Articles Posted in Wrongful Termination

Just ahead of the bill-signing deadline in October, Governor Newsom signed several worker-friendly bills including AB 51, AB 9, SB 142, and AB 749.

When an employment situation sours and an employee pursues his rights, usually at some point there is talk of settlement.  Almost routinely, employers include a no-rehire provision in any settlement agreement which prohibits the former employee from seeking reemployment with the employer. While this may not seem like a big deal if you work for a small company and have no intention of seeking reemployment with the same people who wronged you in the first place, for individuals who work for large employers, the no-hire provision can create significant hardship. For example, if you work for a major retailer with numerous locations and you are terminated, a no-rehire provision might prevent you from working for that company ever again, in any capacity. That means, even if you wanted to work for a store 100 miles away, you would be barred from doing so. This is particularly problematic for long-term employees who have deep knowledge of the employer’s policies and practices and have been successful in their positions for years- they know the job, and have done it well, and now they are unable to apply for any future job at the company where their skills are a perfect match. This is also a significant problem for people who work for a utility; it may be that there is really only one employer in the area you can work for and a ban on working for that company will prevent you from working, period. The no-rehire provision would require you to either move to a new location or develop skills for an entirely different field. It seems, to many employees, like a final act of retaliation by their former employer.

Starting January 1, 2020, employment dispute settlement agreements cannot contain a no-rehire provision and such provisions are void as a matter of law and public policy. There is an exception, undoubtedly inspired by the #MeToo and #TimesUp movements- if an employer has made a good faith determination that the terminated employee engaged in sexual harassment or sexual assault, the employer may prohibit or restrict the terminated employee from obtaining future employment with the employer.

For years, the battle over arbitration clauses and agreements has raged on in courts and legislatures throughout the country. The latest development in arbitration in employment in California came on Thursday in California when Governor Newsom signed AB 51. The governor’s approval of AB 51 is a victory employees throughout California- it effectively prohibits employers from forcing employees into mandatory arbitration agreements starting January 1, 2020.

It is common practice throughout California to have an employee sign an arbitration agreement at the time she is hired. These agreements are generally non-negotiable, buried in a pile of new hire paperwork, and require the employee to arbitrate any claims arising out of employment. While valid arbitration agreements provide some of the safeguards that are afforded to litigants in court, it often takes away basic protections and rights including a trial by jury, and class or collective action. Arbitration is also a private process so it allows an employer to keep their wrongdoing under wraps.

The United States Supreme Court has said, repeatedly, that arbitration agreements are valid in the employment context. Recognizing the inherent imbalance in power between employers and employees, several states have tried to stop employers from forcing employees into arbitration. However, given the Supreme Court’s rulings, it is impossible to ban arbitration in employment altogether.  The hope is that in California, AB 51 will even the playing field before an employee signs an arbitration agreement; requiring that an employee can only enter such an agreement voluntarily. The law also prohibits an employer from retaliating against an employee who declines to enter into an arbitration agreement, which provides additional protection.

For 32 years, Mr. Santillan worked for USA Waste of California, Inc. becoming perhaps the world’s most beloved garbage truck driver. The customers whose homes he serviced came out in droves to commend his work and he worked for 30 years receiving hardly any discipline. However, that changed when Mr. Santillan was assigned a new supervisor. After the new supervisor took over, suddenly, Mr. Santillan couldn’t do anything right and he was disciplined six times in a year and half. Nearly three years after the new supervisor took over, Mr. Santillan was fired. His employer claimed that their reason for firing him was because he had too many accidents in a year – which Mr. Santillan disputed. Then, USA Waste replaced Mr. Santillan with a driver who had much less experience and was thirteen years younger than Mr. Santillan. Mr. Santillan’s customers were outraged and came out in droves to demand that Mr. Santillan be reinstated. One family even described that their son dressed up as Mr. Santillan for Halloween because he considered Mr. Santillan “a hero.”

Mr. Santillan filed a grievance which ultimately settled. The terms of the settlement provided that Mr. Santillan would withdraw his grievance and in exchange, he would be reinstated provided that she could pass a drug test, a physical exam, a criminal background check and “e-Verify.” E-Verify is a controversial voluntary system under federal law used to check the work authorization status of employees through federal records. Mr. Santillan passed the drug test, the physical exam and the criminal background checks. He was told to report to work with documentation showing his right to work in the United States. Mr. Santillan returned to work with his driver’s license and social security card. Nonetheless, USA Waste insisted it needed a work authorization number and the expiration date. Mr. Santillan provided his identification number, but according to his employer, could not provide the expiration date. USA Waste terminated Mr. Santillan for a second time.

Mr. Santillan filed a lawsuit based on several claims including age discrimination and wrongful termination in violation of public policy. The trial court dismissed his case holding that Mr. Santillan could not state a prima facie case for discrimination and dismissed his wrongful termination claim holding that Mr. Santillan’s failure to provide the work authorization information that USA Waste demanded within three days was a legitimate non-retaliatory reason for the termination. Mr. Santillan appealed to the Ninth Circuit.

Most of us in California are familiar with California Redemption Value, or CRV, that we pay when we purchase a beverage from a retailer. If you take your empty bottles and cans to a recycling center, you can get a CRV refund, which is normally determined by the weight of the recyclables you bring in. Although one or two cans does not add up to much, Recology employee Brian McVeigh uncovered substantial fraud with respect to these refunds and was fired after reporting his suspicions.

Brian McVeigh worked as an operations supervisor at Pier 96 for Recology San Francisco, the company that provides waste recycling and disposal in the County of San Francisco. During his employment, Mr. McVeigh discovered that employees were engaging in “tag inflation” meaning that the Recology attendants were weighing customers’ recyclables but inflating the weight on the tag. As a result, customers received inflated payments from the California Department of Conservation and attendants were potentially receiving kickbacks from this practice. He reported the fraud to both Recology and the San Francisco police.

Later, Mr. McVeigh was transferred to the company’s buy-back center in Brisbane. Mr. McVeigh began suspecting tag inflation and a management cover up at the Brisbane location and reported his suspicions to local police. After finding out about his reports, Recology threatened Mr. McVeigh by telling him that he would be fired if he continued to pursue the CRV fraud, which he reported to HR. Thereafter, Mr. McVeigh was terminated and Mr. McVeigh sued under a number of legal theories.

What can I say about this case except it should be a lesson to employees to sign for the receipt of a disciplinary action when required to do so by your employer, or face the wrath of a disingenuous and biased court of appeals like Mr. Medeiros did in Paratransit, Inc. v. Unemployment Insurance Appeals (Medeiros) (June 15, 2012) __ Cal.App.4th__.

Let’s do what the court did not do, which is look at the facts. Mr. Medeiros was presented with a disciplinary action document by his employer. His employer demanded that he sign the document in the meeting with his employer representatives. He refused to sign it and cited a number of reasons.

Paratransit and Mr. Medeiros’ union had negotiated a memorandum of understanding that required that employees sign disciplinary notices when presented to the employees but explicitly required that “the notice states that by signing, the Vehicle Operator is only acknowledging receipt of said notice and is not admitting to any fault or to the truth of any statement in the notice.” Fair enough! However, the notice presented to Mr. Medeiros did not include this required language. It stated “Employee signature as to receipt”. Perhaps this meant the same thing as required by the union contract, but it sure wasn’t clear and it should have been reason enough for Mr. Medeiros to wait to sign the agreement.