BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
SAN FRANCISCO -- A California Supreme Court ruling that gives whistleblowers greater leeway to sue their former employers for wrongful termination will lead to more lawsuits, say some attorneys.
But other attorneys contend the decision in Richard Green vs. Ralee-Engineering Co. is narrow and not a significant departure from the previous judicial standard.
The California Supreme Court decision focuses on whether public policy can be embedded in administrative regulations in addition to statutory or constitutional provisions and can therefore limit an employer's right to fire an employee.
Mr. Green was a quality control inspector at City of Industry, Calif.-based Ralee-Engineering who claimed he was terminated in 1991 in retaliation for complaining to the company that it was shipping defective aircraft parts.
A trial court granted Ralee-Engineering summary judgment and ruled the company could discharge him even if it was motivated by his objections to its inspection practices, because its conduct would not have violated public policy found in any statutory or constitutional provisions.
An appellate court, however, ruled for Mr. Green. In a 5-2 decision late last month, the state high court upheld the appellate court and returned the case to the trial court for further proceedings.
The Supreme Court concluded that fundamental public policy can be grounded in administrative regulations as well as in statutory or constitutional provisions.
Even though California whistleblower legislation applies to employees who report to public agencies, which Mr. Green did not do, "nonetheless, it does show the legislature's interest in encouraging employees to report workplace activity that may violate public policies that the legislature has stated," says the decision.
The decision also says Federal Aviation Administration regulations apply to Ralee even though Ralee, a parts manufacturer, was not a prime manufacturer directly certified by the FAA.
If Mr. Green's charges are true, it means Ralee misrepresented the safety of the parts shipped to prime manufacturers. This would lead to a breach of fundamental public policy if the prime manufacturers in turn misrepresent airplane parts' safety, says the decision.
"Allowing defendant to discharge plaintiff with impunity after he sought to halt or eliminate its alleged inspection practices would only undermine the important and fundamental public policy favoring safe air travel," the decision concludes.
"By including significant administrative safety regulations promulgated to serve important (Federal Aviation Administration) mandates as a source of fundamental public policy limiting an employer's right to discharge an otherwise at-will employee, we effectively guarantee that employers do not exercise their right to terminate their employees at will in a way that undermines more important public safety objectives," the decision says.
Two dissenting opinions were issued. In one, Justice Marvin Baxter said, "Like the majority, I strongly support motherhood, the American flag and commercial air safety."
However, "by turning their backs on established precedent, the majority have opened the door to virtually limitless litigation in California over what was once a narrowly contoured exception to the legislatively declared general rule of at-will employment," he said.
Wayne S. Flick, an attorney with Latham & Watkins in Los Angeles, submitted a brief in the case on behalf of the Los Angeles-based Employers Group. He said, "I think, by any objective measure, it's a disaster for employers." The decision "will inevitably lead to a flood of employment litigation," said Mr. Flick.
"They have taken on the job of declaring what is public policy in California when they have absolutely no business doing so," he added.
Before this decision, employers were limited in firing employees only if the job action was related to a specific statute, such as an anti-discrimination statute, said Daniel M. Crawford, an attorney with Carroll, Burdick & McDonough in San Francisco who represents employers. "This just broadens it, there's no doubt about it, and that's not good for employers," said Mr. Crawford.
Jonathan B. Cole of Nemecek & Cole in Sherman Oaks, Calif., represented Ralee in the case. He said the decision is inconsistent with a 1992 California Supreme Court decision that says employers' discharge rights are limited by public policy that is delineated in constitutional or statutory provisions.
"They overruled their own decision to support the ruling in this case," said Mr. Cole. "My biggest concern is that they've essentially said an employer can be sued for a public policy violation based upon an act or administrative regulation that doesn't even apply to that employer, but in fact applies to people the employer may contract with, " said Mr. Cole.
As a result, he said, "now you not only have to know the rules that apply to your business, but you may have to know all the laws that apply to all the businesses you may contract with."
"I just think this has broadened the potential for public policy violations immensely," while the specific rules that previously existed that said public policy must be tied to statutory or constitutional provisions are now "out the door," said Mr. Cole.
He predicted that employee whistleblower cases "will proliferate as a result of this ruling."
Mr. Cole also pointed out that, for purposes of the summary judgment, the facts alleged in this case were assumed to be true. In fact, Mr. Green's charge that the company shipped defective airplane parts is a "hotly contested issue" that the company has denied, he said.
But other attorneys say the decision will have little impact. "I really don't think that much has changed in this area of the law" as a result of the decision, said Jeffrey M. Tanenbaum of Littler Mendelson in San Francisco. "The courts have been moving in this direction and, for practical purposes, the advice that I have been giving my clients is that they should view violations of regulations just as seriously as violations of statutes, and that's all that this case means," he said.
"It is a slight change in how the courts have described the law. In essence, employers have been on the hook for these sorts of claims all along," Mr. Tanenbaum said.
Plaintiffs' attorney Cliff M. Palefsky of McGuinn, Hillman & Palefsky in San Francisco, agrees.
"I don't think it dramatically changes the landscape at all," he said. "I think it's always been clear to me that administrative regulations are an embodiment of public policy created under the authority of the legislature and they express very important policy," he said.
"In this case, we're talking about airline safety," he said. "Who else would we protect if not those who speak up for public safety?" said Mr. Palefsky. "I don't think anyone should overreact or treat it as a revolutionary new decision. It makes perfect sense."
"I don't think it's a very broad decision," said attorney George E. Brownfield, a Los Angeles-based solo practitioner who represents Mr. Green. He added, "I think there's something wrong when you have to have the Supreme Court to tell us that an employee cannot be terminated" when he refuses to approve defective parts.
Most cases "do not involve situations where people are finding their companies manufacture defective parts," said Encino, Calif.-based attorney Joseph Posner, who had submitted a brief on behalf of a plaintiffs' attorneys group, the Santa Monica, Calif.-based California Employment Lawyers Assn. While it does happen, he said, "it's not your average case."
Richard Green vs. Ralee-Engineering Co., Supreme Court of California; No. S060370, 98 C.D.O.S. 6792.