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"Lay-Off" vs. "Terminated" vs. "At-Will"

In day to day language, many of these terms can be used interchangeably. Normally, being “laid off” or being “terminated” or being “fired” mean the same thing. In the realm of the law, however, these terms are specifically defined to mean different things. The differences are subtle and nuanced, but different nonetheless.

“Laid off”

According to California Labor Code §1400(c), a “layoff” means the following: “a separation from a position for a lack of funds or lack of work.” Meaning, a layoff is specifically used to define a person who was let go based on the nature of the quantity of the work, not the quality of the work. In the same vein, a “mass layoff” as defined by Labor Code §1400(d) is “the layoff during any 30 day period of 50 or more employees at a covered establishment.” Again, layoff legally is used to mean letting employees go based on the amount of work or funds available to the employer.


Then what does it mean to be terminated? Or fired? As per Labor Code §1400 (f), “termination” means “a cessation or substantial cessation of industrial or commercial operations” from the employee. Termination is analogous with the common term of being “fired.” One may be fired or terminated for a variety of reasons but is traditionally used to mean letting an employee with performance issues go.


So that brings us to the term, “at will.” What does that mean? The state of California, as with the majority of the nation, follows an “at-will” presumption. This means, in the absence of an employee contract stipulating very certain parameters, all employees are presumed to be “at-will” or voluntarily employed. Under “at will” an employee can be fired for any reason or no reason at all, as long as that reason is not unlawful. Even if an employee is fired based on a mistake, or if the punishment seems too harsh, it can still be lawful for the employer to do so.


Now let's look at the exceptions: (1) breach of contract; (2) breach of the “Covenant of Good Faith”; and (3) violation of public policy. Let's bring our attention to reason #3: “violation of public policy.” Violating public policy is one of the exceptions to “at-will” and may also be constituted as “wrongful termination.”

If an employee is wrongfully terminated in violation of public policy, it means there is an apparent “causal connection” between an employee expressing their rights and the employer firing them. For instance, let's say an employee is being sexually harassed by a supervisor. He or she reports it to upper management so that they may be removed from the supervisor's department. Management does not listen but instead decides to get rid of the complaining employee and fires him or her. This employee was attempting to exercise his or her right to work in an environment free of sexual harassment as protected by the Labor Code. Out of retaliation, the employee was fired. This is an example of an employee being fired in violation of public policy. There was a cause and effect phenomenon that occurred. The employee complained and then was fired for it. This is actionable by the former employee by law.

If you have been wrongfully terminated in violation of public policy either out of retaliation or from any of the other mentioned reasons (discrimination and harassment may also be a basis for wrongful termination) contact a wrongful termination attorney near you immediately. 

Aegis Law Firm is here to help! Call us at (800) 543-4829 or send us an email.

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