The Court of Appeal followed the CA Supreme Court rationale and holding in Harris v. City of Santa Monica[2] where an employee sued for pregnancy discrimination under California’s Fair Employment and Housing Act “(FEHA”) but did not sue for wrongful termination in violation of public policy.
This article focuses on Mr. Davis’ claim for wrongful termination in violation of public policy against age discrimination as expressed in California’s Fair Employment and Housing Act (“FEHA”).
Facts
Mr. Davis was an insurance agent for Farmers Insurance Exchange (“Farmers”) in 1977. In 1983 he became a District Manager and formed a District Manager’s Appointment Agreement with Farmers. One of his District Manager responsibilities was to recruit for appointment and train as many agents acceptable to Farmers as may be required to produce sales in accordance with goals and objectives established by Farmers. Farmers considered Mr. Davis to be an independent contractor, not an employee, and terminated the District Manager’s Appointment Agreement in October 2006, when Mr. Davis was 57 years old.
Mr. Davis claimed that he was an employee, not an independent contractor, that he was wrongfully terminated due to his age [without suing for age discrimination under California’s Fair Employment and Housing Act or the federal Age Discrimination in Employment Act], and that he was owed wages for his work. He had several different claims (causes of action).
The Trial
Mr. Davis presented evidence at trial that management made age related comments and that other employees over 40 years old had been terminated. Farmers presented evidence that Mr. Davis’ performance was deficient and argued that his lack of performance was the reason for his termination.
The trial court determined that Mr. Davis was an employee and therefore, the termination of his District Manager’s Appointment Agreement constituted a termination of employment. The jury decided that a substantial motivating factor for Mr. Davis’ termination was age discrimination. But the jury also determined that Farmers would have terminated Mr. Davis anyway based on his poor job performance had Farmers not been substantially motivated by discrimination. Consequently, the jury did not award damages to Mr. Davis.
The Appeal
On appeal, Mr. Davis claimed that the “same decision” defense, where the jury found that Farmers would have terminated Mr. Davis for a lawful reason [poor performance] anyway (absent discrimination) did not apply to claims for wrongful termination in violation of public policy and that the defense only applied to statutory claims, such as age discrimination under California’s FEHA.
Mr. Davis asserted that if any part of the termination decision was motivated by discrimination then he should be able to recover damages.
Alternatively, Mr. Davis asserted that if the “same decision” defense applied to the wrongful termination in violation of public policy claim, he was entitled to declaratory relief, injunctive relief, and attorneys’ fees because he persuaded the jury that discrimination was a substantial motivating factor for his termination. The Court of Appeal did not agree with Mr. Davis for various reasons.
Same Decision Defense to Discrimination – and a Public Policy Violation Claim
In the Harris case, a discrimination case under FEHA, the California Supreme Court concluded that determining that discrimination was a motivating factor was not sufficient to find that the employer’s adverse action constituted discrimination against an employee under FEHA. An employee had to prove that discrimination was a substantialmotivating factor for the adverse action. “Requiring the plaintiff to show that discrimination was a substantial motivating factor, rather than simply a motivating factor, more effectively ensures that liability will not be imposed based on evidence of mere thoughts or passing statements unrelated to the disputed employment decision.”[3]
The Harris court also said that even if an employee proves discrimination was a substantial motivating factor for the adverse action, an employer could avoid liability for damages, back pay, or an order for reinstatement “by proving that a legitimate motive alone would have led it to make the same decision” absent the discrimination.[4]
This is known as the “same decision” defense where there is a mixed motive – both a discriminatory and a lawful motive for the adverse action against the employee.
After the Harris decision, the Judicial Council amended CACI jury instruction No. 2430 related to wrongful termination in violation of public policy, to require a substantial motivating reason for the adverse action like the requirement in a discrimination case. It also added No. 2512, to eliminate liability for damages, back pay, and reinstatement if the employer establishes that it would have taken the same adverse action for lawful reasons.
In Mr. Davis’ case, the trial court found that age discrimination was a substantial motivating factor for Farmers’ decision to terminate Mr. Davis.
Mr. Davis did not sue for age discrimination. He sued for wrongful termination in violation of the public policy against age discrimination expressed in FEHA. Despite the amended CACI jury instruction and the addition of instruction No. 2512, Mr. Davis argued that the same decision defense did not apply to his case for wrongful termination in violation of public policy.
The Court of Appeal analyzed whether the rationale of Harris applied to wrongful termination in violation of public policy cases. The Court cited two prior wrongful termination cases where the courts adopted use of the amended CACI jury instruction No. 2430 following Harris, requiring a substantial motivating reason for the adverse action –Mendoza v. Western Medical Center Santa Ana[5] and Alamo v. Practice Management Information Corp.[6]
The Court of Appeal reasoned that the rationale in Harris, including the use of the same decision defense, should apply to wrongful termination in violation of public policy cases. “Although the California Supreme Court in Harrisfocused on the statutory language of FEHA, the claim that a termination violates public policy must be ‘tethered to fundamental policies that are delineated in constitutional or statutory provisions.’ (Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1095…)”
Further, the Court of Appeal cited other cases asserting that a tort claim based on public policy against age discrimination in FEHA is subject to FEHA’s limitations on the nature and scope of the statutory prohibition against age discrimination and also that a fundamental public policy cannot be offended if a wrongful termination claim was not cognizable under FEHA. The Court of Appeal essentially concluded that because a claim for violation of public policy in FEHA is so closely tied to a FEHA discrimination claim, that what applies to a FEHA discrimination claim must also apply to a claim for violation of public policy that comes from FEHA.
The Court of Appeal held, “If claims for wrongful termination in violation of public policy must track FEHA, it necessarily follows that jury instructions pertinent to causation and motivation must be the same for both.”[7] Thus, the Court of Appeal affirmed the trial court’s decision that the “same decision” defense applied to Mr. Davis’ wrongful termination in violation of public policy claim. As a result, the jury’s conclusion that Farmers proved it had a lawful reason for terminating Mr. Davis absent discrimination (because of his poor performance), precluded an award of damages, back pay, and reinstatement.
The Court of Appeal also concluded that because Harris did not say attorneys’ fees were available without a FEHA claim, along with procedural reasons and lack of evidence, Mr. Davis was not entitled to the limited remedies that the court in Harris said are available when a “same decision” defense is successful – that of a judicial declaration of employer wrongdoing, an award of injunctive relief [to prevent further discrimination against plaintiff or others, for instance], or reasonable attorneys’ fees and costs.
Conclusion
Although this case was not like Harris because it did not include a claim for discrimination, the Court of Appeal concluded that the “same decision” defense that applied in Harris also applies to cases that only have a claim for wrongful termination in violation of public policy.
Many cases involving discrimination and a termination due to discrimination include both a claim for discrimination and a claim for wrongful termination in violation of public policy. This case asserts that defendants can use the “same decision” defense even when a plaintiff sues only for wrongful termination in violation of public policy and the plaintiff proves that discrimination was a substantial motivating factor for the termination. Although this defense still allows a plaintiff to possibly recover reasonable attorneys’ fees and costs, and obtain an injunction and declaratory relief, without recovering damages or reinstatement for the plaintiff, plaintiffs may think twice about filing a lawsuit where the same decision defense looks viable.
Jeff Park is a Partner at Habbu & Park Inc.
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