Employment Law For Employees

Glossary of Workers' Compensation Terms

Employer Exploitation


The following is intended to provide basic general information on employment concerns affecting employees including job discrimination, sexual harassment, age, race, gender, pregnancy, glass ceiling and disability discrimination, wage & overtime, breach of contract, non-compete clauses, wrongful termination, whistle blowing and various other issues. For more specific information, please contact us.


What is Job Discrimination?

If your employer doesn’t like you and fires you, it isn’t necessarily actionable discrimination. The employer must be discriminating on the basis of a "protected class" for the discrimination to be illegal.

The specific categories which are protected are spelled out in particular laws, or statutes. Because gender, or sex, is one protected class, everyone is protected by at least one category. Many people fall into more than one protected class.

In other words, if the category of the discrimination isn’t spelled out in a statute, the employee is not protected from that form of discrimination. Therefore, if the employer doesn’t like you, but you don’t know why, or the category isn’t protected by law, he can fire you or not hire you for that reason.

The essential consideration is why. Why were you fired or not hired? Was it because of your age or race or gender, etc.? Or was it because the employer just didn’t like you, or wanted to hire his brother, etc.? What matters is the motive.

Age Discrimination

Generally, discriminating on the basis of age is illegal under both the Federal Age Discrimination in Employment Act (ADEA), and the California Fair Employment and Housing Act (FEHA).

People under forty years old are not protected by age discrimination laws. If an employer refuses to hire somebody because he or she is thirty-nine, and therefore "too young", that is not illegal. But if it is because he or she is forty and "too old", that is illegal. It is illegal to replace a person over 40 with a person under 40, if age is the reason. It is also illegal to replace a person over forty with a younger person who is also over forty.

Sometimes when employers are down-sizing, they lay people off by offering "golden handshakes", which are special packages to employees who agree to take early retirement. This is not age discrimination. However, if it is being done for the purpose of getting rid of older workers just because of their age, and if it can be shown that there is a real discriminatory motive that is illegal. It is not illegal to replace people who are making high wages with people who will make less because they have less seniority.

However, if the wage considerations are not the real motivator, and the employer is actually trying to replace older workers with younger ones, that is illegal.

Disability Discrimination

Disabled individuals are protected from discrimination by the Federal Americans With Disabilities Act (ADA) the California Fair Employment and Housing Act (FEHA). These laws make it illegal for an employer to discriminate against a qualified individual with a disability in job application procedures; the hiring, advancement, or discharge of employees; employee compensation; job training; or other terms, conditions, and privileges of employment, because of the individual’s disability.

For the employee to be eligible to make a claim of disability discrimination under the ADA or FEHA, he must be a "qualified individual with a disability." This means that he must be able to do the job. For instance, a person with no hands would not be qualified to be a typist. (However, see below discussion on "reasonable accommodation.") If the employer didn’t give him the job, it wouldn’t be discrimination. It’s just that the person simply isn’t qualified.

However, generally, an employer has an obligation to make a "reasonable accommodation" if a disabled employee can otherwise perform the duties of the job.

Reasonable accommodation means that even if a person is disabled, and even if that disability may make it seem like he or she can’t do a job, the employer must consider whether or not a "reasonable accommodation" can be made. A "reasonable accommodation" is when the employer modifies the job duties, provides some extra help, or takes some other measure to ensure that the person can still be able to do the job.

Employees have to ask for reasonable accommodations. Once they do, the employer has the right to consider the requests, and make counter-offers that the employer might see as more reasonable. If the employer and employee can’t agree, then the employee might want to consider bringing suit. However, to win the employee must prove that the employer’s proposal is unreasonable and the employee’s proposal is reasonable.

"With a disability" means that the worker is actually disabled. For an injury, disease, or their ailment to be a "disability" under the law, it must "substantially limit one or more major life activities." A mere annoyance in not enough. The disability must actually interfere with a person’s life.

It is also unlawful to discriminate against a person who is perceived to have a disability. If the employee is not disabled, but the employer believes he is, and discriminated against him, that is also illegal.

Racial Discrimination

It is illegal under both Federal and State Law to discriminate in the "terms or conditions of employment" on the basis of a person’s race or color.

"Terms or a condition of employment" means just about anything relating to someone’s job: their position, pay, title, hours, vacations, most everything is a term or condition of employment. Whether or not a person is hired is also considered a "term or condition of employment."

Race is generally defined as a person’s ancestry, ethnic characteristics or color. Employment discrimination based on association with people or a particular race is also prohibited. For instance, if an employer fired a white employee because he or she was dating a black person, that would be unlawful discrimination.

There are two types of race discrimination: "disparate treatment" and "disparate impact."

"Disparate treatment" is straightforward discrimination. Simply put, it is treating a person differently because of a protected class, like sex or race.

"Disparate impact" discrimination is more complicated. "Disparate impact" is where some type of company policy excluded a certain individual or individuals from the job or from promotions. The policy wasn’t designed to exclude them; that was just the unfortunate result, or the impact.

For example, fire departments frequently imposed various strength requirements for job applicants. Women were frequently unable to meet these requirements. In some instances, the requirements were simply too high; they were more than was necessary. Qualified women were therefore being excluded unnecessarily. This does not mean the fire departments were necessarily trying to exclude women. That was just the result of their policy; it had a disparate impact upon women.  Because the policy wasn’t sufficiently job-related (too much strength was required) there was discrimination.

Disability Discrimination & Workers’ Compensation Claims

An employee injured on the job is entitled to file a workers’ compensation claim. The employee’s injury may be temporary or permanent and may be of a nature that the worker can continue to work or require the worker to take time off work.

If the employer retaliates against the employee for filing a workers’ compensation claim, the employee can also file a claim for additional compensation to punish the employer under California law.

If the employee is fired when the employee can do the job, the employee can also file a claim for discrimination. It depends on whether the employee is able to do his job either with or without accommodation. If the injured employee can do his or her job, the employer cannot fire the employee even if the employer thinks the employee may get re-injured on the job.

Workers’ compensation laws establish what an employee injured on the job can recover by a predetermined formula. However, damages under disability discrimination can include all, part, and future loss of wages, benefits, emotional distress, attorney fees and even punitive damages.

Sexual Orientation Discrimination

It is illegal in California for an employer to discriminate against an employee because of that employee’s sexual orientation.

It is also illegal in California for an employer to discriminate against an employee on the basis of that employee’s perceived sexual orientation. So if an employer believes an employee is gay, and fires him because of that, it is illegal whether or not the employee is actually gay.

One of the aspects of the California law is that the employee must make a complaint to the California Labor Commission no more than 30 days after he or she is discriminated against. Only after the Labor Commission has processed the claim may the employee sue in court.

Frequently the same actions that violate the laws against sexual orientation discrimination violate other laws as well. It is possible that an employer who is discriminating on the basis of sexual orientation is also discriminating on the basis of gender.

National Origin Discrimination

The Immigration Reform and Control Act, (IRCA) prohibits employment discrimination because of national origin against U.S. citizens, U.S. nationals, and authorized aliens. Title VII of the Civil Rights Act of 1964 bans national origin discrimination against any individual.

National origin discrimination is different than race discrimination. It happens when an employer discriminates because of where someone was born. Obviously, race discrimination and national origin discrimination can often go hand-in-hand.

Pregnancy Discrimination & Leave

Discrimination based on pregnancy is illegal under both the California Fair Employment and Housing Act (FEHA) and the Federal Title VII laws.

This includes discrimination based on pregnancy, childbirth, or related medical conditions. Even discrimination based on the "potential" for pregnancy is illegal. For example, in one case a manufacturing company would not allow women to work certain jobs because if they were pregnant there could be harm to their fetus. This was illegal discrimination.

Employers have a number of responsibilities to employees who become pregnant. For instance, if a woman becomes pregnant, and with the advice of her doctor asks for a position that is less strenuous or hazardous, the employer must transfer her to another position if it has one, or can make one without being "unduly burdened."

The California FEHA specifically gives pregnant employees the right to take a leave of absence for a reasonable period of time, not to exceed four months. The employer does not have to pay his employee during this time. Employers can require any employee who plans to take a pregnancy leave to give the employer reasonable notice of the date the leave will start and how long it is expected to last.

In addition, a pregnant employee may also be eligible for up to 12 weeks medical leave under the Federal Family and Medical Leave Act (FMLA).

Employers generally cannot force a pregnant employee to go on pregnancy leave. It is there if the woman wants it. However, if the employer can show that the woman absolutely cannot do her job, or is "disabled" by the pregnancy, and there is no reasonable accommodation that can be made, he may be allowed to make her take a leave of absence.

Gender or Sex Discrimination

Title VII and the FEHA prohibit sex discrimination based on the "terms or conditions of employment."

Similar to racial discrimination, there are two types of sex discrimination: "disparate treatment" and "disparate impact."

Disparate treatment is straightforward discrimination. Simply put, it is treating a person differently because of his or her sex.

Disparate impact is where some type of company policy excludes certain individuals from the job or from promotions. The policy wasn’t designed to exclude them; that was just the unfortunate result.

It is also illegal to make employment decisions based on "stereotypes" regarding gender, such as caring for children.

The Glass Ceiling

A glass ceiling exists when it is possible to draw an imaginary line on the corporate ladder above which all or any one of a protected group cannot rise above. For example, above this "glass ceiling" all managers and executives are 100% white, Anglo-Saxon males. Below the "glass ceiling" are found the group of females, the African Americans, the Latinos, etc.

Glass ceiling cases are primarily proven by statistics and involve a class of employees. If all women cannot rise above the position of supervisor, then all women are being discriminated against in promotion and hiring. Therefore, any glass ceiling case is a potential class action case.

Proving Discrimination

Although the approach for proving discrimination tends to be the same irrespective of the type of discrimination, actually proving discrimination can be more complicated than outlined below. This is especially true of disability discrimination, where other factors, such as "reasonable accommodation" are at issue.

First, the employee shows that (1) he is a member of a "protected class" and (2) he suffered an "adverse employment action."

The employer must then state that there was a legitimate reason for the adverse employment action. For example, we’ll take the case of a black man who was fired, and says it’s because he is black; because the employer is racist. The employer might state that the employee was not fired because he was black, but because the employer was actually down-sizing. That is a perfectly legal reason to fire someone.

The employee then has the chance to show that the employer’s reason for the firing was not the legitimate reason that the employer says it was. The employee is trying to show that the employer’s reason for the firing is a "pretext." In the example, the employee might be able to show that his position wasn’t actually eliminated during the downsizing.

It used to be that that was enough. Once the employee proved that the employer’s supposed reason wasn’t actually the legitimate reason, then the court would presume that the real reason was the illegal one. However, the more current trend is to require the employee to provide some actual proof of discrimination.

In the example, the employee would have to present some evidence that he had been fired because he was black. He might be able to show that the person who decided to fire him had called him the "n-word." This is pretty good proof that the person is a racist. Statistics also can be very useful in proving discrimination cases of all kinds.


Sexual Harassment in the Workplace

Sexual harassment is one of the most complicated areas of employment law. Below is a basic guide to sexual harassment in the workplace. Please note that sexual harassment often goes hand-in-hand with other illegal acts, like gender discrimination. If you have a problem with sexual harassment, you should think about what else might be going on as well.

There are two types of sexual harassment, "quid-pro-quo" and "hostile environment"

Each will be explained separately, although where there’s one, there’s often the other.    

"Quid-pro-quo" is Latin for "this for that." It is a trade. When the trade is on the basis of sex, it is illegal. This is the when the employer makes sex a prerequisite to getting something in the workplace. For example: "sleep with me and you’ll get the job." That’s illegal. Quid-pro-quo can also include negatives. For example, "sleep with me or you’re fired" is also illegal.  

Who can sue? Obviously, the woman who is fired because she wouldn’t sleep with the boss can sue. But in some cases so can a woman who slept with the boss.

Take for example a situation where the boss asks one of his assistants to sleep with him in exchange for a promotion. She does it and gets the promotion. Under the law, she has a claim, because her agreeing to his sexual demands was a condition of the promotion. She also has a claim if she refused and didn’t get the promotion.

Now, if she was just having an affair with him because she wanted to, there is no claim. What about the other assistants? Do they have a case because the other assistant got a promotion because she was sleeping with the boss, and they did not? Probably not. In California and in most states, there is no sexual harassment or discrimination claim because a lover got special treatment. However, if the boss made sexual demands that they refused, and that’s why they didn’t get the promotion or other benefits, they have a claim.

What about the person who accepts the offer of advancement in exchange for sex. She can still sue. She either deserved the promotion or didn’t deserve it; however, she shouldn’t have been put in the position of considering whether or not to sell her body to get it. The problem is the idea of "consent."  

Sexual harassment must be unwelcome. If she encouraged the trade-off or was happy to participate, she has a difficult case.

Victims of sexual harassment can recover for their lost wages, future lost wages, emotional distress, punitive damages, and attorney’s fees.

The Hostile Workplace Environment

Hostile environment sexual harassment is a situation in which the employer, supervisor, or co-worker does or says things that make the victim feel uncomfortable because of his or her sex. Hostile environment sexual harassment does not need to include a demand for an exchange of sex for a job benefit. It is the creation of an "uncomfortable environment."   

A hostile workplace environment also may involve racial, national origin or ethnic discrimination.

First, the conduct must be "offensive." If two employees have a good time exchanging sexual jokes, it would not be sexual harassment.    

If one employee kept telling another employee sexual jokes that the second employee found offensive, it would be sexual harassment.  If two employees dated and engaged in consensual sex, this would not be sexual harassment.  If one of the two then wanted to terminate the relationship, and the other used the unequal relative terms and conditions of employment of the work place to further the relationship, this would be sexual harassment.

Jokes, pictures, touching, leering, unwanted requests for a date have all been found by courts to be sexual harassment. Sexual harassment can be between people of the same sex. Sexual harassment can be a woman harassing a man.

Theoretically, anyone who is offended by a sexually harassing environment may sue. However, that employee’s offense must be reasonable. An extremely sensitive person might not be able to maintain a claim, because her feelings of having been offended were not reasonable.

The courts have held that if you are harassed in the work place about your race, ethnicity, or national origin you may have the right to sue your employer. Discrimination and harassment go hand in hand here. Where there is discrimination, there is also usually harassment.

First, race, national origin or ethnicity discrimination or harassment must be severe and pervasive to be actionable. An idle comment, even if offensive, is not the basis for a lawsuit. Ongoing use of the "n-word" word could be severe and pervasive. Having derogatory words and racial or ethnic slurs written on the bathroom walls could be severe and pervasive. One has to look at it on a case-by-case basis.

Next, the conduct must be carried on "by management" or "management must know about it" and have had an opportunity to stop it and in fact, do not. In other words, management condones the behavior.

If a fellow worker is the one doing the discrimination and harassment, you should follow the company policy and report the conduct to your supervisor and Human Resources. Report it in writing to have proof of the date you reported it, and be sure to be specific about the exact nature of the discrimination or harassment. Saying things like Joe is bothering me or harassing me is not sufficient. Also, saying that Joe called me the "N" word once is insufficient. Don’t retaliate back, or you can be fired.

Sexual Harassment Outside The Workplace

Generally, only employers can be sued for sexual harassment. For example, if a man grabs a woman’s breast in a bar, that’s not sexual harassment, although it may be assault and battery. However, if a woman’s boss grabs her breast (and she doesn’t want him to) that’s probably sexual harassment.

The law in California has recently been changed to allow people to sue others for sexual harassment, even when the harassment isn’t at the job. The following people can be sued for sexual harassment, when they have a business, service, or professional relationship with the person they harassed:

a person’s physician, psychotherapist, or dentist,
marriage, family or child counselors, licensed clinical social workers, and masters of social work,
real estate agents and real estate appraisers,
accountant bankers, trust officer, financial planners and loan officers
collection services,
escrow loan officers,
executors, trustees, or administrator beneficiaries,
landlords and property managers,
people who are in a relationship that is substantially similar to any of the above.

The harassment must occur in the context of the relationship. Generally, only the more direct "quid pro quo" harassment in actionable. The victim must make a request for the behavior to stop. This means the first request or advance is never illegal. For the harassment to be illegal, the victim must not be able to easily terminate the relationship without "tangible hardship." In other words, if the victim can just leave without any trouble, it’s not illegal.

Other Types of Harassment

"Harassment", standing alone, is not illegal. The harassment must be based on an illegal factor, like those listed above under "discrimination." In other words, the employer cannot harass the employee because of his race. But he can harass him because he just doesn’t like him. There is no law against general harassment or bad treatment of employees.

Other Employment Issues

Wrongful Termination

"Wrongful Termination" is a term that generally refers to a person being fired when they shouldn’t have been. It can be very misleading phrase. Many terminations that people think of as "wrongful" aren’t illegal.

In California and most other states, employment is "at will." This means that the employer can fire the employee for no reason or any reason.

There are two exceptions to this general rule:

      1)  Discrimination

Employers cannot discriminate against employees on the basis of age, race, sex, national origin, disability, and a variety of other reasons. Employers cannot discriminate against an employee because he or she has "whistle blown" which is reporting illegal activity of the employer. They also cannot discriminate against an employee for engaging in other protected activities, such as filing workers’ compensation claims.

If an employer fires an employee because of one of these factors that is against the law and the termination is "wrongful termination."

      2)  Contract

If any employee has a contract with the employer, the employee probably cannot be fired without just cause. Contracts can be written, oral or implied. (See section on Breach of Contract.) A common way for an employee to have a written contract is to be in a union. If the employer fires the employee in violation of a contract, that is not, in legal terms, "wrongful termination." It is "breach of contract."

Other than these exceptions and a few rare others, employers can fire employees for any reason, even because they just don’t like the employee.

Whistle Blowing

"Whistle Blowing" is when an employee tells on an employer who is breaking the law. Employees who blow the whistle on their employers are protected by law.

To actually "Whistle Blow", the employee must report an alleged illegal act of the employer to a government or law enforcement agency.

If the employee just complains to someone inside the company, that is not whistle blowing, and the employee is not protected by the whistle blower laws. However, the employee may be protected under other laws. For example, it is illegal to fire someone for complaining of sexual harassment or discrimination.

It is not necessary that the employer actually broke the law. The employee could be whistle blowing on something that isn’t illegal in the first place. The employee is still protected from retaliation or termination. However, the employee must believe that he or she is reporting a violation of the law, and the employee’s belief must be reasonable.

If the employee has reported the allegedly illegal activity to a government or law enforcement agency, he or she is protected. The employer cannot retaliate against the employee. The employer cannot fire the employee for the whistle blowing. The employer cannot mistreat the employee for whistle blowing.

This does not mean that after whistle blowing, the employee cannot be fired for any reason. The employer can continue to treat the employee like any other employee. But the employer cannot treat the employee differently because of the whistle blowing. Obviously, if the employee whistle blows on Monday and is fired Tuesday, it suggests that the employee was retaliated against for making the report.

Wage & Overtime Claims

There are both federal and state laws that affect wage and overtime claims. The law also requires workers to receive overtime based on a certain amount of hours per week that they work.

This law does not apply to "exempt" workers. Primarily, "exempt" workers include managers and assistant managers. However, the mere classification of a person as a manager or assistant manager does not automatically make them "exempt."

In determining whether a "manager" is an "exempt" worker, the law looks to the actual work performed by the person as opposed to their title. In general, to be an "exempt," the manager must supervise other workers, exercise independent judgment and otherwise perform non-routine work for a significant percentage of the work week.

If the assistant manager or manager qualifies as a non-exempt employee and work more than 40 hours a week, they are entitled to overtime pay even if they are on salary.

In large operations, such as chain stores, if the assistant manager or manager are misclassified, this usually applies to everyone in that category. This may potentially provide grounds for a class action on behalf of all similarly situated employees.

Pregnancy Discrimination & Leave

Discrimination based on pregnancy is illegal under both the California Fair Employment and Housing Act (FEHA) and the Federal Title VII laws. This includes discrimination based on pregnancy, childbirth, or related medical conditions.

As noted above, even discrimination based on the "potential" for pregnancy is illegal.

Additionally, as discussed previously, employers must make a reasonable accommodation for disability due to pregnancy and employees have a right to pregnancy leave for a reasonable period of time, not to exceed four months. Employees may also be entitled to up to 12 weeks of medical leave due to pregnancy.

Workers’ Compensation

Generally, if an employee is injured on the job in California, he or she may recover under "Workers’ Compensation." Workers’ Compensation is an insurance system. All employers must have workers’ compensation insurance of some kind.

It doesn’t matter whether or not the injury is an accident. If it happened on the job, the employer’s workers’ compensation insurance must pay for medical treatment and rehabilitation. The flip side of this is that employees in California cannot sue their employers for negligence. The employees can only recover under the workers’ compensation insurance program. This program has definite limitations. For example, employees can recover only set maximum amounts, regardless of how much their income was.

Disability Discrimination & Workers’ Compensation Claims

An employee injured on the job is entitled to file a workers’ compensation claim. The employee’s injury may be temporary or permanent and may be of a nature that the worker can continue to work or require the worker to take time off work. If the employer retaliates against the employee for filing a workers’ compensation claim, the employee can also file a claim for additional compensation to punish the employer under the workers’ compensation claim.

Non-Competition Clauses

Sometimes employers require an employee to sign an employment agreement containing a non-competition clause or covenant. Ordinarily the employee is in contact with customers or clients of the employer, or deals with patent or copyright information, usually referred to as proprietary information. The employer does not want the employee to leave or go to work for a competitor and take the customers, clients or proprietary information to a competitor.

Balanced against the employer’s desire for protection, the employee needs to get another job after leaving that employer. The easiest and most remunerative job would be in the same field, with the same job title, doing the same work. Therefore, by necessity the employee needs to work for a competitor in order to utilize his knowledge, experience and skills.

California courts tend to protect an employee’s right to earn a living. Accordingly, a non-competition clause may be held invalid if it is overly broad or restrictive.

Implied & Oral Contracts

Implied contracts can be created many ways. They are more common than written contracts in the employment relationship. Implied contracts are often called "oral or implied contracts." This is because implied contracts are usually created by both circumstances (which "imply" that a contract exists) and oral statements. For the sake of clarity, "oral or implied contracts" will be referred to here simply as "implied contracts."

Contracts that are more strictly oral in nature will be called "oral contracts", and are discussed below.

A number of factors are considered in determining whether an implied contract has actually been created. The more factors that exist in a given situation, the more likely there is an implied contract.

1. Length of Service. This is a very important factor in creating an implied contract. The length of service must be significant. Two weeks at an employer does not create an implied contract.
2. Progressive Discipline Policy. Many employers have policies of "progressive discipline." These policies state that employees will not be fired the first time they make a minor mistake. Instead, employees receive warnings, second warnings, etc., before they are fired. Even when there is a progressive discipline policy, there are probably a number of things the employee can do which will get him fired immediately.
3. Employee Benefit Programs. Retirement programs, 401K programs, and the like can help to create implied employment contracts, because they help imply that the employee is expected to be around long enough to participate in them or get their benefit.
4. Representations or Actions. Occasionally, an employer’s actions or representations will give rise to certain expectations of the employee regarding his employment.
5. Employee Handbooks. Most often, the "terms" of the implied contract can be found in an employee handbook. For example, the handbook may have a "progressive discipline policy," which states that employees are to be given warnings for certain infractions before they are fired.

If the employee can establish that there is an implied contract, and that one of the terms was that the employer would follow the progressive discipline policy in the handbook, the employee can point to the handbook and treat it like a written contract. He can look at the language of the policy and see if the employer has failed to follow it.

An agreement that the employer won’t fire the employee without "good cause" is the basic term of the implied contract in an employment relationship. If an implied contract exists and the employer fires an employee without "good cause," the employer may be liable for damages for breach of contract.

It is possible to have an oral contract concerning your employment; however, it may not be enforceable. Some contracts must be in writing to be enforceable.

The major problem with oral contracts is that they are hard to prove. If what you are asking for is important, ask your employer to confirm it in writing. It is important to note that many executive contracts are in writing. Generally, if it only comes down to your word against the employer, you will have an uphill battle because "you" have "the burden of proof" to establish that a contract exists.

Breach of Contract-Written Contracts

Employees in California are generally "at-will." This means they can be hired or fired at any time, with or without good cause. This means an employer can fire someone just because he doesn’t like him. If someone is fired because of their race, gender, national origin, or other reasons such as those, it is illegal discrimination.

Written employment contracts are very rare. Usually, only sports stars, actors and highly-paid executives have them. It is important to note that many executive contracts are in writing. If the company breaks its contract with these employees, the employees may sue for "breach of contract".

There is another class of employee who always has written contract. This is the union employee. Union employees have a union contract. However, before the union member may sue, he must first pursue his "administrative remedies." These include grievance procedures, arbitrations, and other processes that may be in the union contract.

A written contract can have an unlimited numbers of "terms" or "conditions." For instance, one term might be that the employee will be employed for five years. This means he can’t quit and can’t be fired.

But there are always exceptions to a term regarding length of service. The most common is termination for "good cause." However, even an employee with a written contract, which states he will be employed for a certain length of time, can almost certainly be fired for "good cause." A written contract that only allows for termination when there is good cause probably defines what "good cause" is. For instance, the contract might say that taking company property is good cause for termination. The employee may think that taking an old and unused piece of property is not a big deal. If the employee takes the property, there is good cause. Frequently, the issue of "good cause" boils down to an interpretation of certain conduct of the employee with the employer and employee taking different positions.

In drafting a contract, the employer can’t just put unreasonable clauses in the contract. If an employer imposes unreasonable clauses on an employee otherwise deals outrageously with an employee he may be dealing in "bad faith."

For example, assume an employer wants to fire a particular employee. That employee takes home a memorandum from the company, which was sent to him at work. The company calls this taking company property stealing and fires him. The employer is not dealing in good faith. The memo was sent to the employee. It was sent for his use. He could have thrown it away. The employer is not dealing in good faith, because he is making a clearly unreasonable interpretation of the contact. The employer has "breached the contract in bad faith."

Therefore, even if an employee has violated a company policy in the strict sense, the employer may still have "breached" the contract.

Under California breach of contract law, an employee can sue for his lost wages and benefits. He can sue for the wages he would get in the future, minus what he’s earned at a new job, and minus the wages he should earn, assuming he gets a job in a reasonable time. The employee cannot sue for emotional distress. This means that the damages the employee can recover are limited to the compensation the employee would have received had he not been fired.

Practical Considerations

Expense of Litigation

It can cost tens and hundreds of thousands of dollars to take a case to trial. It is not uncommon for attorneys to charge $300 or more per hour. Such costs are necessary to cover the expenses of operating a law firm.

Many people who have an employment law problem cannot afford this. Often, they have been fired, and therefore have no income. Often, even if they won they would recover too little to make hiring a lawyer worthwhile.

A common solution is the "contingency fee."

Some lawyers will represent clients on a "contingency fee" basis. A contingency fee is where the lawyer gets a portion of the client’s recovery. Contingency fees are often around 33% to 40%, and sometimes are higher.

For example, The Law Offices of Michael T. Chulak & Associates takes some cases on a contingency fee basis. Before it takes a case on that basis, it must consider the same things that a client who was considering paying on an hourly basis would consider. For example, factors to consider include the chances of success, the potential amount of damages, and the costs of suing.

If the case is a real long shot, the law firm is less likely to take the case on contingency. This is the same as the client who is considering spending his own money. The better the odds, the more likely the client is to gamble on winning. The law firm must consider the same thing when its money and time are at stake.

Even if the odds of success are good, the lawyer must still consider the potential damages. Maybe the person who was fired got a job the very next day for more money. What is there to sue over? The lost wages are minimal. Even if the client wins, there isn’t much money at stake. It wouldn’t be worth it for an employee to pay a lawyer thousands of dollars to sue over one day’s wages. Likewise it isn’t worth it for the law firm.

Aside from paying the lawyer for his time, there are also costs that must be paid. For instance, it costs $355.00 to file a lawsuit in Los Angeles Superior Court. It costs an average of $1,000.00 to pay for a stenographer to attend a deposition. Mailing costs and long-distance telephone bills, private investigators and messengers, are all costs of litigation.

If a lawyer is being paid on a contingency, the costs do not come out of the lawyer’s contingency fee. The contingency fee pays the lawyer only for his time and effort. The client has to pay for the costs.

There are two ways the costs can be handled. First, the client can pay them up front. Second, the lawyer can pay the costs, and be reimbursed out of the settlement or verdict of the case is successful. Some lawyers advance costs. Some don’t. Call us for a no cost consultation regarding any employment claim.


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