California Civil Jury Instructions (CACI) (2017)

2401. Breach of Employment Contract - Unspecified Term— Essential Factual Elements

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2401.Breach of Employment Contract—Unspecified
Term—Essential Factual Elements
[Name of plaintiff] claims that [name of defendant] breached their
employment contract. To establish this claim, [name of plaintiff] must
prove all of the following:
1. That [name of plaintiff] and [name of defendant] entered into an
employment relationship. [An employment contract or a
provision in an employment contract may be [written or oral/
partly written and partly oral/created by the conduct of the
2. That [name of defendant] promised, by words or conduct, to
[discharge/demote] [name of plaintiff] only for good cause;
3. That [name of plaintiff] substantially performed [his/her] job
duties [unless [name of plaintiff]’s performance was excused [or
4. That [name of defendant] [discharged/demoted] [name of plaintiff]
without good cause; and
5. That [name of plaintiff] was harmed by the [discharge/demotion].
New September 2003
Directions for Use
In cases where constructive discharge is alleged, use CACI No. 2402 instead of
this one.
The element of substantial performance should not be confused with the “good
cause” defense: “The action is primarily for breach of contract. It was therefore
incumbent upon plaintiff to prove that he was able and offered to fulfill all
obligations imposed upon him by the contract. Plaintiff failed to meet this
requirement; by voluntarily withdrawing from the contract he excused further
performance by defendant.” (Kane v. Sklar (1954) 122 Cal.App.2d 480, 482 [265
P.2d 29], internal citation omitted.) Element 3 may be deleted if substantial
performance is not a disputed issue.
See also CACI No. 304, Oral or Written Contract Terms, and CACI No. 305,
Implied-in-Fact Contract.
The California Supreme Court has extended the implied contract theory to
encompass demotions or other similar employment decisions that violate the terms
of an implied contract. (See Scott v. Pac. Gas & Elec. Co. (1995) 11 Cal.4th 454,
473–474 [46 Cal.Rptr.2d 427, 904 P.2d 834].) As a result, the bracketed language
regarding an alleged wrongful demotion may be given, or other appropriate
language for other similar employment decisions, depending on the facts of the
Sources and Authority
• At-Will Employment. Labor Code section 2922.
Contractual Conditions Precedent. Civil Code section 1439.
• “Where there is no express agreement, the issue is whether other evidence of
the parties’ conduct has a ‘tendency in reason’ to demonstrate the existence of
an actual mutual understanding on particular terms and conditions of
employment. If such evidence logically permits conflicting inferences, a
question of fact is presented. But where the undisputed facts negate the
existence or the breach of the contract claimed, summary judgment is proper.”
(Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 337 [100 Cal.Rptr.2d 352,
8 P.3d 1089], internal citations omitted.)
• The employee bears the ultimate burden of proving that he or she was
wrongfully terminated. (Pugh v. See’s Candies, Inc. (Pugh I) (1981) 116
Cal.App.3d 311, 330 [171 Cal.Rptr. 917].)
• “The presumption that an employment relationship of indefinite duration is
intended to be terminable at will is therefore ‘subject, like any presumption, to
contrary evidence. This may take the form of an agreement, express or implied,
that . . . the employment relationship will continue indefinitely, pending the
occurrence of some event such as the employer’s dissatisfaction with the
employee’s services or the existence of some “cause” for termination.’ ” (Foley
v. Interactive Data Corp. (1988) 47 Cal.3d 654, 680 [254 Cal.Rptr. 211, 765
P.2d 373], internal citation omitted.)
• “In Foley, we identified several factors, apart from express terms, that may bear
upon ‘the existence and content of an . . . [implied-in-fact] agreement’ placing
limits on the employer’s right to discharge an employee. These factors might
include ‘ “the personnel policies or practices of the employer, the employee’s
longevity of service, actions or communications by the employer reflecting
assurances of continued employment, and the practices of the industry in which
the employee is engaged.” ’ ” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th
317, 336–337 [100 Cal.Rptr.2d 352, 8 P.3d 1089], internal citations omitted.)
• Civil Code sections 1619–1621 together provide as follows: “A contract is
either express or implied. An express contract is one, the terms of which are
stated in words. An implied contract is one, the existence and terms of which
are manifested by conduct.”
• “ ‘Good cause’ or ‘just cause’ for termination connotes ‘ “a fair and honest
cause or reason,” ’ regulated by the good faith of the employer. The term is
relative. Whether good cause exists is dependent upon the particular
circumstances of each case. In deciding whether good cause exists, there must
be a balance between the employer’s interest in operating its business efficiently
and profitably and the employee’s interest in continued employment. Care must
be exercised so as not to interfere with the employer’s legitimate exercise of
managerial discretion. While the scope of such discretion is substantial, it is not
unrestricted. Good cause is not properly found where the asserted reasons for
discharge are ‘trivial, capricious, unrelated to business needs or goals, or
pretextual.’ Where there is a contract to terminate only for good cause, the
employer has no right to terminate for an arbitrary or unreasonable decision.”
(Walker v. Blue Cross of California (1992) 4 Cal.App.4th 985, 994 [6
Cal.Rptr.2d 184], internal citations omitted, abrogated on another ground in
Guz, supra, 24 Cal.4th at p. 351.)
• “The general rule is that the measure of recovery by a wrongfully discharged
employee is the amount of salary agreed upon for the period of service, less the
amount which the employer affirmatively proves the employee has earned or
with reasonable effort might have earned from other employment.” (Parker v.
Twentieth Century-Fox Film Corp. (1970) 3 Cal.3d 176, 181 [89 Cal.Rptr. 737,
474 P.2d 689], internal citations omitted.)
Secondary Sources
Chin et al., Cal. Practice Guide: Employment Litigation ¶¶ 4:2, 4:8, 4:15, 4:65,
4:81, 4:105, 4:270–4:273 (The Rutter Group)
1 Wrongful Employment Termination Practice (Cont.Ed.Bar 2d ed.) Contract
Actions, §§ 8.4–8.20B
4 Wilcox, California Employment Law, Ch. 60, Liability for Wrongful Termination
and Discipline, §§ 60.05, 60.07 (Matthew Bender)
21 California Forms of Pleading and Practice, Ch. 249, Employment Law:
Termination and Discipline, §§ 249.90, 249.43, Ch. 250, Employment Law: Wage
and Hour Disputes, § 250.66 (Matthew Bender)
5 California Points and Authorities, Ch. 50, Contracts, §§ 50.10, 50.11, 50.350
(Matthew Bender)
10 California Points and Authorities, Ch. 100, Employer and Employee: Wrongful
Termination and Discipline, §§ 100.21, 100.22, 100.28, 100.29 (Matthew Bender)
California Civil Practice: Employment Litigation §§ 6:9–6:11 (Thomson Reuters)