Recently in Wrongful Termination Category

February 28, 2014

Watch Out for those Don't Speak Clauses (aka Non-Disparagement Clauses) in Employment Agreements!

file000594744442.jpgEmployers have been trying to include non-disparagement clauses in employment exit agreements for a long time but they seem to have gained some popularity recently. The New York Times recently ran an opinion piece, "Fired? Speak No Evil", by a laid-off employee, Will Blythe, which spotlighted the issue even further.

Mr. Blythe's former employer fired him and then provided him a severance agreement containing a non-disparagement clause - for Mr. Blythe to "never make any negative or disparaging statements" about the company, its directors, shareholders, remaining employees, products, etc. If Mr. Blythe did not sign the clause, he would not receive his two weeks of severance pay. Mr. Blythe questioned the necessity of that part of his termination and the company president assured him that these types of clauses were perfectly ordinary in the business world. So why did Mr. Blythe end up not signing his agreement, and forgoing two weeks of pay? He wanted his own perfectly ordinary ability to speak his mind.

Employers have been increasingly including these disparagement clauses in settlement agreements and termination or severance agreements like in Mr. Blythe's case. These clauses seek to prevent employees from speaking about their former employer in exchange for some amount of severance or money. They may be as simple as one or two sentences, saying something like "You agree not to disparage or negatively comment on the Employer, its officers and management, and/or current or former employees." Often these clauses also include that violations for an employee disparaging or negatively commenting ends up costing the employee the entire severance or money he received or the employee may even be subject to penalties called liquidated damages.

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June 27, 2013

Viability of Wrongful Termination In Violation of Public Policy Claims Based on Labor Code Section 132a

b20nature_characters_humanoids022.jpgIn California, employees who are fired used to be able to bring a wrongful termination in violation of public policy action under Labor Code Section 132a against their employers. Labor Code Section 132a protects employees from being retaliated against for filing or intending to file worker's compensation claims against their employers. After a recent California court of appeals decision, Dutra v. Mercy Medical Center, wrongful termination claims may not be viable in court based on Section 132a

Michelle Dutra injured her back and was subsequently terminated from her job less than two months later after her injury. Ms. Dutra then sued her employer, claiming that she had been terminated in violation of public policy for filing a worker's compensation claim. The trial court dismissed the wrongful termination case since it determined the Worker Compensation Appeals Board (WCAB) has exclusive jurisdiction for claims under Section 132a though it permitted plaintiff an opportunity to amend her complaint.

So what's the problem with the WCAB determinng wrongful termination in violation of public policy claims based on Section 132a? The WCAB provides workers a streamlined, no-fault way to determine the extent of their claim for work-place injuries and compensation without delving into liability, or any other common law defenses that are typically available in litigation. The reasoning is that these work-place injury claims would be quickly resolved under the WCAB's no-fault system. But the remedies available under the WCAB severely limit employees' ability to recover damages. For examples, employees filing Section 132 a claims cannot claim future wage loss and are only able to recover up to $10,000 in penalties for back pay! Also, attorney fees are unavailable under Section 132a claims.

In Dutra, the Appeals court affirmed the trial court's decision. Here's the court's reasoning: First, relying on City of Moorepark v. Superior Court, the Dutra court stated that allowing plaintiffs to pursue common law tort claims based on Section 132a would provide the plaintiff broader remedies than Section 132a allows. In other words, if the public policy that supports the wrongful termination claim has limitations such as requiring specific procedures and narrower remedies, then allowing plaintiff to pursue the tort claim will enlarge the remedies and procedures provided by statute. Second, although City of Moorepark did allow a plaintiff to pursue common law wrongful termination remedies, in Dutra, plaintiff failed to avail her of those other remedies refusing to amend her complaint.

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March 12, 2013

Manager's Deceptiveness during Investigation of Discrimination is Not Protected Activity for Proving Retaliation

office workers.JPGProviding evasive and untruthful responses and not cooperating with an investigation by an employer is not considered a protected activity under the Fair Employment and Housing Act's (FEHA) Government Code Section 12940(h) prohibiting retaliation. That's what a recent Court of Appeal case, McGrory v. Applied Signal Technology, Inc., held by siding with the employer on all accounts and granting employer's motion for summary judgment, which essentially prevents the case from going forward to the jury.

John McGrory managed approximately 12 employees at Applied Signal Technology, Inc. In 2008 and 2009, he instituted adverse employment actions against one of his female subordinates by issuing a verbal warning and subsequently, a performance improvement plan. This employee, who was a lesbian, submitted an internal complaint against McGrory, accusing him of gender and sexual orientation discrimination and harassment.

The employer hired an outside attorney to investigate the manager, McGrory. This attorney concluded that the performance concerns about the female employee were justified. However, the investigation unearthed conduct by McGrory and other male employees making comments or jokes of sexual or racial nature regularly. In fact, McGrory admitted making many of the comments despite another female subordinate expressing discomfort with such conduct. After completing the investigation, the outside attorney concluded that McGrory was "uncooperative and untruthful" and that the female employee was credible during the investigation.

Based upon McGrory's deceptiveness during the investigation, his violation of the employer's policies on harassment and ethics, and what the employer perceived as the risk future legal liability posed by continuing to employ McGrory, the employer fired him.

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February 28, 2013

Famous Cleo Restaurant Sued for Race and Sexual Orientation Harassment and Discrimination

Keyon Wilson, an African-American gay woman, who joined Cleo Restaurant as a line cook on September 21, 2012, claims that she was subjected to racist and anti-gay slurs that were just too much to bear. On February 19, according to a Huffington Post article, Wilson filed a lawsuit against Cleo Restaurant and its parent company, SBE Entertainment Co., in Los Angeles Superior Court. The allegations include discrimination, harassment, wrongful constructive termination, and intentional infliction of emotional distress.

When Wilson started working as a line cook at Cleo, she was the only African-American staff person in the kitchen. Under different circumstances, that fact probably would not have mattered. Wilson further alleges that other employees who were heterosexual and not African-American were not treated in such a harassing and discriminatory manner.

The complaint alleges that right after Wilson started working there, supervising chefs and other colleagues began spewing slurs and insults at her. According to another news article, a coworker said to her, "Get to the back of the bus, Rosa Parks." Wilson was also called a ''ho'' and a negative word commonly used against gay people. These epithets ranged from fairly "generic" to unseemly, degrading sexual comments, addressing Wilson's sexual orientation and race. The question for the jury to consider if it gets that far would be whether the harassing conduct reaches a level where it is considered severe or pervasive to arise to a hostile environment.

According to the complaint, Wilson didn't just quit when she encountered this harassment. Instead, she went to the company's human resources department to complain about the harassment she was being subjected to by her co-workers and supervisors. But nothing changed. In fact, her working conditions became worse after she complained to human resources. Basically, the company retaliated against her for making her complaints of sexual orientation and racial harassment. What did they do? They forced Wilson to take unpaid days off and paid her in an untimely manner. Worse, the company failed to take all steps necessary to prevent harassment and retaliation from occurring.

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February 27, 2013

Pregnant Woman Alleges She Was Fired for Having Pre-Marital Sex

1385162_college_campus.jpg Having a baby is a pretty personal matter. When a woman decides to become pregnant should not be of any concern to her employer. Employers have no business getting involved in any of the personal decision-making, especially the moment of conception and whether or not the female employee is married.

But ex-employee Teri James says that she was fired from her position as a financial aid specialist at San Diego Christian College, for having pre-marital sex. According to an article in The New American, Teri James admitted to being pregnant when pressed by a human resources employee. At that point, James was a 29 year-old, unmarried woman. She was given two options: either resign or be fired. When James refused to resign, she was terminated.

Apparently, according to the employer such conduct violates the College's "Community Covenant" that all new employees must sign. The Covenant provides that all employees must refrain from "sexually immoral behavior," which includes pre-marital sex, pornography, adultery, and homosexuality. Teri James' termination notice indicated that the College terminated her employment because she engaged in activity outside the scope of the employee handbook and Community Covenant.

Strangely enough, after James' termination, the College offered her boyfriend (the father-to-be) an employment position, even though human resources personnel knew he was her boyfriend. Teri James brought a lawsuit against San Diego Christian College alleging pregnancy, gender and marital status discrimination, all in violation of the California Fair Employment and Housing Act ("FEHA"). She further asserted claims for wrongful termination of employment in violation of public policy, gender discrimination and invasion of privacy, both in violation of the California State Constitution. Two related claims concern the unlawful use or disclosure of employee medical records in violation of the Confidentiality of Medical Information Act, and a claim for the intentional infliction of emotional distress.

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October 27, 2008

Former Employees Bring Class Action Against Heller Ehrman

In the world of law firms being sued by their former employees, there is the suit of Werth v. Heller, Ehrman, White, & McAuliffe LLP (Case No. C084799). This class action lawsuit was brought following the dissolution of the law firm Heller Ehrman. The class of plaintiffs allege that in terminating its employees and dissolving its partnership Heller Ehrman violated, among other things,the federal WARN Act (29 U.S.C. §2101 et seq.) and the California WARN Act (Cal. Labor Code §1400 et seq.). Under both the federal and the California WARN Act, a company that conducts a mass layoff or plant closing is required to provide employees with sixty days advance written warning of the layoff or plant closing.

In the Werth case, the plaintiffs claim that the class of class of employees was not provided with the proper warnings. Additional coverage of the lawsuit can be found at

--Michael Sachs

October 16, 2008

CBS 5-TV Sued For Age And Sex Discrimination

Today the San Francisco Chronicle ran an article discussing the recent case brought by two veteran TV reporters against CBS 5-TV (KPIX),

On March 31, CBS 5-TV terminated 14 newsroom employees. The TV station states that these employees were terminated in a cost-cutting move. All of the 14 employees who were terminated were males.

Bill Schechner, age 66, and John Lobertini, age 48, filed a lawsuit today in San Francisco Superior Court claiming they were victims of age discrimination and sex discrimination. The lawsuit alleges that CBS "designed its workforce reduction process to eliminate older employees" and targeted "only male on-air talent" in the layoff.

The case is captioned Schechner v. KPIX-TV, case number CGC-08-480933. The complaint is listed on the SFSC website, but is not yet available to the public. Starting tomorrow the complaint should be available here.

--Michael Sachs

April 21, 2008

Court of Appeal Upholds Race Discrimination Verdict Against Sybase and Reinstates Punitive Damages Award

about01_main.jpgOn April 18, 2008, the California Court of Appeal, First District, affirmed a jury's finding of race and/or gender discrimination against Sybase, Inc. and the compensatory damage award of $1,342,943 to Sybase's former employee, Marietta Harvey. The Court of Appeal also reinstated the jury's punitive damages award of $500,000. The jury had awarded punitive damages after finding that Sybase's conduct in terminating Ms. Harvey demonstrated malice, fraud, and/or oppression. The trial judge had reversed the jury's punitive damage award, but the Court of Appeal ruled that the trial court's action doing so was erroneous. The case is Harvey v. Sybase, Inc. (2008) ___ Cal.App.4th ___ (A109300).

Marietta Harvey, the plaintiff, was originally from the Phillippines. She worked in the Human Resources Department of Sybase, Inc. beginning in 1999. She rose to become the only "Group Director" in Human Resources, second in command to Nita White Ivy (also from the Phillippines), the Vice President of Human Resources. She received consistently exceptional job reviews over the years. In February of 2003, for reasons unclear to Ms. Harvey, she was fired from Sybase, Inc.

The case was tried to a jury in the fall of 2004. After hearing evidence at trial that Sybase's CEO had commented that the Human Resources Department "looked like an airport," and that Ms. White-Ivy had repeatedly stated that her department needed more white males, the jury found that Ms. Harvey's termination was motivated by race or gender discrimination in violation of California law. In ruling on appeals by both Sybase and Ms. Harvey, the Court of Appeal held that this evidence was sufficient to support both the compensatory award for lost earnings and the punitive damage award based on malice.

Ms. Harvey was represented at trial by David J. Becht and Barbara R. Adams of Adams ∣ Nye ∣ Trapani ∣ Becht LLP and on appeal by Bruce Nye, also of this firm.

P.S.: More coverage for this decision at the excellent Horwitz and Levy Blawg, California Punitive Damages, an Exemplary Blog.

February 18, 2008

Wrongful Termination Case Based on Labor Code Section 232.5 is Preempted by NLRA

California has two statutes, Labor Code sections 232 and 232.5, that protect the rights of employees to disclose information about their compensation or working conditions. The first, Labor Code section 232, was enacted in 1984, provides:

No employer may do any of the following:

(a) Require, as a condition of employment, that an employee refrain from disclosing the amount of his or her wages.

(b) Require an employee to sign a waiver or other document that purports to deny the employee the right to disclose the amount of his or her wages.

(c) Discharge, formally discipline, or otherwise discriminate against an employee who discloses the amount of his or her wages.

This statute was broadly interpreted by the Court of Appeal in Grant-Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 136. There, the court upheld a claim for wrongful termination against public policy after an employee was allegedly terminated for telling co-employees (during an exchange of information between co-employees) that she did not receive a bonus. The court held that (a) section 232 set forth the public policy of the state protecting employees from adverse employment action for disclosing information about "wages," and (b) that the statute was intended to protect employees who wanted to discuss "some aspect of their compensation, for example, a possible increase in pay, perceived disparities in pay, or the awarding of bonuses."

Only months after the court's Grant Burton decision, the legislature enacted Labor Code section 232.5:

No employer may do any of the following:

(a) Require, as a condition of employment, that an employee refrain from disclosing information about the employer's working conditions.

(b) Require an employee to sign a waiver or other document that purports to deny the employee the right to disclose information about the employer's working conditions.

(c) Discharge, formally discipline, or otherwise discriminate against an employee who discloses information about the employer's working conditions.

(d) This section is not intended to permit an employee to disclose proprietary information, trade secret information, or information that is otherwise subject to a legal privilege without the consent of his or her employer.

In the following six years, no California court has issued a published decision involving section 232.5. . . . . until now.

More after the jump.

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