California Supreme Court Ruling in Asmus v. Pacific Bell

On June 1, 2000, the California Supreme Court ruled, in Asmus v. Pacific Bell, that an employer may unilaterally terminate an employment policy that contains a specified condition if the condition is one of indefinite duration, and the employer effects the change after a reasonable time, on reasonable notice, and without interfering with the employees’ vested benefits. The California Supreme Court granted the Ninth Circuit’s request to certify this issue for decision because it desired to provide guidance to employers on the question of how employers can terminate or modify an existing policy or practice “so as not to create unwanted contractual obligations,” the question left open by the Court in Scott v. Pacific Gas & Electric Co., 11 Cal.4th 454 (1995) (holding that unilaterally created employment policies are enforceable).

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