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| We demoted an ee yesterday. I am looking for a letter or verbiage, so that I can have him sign something, but want to make sure that it is correct.
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Demotion
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There are no federal or state laws limiting your right to demote an employee. However, employees can sue for “wrongful demotion” if you demote them without “just cause”.
Best Practices
Document all demotions and the “just cause” for the demotion.
No Laws Limiting Demotion
There are no federal or state laws that specifically limit your right to demote an employee. However, you cannot demote an employee without “just cause”.
Wrongful Demotion
The California Supreme Court has created a right to sue for “wrongful demotion” as a breach of contract to demote only for just cause.
In Scott, et al. v. PG&E 1, two senior managers were demoted and had salaries and benefits reduced for alleged misconduct. The employer’s handbook contained a progressive discipline system requiring counseling, oral and written warnings, and other disciplinary steps before demotion would occur. The California Supreme Court decided that the employer’s policies, practices, and communications created an implied contract not to demote without just cause.
Just Cause
In general, an employee may be demoted for “just cause”. Just cause means a legitimate business reason or as a disciplinary measure, as long as the demotion does not breach a contract (written, oral, or implied) not to demote for any reason.
As with termination, an employee may not be demoted for a discriminatory reason or in retaliation for exercising a legal right. For example, you cannot demote an employee as a punishment for filing a workers’ compensation claim, or demote only older employees because they have climbed higher in the company’s salary structure and are considered too expensive. For more information, see Protection From Retaliation.
A fixed amount of money for each payroll period, whether weekly, bi-weekly, semimonthly or monthly
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| Is it neccessary for the employee to sign a letter detailing the reasons for his/her demotion? or is this a something the employee can use against the employer?
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