The employment relationship in California is governed by Labor Code section 2922. Labor Code section 2922 states, “An employment, having no specified term, may be terminated at the will of either party on notice to the other.” This is known as “at-will” employment.
But an employer can override this rule by creating a contract that creates something other than “at-will” employment. This can be an “express” or an “implied” contract. Express contracts use words in written or oral contracts. Implied contracts are based on employer conduct, including inaction, such as allowing an employee’s poor behavior or poor performance to go uncorrected for years while giving the employee annual pay raises and decent performance reviews.
Express or implied contracts can create employment guaranteed for a specific period of time or legal obligations that discharge will occur only for “cause” or “good cause” or only after certain disciplinary steps have been taken, i.e. “progressive discipline.” As an employer, this is something you don’t want to do.