Desperate Housewives Case Addresses Wrongful Termination Based on Failure to Renew Contract

It should not be surprising that in California, prominent court cases involve the entertainment industry at times. In my last EntertainHR blog post, I discussed the 2006 California Supreme Court’s decision in Lyle v. Warner Brothers Television Productions, where the court held that within the adult-oriented situation comedy Friends writers’ room, conduct that might otherwise easily be considered sexual harassment elsewhere was permissible.  Like Friends, dramedy Desperate Housewives has also found its way into California employers’ legal briefs.

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In 2004, Nicollette Sheridan—who played Edie Williams—signed a contract with Touchstone Television Productions to appear on the initial season of Desperate Housewives. Touchstone had the exclusive option to renew Sheridan’s contract on an annual basis for up to six additional seasons, and did so for seasons two (2005), three (2006), four (2007), and five (2008).

In September 2008, during the production of season five, Sheridan claimed that series creator Marc Cherry had hit her.  Sheridan complained to Touchstone about this alleged battery. Subsequently, in February 2009, Touchstone informed Sheridan that it was not exercising her contract option for season six. Instead, during season five, her character would be killed in a car accident.

In February 2010, Sheridan sued Touchstone, alleging among other claims, that she was wrongfully terminated in February 2009 for complaining about Cherry’s alleged battery. In all, Sheridan sought more than $20 million in compensatory damages, as well as punitive damages.

After the jury deadlocked on Sheridan’s wrongful termination claim and the trial court declared a mistrial, Touchstone filed a petition with the California Court of Appeal, raising an issue that it failed to successfully advance on three prior occasions: that Sheridan’s employment had not been “terminated,” but instead Touchstone chose not to exercise its contract option.

The Court of Appeal found in Touchstone’s favor. Relying on California precedent, the Court of Appeal held that “[d]ecisional law does not allow a plaintiff to sue for wrongful termination in violation of public policy based on an employer’s refusal to renew an employment contract.”

Though the day-to-day practical implications of the court’s 2012 decision in Touchstone v. Superior Court are somewhat limited, it is interesting to know that the Touchstone case has subsequently been relied on by other courts addressing the wrongful termination claims within the context of failures to exercise contract options.