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socrateaser, Lawyer
Category: California Employment Law
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exception to at will emplyment -good faith/fair dealing

Customer Question

regarding the exception to at will emplyment under good faith and fair dealing exception: My performance was stellar as shown by performance reviews. This week VP appointed a new 2nd level manager over my manager. He had one on one with me Thursday saying he will insist on my making changes. Persons who left the company know how crude he is. He was crude to us. I complained to VP and CEO about many detailed complaints in email and asked for reassignment. He said this wont be allowed, there are no other openings he would not address my complaints that the guy was crude. I responded in email and copied CEO that I thought he was hypocritical expecting people to believe that he was the serious Christian he always wants to say he is and that this was double talk. I said he was lying for convenience and that God was watching his every move and that he knows very well that this guy is crude because many have complained and resigned. The next day without any discussion at all, HR said I was being terminated and walked me out the door. This appears to me to be termination based on malice. Do I have a case? If my employment aggreement said complaints can only be dealt with by arbitration, am I refused to use threats of a court case or jury trial in this case?


I lost 25% of my stock options which were to vest in 14 days as well as loss to all future value of the options on acquisition or going public. I also lost an enjoyable job and other employers are asking me to accept less pay. I was earning $135,000. Only 2 weeks severence was given


 


From Wikipedia: on at will under good faith and fair dealing which courts recognize in California:


 


This exception for a covenant of good faith and fair dealing represents the most significant departure from the traditional employment-at-will doctrine. Rather than narrowly prohibiting terminations based on public policy or an implied contract, this exception – at its broadest – reads a covenant of good faith and fair dealing into every employment relationship. It has been interpreted, by some courts, to mean either that employer personnel decisions are subject to a “just-cause” standard or that terminations made in bad faith or motivated by malice are prohibited

Submitted: 3 years ago.
Category: California Employment Law
Expert:  socrateaser replied 3 years ago.
Hello,

You've done some good research into general law.

A covenant of good faith and fair dealing is implied by law in all contracts. Broadly stated, the covenant requires that neither party do anything to deprive the other of the benefits of the agreement. Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 683-684, 254 Cal.Rptr. 211, 227-228; Rest.2d Contracts § 205.

In the employment context, the implied covenant prevents the employer from frustrating the employee's enjoyment of rights provided by the contract, including the right to continued employment absent good cause for discharge. Kelecheva v. Multivision Cable T.V. Corp. (1993) 18 Cal.App.4th 521, 531-532, 22 Cal.Rptr.2d 453, 459; see Kuhn v. Department of Gen. Services, supra, 22 Cal.App.4th at 1638, 29 Cal.Rptr.2d at 196.

However (and this is a big however), before the implied covenant comes into play, it must be shown that the employer promised the benefits sought by the employee. Thus, where the employer is claimed to have breached the implied covenant by terminating the employee without cause, the employee must prove that the employer expressly or impliedly promised not to do so.

Such proof, of course, would also support a breach of contract claim. Thus, the result is equally explicable in traditional contract terms. Pugh v. See's Candies, Inc. (Pugh I) (1981) 116 Cal.App.3d 311, 329, 171 Cal.Rptr. 917, 921 (disapproved on other grounds in Guz v. Bechtel Nat'l, Inc. (2000) 24 Cal.4th 317, 100 Cal.Rptr.2d 352).

In plain English, you would have to show that your former employer (1) has a written policy noticed to each employee before the commencement of work, which provides for a specific disciplinary process, in the event of an employee's failure to perform according to the employer's reasonable expectations or employee's express job description; (2) the employer failed to follow the required disciplinary process, and (3) the employee was terminated from employment as a result.

If you can prove the above-described three elements, then you can sue the employer for breach of contract. However, unless the employment policies or contracts permit prevailing party attorney's fees, then you cannot get attorney's fees compensated as part of your lawsuit. You also cannot be reinstated to your job -- your damages are limited to lost wages from the date of termination until the date that you can reasonably be expected to obtain (or you actually obtain) new employment.

For an employment rights lawyer referral, see this link.

Hope this helps.

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socrateaser, Lawyer
Satisfied Customers: 34826
Experience: Retired (mostly)
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Customer: replied 3 years ago.
You mentioned for an employment rights lawyer, see this link. But there was no link. Do you have that link?
Expert:  socrateaser replied 3 years ago.
Whoops. My bad. Click here.
Customer: replied 3 years ago.
Thanks for giving me the link. The only reason why I did not click the accept on that follow up answer is that the system indicates I would be paying for accepting another answer. I don't fully understand this system, but this is to let you know Thanks for providing the link.
Expert:  socrateaser replied 3 years ago.
No worries. If the system sends out subsequent payment requests with my userid, rest assured that I am not sending nor do I authorize such email. You decide whether or not to pay and how much.

Best wishes.

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