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*At Will* In An Employment Contract Means Termination Without Cause

Yesterday, the California Supreme Court ruled in the Dore v. Arnold Worldwide, Inc. case that an employment contract containing an "at will" clause and without a definite term for employment means that either an employer or an employee can terminate that contract without cause and without explanation.  The particular contract in issue in this case included a provision that the termination could occur "at any time."

Previously, the courts of appeal in California were split whether that additional term should be interpreted to mean the contract required 'cause' before an employee could be terminated.  Disagreement existed whether 'at any time" meant that there was some undefined length of employment, requiring notice and good reason before terminating an employee.

Those disagreements exist no longer.  The Supreme Court overruled (they used the term 'disapproved")* the several cases that  required an explanation before firing an employee where the contract included "at any time" language, even though the employment contract didn't actually include "cause" language.

Now, California employers can terminate California employees at any time for any reason, without cause as long as the employment contract specifies the employment is "at will" and does not contain any language about how long the employment will last (even if it contains "at any time" language).  The split between the courts of appeal has been resolved in favor of California employers.

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The three disapproved cases are:  Seubert v. McKesson Corp. (1990) 223 Cal.App.3d 1514; Wallis v. Farmers Group (1990) 220 Cal.App.3d 718; and, Bert G. Gianelli Distributing Co. v. Beck & Co. (1985) 172 Cal.App.3d 1020.  The Court tossed out precedent over 20 years old to reach this decision.

Posted by J. Craig Williams on Saturday, August 05, 2006


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