Labor Code § 2922

Overview

Labor Code section 2922 codifies the foundational rule of California employment: a hiring with no specified term is presumed to be at will, terminable by either party with or without cause. Every wrongful-termination theory is, in substance, an argument that some source of law displaces or limits this default.

The at-will presumption is strong but not absolute. It can be overcome by an implied-in-fact agreement requiring good cause for termination, and it never licenses a discharge that violates a fundamental public policy or a specific statutory prohibition.

The presumption

Rebutting the presumption: implied contract

The presumption is rebuttable. In Guz v. Bechtel National, the California Supreme Court explained how an implied-in-fact contract limiting the employer’s termination rights can arise from the totality of the parties’ relationship — personnel policies, longevity, assurances, and industry practice — even without an express written agreement. Where such a contract exists, the employer may terminate only for good cause. (See Guz v. Bechtel National; Foley v. Interactive Data.)

Limits: public policy and statute

Independent of contract, the at-will rule does not authorize a discharge that contravenes a fundamental public policy — the tort recognized in Tameny v. Atlantic Richfield Co. — nor one that violates a specific statute, such as the FEHA or the whistleblower protections of Labor Code section 1102.5. These limits operate as external constraints on the section 2922 default. (See Tameny.)

Practice notes

Begin every wrongful-termination analysis with section 2922, then identify the precise limit being asserted: an implied-in-fact good-cause contract, a fundamental public policy, or a statutory prohibition. The viability of the claim turns on establishing that limit, because the at-will presumption otherwise controls.

Related on this site