How Long Does an Employee Have to File a Lawsuit against the Company after Termination or Separation?

The statute of limitations (i.e. the time period to pursue legal action) varies depending the cause of action alleged and underlying laws that apply. Federal statute of limitations provisions set forth the limitations for suits filed in federal courts. State law statute of limitations provisions vary by state and according to the type of case or claim. In California, the statute of limitations for wrongful termination claims varies depending on the type of lawsuit filed. The most common employment claims are:

  • Wrongful Termination in Violation of Public Policy

The statute of limitations based on violation of public policy is two years after the date of the termination took place.

  • Wrongful Termination based upon Unlawful Discrimination, Harassment, and/or Retaliation under Federal or State Laws.

An employee has the choice of filing under Title VII (federal law) or the Fair Employment and Housing Act (FEHA -state law), although almost always, California employees file claims under FEHA because it is far more employee-friendly.

If the employee files a charge under FEHA, an employee has one year to file a charge of wrongful termination based on discriminatory, harassing or retaliatory acts. A charge is filed with the DFEH, and if the Department does not resolve the case, it issues a notice of right to sue.

Alternatively, an employee can request an immediate right to sue, in which case, no investigation is conducted and the Department issues an immediate right to sue.  In either instance, an employee has one year from issuance of the right to sue notice to file a lawsuit in court.

  • Wrongful Termination based upon a Breach of Written or Implied Contract

When a written employment contract is in place and the termination violates one of the provisions therein, an employee has four years to file a claim of wrongful termination. The four years will begin from the date that the breach occurred rather than from the date of termination.  However, if the employment contract is implied, because of a laws or facts based on the actions and behavior of the employer and employee, the statute of limitations is two years from the date of the breach.

Lisa Sherman
California Labor & Employment Attorney