Employee Entitled To $17.2 Million For Wrongful Termination/Defamation
King v. U.S. Bank Nat'l Ass'n, 52 Cal. App. 5th 728 (2020)
Timothy King sued his former employer for defamation, wrongful termination in violation of public policy, and breach of the implied covenant of good faith and fair dealing after he was terminated following an investigation into claims of gender discrimination and harassment that were made against him by a subordinate employee (Kim Thakur) about whom "King had performance concerns." A jury awarded King $6 million on the defamation claim; $2.5 million on the wrongful termination claim; and $200,000 on the implied covenant claim. The jury also awarded King $15.6 million in punitive damages for a total judgment of $24.3 million. The trial court conditionally granted the Bank's new trial motion subject to King's accepting a remittitur, which would reduce the judgment to $5.4 million; King accepted the remittitur.
The Bank then appealed, and King cross-appealed. The Court of Appeal reversed the trial court's new trial orders and, after conducting its "own independent review," it concluded King was entitled to a one-to-one ratio of punitive to compensatory damages, resulting in the judgment being increased to $17.2 million ($8.6 million in compensatory and $8.6 million in punitive damages). The Court found the claims supported by substantial evidence, including evidence of Human Resources' failure to properly investigate and its reliance on sources known to be unreliable or biased against King. Further, the Court found substantial evidence that the Bank wanted to terminate King in order to deprive him of his annual bonus. Morgado v. City & County of San Francisco, 2020 WL 5033169 (Cal. Ct. App. 2020) (after-tax mitigation income earned by wrongfully terminated employee may be deducted from front pay owed by former employer).
"Continuing Violation" Theory Saves Employee's Sexual Harassment Claim
Blue Fountain Pools & Spas Inc. v. Superior Court, 2020 WL 4581664 (Cal. Ct. App. 2020)
Daisy Arias alleged she suffered sustained, egregious sexual harassment for most of the time she was employed by Blue Fountain, which was directed at her by Sean Lagrave, a salesman who worked in the same office as Arias. Although the alleged harassment dated back to when she first began her employment with the company in 2006, Arias did not file an administrative complaint with the California Department of Fair Employment and Housing until after her employment ended in 2017. Blue Fountain filed a motion for summary adjudication seeking dismissal of the hostile work environment claim on the ground the claim was barred by the applicable statute of limitations.
When the trial court denied the motion for summary adjudication, Blue Fountain filed a petition for writ of mandate in the Court of Appeal seeking an order from the appellate court that would compel the trial court to grant defendant's motion. However, the Court of Appeal denied the petition, holding that Arias' claim was not barred by the statute of limitations on three grounds: (1) several incidents of sexual harassment occurred during the one-year period preceding the termination of her employment; (2) a new owner took over the business in 2015, "[t]hus, even if the conduct of prior management made further complaining futile [and thus commenced the running of the statute of limitations], the arrival of new management created a new opportunity to seek help"; and (3) there was a triable issue of fact as to whether a reasonable employee would have concluded complaining more was futile. Compare Willis v. City of Carlsbad, 48 Cal. App. 5th 1104 (2020) (city's actions in reassigning officer and repeatedly denying him promotions were sufficiently "permanent" to preclude application of continuing-violation theory).
Tortious Interference With At-Will Contract Requires Independently Wrongful Act
Ixchel Pharma, LLC v. Biogen, Inc., 9 Cal. 5th 1130 (2020)
In this commercial dispute between two companies, the California Supreme Court determined the bounds of a claim for tortious interference of an at-will contract - a holding that has application in the employment context as well. Plaintiff Ixchel Pharma, a biotechnology company, entered into an agreement with Forward Pharma to jointly develop a drug for the treatment of a disorder called Friedreich's ataxia. Forward subsequently decided to withdraw from the agreement with Ixchel as a result of a settlement Forward had entered into with another biotechnology company (defendant Biogen, Inc.)
The first legal question posed to the California Supreme Court by the Ninth Circuit was whether Ixchel could sue Biogen for tortiously interfering with the at-will contract that existed between Ixchel and Forward in the absence of an independently wrongful act; the second...
