wrongful termination of employment

8/22/2019 Wrongful Termination of Employment

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2006 DLA Piper Rudnick Gray Cary US, LLP

WRONGFUL TERMINATION

OF EMPLOYMENT


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TABLE OF CONTENTS

Page

-i- 2006 DLA Piper Rudnick Gray Cary US, LLP

I INTRODUCTION .................................................................................. 1

II CLAIMS FORBREACH OF CONTRACT ............................................... 1

A. Creating the At-Will Employment Relationship..................... 1

1. The Presumption of At-Will Employment .................... 1

2. The Express, Written Agreement for At-Will

Employment.................................................................... 2

3. Integrating the Written At-Will Agreement .................. 3

4. Establishing At-Will Status for Existing Employees ....55. Where At-Will Language Should Be Included.............. 7

B. Employment Contracts Requiring Good Cause for

Termination.............................................................................. 8

1. Express Contracts to Terminate for Good Cause .......... 8

2. Implied Contracts to Terminate for Good Cause........... 9

C. Consequences of Finding an Implied Contract Good

Cause. ................................................................................... 11

1. The Shifting Definition of Good Cause. .................. 112. Reductions-In-Force.....................................................12

3. Termination for Misconduct ........................................ 12

D. The Wrongful Demotion Claim ............................................15

E. The Implied Covenant of Good Faith and Fair Dealing.......16

III WRONGFUL TERMINATION IN VIOLATION OF PUBLIC POLICY ..... 17

A. General Requirements for Public Policy Claims ..................17

1. The Public Policy Must Be Tethered to a

Constitutional or Statutory Provision........................... 182. The Public Policy Must Benefit the Public at Large ... 18

3. The Public Policy Must Be Well-Established,

Substantial and Fundamental ....................................... 19


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TABLE OF CONTENTS(continued)

Page

-ii- 2006 DLA Piper Rudnick Gray Cary US, LLP

B. Whistleblower Claims ........................................................... 20

1. Claims Based on Complaints of Illegal Activity ......... 20

2. Claims Based on Refusals to Perform Illegal Acts......21

3. California Whistleblower Statute................................. 21

4. Post-Enron Federal Whistleblower Protections........... 22

5. Avoiding Whistleblower Claims..................................22

C. Public Policy Claims That Duplicate Statutory Claims........23

D. Liability for Punitive Damages on Public Policy Claims..... 24IV CLAIMS BASED ON PREEMPLOYMENT AND POST-

EMPLOYMENT CONDUCT ................................................................ 26

A. Fraud in Inducing Employment............................................. 26

B. Withdrawal of Job Offer: Promissory Estoppel................... 26

C. The Letter of Recommendation............................................. 27

V TERMINATION GUIDELINES............................................................. 28

VI CONCLUSION ................................................................................... 30


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-1- 2006 DLA Piper Rudnick Gray Cary US, LLP

I

INTRODUCTION

When bringing wrongful termination lawsuits, terminated employees have avariety of weapons in their arsenal. Breach of contract claims are limited to

economic damages (e.g., lost wages and benefits) so employees often add tort

claims to their lawsuits, which allow for the recovery of emotional distress and

punitive damages. Thus, a terminated employee may (and probably will) bring

several claims, alleging that the termination was in breach of an express or implied

contract, in violation of public policy, discriminatory on the basis of race, sex,

religion, disability or some other protected status, or in retaliation for opposing

unlawful activity. The employee may add other claims as well, such as for

wrongful demotion, harassment, infliction of emotional distress, defamation orfraud.

This article will discuss breach of contract claims that can arise out of

terminations and demotions, as well as tort claims for wrongful termination in

breach of public policy, and tort claims based on preemployment and post-

employment conduct.1 This article will also suggest management practices for

structuring the employment relationship to promote fairness and to avoid potential

legal pitfalls when demoting or terminating employees.

II

CLAIMS FORBREACH OF CONTRACT

A. Creating the At-Will Employment Relationship.1. The Presumption of At-Will Employment.

California law provides a general rule that every California

employee is presumed to be employed at the will of either party: An

employment, having no specified term, may be terminated at the will of either

1 As other DLA Piper Rudnick Gray Cary US LLP Employment Law Briefing articles address statutory claims, such asdiscrimination, retaliation and harassment, these types of claims will not be addressed in this article.


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party on notice to the other.2 In other words, absent an agreement to the contrary,

employers may terminate employees for any reason or no reason so long as the

reason does not violate the law or a fundamental public policy. Likewise, the

employee has the option to quit for any reason or no reason.

However, it is relatively simple to rebut the at-will presumptionand claim that an employer must have good cause to terminate the employment

relationship. Thus, a terminated employee will often include a claim for breach of

contract in a wrongful discharge lawsuit, alleging that there was an employment

contract (either express or implied) requiring good cause for termination and that

the employee was fired for something less than good cause. In the absence of an

express, written agreement for at-will employment, a breach of contract claim is

more difficult to defend.

Thus, employers can and should consider entering into express,

written contracts with their employees that spell out the at-will relationship. As a

general business practice, it is not advisable to terminate employees for no reason.

Instead, as discussed in further detail infra in Part V, entitledTermination

Guidelines, termination decisions should be fair, objective and consistent with

company policies. However, where an enforceable express at-will agreement is in

place, a jury should not be allowed to second-guess whether a termination was for

good cause. In other words, although an express at-will agreement will not prevent

the filing of a breach of contract claim, it will offer a powerful weapon to defeat

such a claim.

2. The Express, Written Agreement for At-Will Employment.A written agreement for at-will employment can be as simple as

a one-page at-will employment agreement. Alternatively, a term for at-will

employment can be incorporated into a more extensive written agreement, such as

a job offer letter or an employment contract. There are many variances in the

written terms for at-will employment that California courts have recognized as

enforceable. The following language is typical:

2 Cal. Lab. Code 2922.


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I understand and agree that my employment with the

Company is at-will and therefore is for an unspecified

period of time and may be terminated at any time, with or

without good cause, and with or without advance notice,

by the Company or by me.

Specific examples of at-will agreements that have been

enforced by the courts are as follows:

(1) Employee acknowledges that there is no

agreement, express or implied, between employee

and the Company for any specific period of

employment, nor for continuing or long-term

employment. Employee and the Company have a

right to terminate employment, with or without

cause.3

(2) My employment and compensation can be

terminated, with or without cause, and with or

without notice, at any time, at the option of either

the Company or myself.4

The courts are continually determining the enforceability of

new variations of language used in at-will employment agreements. Accordingly,

any use of the above sample clauses by employers should be reviewed by legal

counsel before distribution to employees.

3. Integrating the Written At-Will Agreement.It is important to integrate the at-will employment agreement.

A written agreement is integrated where the parties adopt the writing as the final

and complete expression of their agreement. Where an employer wants to

integrate a written at-will agreement, the integration clause should follow the

clause providing for at-will employment. A sample integration clause is as

follows:

3 Slivinsky v. Watkins-Johnson Co., 221 Cal. App. 3d 799 (1990).

4 Hoy v. Sears Roebuck & Co., 861 F. Supp. 881 (N.D. Cal. 1994).


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I understand and agree that no person other than the

[Chief Executive Officer] of the Company has the

authority to enter into an agreement contrary to my

at-will employment relationship with the Company. To

be valid, any such agreement to the contrary must be

specific, in writing, and signed by the [Chief Executive

Officer] and me. I further understand and agree that all

prior agreements with the Company on this subject,

whether written or oral, are superseded by this

agreement. I understand and agree that this is the entire

agreement between the Company and me on this subject.

(To ensure its enforceability, use of this sample integration clause by employers

should be reviewed by legal counsel prior to distribution to employees.)

A number of courts have examined integrated at-will

employment contracts. In Slivinsky,5 the court held that an employment application

and employment agreement, read together, were sufficient to establish an

integrated agreement for at-will employment. Consequently, the court rejected the

plaintiffs claim for breach of an implied contract requiring good cause for

termination. The court reasoned: There cannot be a valid express contract and an

implied contract, each embracing the same subject, but requiring different results.

The integrated at-will agreement was enough to bar the implied contract claim,

resulting in dismissal of the lawsuit prior to trial.

The integrated employment agreement inAnderson v. Savin6

further illustrates the proper steps an employer should take to retain the at-will

status of employees. InAnderson, the written contract signed by the employee

provided that it constituted the entire arrangement between the parties and could

not be modified except by written approval. The contract also stated that

nothing could interfere in any way with the right of [the employer] to terminate

the [employees] employment at any time, with or without cause, without

liability. Based on that agreement, the court held that the employment

relationship was at-will.

5 221 Cal. App. 3d 799.

6 206 Cal. App. 3d 356 (1988).


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In contrast with the integrated at-will agreements in Slivinsky

andAnderson, the case ofMcLain v. Great American Insurance Companies7

illustrates at-will language, without an integration clause, that was insufficientto

establish that employment was at-will. InMcLain, the court held that an

employment application form containing an at-will clause did not create an at-will

relationship, because other language in the application stated that the terms and

conditions of employment could be changed at any time, with or without notice.

The court reasoned that if the terms of employment could be changed at any time,

an implied contract to terminate for good cause could be created after the

employment application was signed.

Although employers can and should incorporate at-will

language into various employment documents, only one document need be

integrated. In fact, including integration clauses in several documents may be

confusing. An employment contract or job offer letter is the most appropriatedocument for an integration clause.

4. Establishing At-Will Status for Existing Employees.It is uncertain whether the status of a current employee can be

changed to at-will by a written agreement without offering some consideration in

exchange for the employees agreement i.e., something that justifies the

employees forfeiture of the protections of the good cause standard. It is also

unclear whether the consideration offered must be more than mere continued

employment. Thus, simply implementing a new at-will policy with currentemployees as a condition of continued employment may not be enough to create an

enforceable at-will employment agreement.

Modification of a long-term employees status to at-will

employment has been upheld where valuable consideration, in addition to

continued employment, was offered in return for the employees agreement. In

Cruey v. Gannett Co.,8 an employee signed a written agreement with his employer,

nine years after he was hired, in which the employer agreed to subsidize the

employees purchase of a new home following his relocation to a more expensive

7 208 Cal. App. 3d 1476 (1989).

8 64 Cal. App. 4th 356 (1998).


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housing market. The written agreement also stated that the employee was

employed at-will. The court enforced this at-will agreement, dismissing the

employees breach of contract claim. The court reasoned that the housing subsidy

was sufficient consideration for the at-will agreement.

InAsmus v. Pacific Bell,9 the California Supreme Court shedlight on how courts may address the fairness concerns posed by requiring current

employees to agree to at-will employment. AlthoughAsmus did not involve an

at-will policy, the case addressed a related issue whether an employer who has a

written employment security policy can unilaterally modify that policy. InAsmus,

Pacific Bell had a written policy that promised its managers continued employment

absent a specified change in business conditions. After five years, Pacific Bell

notified its managers that the policy might not be continued. Two years later, the

company terminated the policy, replacing its promise of guaranteed employment

with a generous severance program. In response to a lawsuit filed by sixtymanagers, Pacific Bell argued that the policy could be unilaterally modified by the

company.

The California Supreme Court assumed that the written policy

was a contract but concluded that Pacific Bell could unilaterally terminate it. In

reaching this conclusion, the court reasoned that an employer can eliminate or

modify a security policy of indefinite duration so long as certain conditions are

met. These conditions include terminating the policy (1) after a reasonable time,

(2) on reasonable notice and (3) in a manner that does not interfere with

employees vested benefits. The court concluded that because the managers hadreceived the benefits of the policy for more than five years, the policy had

remained in effect for a reasonable time and there was no denial of vested benefits.

In addition, the court found that the two-year notice of the change given by Pacific

Bell was reasonable. The court also concluded that the managers continued

employment following Pacific Bells modification of the policy was sufficient

consideration to constitute their acceptance of the modified policy. However,

the significance of this final ruling is uncertain because Pacific Bell actually

offered the managers enhanced severance benefits, in addition to continued

employment, in consideration of the modified policy.

9 23 Cal. 4th 1 (2000).


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All told, it is probably safest to offer something to current

employees when changing their status to at-will employment. A promotion, a

housing subsidy, stock options, an increase in wages, a bonus or new benefits

(such as enhanced severance benefits) should be sufficient. In addition, pursuant

toAsmus, employees should be given adequate notice of the new at-will policy

(although a two-year notice is most certainly unnecessary). Finally, given the

uncertain state of the law, an employer who wants to implement a new at-will

employment policy should seek advice from legal counsel.

5. Where At-Will Language Should Be Included.At-will language should be included in various employment

documents, such as job applications, offer letters, employment contracts, employee

handbooks, acknowledgment forms for handbooks and personnel policy manuals.

Depending on the type of document, the language used may need to be modified,

and an integration clause may be appropriate. The following guidelines should

help employers incorporate at-will language into various employment documents:

a. Job Application. A statement of the employers at-willpolicy can be placed above the signature line of the job application. Applicants

can be asked to acknowledge by their signatures that they agree that any

employment offered will be at-will.

b. Job Offer Letter. If a job offer letter is used, the at-willemployment policy can and should be clearly stated in the letter, and an integration

clause also should be included. The new employee should be asked to signify his

or her agreement to the terms of the offer letter, including the at-will terms, by

signing and returning the letter.

c. Employment Contract. If a formal written employmentcontract is used, it should include an at-will employment clause and an integration

clause. As written contracts are formal legal documents, they should advise

employees of their right to seek independent legal counsel before signing.

d. Employee Handbook. The employee handbook can andshould set forth the at-will policy and reserve the employers right not only to

terminate the employment relationship at-will, but also to modify or alter an

employees position through actions other than termination, such as demotion,

promotion, transfer, reclassification or reassignment, at the employers sole

discretion. Any discipline policy in the handbook should remind employees that

employment with the company is at-will and that the employer reserves the right to


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exercise its discretion in the imposition of discipline, including determining when

termination, with or without notice, should occur as a disciplinary measure. It is

especially important to expressly reserve this management discretion where there

is a progressive discipline policy.

e. Employee Handbook Acknowledgment Form. A signedemployee handbook acknowledgment form that includes at-will language can

establish at-will employment. The form should also state that the employee

handbook is not intended to conflict, in any way, with the companys at-will policy

nor to create any contractual obligations. In addition, the form should state that,

except for the at-will policy, the employer reserves the right to make changes to

other policies in the employee handbook, with or without notice. If a job offer

letter or employment contract is not used, an integration clause can be included in

the acknowledgment form.

f. Personnel Policy and/or Operation Manuals. If theemployer maintains a separate personnel policy manual and/or operations manual

in addition to an employee handbook, these manuals can also state the at-will

policy. The employer should make sure that all other policies in the manuals are

consistent with the at-will policy, including, for example, any discipline policies

and reduction-in-force policies.

B. Employment Contracts Requiring Good Cause for Termination.Both express and implied contracts can rebut the presumption of

at-will employment under California law. A written employment contract can

expressly agree to require good cause for termination. For example, labor

organizations have traditionally demanded that that a similar just cause standard

be included in collective bargaining agreements. In contrast to an express writing,

an implied contract that rebuts the at-will presumption arises out of the employers

practices and conduct.

1. Express Contracts to Terminate for Good Cause.Express agreements, which are usually written, often explicitly

require that the employer have good cause to terminate an employee or that the

employer terminate only after a particular notice period. An employer using such

an agreement is strongly encouraged to expressly define in the agreement the

grounds that constitute good cause for termination. Examples of conduct

warranting termination for good cause can also be included. An express definition


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will help the employer and employee avoid the misunderstandings that often arise

when the employment relationships is terminated.

2. Implied Contracts to Terminate for Good Cause.Terminated employees often argue that they formed implied

agreements with their employers that could be terminated only for good cause. In

the absence of an express at-will agreement, it is left to a jury to determine whether

an implied contract to the contrary exists. As one might imagine, employee-

friendly juries are generally inclined to find an implied agreement requiring the

employer to have good cause to terminate the employee.

Juries are instructed to consider certain factors in determining

the existence of an implied contract. In the case ofFoley v. Interactive Data

Corp.,10 the California Supreme Court listed several factors that should be

considered (in the absence of an express agreement) in determining the existenceof an implied contract:

a. The personnel policies or practices of the employer;b. The employees length of service;c. Oral or written assurances by the employer of continued

or long-term employment; and

d. The practices of the industry in which the employee isworking.In the case ofGuz v. Bechtel National, Inc.,11 the California

Supreme Court reaffirmed the Foley factors but instructed that every vague

combination of these factors shaken together in a bag will not establish a right to

be discharged only for good cause. In other words, the mere existence of one or

more of these factors is not determinative. Instead, the totality of the facts must

show a mutual understanding between the employer and employee that their

relationship will continue absent good cause for termination.

10 47 Cal. 3d 654 (1988).

11 24 Cal. 4th 317 (2000).


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In Guz, Bechtel did not have an integrated, written at-will

agreement with the plaintiff. However, Bechtel did have an at-will policy stating

that employees have no . . . agreements guaranteeing continuous service and may

be terminated at [the employers] option. The plaintiff was an employee with

twenty-two years of service who was laid off in a company reorganization that

eliminated his work unit. In his lawsuit, the plaintiff claimed that his layoff

violated an implied contract requiring good cause for termination. He argued that

there was no good cause to eliminate his work unit, because Bechtels stated

reason for the reorganization a downturn in workload was not supported by

the facts. He also argued that even if there was good cause for the reorganization,

his termination lacked good cause because Bechtel had violated written personnel

rules governing rankings of employees for layoff and fair consideration of laid off

employees for other available jobs.

The court found Bechtels personnel policies to be thedeterminative Foley factor. The court reasoned that where an employer distributes

written personnel policies, those policies are highly relevant because they evidence

an intent that employees should rely on them. However, the court found that none

of Bechtels written policies limited the companys right to eliminate jobs or work

units, for any or no reason, even if a reorganization would result in the termination

of existing employees. To the contrary, the court concluded that Bechtels at-will

policy was evidence that the company had reserved the right to conduct a

reduction-in-force at its discretion. Thus, the court concluded that Bechtel need not

show good cause for its decision to eliminate the employees work unit.

However, the court found that Bechtel might have violated an

implied contract arising out of its written Reduction-In-Force Guidelines, which set

forth detailed procedures for selecting candidates for layoff and for helping laid off

employees obtain jobs elsewhere in the company. The court instructed the lower

court to reevaluate this secondary claim to determine whether the plaintiff could

establish a breach of an implied contract based on the companys alleged violation

of these detailed guidelines.

Guz makes clear the importance of making sure that written

policies do not conflict with at-will employment. In addition, employers mustensure that their managers conduct does not conflict with at-will employment.

The following guidelines can help establish and maintain at-will employment

relationships:


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Employers should use written, integrated at-willemployment agreements when hiring employees, to avoid confusion about the

terms of employment.

Personnel policies, operations manuals, employeehandbooks and job applications should all state that employment is at-will.

Employee handbooks and personnel manuals should also state that they are not

intended to create any contractual obligations that conflict with company policies

of at-will employment. In addition, reduction-in-force policies should state that

they are guidelines that are not intended to create any contractual obligations that

conflict with at-will employment.

Managers and supervisors should be trained to not makestatements to employees that conflict with the companys at-will employment

policy by promising continued employment absent good cause for discharge, suchas Youll be employed so long as you do a good job, or Continue to do a good

job and your future with the company will be secure.

C. Consequences of Finding an Implied Contract Good Cause.1. The Shifting Definition of Good Cause.

If a court finds that an implied agreement exists and the

employer could terminate the employee only for good cause, the employer is then

saddled with the heavy burden of proving that it had good cause to terminate the

employee. This is an uphill battle, made even more difficult because the good

cause standard for implied contract claims varies from case to case.

InBinder v. Aetna Life Insurance Co.,12 the court opined that

what constitutes good cause in a particular setting can be a function of the parties

mutual agreement. In other words, the good cause standard is relative and must

be implied from the parties conduct and the surrounding circumstances. In

Binder, the court concluded that Aetna could not hold the plaintiff to a high moral

standard, because the company had previously rehired Zoe Baird soon after her

nomination for Attorney General failed amid allegations of tax irregularities.

12 75 Cal. App. 4th 832 (1999).


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As suggested byBinder, when an employee can establish the

existence of an implied contract, it becomes very difficult for the employer to have

the claim dismissed by the court prior to trial. Not only will the good cause

threshold used by the employer be second-guessed, so will the articulated reason

for termination. Generally, courts have found, prior to trial, that good cause for

termination exists in only two situations: (1) layoffs resulting from reductions-in-

force and (2) misconduct that clearly violates an express employer policy.

2. Reductions-In-Force.Courts have found good cause to exist where a termination is

part of a legitimate reduction in an employers work force. For example, in

Clutterham v. Coachman Industries,13 an employee who was laid off sued his

former employer for breach of contract. The court affirmed dismissal of the case

prior to trial, holding that the employers decision to conduct a layoff was good

cause. Similarly, inMalmstrom v. Kaiser Aluminum & Chemical Corp.,14 an

employers business decision to reduce its staff was held to be good cause for

termination.

However, Guz v. Bechtel National, Inc.15 suggests that an

employer may be liable for breach of an implied contract if it does not adhere to its

written reduction-in-force guidelines and procedures. Thus, it is important for

employers not only to have formal reduction-in-force guidelines and procedures,

but to carefully adhere to them as well.

3. Termination for Misconduct.a. Admitted Misconduct. Courts have found good cause

when the employee admits to misconduct that violates an employers express rule.

For example, in Knights v. Hewlett Packard,16 a custodian was discharged after he

was injured at work, failed to return to work as scheduled and thereafter repeatedly

13 169 Cal. App. 3d 1223 (1985).

14 187 Cal. App. 3d 299 (1986).

15 24 Cal. 4th 317 (2000).

16 230 Cal. App. 3d 775 (1991).


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failed to satisfy deadlines imposed by his employer to return to work or request

extensions. The court dismissed the case prior to trial, holding that the custodians

conduct fell into the category of unacceptable performance by any standard.

Similarly, in Gosvener v. Coastal Corp.,17 a refinery

supervisor, who held a safety sensitive position, was repeatedly warned that hisdrug and alcohol use was interfering with his job performance and attendance

record. After repeated warnings, the employer finally terminated the supervisor.

The court upheld the termination in a ruling made prior to trial, finding that the

repeated violations constituted good cause.

b. Investigations of Alleged Misconduct. In Cotran v.Rollins Hudig Hall International, Inc.,18 the California Supreme Court gave

employers who properly investigate allegations of misconduct broader latitude to

terminate employees for good cause. The court held that a decision to terminate

employees for misconduct need only be based on a good faith belief and

reasonable grounds that misconduct has occurred.

Cotran involved a breach of contract claim by an

executive who was terminated due to complaints of sexual harassment. The

employer conducted an investigation of the complaints that was thorough and

included an opportunity for the executive to provide his side of the story. Based on

the investigation, the company concluded that the harassment had most likely

occurred and, therefore, the company terminated the executives employment. In

determining whether good cause for the termination existed, the CaliforniaSupreme Court held that the employer need not prove that sexual harassment had

actually occurred. Instead, the court ruled that the proper inquiry is whether the

factual basis on which the employer concluded a dischargeable act had been

committed was reached honestly, after an appropriate investigation and for reasons

that are not arbitrary or pretextual. UnderCotran, three factual determinations

are relevant to the question of employer liability: (1) whether the employer acted

in good faith in making the decision to terminate the employee; (2) whether the

decision to terminate followed an investigation that was appropriate under the

17 51 Cal. App. 4th 805 (1996).

18 17 Cal. 4th 93 (1998).


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circumstances; and (3) whether the employer had reasonable grounds for believing

that the employee had engaged in the misconduct.

Silva v. Lucky Stores, Inc.19 applied the Cotran standard

to a sexual harassment investigation, thus giving employers guidance on

procedures for investigations of misconduct. Although all investigations will bedifferent, Silva provides several general suggestions for conducting adequate

investigations:

(1) An employer should implement a written policyspecifying how allegations of misconduct will be investigated. The policy can

provide for the following: that complaints will be treated seriously, investigated

immediately and treated with confidentiality; that an attempt to identify all

potential witnesses will be made; and that the accused employee will be allowed to

respond to the charges.

(2) A neutral person should be designated to conductinvestigations. In many cases, either a Human Resources representative or an

outside investigator may be an appropriate investigator. The person selected

should be trained in investigations, which may include training by legal counsel.

(3) Complaints should be investigated promptly.(4) The employee making the complaint should be

interviewed first, and then the accused employee should be allowed to respond.

Other persons who may have witnessed the alleged conduct should also beinterviewed.

(5) Information obtained from each witness should berecorded by the investigator on a witness interview form. In addition, witness

statements should be provided by important witnesses.

(6) Typically, the investigator should use relevant,open-ended, nonleading questions in the interview, and he or she should attempt to

elicit facts as opposed to opinions or supposition. Confidentiality should not be

promised but should be maintained in each interview. Interviewees should be

19 65 Cal. App. 4th 256 (1998).


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encouraged to contact the investigator after the interview if they want to further

discuss the matter.

(7) The accused employee should be afforded ampleopportunity to present his or her side of the story. This may require having more

than one interview with the accused employee, not only at the beginning of theinvestigation but also at the end, giving the employee a final opportunity to

comment on information gathered during the investigation before a conclusion is

reached.

(8) Witnesses can be allowed an opportunity to clarify,correct or challenge information provided by other witnesses which may contradict

their statements or cast doubt on their credibility.

(9) The investigators conclusions should bememorialized in a written document that focuses on factual conclusions rather thanlegal conclusions.

D. The Wrongful Demotion Claim.Breach of contract claims can also be based on personnel decisions

that are less severe than termination. In Scott v. Pacific Gas & Electric Co.,20 the

California Supreme Court concluded that an employee may bring a cause of action

for breach of an implied contract not to demote without good cause. In Scott, the

plaintiffs were long-term employees who alleged that they were wrongfully

demoted. The plaintiffs claimed that the employer had failed to follow its writtenprocedures, which provided for various progressive disciplinary steps to be taken

before demotion was appropriate. Thus, the plaintiffs sued for breach of an

implied contract not to demote them without good cause.

In recognizing a contractual claim for wrongful demotion, the

California Supreme Court held that an employee may rebut the presumption of an

employers right to demote with evidence of a contractual agreement, express or

implied, limiting that power. The court also instructed that employers can limit

their exposure to contractual liability by consistently articulating and implementing

policies designed to maintain their managerial prerogatives.

20 11 Cal. 4th 454 (1995).


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Scotttherefore suggests that it is important for employers with

progressive discipline policies to expressly reserve the right in those policies to

impose discipline at the employers sole discretion, at any time, including

demotion or termination. In addition, employers should expressly reserve the right

to modify the terms of employment, such as through transfers, promotions,

demotions, reclassification and reassignment.

E. The Implied Covenant of Good Faith and Fair Dealing.California law implies a covenant of good faith and fair dealing in

every employment contract. The covenant assumes that employers will act in good

faith and fairly in performing and enforcing the employment contracts terms.

However, in Guz v. Bechtel National, Inc.,21 the California Supreme

Court made it clear that a claim for breach of the covenant of good faith and fair

dealing adds little or no value to a plaintiffs wrongful termination lawsuit. In Guz,the California Supreme Court confirmed that where an employer and an employee

have an enforceable at-will employment agreement, a claim for wrongful

termination in breach of the covenant of good faith and fair dealing will generally

fail. The court reasoned that where there is an at-will agreement, the implied

covenant cannot impose limits on the employers termination rights that are more

restrictive than the express contractual at-will agreement. Alternatively, the court

held that if breach of an implied contract requiring good cause for termination is

established, a claim for breach of the implied covenant of good faith and fair

dealing is superfluous. The court reasoned that plaintiffs are limited to recoveringcontract damages for breach of the implied covenant (generally, back pay plus lost

future earnings, less all interim or reasonably available interim earnings). Tort

damages, such as for emotional distress and punitive damages, are not available.

Because the implied covenant claim therefore provides no remedy in addition to

those remedies available on the plaintiffs contract claim, the implied covenant

claim is superfluous.

As tort damages are not available on claims for breach of an implied

contract or breach of an implied covenant of good faith and fair dealing, few

terminated employees limit their lawsuits to these contractual claims. Instead,plaintiffs often add claims for wrongful termination in violation of public policy,

21 24 Cal. 4th 317 (2000).


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which allow for the recovery of tort damages. This type of tort claim is discussed

below.

III

WRONGFUL TERMINATION IN

VIOLATION OF PUBLIC POLICY

A. General Requirements for Public Policy Claims.To prevail on a claim for wrongful termination in violation of public

policy, a plaintiff must prove that he or she was terminated for a reason that

violates a fundamental public policy. Public policy claims generally fall into two

categories: (1) whistleblower claims and (2) claims that duplicate statutory claims.Because emotional distress and punitive damages are available for such claims

(unlike breach of contract claims), it is not surprising that many terminated

employees bring public policy claims.

Over the years, the California Supreme Court has repeatedly revisited

and developed the doctrine governing claims for wrongful termination in violation

of public policy. Stevenson v. Superior Court22 sets forth the minimum

requirements that a public policy must meet to support a wrongful termination

claim:

The policy must be delineated in either a constitutional orstatutory provision.

The policy must inure to the benefit of the public rather thanserve merely the interest of the individual.

The policy must have been well-established at the time of theemployees discharge.

The policy must be substantial and fundamental.

22 16 Cal. 4th 880 (1997).


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As discussed below, other cases have clarified these requirements.

1. The Public Policy Must Be Tethered to a Constitutional orStatutory Provision.

In Gantt v. Sentry Insurance,23 the California Supreme Courtheld that public policy claims must be carefully tethered to fundamental policies

that are delineated in constitutional or statutory provisions. The Ganttdecision

was important because it required public policy wrongful termination claims to be

carefully tethered to a statutory or constitutional provision. However, following

Gantt, it was still unclear how closely tethered the public policy had to be.

In Green v. Ralee Engineering Co.,24 the California Supreme

Court answered this question, by allowing a public policy claim based on

administrative regulations to proceed to trial. In so doing, the court suggested that

the standard of carefully tethered may be fairly broad. The Green case issignificant because, for the first time, the court recognized a claim based on

regulations that implement statutory provisions.

2. The Public Policy Must Benefit the Public at Large.In Turner v. Anheuser-Busch, Inc.,25 the California Supreme

Court held that a public policy claim must be based upon a violation of a

fundamental public policy that benefits the public at large, not simply private

individuals. In Turner, the plaintiff claimed that he was forced to quit his job after

complaining about suspected illegal acts by his supervisors. The court found theplaintiffs public policy claim to be invalid because his complaints alleged only

violations of the employers internal policies or its collective bargaining

agreements.

However, in some cases, an individuals interests may also

implicate the publics interests. In Gould v. Maryland Sound Industries, Inc.,26 the

23 1 Cal. 4th 1083 (1992).

24 19 Cal. 4th 66 (1998).

25 7 Cal. 4th 1238 (1994).

26 31 Cal. App. 4th 1137 (1995).


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court concluded that an employee may state a public policy claim by alleging that

he was terminated because the employer wanted to avoid paying his or her wages.

Gouldheld that the California Labor Code sections governing an employers

obligation to promptly pay wages due to employees involve a fundamental public

policy that benefits the public at large, even though they appear to relate to a

purely private and individual dispute between an employer and employee.

Thus, at a minimum, plaintiffs must identify something more

than violations that harm a company or an individuals interest. Instead, the

plaintiff must implicate a broader, public interest.

3. The Public Policy Must Be Well-Established, Substantial andFundamental.

Not all public policies are deemed well-established, substantial

and fundamental. Sullivan v. Delta Air Lines27 provides an example of a policy thatdid not meet this requirement. In Sullivan, an employee alleged that he was

terminated in violation of California Labor Code section 1025, which requires the

reasonable accommodation of employees involved in alcohol or drug rehabilitation

programs. The court held that this statute could not support a public policy claim

because the policy in the statute was not fundamental and substantial. The court

reasoned that, although the statute protects an employees right to participate in a

rehabilitation program, the statute does not prohibit discharging an employee who

is unable to perform his duties due to current use of alcohol or drugs. The court

concluded that this conflicting language could not reflect one clear public policythat was fundamental and substantial.

Similarly, inLagatree v. Luce, Forward, Hamilton & Scripps,28

the court rejected an employees claim that requiring compulsory arbitration

agreements at the beginning of employment violated a fundamental public policy

guaranteeing the right to a judicial forum and a jury. The court concluded that the

conflicting public policy favoring the resolution of disputes through arbitration

precluded the employees claim.

27 58 Cal. App. 4th 938 (1997).

28 74 Cal. App. 4th 1105 (1999).


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It should be expected that the courts will continue to clarify the

requirements of the public policy claim. Indeed, the list of statutes that may

support a public policy claim is lengthy and growing. A practical approach to

preventing these claims is to become familiar with the factual circumstances that

commonly give rise to them. Typical circumstances involve alleged

whistleblowers or alleged statutory violations by employers.

B. Whistleblower Claims.Whistleblower claims are the more recognizable public policy claims.

In the typical whistleblower claim, a plaintiff alleges that he or she was terminated

(1) for complaining of some illegal activity that is prohibited by a statute or a

constitutional provision or (2) for refusing to perform some illegal act requested by

the employer. In this way, whistleblower claims are retaliation claims; the

employee alleges that he or she was terminated in retaliation for complaining about

or refusing to engage in illegal activities.

1. Claims Based on Complaints of Illegal Activity.Whistleblower claims that are based on complaints of alleged

illegal activity are common. The general scenario is that the employee is

terminated after complaining about some improper activity prohibited by law.

The case ofGreen v. Ralee Engineering Co.29 provides a prime

example of a whistleblower claim based on an alleged complaint. In Green, a

quality control inspector reported to his supervisors that the company was shippingdefective components to airplane manufacturers. When he was later terminated,

the inspector claimed that he was a whistleblower who was terminated in

retaliation for his reports.

Weinbaum v. Goldfarb Whitman & Cohen30 provides another

example. In Weinbaum, the plaintiff alleged that his former employer and several

individuals participated in an unlawful scheme to misrepresent the financial

condition of six corporations. The plaintiff alleged he was fired for objecting to

these misrepresentations.

29 19 Cal. 4th 66 (1998).

30 46 Cal. App. 4th 1310 (1996).


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Significantly, California courts have recognized public policy

claims based on reports of conduct that the employees made pursuant to their job

duties. For example, inHolmes v. General Dynamics Corp.,31 a business manager

who supervised the analyzing of financial data on government defense contracts

reported to his supervisor that the company was violating various provisions of its

defense contracts, which resulted in excessive billings to the government. After

the employee was terminated, he sued for wrongful discharge in violation of public

policy. The court affirmed the jurys verdict, finding that the employer had

wrongfully discharged the plaintiff.

2. Claims Based on Refusals to Perform Illegal Acts.The second type of common whistleblower claim occurs where

an employee alleges that he or she was terminated in retaliation for refusing to

perform an illegal act. Parada v. City of Colton32 provides an example of this type

of whistleblower claim. The plaintiff in Parada was an Assistant Building

Director who was responsible for managing the citys building inspectors and

ensuring the enforcement of local building codes, ordinances and regulations.

When the employee became aware of garage conversions that violated building

codes, he issued stop-work orders. The employees immediate supervisor was

involved in allowing the illegal garage conversions that the employees conduct

halted. When the supervisor terminated the employee, he responded with a claim

for wrongful discharge in violation of public policy, arguing that he was terminated

for refusing to allow the illegal building to continue.

3. California Whistleblower Statute.California Labor Code section 1102.5 prohibits employers from

making, adopting, or enforcing a policy that prevents an employee from disclosing

information to a government or law enforcement agency, where the employee has

reasonable cause to believe that the information discloses a violation of a state or

federal statute, or a violation or noncompliance with a state of federal rule or

regulation. The statute also prohibits an employer from retaliating against an

employee for disclosing such information. The statute further prohibits an

31 17 Cal. App. 4th 1418 (1993).

32 24 Cal. App. 4th 356 (1994).


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employer from retaliating against an employee for refusing to participate in an

activity that would result in a violation of a state or federal statute, or a violation or

noncompliance with a state or federal rule or regulation. The California Attorney

General is required to maintain a whistleblower hotline to receive calls from

persons who have information regarding possible violations of state or federal

statutes. Lastly, employers are required to post a new workplace poster providing

information on employees rights and responsibilities under Californias

whistleblower laws, including the telephone number of the whistleblower hotline.

4. Post-Enron Federal Whistleblower Protections.While the Enron-driven Sarbanes-Oxley Act of 2002 (the

Act) made sweeping reforms to corporate governance law, the Act also created

federal protection for whistleblowers. The Act provides whistleblower protection

to employees of public companies when they act lawfully to disclose information

(within the corporation or to outside investigators, regulators, etc.) about fraudulent

activities within their company. The Act also provides that an employee claiming

a violation of the Act must file a complaint with the Federal Department of Labor.

Importantly, the Act does not preempt or supplant existing state law tort actions for

wrongful termination in violation of public policy. Thus, the Act provides an

additional statutory basis for public policy whistleblower claims.

5. Avoiding Whistleblower Claims.Steps that employers can take to avoid whistleblower claims are

as follows:

Implement Complaint and Investigation Procedures. Anemployer should maintain an effective complaint policy which provides procedures

for receiving and addressing employee complaints. Alternative persons can be

designated to receive complaints, to address the scenario where an employee fears

retaliation for complaining to an alleged violator of the law. A written policy on

the complaint procedure can be distributed to all employees, and all managers

should be trained on how to facilitate the handling of complaints. Investigations of

complaints should be handled promptly and in a confidential manner, andinvestigations should adhere to the impartial standards discussed above in this

article.

Treat Complaints Seriously. It is important to listen toand seriously consider each complaint made by employees. The employer should

document the complaint, any investigation conducted in response to the complaint


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and any conclusions. The employer should also respond to the employee with its

conclusions.

Beware of Close Timing of Discipline or Discharge.Complaints that are made by an employee shortly before discipline or discharge

are troublesome. Where a complaint is closely followed by an adverseemployment action, such as discipline or termination, there may be a presumption

of a retaliatory motive. In these circumstances, legal counsel should be consulted

before moving forward with any discipline or termination.

C. Public Policy Claims That Duplicate Statutory Claims.An alleged violation of a statute can support not only a statutory claim

for wrongful termination but also a tort claim for wrongful discharge in violation

of the public policy embodied in that statute. For example, public policy claims

brought by terminated employees often supplement statutory race or sexdiscrimination claims brought under Californias Fair Employment and Housing

Act (FEHA) or the federal discrimination statutes, even though the tort and

statutory claims rely on the same facts.

A duplicative public policy claim should fail if the employer is

exempt from the underlying statute. For example, in Kelly v. Methodist Hospital of

Southern California,33 the California Supreme Court rejected a public policy claim

based on alleged age discrimination in violation of the FEHA that was brought

against a Methodist hospital. In rejecting the plaintiffs claim, the court reasonedthat the hospital met the definition of a religious entity under the FEHA, as defined

at the relevant time. The court concluded that as the hospital was exempt from

liability under the FEHA, it could not be held liable on a duplicative public policy

claim. Similarly, inJennings v. Marrale,34 the California Supreme Court held that

a public policy claim based on alleged age discrimination couldnotbe stated

against an employer with less than five employees because age discrimination by

such small employers is not covered by the FEHA.

33 22 Cal. 4th 1108 (2000).

34 8 Cal. 4th 121 (1994).


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In addition, a public policy claim that is based on a discrimination

statute should fail if the employee is unable to prove, under the statutory standard,

that his termination was motivated by unlawful discrimination. For example, in

Nelson v. United Technologies,35 an employee was granted a leave of absence to

care for his sick wife and their child. When the employer discovered that the

employee worked elsewhere during his leave of absence, the employer terminated

his employment. In response, the employee brought a statutory claim for violation

of the California Family Rights Act (CFRA) and a public policy claim based on the

same statute. The court found that no evidence suggested the employers proffered

reason for the termination decision (i.e., the employees work during a leave) was

phony. The court thus concluded that the termination decision did not violate

the employees rights under the CFRA. Accordingly, the court ruled for the

employer on both the statutory and public policy causes of action.

In contrast, where a statutory claim is barred due to the terminatedemployees failure to follow administrative procedures required by statute, the

employee may still be able to bring a public policy claim based on the same

statute. InRojo v. Kliger,36 the California Supreme Court determined that a

terminated employee can bring both a statutory sex discrimination claim under the

FEHA and a public policy claim based upon the same incidents of sex

discrimination. The court also held that employees do not have to exhaust their

administrative remedies under the FEHA before bringing a public policy claim.

This is significant because terminated employees bringing statutory discrimination

claims are normally required to exhaust their administrative remedies. Following

Rojo, terminated employees may sue for wrongful termination based ondiscrimination without jumping through the procedural hoop of filing a charge with

the state or federal administrative agency.

D. Liability for Punitive Damages on Public Policy Claims.An important distinguishing feature between the contract causes of

action discussed earlier in this article (i.e., claims for breach of contract or for

breach of the covenant of good faith and fair dealing) and the public policy cause

of action is that punitive damages may be awarded against an employer in

35 74 Cal. App. 4th 597 (1999).

36 52 Cal. 3d 65 (1990).


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connection with a public policy claim. The purpose of punitive damages awards is

to punish defendants whose conduct is the result of oppression, fraud or malice

and, in so doing, to deter future wrongful conduct by way of example. As punitive

damages awards can be quite significant, exposure to such liability should be

seriously considered by employers making termination decisions.

California Civil Code section 3294 governs awards of punitive

damages against employers. An employer may be held liable for punitive damages

based on an employees conduct if (1) the employer had advance knowledge of the

unfitness of the employee and employed him with a conscious disregard of the

rights or safety of others, (2) the employer authorized or ratified the wrongful

conduct, or (3) the employer was personally guilty of oppression, fraud or malice.

A corporate employer can be held liable for punitive damages if such wrongful

conduct was on the part of an officer, director or managing agent of the

corporation.

In White v. Ultramar, Inc.,37 the California Supreme Court clarified the

definition of managing agent by limiting the term to those employees who

exercise substantial independent authority and judgment over decisions that

ultimately determine corporate policy. The court made clear that this definition

does not include supervisors who hire or fire employees but who have no authority

to make decisions that determine corporate policy.

Given the potential liability for punitive damages awards on public

policy claims, employers should be especially careful to instruct all supervisorswho may qualify as managing agents on preventive measures when disciplining

and terminating employees, especially those employees who have access to

sensitive information concerning the company and employees who have voiced

concerns about company practices.

37 21 Cal. 4th 563 (1999).


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IV

CLAIMS BASED ON PREEMPLOYMENT

AND POST-EMPLOYMENT CONDUCT

An employee who sues for wrongful termination may allege related causes

of action based on the employers actions in inducing his or her acceptance of

employment or in giving employment references after he or she leaves the

company. These types of preemployment and post-employment claims provide

additional avenues of tort relief for terminated employees.

A. Fraud in Inducing Employment.An employer can be held liable for falsely inducing a job applicant to

accept employment in reliance on representations of job security and thenterminating the employment relationship. InLazar v. Superior Court,38 the

California Supreme Court held that a terminated employee may sue for fraud if he

or she was fraudulently induced to accept employment. InLazar, the plaintiff was

induced by falsehood to leave a secure job in New York and uproot his family to

take a job in California. When he was terminated two years later in a management

reorganization, he sued for fraud, along with other claims. The court concluded

that employers were not absolutely shielded from traditional tort liability for fraud

in wrongful termination cases.

To the extent an individual is fraudulently induced to enter anemployment contract, he or she can recover all detriment proximately caused by

the fraud, such as the cost of relocation or loss of job security and income from his

or her former employment. Future lost income is also recoverable provided the

damages are not speculative or remote.39

B. Withdrawal of Job Offer: Promissory Estoppel.An employer may be held liable for failing to fulfill a promise of

employment where an individual relinquishes his or her current job in reliance on

38 12 Cal. 4th 631 (1996).

39 Helmer v. Bingham Toyota Isuzu, 129 Cal. App. 4th 1121 (2005).


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the unfulfilled promise of other employment. In Toscano v. Greene Music,40 the

plaintiff was a manager at Greene Musics competitor. Greene Music offered

plaintiff a manager position and, in reliance on that employment offer, plaintiff

resigned his current employment. However, prior to the date that plaintiff was

scheduled to begin his new job, Greene Music withdrew its offer of employment.

The California Appellate Court held that an employee who resigned an at-will

employment position with a former employer in reliance on an unfulfilled promise

of employment may recover reliance damages, under a promissory estoppel theory,

based on wages lost from the prior employment. However, the lost wages damages

must not be speculative or remote.

C. The Letter of Recommendation.The court inRandi W. v. Muroc Joint Unified School District41 held

that a previous employer can be liable for making fraudulent representations in a

letter of recommendation. InRandi W., an employee worked for three different

school districts before being employed by the school district in which the plaintiff

was a student. The three school districts provided letters of recommendation that

offered general and unreserved praise for the employees character and personality

(e.g., dependable and reliable, pleasant personality, high standards, and

relates well to students), despite their knowledge that he had a history of

sexually assaulting students. After the plaintiff student was sexually assaulted by

the employee, she sued, claiming that the letters of recommendation were

fraudulent misrepresentations that caused her harm. The California Supreme Court

held that the letters of recommendation could create liability for fraud. The courtconcluded that the writer of a letter of recommendation owes a duty not to

misrepresent facts in describing the qualifications and character of a former

employee if making these representations would present a substantial, foreseeable

risk of physical injury to the prospective employer or a third person.

Employers cannot avoid lawsuits by requiring job applicants to sign

releases that authorize prior employers to provide job references. InMcQuirk v.

Donnelley,42 the plaintiff signed a release in which he released the prospective

40 124 Cal. App. 4th 685 (2004).

41 14 Cal. 4th 1066 (1997).

42 189 F.3d 793 (9th Cir. 1999).


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employer and all others from any liability or damage which might result from

references given by his prior employers concerning his work record. Relying on

this authorization, a prior employer gave the plaintiff a bad reference which cost

the plaintiff his new job. The plaintiff sued the prior employer for defamation. In

so doing, the plaintiff sought to invalidate his signed release by claiming that

California law prohibits shielding defendants from future liability for intentional

torts such as defamation. The court agreed with the plaintiff and allowed his

defamation claim to proceed to trial. Thus, underMcQuirk, employers should not

rely on written releases as guaranteed protection against claims associated with job

references.

These cases emphasize the care that employers must take in providing

employment references. Generally, a reference should provide merely the

employees name, job title, and dates of employment. An employer who provides

additional information (1) runs the risk underRandi W. that full disclosure may berequired and (2) runs the risk underMcQuirkof a defamation claim if full

disclosure is provided. As providing explicit references about employees may

pose legal risk, the business benefits of doing so should be weighed carefully

against the risks.

V

TERMINATION GUIDELINES

The cases discussed above emphasize the importance of defining the

employment relationship clearly at its inception in order to avoid problems at the

end of the relationship. It is also important to ensure that termination decisions are

fair and justified. The following guidelines can assist an employer who must

contemplate the termination of an employee. Although an employer who follows

these guidelines may still be sued for wrongful termination, the employer will

decrease the likelihood of such claims being filed and will increase the chance of

defeating such claims if they are filed.

Have all employees sign written, integrated at-will employmentagreements that can be modified only by a subsequent document signed by the

employee and an authorized representative of the company.

Place at-will language on employment applications, in job offerletters, in employment contracts (if used), in employee handbooks and the


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accompanying acknowledgment forms, in personnel policy manuals, in reduction-

in-force guidelines and in operations manuals.

Practice progressive discipline so that employees with performanceproblems are given notice that their performance is unsatisfactory and an

opportunity to improve. However, reserve in writing the right to impose anydiscipline, including demotion and termination, at the companys sole discretion.

Any investigation of a complaint about an employees performanceshould be well-documented. The investigator must be impartial. A paid

suspension of the employee may be appropriate during the investigation.

It is very important to ask for the employees side of the story beforemaking a decision to terminate employment. This should involve a face-to-face

meeting with the employee that is documented. More than one meeting may be

needed.

Have an objective third party review all proposed terminations. Thisneed not be an outsider, but it should not be the employees supervisor. Human

Resources or company counsel are often effective in this role.

Consider all potential issues relating to an employee that is beingconsidered for termination before the termination, including (1) the employees

seniority, (2) the employees past performance appraisals, (3) prior disciplinary

action, if any, (4) whether the termination is in compliance with relevant personnelpolicies, (5) any mitigating circumstances, (6) whether the present termination is

consistent with past terminations, (7) prior complaints or concerns raised by that

employee and (8) any assurances that were initially made to encourage the

employee to accept employment with the company.

When terminating an employee, the decision should be announced tothe employee personally and privately. It is helpful to have a company witness

also attend the meeting, in the event of future litigation. However, having more

than two company representatives present may be overbearing and intimidating.

Consider putting the reason for termination in writing so there is nomisunderstanding. If a reason is given, be sure it is truthful and complete.

Reasons for termination will not be credible to a jury if they change or are

supplemented at a later date.

Do not discuss the reason for an employees termination either insideor outside the company, except with other employees who have a need to know


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that information. If a third party requests information concerning the employee,

confirm only the employees dates of employment and positions held.

VI

CONCLUSION

Wrongful termination litigation is a major area of concern for employers.

The employer who does not meticulously create and maintain at-will employment

relationships will find it more difficult to defeat an employees claim that the

employer promised that he or she could be terminated only for good cause. In

addition, public policy claims are gaining momentum as courts identify new

statutes that provide additional bases for such claims. The California courts are

also loosening their grip on alternative tort claims in the employment context, such

as fraud claims.

Thus, employers must take appropriate preventive measures to enhance their

ability to avoid and defend wrongful termination claims. Employers should also

approach employee terminations with great care in order to avoid the expense,

uncertainty and disruption caused by wrongful termination lawsuits.

wrongful termination of employment

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