The Public Policy Exception for At-Will Employment

August 14, 2015 by

at will employmentIf you ask an employer what “at-will employment” means, there’s a good chance they’ll tell you that it means an employer can fire the employee for any reason they want – or for no reason at all.

This is a very common definition of at-will employment, but it isn’t quite accurate. An employer can fire an at-will employee for almost any reason – but there are exceptions.

The best known of these exceptions is that certain forms of discrimination can be illegal grounds for firing an employee. (In California, these forms include discrimination based on race, national origin, gender, religion, age, sexual orientation, pregnancy status, marital status, genetic information, and disability).

There are other reasons for firing an employee that are prohibited by statute. These reasons include firing an employee for filing a claim for workers’ compensation, or for taking leave that is guaranteed to them under federal or state law, or for engaging in protected union activity.

Another exception is that it is illegal to fire an employee for a reason that is in opposition to public policy. This means that an employee cannot be fired for:

  • refusing to violate a statute;
  • performing a statutory obligation;
  • exercising a statutory right or privilege;
  • reporting a violation of a statute of public importance.

If an employee files a claim against an employer for wrongful termination in violation of public policy, he or she will have to demonstrate that:

  • He or she was an employee of the employer;
  • That he or she was discharged by his or her employer;
  • That the alleged violation of public policy was a motivating reason for the discharge;
  • That the discharged caused the employee harm.

Yau vs. Santa Margarita Ford

A good example of these circumstances can be found in the case of Yau vs. Santa Margarita Ford, Inc. It involved an employee of an auto dealership, who became aware that some of his coworkers were submitting fictitious warranty repair claims. He chose to notify the owner of the dealership about what was happening, and his coworkers responded to the accusation by falsely accusing him of being the mastermind of the scheme. He was later told that he was being fired for alleged warranty fraud, and then was promptly led out of his office by sheriff’s deputies.

The employee filed a complaint against his employer for wrongful termination. He argued that the motivation for his firing contravened public policy set forth in several different laws (such as laws prohibiting criminal conspiracy, theft, fraud and deceit). A California Court of Appeal held that these statutes were statutes of public importance, and that his allegations were properly tethered to the statutes.

Have Your Rights Been Violated?

If you’ve been fired from a job in Sonoma County, Mendocino County or Lake County California and believe that the reason for your firing was in opposition to public policy, don’t let anyone tell you that your employer had the right to fire you “for any reason they wanted.” You may very well have a case against your employer, even if you were an at-will employee.

It may be well worth your time to contact an attorney. Our experienced Beck Law P.C. labor and employment law attorneys in Santa Rosa can evaluate your individual situation, and help you decide how to proceed. Contact our office today for a consultation.

Filed Under: California Labor Law, Employee Rights Tagged With: , , , , , ,

The Ninth Circuit Rules on Binding Arbitration Agreements

July 6, 2015 by

binding arbitration, arbitrationsIt has become extremely common for employers to encourage their new employees to sign binding arbitration agreements, in which they waive their right to a jury trial. (These agreements are intended to compel the employees to resolve any future disputes they have with the company via arbitration, which is generally cheaper than going to court.)

Some employers request that their employees sign a binding arbitration agreement directly, but others take a different approach. They simply include an arbitration agreement in their employee handbook, and then ask their employees to sign a statement agreeing to the terms of the handbook.

The advantage to the latter approach is that if the employer decides to update certain aspects of its arbitration agreement, it can revise the handbook, and then ask employees to acknowledge the changes – rather than asking them to sign brand new arbitration agreements.

Court Challenges to Binding Arbitration Clauses in Employee Handbooks

However, one problem that employers have had with this approach is that in some cases, courts have ruled that it is insufficient. One such case was Nelson vs. Cyprus Bagdad Copper Corporation, in which the Ninth Circuit Court of Appeals held that an employee was not compelled to arbitrate, despite an arbitration clause in the company’s employee handbook.

When the employee was hired, he signed the following statement:

“I have received a copy of the Cyprus Bagdad Copper Corporation Handbook…and understand that the Handbook is a guideline to the company’s policies and procedures. I agree to read it and understand its contents. If I have any questions regarding its contents I will contact my supervisor or Human Resources Representative.”

The Court ruled that arbitration cannot be compelled unless the employee has knowingly agreed to waive his or her right to a jury trial. And because the statement above did not mention that the handbook contains an arbitration clause – or that signing the statement constituted a waiver of the right to a judicial forum – the Court ruled that the employee had not knowingly made such a waiver.

Ashbey vs. Archstone Prop. Mgmt.

But what if an employee signs an agreement to abide by the terms of a handbook, and the agreement itself mentions the duty to arbitrate? In May 2015, the Ninth Circuit ruled that such an agreement is enough to compel arbitration.

In Ashbey vs. Archstone Prop. Mgmt., the Court ruled that an employee waived his right to a jury trial when he signed an agreement that contained the following language:

“I acknowledge that I have received directions as to how I may access the Archstone Company Policy Manual, including the Dispute Resolution Policy. I understand that Archstone can administer, interpret, discontinue, supplement, amend or withdraw any of the employment and personnel policies and procedures set forth in this Company Policy Manual. I understand that it is my responsibility to understand the Archstone Company Policy Manual, including the Dispute Resolution Policy, and to adhere to all of the policies contained herein.”

The Court held that because the agreement “expressly notified” the employee about the dispute resolution policy – and did so twice – it was sufficient to compel arbitration. The Court also held that it is not a requirement for the statement to actually list the terms of the policy.

Crafting an Effective Binding Arbitration Agreement Policy

If you want to feel secure that your company’s arbitration agreements will stand up in court, the employment and labor law attorneys at Beck Law P.C., in Santa Rosa can help. You can call or email our office today to schedule a consultation.

Filed Under: Binding Arbitration Tagged With: , , , ,

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