Wrongfully Terminated Employees in San Francisco
When consulting a terminated employee such as an executive, director or manager in California, an attorney must proceed diligently through the array of employment law topics to fully understand the events preceding, and leading up to, the possible wrongful termination. In California employment-at-will means that an employer can fire an employee for just about any reason – good, bad, no, or false. However, an at-will employee may not be fired for a prohibited reason such as against public policy, discrimination, unionizing, or bad faith. Also, a contractor may not be terminated in violation of his or her agreement. Next, careful review must be completed of the work environment, contract language, and the employee handbook or manual. Further, employers are often found to have violated public policy or penalize employees for exercising their rights as whistleblowers.
Although the federal government provides some protection to employees (such as the Fair Labor Standards Act or the WARN Act requiring that companies with over 100 employees give a 60 day notice of plant closings and mass layoffs), most employee rights come from the states. In addition, generally in California contracts that restrain anyone from engaging in a lawful profession, trade or business of any kind are void. In addition, the most common wrongful termination cause of action results from an employee being terminated based on his or her membership in a protected group. This form of discrimination is based on the employee’s age, disability, national origin, pregnancy, race, religion, sexual orientation, gender, or medical condition. Finally, recent cases have also shown that boards of directors and company owners, through their prideful actions, intentionally inflict emotional distress unto exiting employees even at the executive level.
Wrongful Termination (or Discharge) in Violation of Public Policy
Wrongful Discharge is a tort claim which includes the possibility of punitive damages and not merely compensatory damages that a contract provides. This opens up the availability of million dollar settlements and verdicts. The three most common examples of Wrongful Discharge are (i) refusing to commit unlawful acts like perjury; (ii) exercising a statutory right like workers compensation; or (iii) fulfilling a public obligation like jury duty.
Public Policy in general comes in the form of (i) the employee’s refusal to commit an unlawful act; (ii) the employee performed a public duty and received negative treatment, (iii) the employee abided by a statutory right like jury duty; and (iv) the employee was a whistleblower. The elements of Wrongful Termination in Violation of Public Policy are that (i) the employee engaged in a protected activity; (ii) the employer took adverse action against the employee, and (iii) there was a cause-effect connection between the activity and the adverse action. A famous case called Moon River included an employee who went on a company retreat and did not want to moon everyone like the others. After that, she became an outsider in the workplace and fired. The court held for the plaintiff because the forced exposure of the bare buttocks is enough of a violation of Public Policy captured in a statute (indecent exposure statute). In another case a plaintiff received a swift and substantial damages award when she was terminated for serving on a jury (Nees v. Hocks).
Many state and federal laws also contain protections for those who receive adverse actions for reporting employer violations (whistleblowing). For example, the Occupational Safety and Health Act (“OSHA”) forbids employers from the following adverse actions against employees: firing after reporting violations, blacklisting, demotion, denying overtime/promotion, disciplining, failure to hire, intimidation, reassignment, among others. Other statutes like Sarbanes Oxley
Another important consideration is whether the executive was terminated after he or she reported that a statute was violated. In recent years, protection has also been expanded to those whistleblowers that had a reasonable (not merely actual) cause to believe that a statute was violated. One of the most commonly used whistleblower protection statutes is the Sarbanes-Oxley Act (“SOA”). Most importantly, SOA contains whistleblower protections where an employer may not discriminate against an employee who acted reasonably to address (i) mail fraud; (ii) fraud by wire, radio or television; (iii) bank fraud; or (iv) securities fraud. SOA provides for fines, imprisonment and the right to pursue tort damages. Similar to the claim of Wrongful Termination in Violation of Public Policy, SOA claims require a link between the protected activity and the adverse action taken.
A good attorney would look for the following in establishing this circumstantial connection: (i) the time proximity between the protected action and the adverse result; (ii) whether the whistleblower received different treatment than other similarly situated and qualified employees; (iii) whether there was documented corrective action; and (iv) whether there was a history of negative evaluations. For example, a lapse of 18 months between the protected activity and the whistleblower’s termination was held as too long to satisfy the causal connection. (Villarimo v. Aloha Air) In addition, one must make sure that the protected claim must be made in accordance with an employer’s internal dispute resolution process. One recent case resulted in a dismissed retaliation and whistleblower claim because the employee was advised of the internal dispute resolution process but failed to use it. (Campbell v. UC Regents)
A best practice for executives who want to correctly file a corporate whistleblowing claim is to (i) speak out; and (ii) make sure to properly report the misconduct that was witnessed to not only supervisors but also to the Board of Directors.
Unlawful Termination Based on Discrimination
Title VII of the Civil Rights Act of 1964 and the California Fair Employment and Housing Act (“FEHA”) prohibit employers from discriminating because an employee belongs to a “protected class.” Under Title VII, it is unlawful for employers to discharge or discriminate against individuals in their compensation, terms, conditions, or privileges of employment because of their race, color, religion, sex, gender, pregnancy, medical condition or national origin. (Cal. Gov’t Code §12940(a).)
Intentional Infliction of Emotional Distress
An exception to employment at-will occurs if the executive experienced Intentional Infliction of Emotional Distress (“IIED”). This tort may be brought against the former employer (without the case being dismissed for workers compensation) when the employee can show harm – and not merely physical harm (unique in California). The four elements of IIED are (i) the defendant intended to inflict emotional distress or knew or should have known of its likelihood; (ii) the conduct was extreme and outrageous (beyond bounds of decency); (iii) the defendant’s actions caused plaintiff distress; and (iv) plaintiff’s emotional distress was severe and of the kind that no reasonable person could be expected to endure it. In a recent case, a Chief Financial Officer (“CFO”) got his company in deep trouble over workplace harassment and IIED when, after being rebuffed several times by his report who was the director of sales. After she rejected him several times, and complained to the company owner and several members of the board, the CFO began to slander her, stalk her, and even embarrass her in front of her co-workers for minor events. When she finally had an emotional breakdown and considered suicide, she quit and brought action against the company. Sadly, no monetary figure can truly make up for the trauma caused, disgraceful ignorance by the company owner, and embarrassment that would take years of therapy to alleviate.
To review your case, speak to our San Francisco wrongful termination attorneys at San Francisco Employment Attorneys today for a free consultation. Call us at 877-789-9707 today.