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Employer Fails to Reimburse California Employee Expenses; Employee Sues for Constructive Termination

Mr. Vasquez worked for Franklin Management Real Estate Fund as a maintenance technician. As part of his job, he was required to drive his personal vehicle at least 30 miles per day. His employer refused to reimburse mileage, as is required under California Labor Code 2802.  The employee felt he was forced to quit (probably because his mileage costs depreciated his car and most likely the gas costs were a high percentage of his already-low pay). The trial court disagreed stating that expenses of $15 per day were not so intolerable as to cause an average person to believe they had no choice but to quit. On appeal, reversed.

The Court of Appeals, found that  the employee’s wages fell below California’s minimum wage when the cost of driving was subtracted from his wages. This left him unable to pay his basic living expenses. The court found that had he continued, he would have found himself without a job or a car.  222 Cal. App 4gth 819 (12/3/13). Of course, employer knowledge of the hardship is important to establish  and here the employee repeatedly told his boss about this untenable situation.

In conclusion, the Court of Appeals held that the jury could conclude that the employer “knowingly permitted working conditions that were so intolerable or aggravated at the time of the employee’s resignation that a reasonable employer would realize that a reasonable person in the employee’s position would be compelled to resign.”

At Stephen Danz & Associates, a statewide California employee-side law firm, we have faced numerous, similar situations where reimbursement for some basic expenses, usually incurred in good faith by an employee, met with a stony silence when reimbursement was sought. Typically, charges for travel and hotels to attend conventions are at issue. The Vasquez case teaches that California employers who lie to their employees and promise reimbursement (or imply it by allowing the employee to advance their own costs), do so at their own risk. For, in addition to the reimbursement of the employee, a wrongful termination (or constructive termination) lawsuit can result in the payment of back and future lost wages, emotional distress and punitive damages. This could especially true if the employee complains about failure to receive reimbursement and is then fired. This is la retaliatory termination in violation of common law and California’s Labor Codes.

Let’s chat about your employment situation, whether involving costs you’ve advanced or other intolerable issues such as sex harassment. We are here to help. Give us a call at 877 789-9707 or respond to our contact form on line.