California Civil Jury Instructions (CACI)

2405. Breach of Implied Employment Contract - Unspecified Term—"Good Cause" Defined—Misconduct

[Name of plaintiff] claims that [name of defendant] did not have good cause to [discharge/demote] [him/her] for misconduct. [Name of defendant] had good cause to [discharge/demote] [name of plaintiff] for misconduct if [name of defendant], acting in good faith, conducted an appropriate investigation giving [him/her/it] reasonable grounds to believe that [name of plaintiff] engaged in misconduct.

An appropriate investigation is one that is reasonable under the circumstances and includes notice to the employee of the claimed misconduct and an opportunity for the employee to answer the charge of misconduct before the decision to [discharge/demote] is made. You may find that [name of defendant] had good cause to [discharge/demote] [name of plaintiff] without deciding if [name of plaintiff] actually engaged in misconduct.

Directions for Use

This instruction should be given when there is a dispute as to whether misconduct, in fact, occurred. (Cotran v. Rollins Hudig Hall International, Inc. (1998) 17 Cal.4th 93 [69 Cal.Rptr.2d 900, 948 P.2d 412].)

Sources and Authority

"The proper inquiry for the jury . . . is not, 'Did the employee in fact commit the act leading to dismissal?' It is 'Was the factual basis on which the employer concluded a dischargeable act had been committed reached honestly, after an appropriate investigation and for reasons that are not arbitrary or pretextual?' The jury conducts a factual inquiry in both cases, but the questions are not the same. In the first, the jury decides the ultimate truth of the employee's alleged misconduct. In the second, it focuses on the employer's response to allegations of misconduct." (Cotran, supra, 17 Cal.4th at p. 107.)

"We give operative meaning to the term 'good cause' in the context of implied employment contracts by defining it . . . as fair and honest reasons, regulated by good faith on the part of the employer, that are ot trivial, arbitrary or capricious, unrelated to business needs or goals, or pretextual. A reasoned conclusion, in short, supported by substantial evidence gathered through an adequate investigation that includes notice of the claimed misconduct and a chance for the employee to respond." (Cotran, supra, 17 Cal.4th at pp. 107-108, internal citations omitted.)

"Cotran set forth a new standard for good cause in termination decisions. Three factual determinations are relevant to the question of employer liability: (1) did the employer act with good faith in making the decision to terminate; (2) did the decision follow an investigation that was appropriate under the circumstances; and (3) did the employer have reasonable grounds for believing the employee had engaged in the misconduct." (Silva v. Lucky Stores, Inc. (1998) 65 Cal.App.4th 256, 264 [76 Cal.Rptr.2d 382], internal citation omitted.)

"We have held that appellant has demonstrated a prima facie case of wrongful termination in violation of his contract of employment. The burden of coming forward with evidence as to the reason for appellant's termination now shifts to the employer. Appellant may attack the employer's offered explanation, either on the ground that it is pretextual and that the real reason is one prohibited by contract or public policy, or on the ground that it is insufficient to meet the employer's obligations under contract or applicable legal principles. Appellant bears, however, the ultimate burden of proving that he was terminated wrongfully." (Pugh, supra, 116 Cal.App.3d at pp. 329-330, internal citation omitted.)

Secondary Sources

2 Witkin, Summary of California Law (2000 supp.) Agency and Employment, § 156

4 Wilcox, California Employment Law, Ch. 60, Liability for Wrongful Termination and Discipline, § 60.09[5][b] (Matthew Bender)

1 Wrongful Employment Termination Practice (Cont.Ed.Bar 2d ed. 1997) Contract Actions, § 8.26

21 California Forms of Pleading and Practice, Ch. 249, Employment Law: Termination and Discipline, §§ 249.21, 249.43 (Matthew Bender)

10 California Points and Authorities, Ch. 100, Wrongful Termination and Discipline, Forms 8, 15 (Matthew Bender)

Bancroft-Whitney's Cal. Civil Practice: Employment Litigation (1993) Termination of Employment, §§ 6:18-6:19

(New September 2003)