Scott McFetters was a salesman in the Orange County office of Amplicon Inc., a computer leasing company. When the firm started using a new lease arrangement called an ABC lease, McFetters objected because he thought it wasn’t fair to customers. What happened next resulted in a $870,000 verdict for McFetters against Amplicon, which was recently upheld by the California Court of Appeal. We’ll look at what the company did to cause the jury to make such a huge award and how you can avoid putting yourself in a similar situation.
Employer Pushes Misleading Leases
The ABC lease required customers at the end of the term to choose one of the following options: renew the lease, purchase the equipment at a mutually agreeable price, or lease new equipment at the same or a higher price. McFetters believed that this process would end up forcing customers into a new lease. He considered this to be wrong and complained to management about it and other Amplicon marketing practices.
Join us this fall in San Francisco for the California Employment Law Update conference, a 3-day event that will teach you everything you need to know about new laws and regulations, and your compliance obligations, for the year ahead—it’s one-stop shopping at its best.
Boss Allegedly Assaults Employee
When Amplicon president and CEO Patrick Paddon heard about McFetters’ complaints, he allegedly became enraged, grabbed McFetters, hit, shook and dragged him out of his office, and told him he was fired. But other supervisors intervened and assured McFetters that he wasn’t terminated and they would make sure he no longer had to deal directly with Paddon.
But McFetters said Paddon continued to taunt and humiliate him in front of co-workers. McFetters finally quit after the supervisors who had been the buffers between him and Paddon left the company.
Employee Goes To Court
McFetters sued Amplicon, charging that he was forced out of his job because he refused to go along with the company’s marketing program which he said violated the California law against unfair business practices. He also complained that he was the victim of intentional infliction of emotional distress and a variety of other wrongs committed by Amplicon. The jury agreed and awarded McFetters $870,000, which included $650,000 in punitive damages.
Appellate Court Sides With Employee
Amplicon tried to convince the Court of Appeal that McFetters should not collect on the jury’s verdict. First, the company said that McFetters was not fired but had quit. The court made short work of this, ruling that McFetters had been constructively terminated—meaning he was forced to quit because the intolerable working conditions left him no alternative but to resign.
Next Amplicon argued that the marketing of the ABC leases that McFetters had objected to was nothing more than hard-nosed bargaining. But the court disagreed, characterizing Amplicon’s tactics as ‘sleazy and wrongful’ and, therefore, sufficient for the jury to conclude that the company had engaged in unfair business practices. Consequently, by effectively terminating McFetters for refusing to engage in such conduct, the company illegally retaliated against him in violation of public policy.
Finally, Amplicon tried to downplay the taunting and ridiculing of McFetters by the president of the company as insignificant and trivial. The court again rebuffed Amplicon, emphasizing that these actions had to be taken seriously because they were committed by the owner of the company, who had already physically assaulted McFetters.
The Court of Appeal concluded that McFetters should be given the option of accepting the jury’s award or having a new trial.
Use Caution If Employee Complains
Retaliation claims against employers are extremely dangerous, and they can surface anytime an employee files a complaint with the government or objects to your business practices or working conditions. It’s essential not to take adverse action against a worker who has complained without detailed documentation of your legitimate business reasons for doing so. It’s wise to get professional advice as well.