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California’s at will doctrine eroding more with SB 497

21 Nov


Update Applicable to:

All California employers and multi-state businesses with at least 1 worker in California.

What happened?

On October 8, 2023, Governor Gavin Newsom signed into law Senate Bill (SB) No. 497 also referred as the Equal Pay and Anti-Retaliation Protection Act, which amends California Labor Code Sections 98.6, 1102.5, and 1197.5 to create a rebuttable presumption of retaliation if an employee is disciplined or discharged within ninety days of certain protected activity. The effective date for the rebuttable presumption of retaliation is January 1, 2024.

What are the details?

California Labor Code Section 2922 states the at will doctrine, meaning that the employment relationship can be terminated by either party at any time, with or without cause and with or without advanced notice.

With the new law in SB 497, the at will doctrine is limited again due to another protected activity, expanding even more the amount of vast exceptions established under protected employee categories and activities.

The presumption (created in SB 497) makes it easier for an employee to establish a case of retaliation by creating a rebuttable presumption in favor of the employee’s claim. It applies if an employer takes an adverse employment action (such as discharged, threatened with discharge, demoted, suspended, or retaliated) against an employee within 90 days of that employee engaging in protected conduct and the burden is on the employer to demonstrate that there was a legitimate, nonretaliatory reason for the alleged retaliation.

Best practices

  • Employers should review the resources provided and consult with their trusted attorney on whether they can implement a policy or practice that allows the employer to demonstrate that there was a legitimate, nonretaliatory reason for the alleged retaliation.

Employers should review additional resources here:

Law Firm Articles: Article 1, Article 2,  Article 3

Department of Industrial Relations (CA) Release of at will doctrine

Code sections: 98.6, 1102.5, and 1197.

Erratum: the author in Law Firm Article 1, typed “AB 497 and the At-Will Doctrine in California”, when it should have been “SB 497 and the At-Will Doctrine In California”. The correct bill (now law) is SB 497, which is being referenced throughout the entire article; AB 497 is about “Special education: braille instructional aide: notice of teacher credentialing programs.”

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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