Joan Grinzi, a case manager for San Diego Hospice Corp., was fired after 13 years on the job as an at-will employee. Hospice, which is a private company, allegedly initially told Grinzi that she was being terminated because she belonged to the Women’s Garden Circle, an investment group that Hospice considered to be an illegal pyramid scheme. A few days later, Hospice seemed to change its story, saying Grinzi was discharged for wrongful use of the company’s e-mail system.
Employee Asserts Free-Speech Rights Violated
Grinzi sued Hospice for wrongful termination in violation of public policy. She argued that the real reason for her termination—Hospice’s objection to her Women’s Garden Circle membership—violated her First Amendment free-speech rights and her right to engage in lawful conduct outside working hours, as outlined in California Labor Code sections 96(k) and 98.6. The trial court granted Hospice’s request to dismiss the lawsuit, and Grinzi appealed.
Public Policy Claim Fails
Now a California appeal court has upheld the dismissal. The court explained that an at-will employee can be terminated at any time, with or without good cause. However, an employer cannot discharge an at-will employee for a reason that violates public policy if that policy is fundamental and substantial, is spelled out in the U.S. or state constitution or a federal or state statute, and is for the public’s benefit.
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The court noted that when employers are not covered by a particular statute, any public policy flowing from that statute doesn’t extend to them. With that in mind, the court ruled that the First Amendment did not contain a public policy prohibiting Grinzi’s discharge for free expression. That’s because the free-speech provision only restricts government action abridging free speech, not a private employer such as Hospice.
What’s more, Labor Code Section 96(k), which bars employers from interfering with employees’ lawful outside activities, doesn’t set forth a public policy. That’s because this law doesn’t actually give employees any rights but merely sets up a procedure for the Labor Commissioner to assert constitutional protections on employees’ behalf. To rely on Labor Code section 96(k)—or section 98.6, which prohibits discharging an employee for conduct protected by 96(k)—for a wrongful termination claim, Grinzi would first have to show that her discharge violated a constitutional interest, which she failed to do.
Use Caution
Even though the employer won this case, the lawsuit is a reminder that at-will employees can’t be terminated for a reason that violates public policy. Some common examples of discharges that might run afoul of public policy include those based on a protected characteristic such as gender, race, or sexual orientation. And another California appeal court recently ruled that the state has a public policy of discouraging fraud—thus, an employee who claimed he was fired for refusing to engage in fraudulent billing practices was permitted to sue for retaliatory discharge in violation of public policy.
Further, keep in mind that although Grinzi couldn’t prove a free speech violation because she worked for a private employer, there are constitutional limits on a public employer’s ability to restrict an employee’s freedom of speech.