A California appellate court has upheld a hefty jury award to an employee who was fired for purportedly stealing a soft drink from his employer’s convenience store. The termination came just hours after the employee testified against the company in a co-worker’s unemployment hearing—suggesting the real reason for the firing was the testimony, not the soda.
The court’s decision illustrates your risk of an expensive retaliation claim if you take adverse action against an employee who lodges a complaint or testifies against you. But by following a few simple guidelines, you can avoid a similar fate.
Employee Grabs Soda On Way To Testifying
Thomas White worked as an assistant manager for an Ultramar store in Pacific Beach. Ultramar had fired White’s manager, and White was scheduled to testify at his unemployment hearing. On his way to the hearing, White and a co-worker stopped at the store and White helped himself to a soft drink. White said the new manager observed him taking the drink and said nothing, although the manager claimed he told White he was supposed to pay for the soda. White left the store with his drink, went to the hearing and testified against the company. When he reported to work later that day, he was fired.
Retaliation Or Theft?
White sued for wrongful termination, claiming he was fired in retaliation for his testimony at the unemployment hearing. According to White, the supervisor who fired him said ‘he knew better’ than to testify against the company. White also argued that he hadn’t done anything wrong because company policy allowed employees to take free drinks. Ultramar said its free-drink policy only applied to on-duty employees. It claimed White was fired for stealing the soda, and the termination had nothing to do with his testimony.
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Jury Awards Damages
A jury rejected the employer’s arguments and awarded White $42,000 in compensatory damages, $300,000 in punitive damages and more than $70,000 in attorneys’ fees. The company asked the California Court of Appeal to overturn the jury’s award. Ultramar argued that even if it had fired White for testifying against the company, it did nothing illegal because there was no law prohibiting employers from terminating workers who testify at unemployment hearings.
Termination Violates Public Policy
The Court of Appeal concluded Ultramar could be liable for firing White. The decision was based on the public policy of protecting unemployed workers—which would be undermined if employers could retaliate against employees who testify. Note that since this lawsuit was filed, a new law was passed that specifically bars retaliation against employees for testifying in unemployment benefit proceedings.
How To Sidestep Trouble
To reduce your risk of getting sued if you take adverse action against a worker who has just —testifiedor even made a complain—against you, keep these simple rules in mind:
- Document misconduct. If an employee has violated a company rule or isn’t performing up to par, thoroughly document the problems and make the worker aware of them. If appropriate, issue a warning in writing before you take more serious action. A detailed record justifying your decision will make it easier to show you were not retaliating.
- Treat complaining employees carefully. Claims of retaliation can arise in a variety of situations, including when employees complain directly to you or to a government agency about discrimination, harassment or a violation of safety or other laws. And you can be liable even if your actions were perfectly legal in the first plac—as long as the worker reasonably believed they weren’t. To be safe, always get expert advice before taking adverse action against an employee who has complained.
- Let time pass. Ultramar set itself up for a major problem by firing White so soon after he testified. In sensitive situations like this, carefully evaluate whether discipline or termination is justifie—and keep in mind that an unsympathetic jury is likely to believe it’s not. If you have independent grounds for taking action, let plenty of time pass before you do so. This will make it harder to show a connection between the discipline and the employee’s testimony or complaint.
- Be consistent. If you’ve looked the other way when employees have broken rules in the past, you may have a difficult time justifying the use of a new get-tough policy on a worker who has just testified or filed a complaint about your policies or practices.