In California labor law, a “implied employment contract” is an agreement between you and your employer that is developed via both parties’ behavior rather than through paper.
The “at-will” rule states that unless an employer and employee have agreed otherwise, either party may end the employment relationship at any moment, for any reason or no reason. However, if your employer fires you despite an implicit contract for continuous employment, you may be able to claim for damages under California’s wrongful termination laws.
An implied contract is a legally binding agreement that is made by the actions of the contracting parties rather than being written down.
In the context of employment law, an implicit contract often refers to an agreement between the employer and the employee not to fire the employee without cause. Employees who do not have an employment contract or a collective bargaining agreement in California face the risk of being fired at any time, regardless of whether there is a legitimate reason. This is referred to as the “at-will” employment policy.
An implicit employment contract, on the other hand, is an exemption to the at-will employment rule. (Wrongful termination in violation of public policy is another exemption.) If you can establish that your employer’s previous actions generated an implied contract not to terminate employment without cause, you can claim for wrongful termination if you lose your job in a way that violates that contract’s provisions.
The conduct of your employer, that is, its actions, creates an implied contract. As a result, evidence of your employer’s behavior is the best approach to prove the existence of an implicit contract between you and your employer. California courts are obliged to consider all of the conditions of the employee-employer relationship when determining whether or not an implied employment agreement exists.
The following are some of the most important factors to consider when determining whether you and your employer had an implicit employment contract:
If you sue your former employer for wrongful termination under the implied employment contract basis, your damages will usually be restricted to the implied contract’s worth. As a result, the damages for a breach of an implied employment agreement will be as follows:
Many employees who are suing their employers for breach of implicit employment contracts are surprised by the last item on the list above. Plaintiffs in contract litigation in California must “mitigate damages,” which means they must try to recoup the money they lost because the other party to the contract broke their promise.
That means that, in wrongful termination cases based on an implied contract basis, your damages may be reduced by the amount you could have earned in another job after you were dismissed, if your employer can establish that:
The statute of limitations for launching a wrongful termination action based on a breach of an implicit employment contract is two years from the date of termination. This may appear to be an interminable period. However, before to filing a lawsuit, you must conduct research and gather information to ensure that you can provide the strongest possible case.
If you believe you have a case against a former employer for breach of implied employment contract, you should contact a wrongful termination lawyer as soon as possible in order to discuss your options and begin gathering evidence for your case. Feel free to give our office a call to schedule a consultation for your case at 310.943.1171.
After a serious truck accident, you will often hear references to "FMCSA regulations." The Federal Motor Carrier Safety Administration (FMCSA)…
Months after the devastating Eaton Fire swept through Altadena and surrounding communities, Los Angeles County has released its long-awaited after-action…
Road construction is a constant presence on California's busy highways. While these work zones are necessary, they also create temporary…
It’s a common sight on California's roads. A driver flicks a still-lit cigarette butt out of their car window. Many…
When a large commercial truck is involved in an accident, the consequences are often devastating. Furthermore, these incidents are rarely…
What Happened and What It Means for the Community On the morning of September 26, 2025, a BNSF Railway train…