Wrongful Termination & Public Policy: Explained!

Wrongful Termination and Public Policy Concept

Employers in California are prohibited from terminating employees for illegal reasons. For instance, an employer may not fire an employee due to their race, gender, disability, sexual orientation, or other protected status. An employer may also not terminate an employee if doing so would violate a fundamental public policy. In the event an employer’s actions have been motivated by unlawful reason — or they violate California public policy — the employee may be entitled to commence a lawsuit for wrongful termination.

What is Wrongful Termination in Violation of Public Policy?

Generally, employment in California is “at will,” by default under the state’s Labor Code. In other words, if there is no specified term of the employment, it may be terminated by either party upon notice — with or without cause. But while an employee may be fired for almost any reason ((McGrory v. Applied Signal Technology, Inc. (2013) 212 Cal.App.4th 1510, 1514, citing Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 335)), they may not be terminated if an employer’s reason for firing them violates public policy. ((Stevenson v. Superior Court (1997) 16 Cal.4th 880, 887.))

The relevant public policies are contained in California’s Fair Employment and Housing Act, as well as the California and United States constitutions. ((Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167.)) However, it’s important to understand that in order to assert a public policy violation, the policy must be one that benefits the public at large — rather than apply to a single employee, employer, or private party. ((Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 670–671.))

What Reasons Violate Fundamental Public Policies Under California Law?

There are many reasons for termination that might violate a public policy in California. Some examples of employer actions that are prohibited by law and violate public policy include the following:

  • Retaliation for refusing to participate in an illegal activity
  • Retaliation for objecting to an employer’s fraudulent practices
  • Discrimination based on an employee’s age, genetic conditions, or disability
  • Retaliation for “whistleblowing,” i.e. reporting an unsafe or dangerous working environment
  • Adverse employment action taken based on a refusal to sign an illegal non-compete clause
  • Discrimination based on race, color, national origin, ancestry, or other protected characteristics
  • Discrimination based on marital status, pregnancy, sexual orientation, gender, or gender identity
  • Discharge based on taking time off to serve on a jury
  • Retaliation for engaging in political activities outside the workplace
  • Retaliation for seeking full wages

It’s essential to understand the difference between wrongful termination in violation of public policy claims and other types of wrongful termination. There are several ways in which employment termination can be wrongful, including by an employer breaching an employment contract. But in such cases, the root of the claim is created by a contract — not public policy considerations. If an employment agreement is violated, the proper legal remedy would be a breach of contract action.

Unlike wrongful termination actions based on contracts, wrongful termination in violation of public policy is largely a court-created doctrine and is driven by case law. This cause of action is a “tort” — which is distinct from a breach of contract action. Significantly, in tort actions, a victim can often pursue remedies such as punitive damages, attorney’s fees, and litigation costs.

How Do You Prove Wrongful Termination in Violation of Public Policy?

Wrongful termination in violation of public policy is a legal cause of action that is divided into different elements — and each one must be proven in order to recover your damages. The elements that must be established to prevail in a lawsuit for wrongful termination in violation of public policy are as follows:

  • An employment relationship existed — In order to state a claim for wrongful termination, an employer-employee relationship must have existed. Temporary, full-time, part-time, and contract employees are all eligible to state a claim for wrongful termination. However, independent contractors cannot pursue a wrongful termination claim unless they were misclassified and are actually employees.
  • The employer terminated the employee — Generally, if an employee resigns, they cannot bring a claim for wrongful termination unless they were constructively discharged. In these situations, an employer forces the employee to quit by making the workplace unbearable. ((Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1252.)) It is also not enough to argue that the employer failed to renew an employee’s contract. If the employment reaches the end of its term, nonrenewal does not constitute termination.
  • Improper motivation — A substantial motivating factor in the employer’s decision to terminate the employee must be a reason that violated public policy. While there is no clear definition regarding what constitutes an improper motivation, it usually must violate a statute, regulation, or constitutional provision. The public policy must also be fundamental, substantial, and firmly established as well as benefit the public at large, rather than an individual.
  • Damages — The termination must have caused the plaintiff to suffer damages. In other words, they must show that the wrongful termination harmed them financially or emotionally. ((Judicial Council of California Civil Jury Instructions, Section 2430.))

Importantly, there is a two-year statute of limitations in most wrongful termination in violation of public policy lawsuits in California. The timeframe in which to file a claim begins on the date the wrongful termination occurred. However, it’s crucial to be aware that certain causes of action for wrongful termination have shorter statutes of limitation. For example, you must file a complaint with the California Department of Fair Employment and Housing within three years for workplace discrimination or harassment.

What Remedies Do Employees Have if They Were Terminated in Violation of Public Policy?

If you were wrongfully discharged by your employer in violation of a statute or public policy, you may be able to recover a wide variety of damages by filing a lawsuit. Recoverable damages in a wrongful termination claim generally fall into four categories: compensatory damages, punitive damages, attorney’s fees, and litigation costs.

Compensatory damages are meant to compensate an employee for the financial losses they suffered as a result of the wrongful termination. These types of damages may include things like back pay, future lost earnings, and loss of benefits. Monetary compensation for the emotional distress an employee suffered may also be awarded.

Punitive damages are meant to punish a party for their wrongful actions — and serve to deter others from engaging in similar conduct. This category of damages is typically awarded in cases in which an employer’s actions are particularly egregious. Unlike compensatory damages, the amount of punitive damages available does not depend on the degree of harm suffered by the employee. Rather, it focuses on the wrongdoing of the employer.

The California legislature has sought to encourage employees to stand up for their rights in the workplace. Accordingly, in many cases, an aggrieved employee may recover their attorney fees and litigation costs related to wrongful termination in violation of public policy. These damages are most commonly awarded when the employer has violated a discrimination provision of the Fair Employment and Housing Act.

Contact an Experienced California Employment Law Attorney

It’s critical to stand up for your rights in the workplace and hold your employer accountable for their wrongful conduct. If you were terminated from your employment in violation of public policy, a skilled employment lawyer can assess your case and fight for the compensation you deserve. The knowledgeable employment law attorneys Optimum Employment Lawyers provide high-quality representation for employees who have suffered economic and emotional harm in the workplace — and strive to obtain the monetary recovery to which they are entitled. Contact us at (949) 954-8181 to schedule a consultation.

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