• California Supreme Court Rules “At-will” Means What It Says

    By statute (California Labor Code Section 2922) all employment is presumed to be at the will of either party, terminable with or without cause or notice. The presumption of at-will employment codified in section 2922 of the Labor Code can be overcome by an express or implied agreement to the contrary. Evidence outside the writing may sometimes be introduced to explain ambiguities in the contract establishing a “for cause” requirement overcome the at will presumption.

    In Dore v. Arnold Worldwide, Inc., 39 Cal. 4th 384, the employee signed an employment letter containing an at-will provision and defining “at will” as the right to terminate the employment “at any time.” The employee argued that the verbal formulation “at any time” in the termination clause of an employment contract was ambiguous because it did not expressly speak to whether cause was required. The employee argued that he could introduce evidence that cause was required to explain the ambiguity. The Supreme Court disagreed. The court held the words “at any time” ordinarily encompassed the notion of “with or without cause.” The letter also stated that employment was “at will,” a term that, when used in an employment contract, normally conveyed an intent that employment could be ended by either party at any time without cause. Thus, no triable issues of fact existed as to breach of contract and breach of the implied covenant of good faith and fair dealing. So the employer won summary judgment.

    This case must be distinguished from those other cases where the words “at will” and other language could be interpreted as requiring cause or that do not address the issue, thus leaving the door open for other evidence outside the written document that proves a good cause requirement for termination. Unfortunately, the court’s opinion provides no clue as to how it would rule on cases that had similar language (like termination on 30-days’ notice) but did not have at will language. Only one case out of five held the language clearly called for termination without cause. The other four allowed the employee to introduce evidence that 30-day notice meant “for good cause.”

    Many questions remain in this ever-changing legal landscape. Employers should ensure that their offer letters, employment contracts and employee handbooks clearly state employment is at-will and may be terminated without notice and without cause.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Phillip J. Griego of The Law Office of Phillip J. Griego.
     

    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.

    Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Exhausting Claims under the Labor Code Private Attorney General Act

    9th Circuit Confirms Employees Do Not Have to Exhaust Administrative Remedies to Pursue Statutory Penalties

    When the legislature amended the Private Attorney General Act (PAGA), employees seeking civil penalties that previously could only be collected by the Labor Workforce Development Agency (LWDA) were required to exhaust administrative remedies by providing notice to the LWDA before commencing suit. It was unclear whether employees were required to exhaust such remedies if they were not seeking civil penalties, but rather were seeking only statutory penalties.

    For example, Labor Code Section 203 allows an employee to obtain a statutory penalty equal to the employee’s daily rate of pay, up to a maximum of 30 days, when an employer fails to timely pay an employee’s final wages. Under PAGA, the employee could also bring a claim for civil penalties. In 2005, a California Appellate Court, in Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 365, held that employees seeking statutory penalties for wage and hour violations, as opposed to civil penalties under the PAGA, are not required to file a claim with the LWDA.

    On August 28, 2006, the Ninth Circuit adopted Caliber’s ruling. Dunlap v. Superior Court (Bank of America, N.A.) 06 C.D.O.S. 8049. Adopting Caliber’s rationale, the Ninth Circuit similarly distinguished between statutory claims that could have been brought by employees regardless of the PAGA and civil penalties that could only be obtained by the LWDA, holding “To be subject to the [PAGA], the employee’s cause of action must allege a violation of one of the provisions listed in section 2699.5 and seek recovery of a ‘ civil penalty’ assessable by the [LWDA].”

    While the California Supreme Court has yet to issue a decision on this issue, Caliber and Dunlap will likely continue to be the law. The PAGA is a powerful means for ensuring compliance with the Labor Code. All employers in California should carefully evaluate their policies and procedures to ensure compliance.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     

    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.

    Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.