On December 29, 1988, the California Supreme Court decided Foley vs. Interactive Data Corp., perhaps the most eagerly awaited state supreme court decision in years. The Foley ruling, which immediately was hailed as a tremendous victory for California employers, eliminated punitive damage awards for many wrongfully terminated employees. That was good news for the employers. The decision, however, also provided employers with sobering news. Most significantly, the court ruled that employment relationships essentially are contracts, with terms created by the reasonable expectation of the parties. Thus, the majority of California employees now have a right to sue for breach of contract if terminated without good cause. Although precluded from asking for punitive damages in most instances, these employees can seek loss of income and benefits until comparable employment is found (which, for older workers, may be the rest of their working lives.) One such lost benefit could be an employees fully vested pension.
Gore, Bill. "Hiring Ruled Contractual." Douglas A. Kahn and S. Shields, co-authors. Personnel J. 68, no. 4 (1989): 94-100.