CACI No. 2403. Breach of Employment Contract - Unspecified Term - Implied-in-Fact Promise Not to Discharge Without Good Cause

Judicial Council of California Civil Jury Instructions (2023 edition)

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2403.Breach of Employment Contract - Unspecified
Term - Implied-in-Fact Promise Not to Discharge Without Good
An employer promises to [discharge/demote] an employee only for good
cause if it is reasonable for an employee to conclude, from the
employer’s words or conduct, that the employee will be
[discharged/demoted] only for good cause.
In deciding whether [name of defendant] promised to [discharge/demote]
[name of plaintiff] only for good cause, you may consider, among other
factors, the following:
(a) [Name of defendant]’s personnel policies [and/or] practices;
(b) [Name of plaintiff]’s length of service;
(c) Any raises, commendations, positive evaluations, and promotions
received by [name of plaintiff]; [and]
(d) Whether [name of defendant] said or did anything to assure [name
of plaintiff] of continued employment; [and]
(e) [Insert other relevant factor(s).]
Length of service, raises, and promotions by themselves are not enough
to imply such a promise, although they are factors for you to consider.
New September 2003; Revised April 2009, June 2013, May 2020
Directions for Use
This instruction should be read when an employee is basing the claim of wrongful
discharge on an implied covenant not to terminate except for good cause. Only
those factors that apply to the facts of the particular case should be read.
In certain cases, it may be necessary to instruct the jury that if it finds there is an
at-will provision in an express written agreement, there may not be an implied
agreement to the contrary. (See Faigin v. Signature Group Holdings, Inc. (2012) 211
Cal.App.4th 726, 739 [150 Cal.Rptr.3d 123] [there cannot be a valid express
contract and an implied contract, each embracing the same subject, but requiring
different results].)
Sources and Authority
Express and Implied Contracts. Civil Code sections 1619-1621.
“Labor Code section 2922 establishes a statutory presumption of at-will
employment. However, an employer and an employee are free to depart from the
statutory presumption and specify that the employee will be terminated only for
good cause, either by an express, or an implied, contractual agreement.”
(Stillwell v. The Salvation Army (2008) 167 Cal.App.4th 360, 380 [84
Cal.Rptr.3d 111], internal citations omitted.)
“[M]ost cases applying California law . . . have held that an at-will provision in
an express written agreement, signed by the employee, cannot be overcome by
proof of an implied contrary understanding.” (Guz v. Bechtel National, Inc.
(2000) 24 Cal.4th 317, 340 fn. 10 [100 Cal.Rptr.2d 352, 8 P.3d 1089], original
“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.” (Guz, supra, 24 Cal.4th at p. 337, internal citations omitted.)
“The question whether such an implied-in-fact agreement [to termination only
for cause] exists is a factual question for the trier of fact unless the undisputed
facts can support only one reasonable conclusion.” (Faigin, supra, 211
Cal.App.4th at p. 739.)
“In the employment context, factors apart from consideration and express terms
may be used to ascertain the existence and content of an employment agreement,
including ‘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.’ (Foley v. Interactive Data Corp. (1988) 47 Cal.3d
654, 680 [254 Cal.Rptr. 211, 765 P.2d 373], internal citation omitted.)
“[A]n employee’s mere passage of time in the employer’s service, even where
marked with tangible indicia that the employer approves the employee’s work,
cannot alone form an implied-in-fact contract that the employee is no longer at
will. Absent other evidence of the employers intent, longevity, raises and
promotions are their own rewards for the employee’s continuing valued service;
they do not, in and of themselves, additionally constitute a contractual guarantee
of future employment security.” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th
317, 341-342 [100 Cal.Rptr.2d 352, 8 P.3d 1089], original italics.)
“We agree that disclaimer language in an employee handbook or policy manual
does not necessarily mean an employee is employed at will. But even if a
handbook disclaimer is not controlling in every case, neither can such a
provision be ignored in determining whether the parties’ conduct was intended,
and reasonably understood, to create binding limits on an employers statutory
right to terminate the relationship at will. Like any direct expression of employer
intent, communicated to employees and intended to apply to them, such
language must be taken into account, along with all other pertinent evidence, in
ascertaining the terms on which a worker was employed.” (Guz, supra, 24
Cal.4th at p. 340, internal citations omitted.)
“Conceptually, there is no rational reason why an employers policy that its
employees will not be demoted except for good cause, like a policy restricting
termination or providing for severance pay, cannot become an implied term of an
employment contract. In each of these instances, an employer promises to confer
a significant benefit on the employee, and it is a question of fact whether that
promise was reasonably understood by the employee to create a contractual
obligation.” (Scott v. Pac. Gas & Elec. Co. (1995) 11 Cal.4th 454, 464 [46
Cal.Rptr.2d 427, 904 P.2d 834].)
“[Employer] retained the right to terminate [employee] for any lawful reason.
Thus, . . . the fact that [employer] was obligated to pay compensation if it
terminated [employee] for reasons other than his misconduct did not convert an
otherwise at-will agreement into a for-cause agreement.” (Popescu v. Apple Inc.
(2016) 1 Cal.App.5th 39, 59 [204 Cal.Rptr.3d 302].)
Secondary Sources
3 Witkin, Summary of California Law (11th ed. 2017) Agency and Employment,
§§ 246, 250, 251
Chin et al., California Practice Guide: Employment Litigation, Ch. 4-B, Agreements
Limiting At-Will Termination, ¶¶ 4:81, 4:105, 4:112 (The Rutter Group)
1 Wrongful Employment Termination Practice (Cont.Ed.Bar 2d ed.) Contract
Actions, §§ 8.6-8.16
4 Wilcox, California Employment Law, Ch. 60, Liability for Wrongful Termination
and Discipline, § 60.05[2][a]-[e] (Matthew Bender)
21 California Forms of Pleading and Practice, Ch. 249, Employment Law:
Termination and Discipline, §§ 249.01, 249.13, 249.15, 249.50 (Matthew Bender)
10 California Points and Authorities, Ch. 100, Employer and Employee: Wrongful
Termination and Discipline, §§ 100.21, 100.22, 100.25-100.27, 100.29, 100.34
(Matthew Bender)
California Civil Practice: Employment Litigation §§ 6:14-6:16 (Thomson Reuters)

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