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TURNING EMPLOYER WRONGS INTO EMPLOYEE RIGHTS

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Can I win punitive damages from my California Employer?

Punitive damages are controlled by California Civil Code Section 3294 and 3295. In seeking these damages, the “bad act” must be engaged in or ratified by an officer, director or managing agent of the corporation.  (This office is proud to have established new California law on the subject at the Supreme Court level with the decision of Maxwell vs. Beverly Enterprises (companion case to White vs. Ultramar).

Most litigation occurs over the definition of “managing agent”. This is almost always a fact question for the jury. For example, what about a store manager at a “big box” store such as Target, Home Depot, Best Buy, etc., that supervises 300 employees but has limited power to set policies? If he/she intentionally refuses to enforce a policy is that the “making” of policy? If an employee is terminated outside of store policy (say, for complaining about discrimination), has the manager “made policy”? Some cases hold that simple non-enforcing policy is sufficient to show discretion.

On the other hand, what about a higher-level district manager who is basically a paper-pusher and does not go into the field, but simply trusts his store managers to implement policy? If he is advised of a violation of policy, but does nothing, is that sufficient to call him a “managing agent” for purposes of liability. Most cases hold “yes”. In fact in our Maxwell decision, the court held that both the nursing home administrator and the district manager were managing agents. The jury returned a verdict in excess of $1,550,000.

Your attorney’s skill in preparing the jury for this phase of the trial (called the second phase) is critical to winning. For example, has your attorney questioned prospective jurors to make sure they will follow the law with regard to punishment? Do they understand that the law authorizes penalty damages if malice, oppression or fraud is found? The amount of punitive damages is generally based on the reprehensibility of the underlying conduct, the relationship between the punitive damages and the harm and the amount needed to deter and punish so that future conduct of a similar ilk will be prevented. CACI 3949.