Wrongful termination in violation of public policy

An outline of California’s employment at-will statute and the many exceptions to it

2015 June

The general rule is California employees are employed at-will

Section 2922 of the California Labor Code declares: “An employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month.”

Employers often rely on the at-will presumption in order to attempt to avoid liability for their wrongdoings. Wrongful termination in violation of public policy is an exception to this general rule. “[W]hile an at-will employee may be terminated for no reason, or for an arbitrary or irrational reason, there can be no right to terminate for an unlawful reason or a purpose that contravenes fundamental public policy.” (Gantt v. Sentry Ins. (1992) 1 Cal.4th 1083, 1094.)

Statutory exceptions to the general rule of at-will employment

Some of the most compelling claims we can bring on behalf of employees against their employers are for violation of the state and federal anti-discrimination statutes, including the California Fair Employment and Housing Act (“FEHA”), Title VII of the Civil Rights Act of 1964, the federal Americans with Disabilities Act and its amendments (“ADA”), the federal Age Discrimination in Employment Act (“ADEA”), and the federal Family Medical Leave Act (“FMLA”). Section 1102.5 of the California Labor Code – our state whistleblower statute − provides another strong exception to the at-will doctrine.

The common-law exception to the general rule

Wrongful termination in violation of public policy is the common-law exception to the general rule of at-will employment. Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, is the seminal California case governing wrongful termination in violation of public policy. An “employer’s traditional broad authority to discharge an at-will employee may be limited by statute...or by considerations of public policy.” (Id., 27 Cal.3d at 172.) The law imposes a duty on all employers to refrain from terminating an employee in violation of public policy. (Id. at 176.)

An employee can establish a claim of constructive termination in violation of public policy by showing that “the employer either intentionally created or 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.” (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1251.)

Public policy defined

In order to establish a wrongful termination in violation of public policy, a plaintiff must show that the employer violated a policy that is (a) enumerated in a constitutional, statutory, or regulatory provision of state or federal law, (b) “public” in the sense that it “inures to the benefit of the public” (rather than an individual interest), (c) well established at the time of the discharge, and (d) substantial and fundamental. (Stevenson v. Superior Ct. (1997) 16 Cal.4th 880, 894; Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 79.)

Nexus required

An employee-plaintiff must also show a causal nexus between his or her protected activity and the adverse employment action taken against the employee. (Turner v. Anheuser-Busch, Inc. (1994) Cal.4th at 1258-1259.) Short of having the rare admission by the employer that the termination was because of the plaintiff’s participation in a protected activity, strong evidence to establish a nexus will be a short proximity in time between the protected activity and the adverse employment action. Other circumstantial evidence of retaliatory motive includes shifting reasons for the termination and the employer’s violation of its own policies in its treatment of the plaintiff.

Pre-requisites for a Tameny claim

There must be an employer-employee relationship to pursue a claim for wrongful termination in violation of public policy. Independent contractors are not protected. (Varisco v. Gateway Science & Engineering, Inc. (2008) 166 Cal.App.4th 1099, 1103; Ali v. L.A. Focus Publication (2003) 112 Cal.App.4th 1477, 1484-1485.)

The plaintiff may only pursue his or her claim of wrongful termination against an employer, not a co-worker or supervisor. (Khajavi v. Feather River Anesthesia Med. Group (2000) 84 Cal.App.4th 32, 53; Cf. Cal. Gov. Code, § 12940(j)(3) [individual supervisors may be held liable for discriminatory harassment]; but see Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158 (“we conclude that the employer is liable for retaliation under section 12940, subdivision (h), but nonemployer individuals are not personally liable for their role in that retaliation.”].)

Public entities are only liable for their acts and omissions as provided by statute. As a result, public employees cannot pursue a common law claim of wrongful termination in violation of public policy. (Gov. Code, § 815(a); Ross v. S.F. Bay Area Rapid Transit Dist. (2007) 146 Cal.App.4th 1507, 1514.)

In some cases, if the statute on which you intend to base your claim already defines a remedy and procedure for the violation of law established by the statute, then it may not serve as the basis for a Tameny claim. (Dutra v. Mercy Med. Ctr. Mt. Shasta (2012) 209 Cal.App.4th 750, 756, [plaintiff cannot found a Tameny claim on Lab. Code, § 132a because jurisdiction to adjudicate this statutory violation is limited to the WCAB and allowing the claim “would impermissibly give her broader remedies and procedures than that provided by statute”].)

Bases for claims of wrongful termination in violation of public policy

• Discrimination and retaliation statutes

Rojo v. Kliger (1990) 52 Cal.3d 65, 70-71, holds that, “the FEHA does not supplant other state laws, including claims under the common law, relating to employment discrimination; an employee need not exhaust the administrative process under the act before resort to judicial relief for nonstatutory causes of action; and sex discrimination in employment may support a claim of tortious discharge in contravention of public policy.”

Disability discrimination may also serve as the basis of a wrongful termination claim. (City of Moorpark v. Superior Ct. (Dillon) (1998) 18 Cal.4th 1143, 1160.)

• Violation of the California Family Rights Act

Faust v. California Portland Cement Co. (2007) 150 Cal.App.4th 864, 886, [violation of CFRA is actionable as a wrongful termination in violation of public policy [Cal. Gov. Code, § 12945.2].)

• Complaint of workplace safety − Cal-OSHA

Boston v. Penny Lane Centers, Inc. (2009) 170 Cal.App.4th 936, 947, [plaintiff could vindicate her right to a safe workplace under Section 6300, et seq., of the California Labor Code using the common law tort of wrongful discharge, which preexisted and was separate from a cause of action created by §§ 1596.881, et seq., of the California Health and Saf. Code].)

Hentzel v. Singer Co. (1982) 138 Cal.App.3d 290, 298, [an employee is wrongfully terminated where he or she is discharged after complaining to the employer about working conditions or practices which the employee reasonably believes to be unsafe].)

• Advocating appropriate medical care for a patient

Khajavi v. Feather River Anesthesia Med. Group (2000) 84 Cal.App.4th 32, 51-52, [Bus. & Prof. Code, § 2056(c) “expresses a public policy to protect physicians and surgeons from retaliation for advocating medically appropriate health care, [and] a wrongful discharge action can be premised on a termination in violation of this public policy.”])

• Complaints about wage-and-hour violations

Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, [employee who complains about failure to pay overtime wages and who was allegedly terminated in order to avoid payment of accrued commissions and vacation pay establishes a claim of wrongful termination in violation of public policy].)

• Discussion of wages

Grant-Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 1361, 1366, [Lab. Code, § 232 prohibits discharge of employees for discussing their wages because they had a fundamental right rooted in public policy to discuss with other employees whether they were equitably compensated].).

• Testifying at a hearing

White v. Ultramar (1999) 21 Cal.4th 563, 568, [plaintiff alleged wrongful termination in retaliation for testifying at an unemployment hearing]; see, also, Lab. Code, § 230(b), prohibiting discharge based on an employee’s taking time off to appear in court as a witness.)

• Political activity

Ali v. L.A. Focus Publication (2003) 112 Cal.App.4th 1477, 1487-1489, [Lab.Code, § 1101 establishes the public policy that prohibits an employer from terminating an employee for engaging in political activity].)

• Penal code violations

Casella v. SouthWest Dealer Services, Inc. (2007) 157 Cal.App.4th 1127, 1143, [Pen. Code, § 484 that defines theft can serve as the statutory foundation for a wrongful termination in violation of public policy].)

• Fraud

Haney v. Aramark Uniform Services, Inc. (2004) 121 Cal.App.4th 623, 629, [“we hold that the public policy of discouraging fraud constitutes a fundamental public policy of California and it is sufficient to support the employee’s wrongful discharge claim.”].)

• Tax Code and Anti-Trust Laws

Collier v. Superior Ct. (MCA, Inc.) (1991) 228 Cal.App.3d 1117, 1122-1123, [an employee who complained about other employees engaged in violation of laws against bribery and kickbacks (Cal. Pen. Code, § 641.3), embezzlement (Cal. Pen. Code, § 504), tax evasion (Cal. Rev. & Tax Code, § 7152 and 26 U.S.C. § 7201, 7202), and possible drug trafficking and money laundering may establish a Tameny claim].)

• False Claims Act

Holmes v. General Dynamics Corp. (1993) 17 Cal.App.4th 1418, 1429, [employee terminated in retaliation for reporting his employer’s breaches of government defense contracts to management establishes a wrongful termination in violation of public policy].)

McVeigh v. Recology San Francisco (2013) 213 Cal.App.4th 443, 472, [employee alleges a viable Tameny claim based on reporting the employer’s overcharging the state in violation of False Claims Act].)

• Immigration Reform and Control Act (“IRCA”)

Jie v. Liang Tai Knitwear Co. (2001) 89 Cal.App.4th 654, 662, [“if defendants fired plaintiffs for complaining to the authorities that defendants were employing undocumented workers in violation of IRCA, such termination would be in violation of a fundamental public policy.].) Note that an employee need not prove that the employer actually violated the statute in question. It will suffice if the employer fired an employee for his or her “reasonably based suspicions” of illegal activity. (Green v. Ralee Engineering Co. (1988) 19 Cal.4th at 87.)

• Section 16600 of the Business and Professions Code

D’sa v. Playhut, Inc. (2000) 85 Cal.App.4th 927, 929, [“We hold an employer cannot lawfully make the signing of an employment agreement, which contains an unenforceable covenant not to compete, a condition of continued employment, even if such agreement contains choice of law or severability provisions which would enable the employer to enforce the other provisions of the employment agreement. We further hold that an employer’s termination of an employee who refuses to sign such an agreement constitutes a wrongful termination in violation of public policy.”])

Silguero v. Creteguard, Inc. (2010) 187 Cal.App.4th 60, 68, [firing an employer for breaching a non-compete with a former employer violates the public policy favoring open competition and employee mobility expressed in Section 16600].)

Why bring violation of public policy claims?

In situations where an employee has been terminated in violation of a state or federal discrimination statute, for example, one might question why it makes sense to bring a claim of wrongful termination in violation of public policy, as well. There are a few good reasons.

First, in instances where the plaintiff has failed to exhaust his or her administrative remedies in a timely manner, the wrongful termination claim may be the plaintiff’s only remedy.

Secondly, it makes sense to allege a common-law claim in addition to the statutory claim in instances where the statute of limitations on a statutory claim is shorter than the wrongful termination statute of limitations (two years).

Third, even if a plaintiff asserts a valid statutory claim, the wrongful termination claim provides a unique basis on which to proceed to trial in case a court dismisses the statutory claim erroneously.

Finally, a plaintiff might allege that he or she has been terminated for a combination of illegal reasons. She can argue that, so long as the jury believes it is more likely than not that the termination was illegal under any of the multiple statutory bases for the wrongful termination claim, plaintiff wins. In this way, a plaintiff can recover in a situation where there is a combination of discriminatory or illegal reasons for the termination, where she might not have recovered on any of her individual statutory claims.

Pleading wrongful termination in violation of public policy

Plaintiffs should plead a wrongful termination cause of action by using the most recent CACI 2430 as a roadmap. Simply insert your facts into the format that CACI provides. When you plead your case with CACI as your guide, it allows you to use your Complaint for Damages throughout the litigation to:

(a) prepare your client for deposition, (b) prepare for opposing party depositions, (c) prepare your discovery requests and responses, (d) organize your facts and law in opposition to motions for summary judgment or adjudication of issues, and (e) prepare your case for trial.

For example:

FIFTH CAUSE OF ACTION

(For Wrongful Termination in Violation of Public Policy Against All Defendants and Does 1-40)

The plaintiff was employed by defendant; The defendant discharged plaintiff; The plaintiff’s opposition to abide the defendant’s discriminatory and harassing conduct was a substantial motivating reason for the plaintiff’s discharge. The plaintiff’s termination was in violation of fundamental, basic, and substantial public policies of the State of California, including, but not limited to, the California Fair Employment and Housing Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and Title VII of the Civil Rights Act of 1964; and The discharge caused the plaintiff harm. Economic damages. As a direct and legal result of the conduct of defendants, and each of them, as set forth above, plaintiff suffered and will suffer special damages for lost earnings and wages in an amount not yet fully known, but in excess of $1million. Non-economic damages. As a direct and legal result of the conduct of defendants, and each of them, as set forth above, plaintiff suffered general damages including, but not limited to, damage to her reputation, pain and suffering, humiliation, embarrassment, and emotional distress, all in an amount to be proved at trial. Exemplary and punitive damages. Defendants, by their conduct as set forth above, have engaged in despicable conduct, exposing plaintiff to cruel and unjust hardship, with the intention to cause injury to plaintiff, and with conscious disregard of her rights. Defendants occupied a position of trust which gave them power to damage plaintiff’s ability to earn a livelihood. Defendants abused that position of trust by maliciously, fraudulently, and oppressively discharging plaintiff and discriminating against her under the circumstances described here. Defendants’ conduct was carried out by and ratified by one or more of Defendants’ managing agents. Plaintiff is therefore entitled to punitive damages in an amount to be proven at trial. Defendants’ conduct in discriminating against plaintiff was willful and oppressive and done in conscious disregard of her rights. Ratification. Plaintiff is informed and believes and on that basis alleges that Defendants, and each of them, were at all relevant times aware of the conduct of each of the other Defendants and approved and ratified that conduct.

[This article was originally presented at CAALA’s 2014 Annual Convention – editor.]