Legal Question in Discrimination Law in California

Re: Hiring Friends, giving current employees the boot

Nepotism is not illegal and employers can terminate without cause, unless you have a contract that says otherwise. What should be examined is whether the intent or effect of the terminations is discriminatory based on age or some other category that is protected by law. If the company systematically replaces people over 40 with people under 40, you may have a case of age discrimination.

Re: Hiring Friends, giving current employees the boot

In general an employer can terminate an at will employee without cause as long as the termination does not violate a law or is discriminatory.

If you have an employment agreement or if your employer made certain promises regarding your employment either verbally or for example in an employee handbook, then its possible that your employer could only terminate you for good cause. If you are a long term employee it may be possible to argue that there was an implied contract.

Age discrimination is illegal, but difficult to prove.

A written employment contract specifying the grounds that the employer could terminate you would be your best protection, but most employers will not enter into such an agreement unless the employee is critical to the business.

I'd get any promises from your employer in writing.

I would recommend consulting with an attorney if your employer does terminate your position.