Two Key Decisions, one state, one Federal!

Two new employment decisions were issued recently, one by a California Court of Appeal and the other, a Federal decision by the Ninth Circuit Court of Appeals.  In Prue v. Brady Company, the California court held that a plaintiff who suffered a work-related injury and subsequently was fired stated a valid legal claim against the employer for wrongful termination in violation of public policy.  The employer argued that the plaintiff’s claim was invalid because it effectively was a Labor Code section 132a retaliation claim that could only be brought before the Workers’ Compensation Appeals Board, not in court.  The court disagreed, reasoning that the plaintiff adequately alleged that he was wrongfully terminated for having a disability, in violation of the public policy of the Fair Employment and Housing Act, and therefore the claim was not barred by the doctrine of workers’ compensation exclusivity.

The employer argued that even if the claim was based on the public policy of FEHA, the claim would be barred by the one-year statute of limitations applicable to FEHA claims.  The court rejected this argument as well, ruling that a wrongful termination in violation of public policy claim is governed by a two-year statute of limitations and not by the statute of limitations applicable to FEHA claims.  This decision is not particularly novel, but is a good reminder for employers that employees who believe they have been fired for reasons relating to a work comp injury can sue their employer in court and seek punitive damages (under a disability discrimination theory) and are not limited to the remedies set forth in Labor Code 132a.

This is going to be problematic. Employers need to be mindful not to take ANY action against an employee who has filed a workers comp claim. Do not terminate them just because you have not “heard from them” and be sure to return them to their same job, or a comparable position with comparable pay.

On another note, the Ninth Circuit issued its decision in Rosenfield v. GlobalTranz Enterprises, holding that a high-level HR manager had presented sufficient evidence to go to trial on her claim for retaliation under the Fair Labor Standards Act (FLSA).  The district court had granted summary judgment in favor of the defendant-employer, holding that the HR manager had not presented sufficient evidence that she engaged in activity that the employer reasonably could have understood as a protected complaint under the FLSA.  Reversing the district court’s ruling, the Ninth Circuit held that there was sufficient evidence from which a jury could conclude that the manager had complained about non-compliance with the FLSA and that this complaint was protected by the FLSA’s anti-retaliation provision.  The Ninth Circuit acknowledged that the fact that the complaining party is a manager (and may have job duties that include advising the company on compliance or non-compliance with the FLSA and other employment laws) must be considered in assessing whether his or her conduct rises to the level of a protected complaint under the FLSA.

In this case, the plaintiff was the employer’s Manager of Human Resources (and later the Director of Human Resources).  Over a period of time, she informed her superiors several times that she did not believe the company was in compliance with the FLSA and that several employees likely were misclassified.  She alleged that her boss told her that he was in charge of FLSA compliance, not her, and that he would determine whether any recommended changes would be implemented.  She further alleged that her recommended changes were not implemented and that she instead was fired.  On these facts, the Ninth Circuit held that there was sufficient evidence from which a jury could conclude that she had made a protected complaint under the FLSA.  The court emphasized the evidence that FLSA compliance was not part of the plaintiff’s job duties (according to plaintiff), implying that if FLSA compliance had been part of her regular job duties (as it often is with high level HR managers), the result may have been different.

Here’s the takeaway. Keep in mind, that even upper level managers who are tasked with informing the company of potential compliance problems as part of their regular job duties may, on certain facts, be able to show that their conduct rose to the level of a protected “complaint” of FLSA violations and thereby succeed in stating a claim for retaliation against the employer for any adverse action taken against them following their “complaint.”

Note: If you have a person in the position of protecting the company whose job it is to ensure compliance, LISTEN TO THEM! (yes, it is in caps which means I AM shouting LOL!!).


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