Wrongful termination & discrimination: California employment law overview.

California is generally an at-will employment state. This means that employment may be terminated with or without cause by either the employer or the employee. This doesn't mean, however, that an employer may terminate an employee for any reason they want.
Employers may not terminate employment for certain protected reasons—like race, gender, age, religion, disability, or other protected statuses. Employees that have been terminated for these reasons can bring a lawsuit against their former employer alleging wrongful termination based on discrimination.

Before deciding whether to bring a wrongful termination lawsuit, however, it is important to understand what acts make termination wrongful. Importantly, termination may be wrongful on a number of grounds. This post focuses on wrongful termination based on discrimination.

Wrongful termination generally.

In California, employers don't have to be fair, nice, or even rational. They can terminate employees for many different reasons, as long as those reasons are not prohibited by law or public policy. When the employer crosses that line, however, employees may have a right to bring a lawsuit for wrongful termination.

In California, lawsuits based on wrongful termination of employment may be based on any one of several claims, including:

  • Discrimination.
  • Violations of public policy.
  • Sexual harassment.
  • Retaliation or whistleblower claims.
  • Refusal to provide required work leave.
  • Freedom of speech violations.
  • Or breach of contract claims.

Discrimination claims are one of the most common types of wrongful termination lawsuits for California employees. According to some statistics, more than half of employment-related lawsuits involve discrimination. ((See, e.g., U.S. Employment Opportunity Commission, EEOC Litigation Statistics, FY 1997 through FY 2012 (2012), available at http://www.eeoc.gov/eeoc/statistics/enforcement/litigation.cfm.)) But, what is required to establish a valid wrongful termination claim based on discrimination?

Elements of a wrongful termination lawsuit based on discrimination.

A valid lawsuit must be based on an established "cause of action." A cause of action is the legal theory that litigants use to justify their claim that they are owed money damages. In order to establish a cause of action for any lawsuit, litigants must be able to allege certain specific facts—called elements. In other words, in order to establish a valid lawsuit, an employee must be able to allege that all elements of their cause of action can be met.

The elements of a wrongful termination cause of action can vary depending on what the lawsuit's basis. For instance, a wrongful termination lawsuit based on a freedom of speech violation would have different elements than a wrongful termination lawsuit based on a violation of public policy.

For discrimination specifically, the following elements must be met

  • An employment relationship existed between the worker and the employer.
  • The employer terminated the worker's employment.
  • The worker's protected status—i.e., race, age, gender, sexual orientation, etc.—was a substantial motivating reason for the employer's decision to discharge the worker.
  • The worker suffered harm.
  • And the employer's conduct was a substantial factor causing the worker's harm. ((Judicial Council of California Civil Jury Instructions, Instruction No. 2500.))

Because these elements are so important to a wrongful termination lawsuit, we'll explore each element in turn.

An employment relationship existed.

As ugly as prejudice can be, discrimination is not, in and of itself, unlawful in everyday life. Discrimination is only prohibited in the context of certain protected types of relationships. The employment relationship is one of those protected areas. ((Gov't Code, § 12940.)) Both state and federal law prohibit discrimination in the employment context. ((Id.; 42 U.S.C. § 2000e-2.))

As stated by the California legislature:

It is hereby declared as the public policy of this state that it is necessary to protect and safeguard the right and opportunity of all persons to seek, obtain, and hold employment without discrimination....

The employment was terminated by the employer.

Of all the elements of wrongful termination lawsuits, the "termination" requirement is, at first glance, the most straightforward. An employee generally cannot claim that they were wrongfully terminated if they quit first. Questions arise, however, when employees are forced to resign by their employer. Is a forced resignation a "termination" for the purposes of a wrongful termination lawsuit?

The law that governs discrimination in California is Government Code, section 12940. The specific word used by that statute is "discharge"—not termination. The Supreme Court of California has found that an employee may be discharged for the purposes of this statute if they are forced to resign. ((Mullins v. Rockwell Int'l Corp. (1997) 15 Cal.4th 731, 737.)) This doctrine is called "constructive discharge."

The idea behind the doctrine of constructive discharge is that a resignation is not always voluntary on the employee's part. Employers often try to avoid liability by engaging in conduct that forces the employee to quit. Rather than letting employers bypass employment laws with this tactic, the courts will try to determine whether the resignation was actually employer-initiated. If the employer has coerced the employee's resignation by creating intolerable working conditions, the subsequent resignation may be determined a "constructive discharge." ((Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1249.))

The employee's protected status is involved.

As employment lawyers, we often get calls from distressed employees asking whether they have a case for discrimination. In many cases, the most crucial issue is whether the specific kind of discrimination at issue is prohibited. Not every kind of discrimination is prohibited.

The word "discrimination" can be used colloquially to mean many different things. But, from a legal perspective, employment discrimination is much more specific. The discrimination must be motivated by the employee's membership of a protected group or status. But what groups or statuses are protected?

Under California law, a termination cannot be motivated by:

  • Race, color, ancestry, or national origin.
  • Religious creed.
  • Physical or mental disability.
  • Medical condition.
  • Genetic information.
  • Marital status.
  • Sex, gender, gender identity, or gender expression.
  • Age.
  • Or sexual orientation. ((Gov't Code, § 12940.))

Other groups might not receive legal protections for their termination.

Discrimination was a motivating factor.

Most cases will turn on whether the termination was motivated by the employee's protected status. Determining whether the termination was motivated on improper grounds can be difficult. Fortunately for employees, the employee's protected status does not need to be the sole motivation in the employee's termination. In fact, a court could even find that legitimate reasons existed for terminating the employee. ((Harris v. City of Santa Monica (2013) 56 Cal.4th 203.)) The employee, however, must still prove that the employee's protected status was a substantial motivating factor in their termination. ((Id. at 225–232.))

Importantly, if the employer proves by a preponderance of the evidence that the employee would have been terminated anyway for lawful reasons, the employee may lose their right to a large portion of the damages that they would have otherwise been entitled to. ((Id. at 241.))

Wrongful Termination Statute of Limitations.

A statute of limitations is a law that requires people to bring their claims within a specific period of time. In other words, if an employee does not sue for wrongful termination fast enough, the employee's claim could expire. The length of the statute of limitations can vary from law to law.

In California, discrimination claims can be brought under two different sets of laws:

  • California's Fair Employment and Housing Act.
  • And the federal Civil Rights Act of 1964—specifically, Title VII of that act.

The statute of limitations will vary depending on which laws the employee chooses to enforce.

Under Title VII, the statute of limitations is normally 180 days after date of the alleged discriminatory act. ((42 U.S.C. § 2000e-5, subd. (e)(1).)) However, if a state or local government has authority to grant or seek relief from the unlawful practice, the employee may file a charge with that agency within 300 days of the alleged discriminatory act. ((Id.)) California has that kind of agency—the Department of Fair Employment and Housing. ((See Worksharing Agreement between EEOC and California DFEH (Oct. 3, 2008) available at http://www.dfeh.ca.gov/res/docs/DFEH%20Workshare/EEOC%20Contract%202008-09_Red.pdf.)) So, in California, the statute of limitations is effectively 300 days for most employees to bring a Title VII action.

If the claim is not resolved by the state or federal agency, a right-to-sue letter will issue to the employee. This gives the employee a right to bring a civil action in court against the employer for Title VII violations. Once this happens, the employee has 90 days after the issuance of the right-to-sue letter to bring a Title VII action in court. ((42 U.S.C. § 2000e-5, subd. (f)(1).))

If the employee chooses instead to pursue remedies under the Fair Employment and Housing Act ("FEHA"), a complaint must be filed with the Department of Fair Employment and Housing within one-year of the alleged discriminatory act. ((Gov't Code, § 12960, subd. (d).)) For wrongful termination cases, the one-year period begins on the date that the employee is actually terminated—not when they first learn about the termination. ((Romano v. Rockwell Int'l, Inc. (1996) 14 Cal.4th 479.))

Like a Title VII action, a right-to-sue notice will be issued by the Department of Fair Employment and Housing if the complaint is not resolved. Under FEHA, however, the employee has substantially more time to file a complaint in court. The employee must file a lawsuit in court under FEHA within one year the Department of Fair Employment and Housing's right-to-sue notice. ((Gov't Code, § 12965, subd. (b).)) So employees are afforded more time under FEHA to bring their complaints.

Factors that may influence a wrongful termination case.

Obviously every case is different, so how can employees know the strength of their wrongful termination case? A few factors can provide some help with what courts will look at:

  • Is the employee at-will? At-will employees do not need to be given a reason for termination in many cases. If there is no reason given for a termination, it can be difficult to prove that the termination was motivated by a prohibited type of discrimination.
  • Is the discrimination well-documented? One of the biggest obstacles in a discrimination case is the issue of proof. Discrimination that has a lot of witnesses, documentary evidence, or multiple repeated instances of discrimination
  • Was a legitimate non-discriminatory reason given for the termination? If legitimate reasons for termination exist, the employer may be able to demonstrate to the court that the termination would have happened even without the discriminatory motivation. This could strengthen the employer's case and weaken the employee's case. Importantly, however, the discriminatory motivation does not need to be the only motivation to justify a wrongful termination lawsuit. It just has to be a substantial motivating factor.
  • Did the employee work to prevent additional damages? Employees that are victims of wrongful termination have a duty to work to minimize the extent of their financial harm. ((Parker v. Twentieth Century-Fox Film Corp. (1970) 3 Cal.3d 176, 181.)) They cannot, for instance, sit on their hands after termination if reasonable efforts could have obtained a comparable job for the employee. In the legal world, we call this a duty to mitigate damages. If the employee fails to mitigate, the damages they can recover may be lessened and could weaken the case. This doesn't mean, however, that the employee must humiliate themselves or burden themselves too greatly. They just need to make reasonable efforts to minimize their harm suffered.

What remedies are available to victims of wrongful termination?

In general, employees that have been the victim of wrongful termination are entitled to both compensatory and punitive damages, unless the wrongful termination is based solely on the employer's breach of contract. ((Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167; Civil Code, § 3294)) Judgements for employees can vary substantially from case-to-case, but settlements for wrongful termination often exceed $40,000. ((California Department of Fair Employment & Housing, 2010 Annual Report, http://www.dfeh.ca.gov/res/docs/AnnulaReport/2010%20annual%20report%20final.pdf.))

Compensatory Damages.

Compensatory damages are meant to compensate the employee for the harm caused by the termination. ((Civil Code, § 3333.)) It does not matter that some of the damages could not have been anticipated by the employer. ((Crisci v. The Security Insurance Co. of New Haven (1967) 66 Cal.2d 425, 433.))

Compensatory damages are categorized as being either: special damages or general damages. Special damages include the costs of wages and benefits that would have been given to the employee if the wrongful termination had not occurred. General damages compensate for injuries where no exact dollar amount can be calculated—like emotional distress. Employees are often entitled to interest for their compensatory damages, dating back to the date of the wrongful termination. ((Civil Code, § 3287.))

Punitive Damages.

Unlike other kinds of damages, punitive damages are damages meant to punish the wrongdoer. So employees can sometimes receive damages that are greater than those they actually suffered. Punitive damages are available to employees where the employer was guilty of malice, fraud, or oppression. ((Civil Code, § 3294; Palmer v. Ted Stevens Honda (1987) 193 Cal. App.3d 530.)) Without malice, fraud, or oppression, punitive damages are generally not available for wrongful termination alone. ((Scott v. Phoenix Schools, Inc. (2009) 175 Cal.App.4th 702, 715–716.)) The employee must be able to prove the existence of malice, fraud, or oppression with clear and convincing evidence. ((Id.))

If punitive damages are available, they can be up to nine times that amount of actual damages sustained by the employee. ((State Farm Mutual Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408.)) To determine the exact amount of punitive damages, courts will look at:

  • How reprehensible the employer's conduct was.
  • Whether the employer knew the employee's harm was likely to occur because of its conduct.
  • What amount is necessary to punish the employer and discourage future wrongful conduct. ((Id.; Judicial Council of California Civil Jury Instructions, Instruction 3940.))

Other Damages.

In some cases, reinstatement of the employee to their former position may be available. Employees may also be entitled to attorney fees and court costs to compensate them for the cost of the lawsuit.

Final Thoughts

If you have been terminated due to your membership of a protected group, you may be entitled to relief. To pursue that relief, however, you should have competent and experienced representation on your side. Call us, Optimum Employment Lawyers, Los Angeles and Orange County employment lawyers, at (949) 954-8181. Our consultations are free and confidential. We are committed to protecting the rights of all hard-working employees.