Bay Area Employment Lawyer Blog

Dr. Jadwin sued his employer, Kern County, in federal court, for placing him on administrative leave in retaliation for his complaints about patient care and other violations. This underlying federal case subsequently resulted in a verdict of over $500,000.00 to Dr. Jadwin.

Instead of heeding the warning of being particularly careful not to retaliate, or appear to retaliate, against an employee with a pending claim, the County of Kern threw caution to the wind and sued Dr. Jadwin in state court, claiming that the good doctor filed a false claim for $3125 in expenses. Fresno's claim against Dr. Jadwin was assigned to mandatory arbitration where Dr. Jadwin prevailed. After a variety of inappropriate maneuvering by the County, the State Court ruled that Fresno's claim was frivolous and brought to harass Dr. Jadwin.

The Court of Appeals, in County of Kern v Jadwin (July 5, 2011) --- C.A. 4th -- --, 2011 WL 2611819, affirmed the finding by the trial court that the case was frivolous and upheld the trial court's award of $50,000.00 in attorney's fees. The Court of Appeals agreed with the lower court that the facts "'paint a picture . . .' of a lawsuit filed and maintained for the purpose of harassing Jadwin."

This case drives home the lesson that an employer must tread lightly once an employee has filed a claim, and should ensure that the employee is treated the same as other employees. It is equally true that, once an employee makes or anticipates making a claim of any sort, he or she should understand that his/her actions may be put under the employer's microscope, and thus the employee should use every effort to comply with all company rules and regulations and perform work in an exemplary manner while under this microscope!

Jody LeWitter
July 25, 2011

Nicolas Tides and Matthew Neuman both worked for Boeing in the State of Washington and both were concerned that Boeing's practices violated the Sarbanes-Oxley Act. The two employees complained internally, on multiple occasions, that they believed the system in place at Boeing permitted unauthorized users to alter the company's internal controls rating system. Tides and Neuman, subsequently and independently, spoke to the press about their concerns, even though they were aware of a corporate policy prohibiting such conduct. Boeing fired both employees for unauthorized disclosures to the press. Both sued, claiming violations of Sarbanes-Oxley's whistleblower protections pursuant to 18 U.S.C. Section 1514A(a)(1).
Unfortunately for both Mr. Tides and Mr. Neuman, 18 U.S.C. Section 1514A(a)(1) explicitly sets forth a list of the three entities or people to whom a whistleblower may report a perceived violation of the law for purposes of the Sarbanes-Oxley whistleblower protection statute, and none of these included the press. The court in Tides v The Boeing Co., --- F.4th ---- (9th Cir. May 3, 2011), sets forth the statutory protection as extended to 1. Federal regulatory or law enforcement agencies, 2. Congress, or 3. A supervisor. See 18 U.S.C. Section 1514A(a)(1). Thus, when Boeing brought a motion claiming that these employees' actions were not protected under the Sarbanes-Oxley whistleblower section above, because they disclosed to the press, the Ninth Circuit agreed with Boeing.
There is some saving grace for those who face retaliation for making complaints of illegal practices in the State of California. First, learn from the mistakes above and complain to a specified person or entity under the statute. Second, if the wrongdoing violates other statutes, look at the possibility of using other statutory remedies. Third, if the wrongdoing violates the general public policy of the State of California, consider whether you might have a common law public policy claim. Lastly, if your claim is under Sarbanes-Oxley, consider using a different provision of the statute, such as 18 U.S.C. Section 1514A(a)(2). This provision protects employees who "file, cause to be filed, testify, participate in, or otherwise assist in a proceeding filed or about to be filed (with any knowledge of the employer) relating to an alleged violation of" parts of Sarbanes-Oxley. The Ninth Circuit in this case did not reach the question of whether there would have been a claim had the employees in the Tides case used that statutory provision.
Jody LeWitter
July 18, 2011

By now this ought to be the accepted and undisputed black letter law: in the State of California, nothing good can come of a non-compete clause. A non-compete clause is generally illegal and in violation of the public policy set forth in California Government Code Section 16600. The reasoning is simple: the public policy of the State of California simply and unequivocally supports the rights of employees to seek work in their chosen profession or field. An employer's general attempts to limit where an employee finds his or her next job, except for the employer's legitimate interest in maintaining its confidential and proprietary information, is against public policy. An employer - who, under the "at will" laws of the same State of California, has the right to fire an employee "at will" (that is, for any reason that does not violate any specific law) - should not be permitted to prohibit an employee from finding new, gainful employment in his or her field. After all, fair is fair.

Therefore, it should come as no surprise that the court in Silguero v Creteguard, 187 Cal. App. 4th 60 (2010) held that a plaintiff stated a cause of action for violation of public policy where her current employer fired her because her past employer wrote a letter asking that her current employer assist in enforcing an illegal non-compete agreement prohibiting her from working in sales for 18 months after the termination of her employment. This is a simple, straight forward, public policy claim that should serve as a warning to employers to act cautiously regarding non-compete agreements - or better yet - just stay away from them.

The only question in the Silguero case is whether the employee should have also brought a claim against her past employer based on the letter it wrote, for violation of public policy and/or other tort claims such as intentional interference with contract or intentional interference with prospective economic advantage. After all, Silguero's past employer really is as guilty a party as her current employer, as its actions caused her current employer to fire her. Let's keep hoping that employers stay away from these non-compete agreements, and if they don't, that the courts keep telling them to do so!

Jody LeWitter
January 23, 2011