Tag Archives: Wrongful Termination

Wrongful Termination — Former Teacher Awarded $3.5 Million

What a difference being a government employee makes. Most workers are at-will employees and can be terminated without cause on the whim of the employer, but teachers can only be terminated for cause. In the case of Lyndsey Wilcox v. Newark Valley Central School District, that distinction led to a huge verdict.

A jury on Wednesday awarded close to $3.5 million in damages to Wilcox, who alleged she was fired without cause. Wilcox was dating another teacher when it was discovered that he was acting inappropriately toward female students. He was ultimately convicted of sex offenses and sentenced to 30 years in prison. Wilcox successfully argued that she was only terminated for the sins of her boyfriend.

The jury deliberated for about three hours before returning with a verdict awarding Wilcox $351,990 for lost wages and $2.1 million for future lost earnings and $1 million for emotional distress.

Is Discrimination Against Redheads Illegal in the Workplace?

When I am explaining the concept of at-will employment, to illustrate the point that an employer can fire an employee for anything so long as it does not violate public policy or statute, I will sometimes say, “He could decide he doesn’t like the color of your hair and fire you for that.” But an interesting case out of New Jersey might prove me wrong.

According to an article in the New York Post, the NYPD sent out an anti-bias message this month to Manhattan sergeants and lieutenants, who were told that redhead harassment would not be tolerated.

“We’re apparently victims now,” said one cop with ginger locks. “We’re protected from discrimination.”

No lawsuit has been filed against the city, but the feds say a claim alleging unfair treatment over red hair would be supported by federal law, which bars workplace bias against applicants and employees based on race, national origin, skin color, religion, sex or disability.

Wait a second. What does hair color have to do with any of those protected classes? That’s were things get interesting. Think about it. If you had to guess the nationality of someone with red hair, what would you pick? You’d probably guess Ireland, because people with red hair are found in higher numbers in Britain and Ireland than elsewhere, according to the federal Equal Employment Opportunity Commission. So if someone could prove discrimination against redheads, that would mean that there is a disparate impact against those of Irish dissent, and nationality is a protected class.

These are the sort of mental games that only attorneys play. In the real world, it would be very unlikely that anyone is going to suffer adverse job action or discrimination based on being a redhead. As one retired officer quoted by the New York Post stated, “To put redheads in a protective class — that’s ridiculous!” However, the analysis is still useful to illustrate how a seemingly “innocent” form of bias can create illegal discrimination.

Former Apple Employee Sues for Wrongful Termination

Here is a interesting wrongful termination action, in that it illustrates a couple of basic points of wrongful termination and should prove to be very informative on the law as it proceeds.

Wayne Goodrich is a former employee of Apple. As an at-will employee, he could of course be terminated without cause. In December 2011 he was terminated by Apple for “business reasons”, and told that the termination had nothing to do with his job performance. Goodrich claims that was a wrongful termination in violation of contract because he was not an at-will employee. He asserts that Steve Jobs gave him a job for life. Goodrich claims that in 2005, during a one-on-one meeting with Steve Jobs, Jobs told him that he would always have a job.

Steve Jobs is dead, and there were no witnesses to the conversation, so we must rely entirely on what Goodrich alleges was said during the conversation. Aside from that problem with proof, Goodrich’s claim will fail for the following reasons.

Goodrich began his job at Apple in 1998. He doesn’t claim that he had a job for life at the time he was hired, but rather that the contract was created by the 2005 statement by Jobs. Under basic contract principles, a contract requires mutual consideration. Goodrich was already working at Apple at the time of the statement, so what did Apple receive in return for this promise of life time employment? Thus, under basic contract principles, the claim fails.

There is a concept called promissory estoppel, which provides the contract consideration if the plaintiff can show that the defendant knew he was relying to his detriment. In other words, if Goodrich had gone to Jobs and informed him that he was leaving to take a job at HP for a much higher salary, and Jobs had said, “don’t take the job at HP, stay here where you will always have a job”, then that detrimental reliance in turning down the HP job could provide the consideration. However, as far as I know, Goodrich is making no such claim.

The other fatal flaw in Goodrich’s case is the wording of the alleged statement. If an employee is going to claim that they were given a job for life, then the terms of that “lifetime job contract” have to be sufficiently certain to be enforceable.

Assume that Jobs said to Goodrich, “Wayne, you’re my guy. I can’t imagine running this company without you. You will always have a job at Apple.”

What does that mean? If Goodrich stopped coming to work and sat at home watching Jerry Springer, would he still have a job for life at Apple? No, I’m sure even Goodrich would stipulate that there were circumstances for which he could be fired. He would probably assert that he could only be fired for cause. But what if the cause is that his job is eliminated, or the company is restructured? Or what if Jobs meant that you’ll always have a job while I’m here? And what about the reverse? Was Goodrich required to stay there for life? Did Jobs really mean that Apple was committed to Goodrich for life, but Goodrich was free to shop around his services to see if he could make more money? That seems unfair and unlikely.

The point is, that simple statement by Jobs is just too uncertain to be enforced. There are circumstances where an employer can transmute an at-will employee into an employee who can only be terminated for cause. We have prevailed on a number of cases on that basis. But based on what I know of this case, claiming a job for life just will not fly. It should also be noted that Steve Jobs himself was fired by Apple, although he was eventually brought back.

We’ll watch this case develop and see if I am prescient. Here is a more detailed article about the action against apple.

Don’t Be Blind to the Signs You are About to be Terminated

I feel the need to vent.

I’ve received three calls today from long-term employees who were fired out of the blue and have no idea what they are going to do with themselves. Again I say it. Never stop making yourself more employable, and keep your eyes open for the writing on the wall that you may be about to lose your job.

I’ve written before about how you must continually be improving your employability, so this time I will focus on how to recognize the warning signs that you may be getting the boot.

The company implements extreme cost-cutting measures.

First understand that the signs may not have anything to do with you, but rather the overall economic health of the company. If you see the company is struggling, then you should assume that a reduction of the staff will soon follow.

In the traditional office environment, things like overtime, company lunches, free soft drinks and other perks will disappear. In the retail setting, just look at the shelves. A struggling store will cut back on inventory. There will be a hiring freeze, and the company could be encouraging a staff reduction with severance packages.

You have seemingly become incompetent.

Alternatively, the signs could have nothing to do with the economic health of the company, but rather how you are suddenly being treated.

The vast majority of terminations are not wrongful under the law due to the at-will employment presumption. Nonetheless, that does not stop employees from suing for wrongful termination anyway, and those actions are costly to the company. Therefore, the company will want to build a package on you so that if you do sue, there is a paper trial showing that you were incompetent in your job. To that end, the following acts are red flags that you are being papered. Continue reading

An Emotional Distress Claim Should Not Be Undertaken Lightly

Wrongful Termination Attorney Emotional DistressThe case of Mallard v. Progressive Choice Ins. Co. beautifully illustrates a point I discuss with all clients who want to make an emotional distress claim, and provides a good stepping-off point to discuss the reality of damages in a wrongful termination case.

Sometimes I will get a call from a potential client within minutes after they were fired by their employer. They want to sue for wrongful termination and they want to sue NOW!

But what is the employee going to sue for? Union workers and government employees will sometimes sue to get their jobs back, but 99% of the time when someone calls me wanting to sue for wrongful termination, they want to sue for damages. They understand that even if they could sue to get their job back, it would not be a very pleasant environment to work. They want money.

So let’s look at that. Fifteen minutes after an employee has been fired, what damages have they suffered? When I ask the caller that question, they answer, “I was fired!” Yes, but what are your damages? “I was fired!”

Rather than to go on all day in this fashion, I explain. Damages are something you can put a dollar sign in front of. Being fired is not a damage, although obviously it can CAUSE damages. But 15 minutes after a termination, an ethical attorney should explain that there are no real damages at that point.

Let’s do the math. If the employee was making, say, $25 an hour, and they were fired two hours before their shift ended, then the damages at that moment they are calling me are $50, at least in terms of lost wages. But let’s carry it out a little. Let’s assume for our hypothetical that the employee had seen the writing on the wall and had already sent out some feelers for a new job before the axe fell. She makes a few calls, and a week later she starts a new job with the same title that pays $30 per hour with better benefits. What are her damages then?

Well, she went a week without being paid, so she lost $1,000 in wages. If the termination was wrongful, her old employer should at least cut her a check for $1,000 to reimburse her for the lost wages, right? But wait a second. Because of the termination, she will make $10,000 more for the year than if she hadn’t been fired, because now she is making $5 per hour more. Fair’s fair. If you thought her employer should pay her for what she lost as a result of the termination, then it is only fair that she should pay to the employer the money she gained as a result of the termination, right?

I’m speaking tongue in cheek of course, but I want you to think in terms of the real damage to our terminated employee. Last week I discussed all the damages that flow from a wrongful termination, and if you look at that list, assuming our employee did not suffer any setback to her career track, then there are no significant damages a week after termination.

“But what about emotional distress damages?”, the caller asks. That’s a valid question. If your employer wrongfully terminated you, you might have suffered some emotional distress damages, and those are recoverable on a wrongful termination claim. But an ethical attorney then needs to explain what you open yourself up to when you claim emotional distress.

Which leads us to today’s case review. Continue reading

Will I Be Taxed on My Wrongful Termination Settlement?

Wrongful Termination TaxesBelieve it or not, there are still a few precious forms of “income” that are not taxed.  I’m not a tax attorney, but the last time I checked insurance proceeds are generally not taxed, nor are personal injury damages.

But what about a settlement from a wrongful termination action?

Back in the day, emotional distress damages were viewed as personal injury damages and were not taxed. Since the proceeds of a settlement are somewhat fungible (does the $100,000 represent loss of future income or emotional distress damages?), attorneys would put in the settlement that the damages were for emotional distress.

Those days are gone, and not only will you be taxed on your recovery, you will have payroll taxes withheld from any amount arising from back pay, future lost wages and any overtime or unpaid wage claims. In a sense it all comes out in the wash. Here’s what I mean. Let’s say you worked for a year and received your normal pay, with all of the concomitant withholdings. Now let’s say you were wrongfully terminated at the beginning of that year but found an even better job a year later, making your damages for that year the loss of wages (taking out of the equation for point of illustration all of the other damages to which you might be entitled). Your damages should be what you would have earned but for the wrongful termination, so you should not expect that these lost wages would be exempt from withholding.

However, the problem from a mental standpoint is that we all grouse about the amount that comes out of our checks every pay day, but when it all comes out of a settlement in one lump sum, then you really feel the pain.

So, what type of damages can you recover in a wrongful termination action, and what are the tax consequences? Rather than to reinvent the wheel, I direct your attention to this very fine summary of wrongful termination damages and tax consequences.

Don’t Bet Your Job on Whether You Know Better

Wrongful TerminationA case out of San Diego beautifully illustrates an issue that I frequently encounter with prospective clients, and provides a cautionary tale.

The fact pattern is so common that I have given it a name — the “‘I Know Better’ Syndrome”, or “Syndrome” for short.  The Syndrome arises when an employee takes a firm stand on some issue, to the point of refusing to do what they are told, believing that they have a better understanding of the law or company policies.

For example, the company policy will be that reimbursements can’t be made out of petty cash without a receipt. The boss tells an employee to reimburse another worker for a company lunch, and the employ refuses because the worker does not have a receipt. The boss writes her up for insubordination, but the employee will have none of that and goes to Human Resources to complain that she was written up when all she did was follow company policy. The next thing she knows, she is called in and terminated because her inflexible adherence to the strict letter of the policies has just become too much of an annoyance.

So it was in the San Diego case.  Here is a summary of the facts, as reported by Sign On San Diego. The Superior Court in San Diego is way behind the electronic curve so I could not review the actual court documents on file.  This summary is based on what was reported on Sign On San Diego and may not be entirely accurate. The point here is not the specific facts but the legal issue they illustrate.

Shari Watson, a Chula Vista council aide, was told to deposit a $2,400 check from Cox Communications, made out to “The City of Chula Vista/International Friendship Games”. This bothered Watson, because Cox had only agreed to a $1,000 sponsorship for the event.  Watson could not reconcile why Cox would be sending a check for $2,400.  Watson asked Deputy Mayor Rudy Ramirez if she could call Cox to see if the check was made out in error, but he told her to go ahead and deposit it and let the finance department work out any problems.

Freeze.  Right there is the moment in time that employees fall prey to the I Know Better Syndrome.  The supervisor has just given clear instructions, but the employee thinks she knows better.  Watson was absolutely, positively, 100% correct – the check was a mistake, and was meant for payment of city permits and not for the event – but that wasn’t really the issue. Ramirez had instructed her to deposit the check and let another department deal with the possible mistake, according to the article. When Watson refused to deposit the check, Ramirez had another employee deposit it, and the accounting snafu was eventually rectified. However, Ramirez fired Watson, allegedly for her “inability to take direction.”

Well that can’t be allowed to stand, right? Continue reading