicting inferences, a question of fact is presented.” (Guz, supra, 24 Cal.4th at p. 337, internal citations omitted.)
• “The question whether such an implied-in-fact agreement [to termination only for cause] exists is a factual question for the trier of fact unless the undisputed facts can support only one reasonable conclusion.” (Faigin, supra, 211 Cal.App.4th at p. 739.)
• “In the employment context, factors apart from consideration and express terms may be used to ascertain the existence and content of an employment agreement, including ‘the personnel policies or practices of the employer, the employee’s longevity of service, actions or communications by the employer reflecting assurances of continued employment, and the practices of the industry in which the employee is engaged.’ ” (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 680 [254 Cal.Rptr. 211, 765 P.2d 373], internal citation omitted.)
• “[A]n employee’s mere passage of time in the employer’s service, even where marked with tangible indicia that the employer approves the employee’s work, cannot alone form an implied-in-fact contract that the employee is no longer at will. Absent other evidence of the employer’s intent, longevity, raises and promotions are their own rewards for the employee’s continuing valued service; they do not, in and of themselves, additionally constitute a contractual guarantee of future employment security.” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 341–342 [100 Cal.Rptr.2d 352, 8 P.3d 1089], original italics.)
• “We agree that disclaimer language in an employee handbook or policy manual does not necessarily mean an employee is employed at will. But even if a handbook disclaimer is not controlling in every case, neither can such a provision be ignored in determining whether the parties’ conduct was intended, and reasonably understood, to create binding limits on an employer’s statutory right to terminate the relationship at will. Like any direct expression of employer intent, communicated to employees and intended to apply to them, such language must be taken into account, along with all other pertinent evidence, in ascertaining the terms on which a worker was employed.” (Guz, supra, 24 Cal.4th at p. 340, internal citations omitted.)
• “Conceptually, there is no rational reason why an employer’s policy that its employees will not be demoted except for good cause, like a policy restricting

termination or providing for severance pay, cannot become an implied term of an employment contract. In each of these instances, an employer promises to confer a significant benefit on the employee, and it is a question of fact whether that promise was reasonably understood by the employee to create a contractual obligation.” (Scott v. Pac. Gas & Elec. Co. (1995) 11 Cal.4th 454, 464 [46

Cal.Rptr.2d 427, 904 P.2d 834].)

• “[Employer] retained the right to terminate [employee] for any lawful reason. Thus, . . . the fact that [employer] was obligated to pay compensation if it terminated [employee] for reasons other than his misconduct did not convert an otherwise at-will agreement into a for-cause agreement.” (Popescu v. Apple Inc. (2016) 1 Cal.App.5th 39, 59 [204 Cal.Rptr.3d 302].)

Secondary Sources

3 Witkin, Summary of California Law (11th ed. 2017) Agency and Employment,

§§ 246, 250, 251

Chin et al., California Practice Guide: Employment Litigation, Ch. 4-B, Agreements Limiting At-Will Termination, ¶¶ 4:81, 4:105, 4:112 (The Rutter Group)

1 Wrongful Employment Termination Practice (Cont.Ed.Bar 2d ed.) Contract Actions, §§ 8.6–8.16

4 Wilcox, California Employment Law, Ch. 60, Liability for Wrongful Termination and Discipline, § 60.05[2][a]–[e] (Matthew Bender)

21 California Forms of Pleading and Practice, Ch. 249, Employment Law: Termination and Discipline, §§ 249.01, 249.13, 249.15, 249.50 (Matthew Bender)

10 California Points and Authorities, Ch. 100, Employer and Employee: Wrongful Termination and Discipline, §§ 100.21, 100.22, 100.25–100.27, 100.29, 100.34 (Matthew Bender) California Civil Practice: Employment Litigation §§ 6:14–6:16

Call 310-312-1100 Now to schedule a time to discuss your matter with Attorney John Michael Jensen.