Mark Ramijak worked as an account executive for FileNet Corp. in Costa Mesa, a company that sells and services document management software. He claimed that FileNet owed him about $200,000 in commissions and bonus payments from sales he had made of software and maintenance service contracts—and he eventually took his pay gripe to the California Labor Commissioner. What happened next resulted in a multimillion-dollar jury verdict against FileNet. We’ll look at the case and how you can avoid putting your company in a similar situation.
Salesman’s Territory Reduced After He Files Wage Claim
Ramijak was a FileNet salesman for over 11 years and always received stellar performance reviews. But just two months after he filed a claim with the Labor Commissioner, FileNet drastically cut Ramijak’s sales territory.
FileNet contended that Ramijak had been aware for at least a year that his territory would be reduced. However, according to Ramijak’s lawyer, Josephine Tucker of Morrison & Foerster’s Orange County office, FileNet first threatened to cut back Ramijak’s territory after he complained about the commissions. As a result, Ramijak temporarily backed off his claim. Then, after he filed a formal charge with the Labor Commissioner, Ramijak’s territory was reduced.
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Employee Fired For Moonlighting
FileNet next hired a private investigator to conduct surveillance of Ramijak, including allegedly trailing him, conducting computer searches and interviewing Ramijak’s associates. Several weeks later, Ramijak was fired.
FileNet asserted that Ramijak was terminated because it turned out that he had a second job with a computer network security firm, Network Ranger, which presented a conflict of interest. Ramijak maintained that Network Ranger wasn’t a competitor, and what’s more, his FileNet boss had been aware for some time that he was working for Network Ranger but didn’t care so long as Ramijak continued to meet his sales goals. Tucker also told CEA that FileNet’s moonlighting policy permitted employees to hold second jobs.
Employee Cries Foul
Ramijak sued. He claimed, among other things, that he was fired in retaliation for filing the Labor Commission claim. He also alleged that the company embarked on the surveillance campaign to dig up some excuse for the termination. In addition, Ramijak charged that FileNet violated the California Investigative Consumer Reporting Agencies Act by terminating him based on information from the surveillance report without following required employee notice procedures.
FileNet denied that it owed Ramijak any commissions or that it retaliated against him. It maintained that Ramijak was terminated because his second job amounted to a conflict of interest. Plus, the company argued, the surveillance report—which it reportedly received the day Ramijak was fired—had nothing to do with the termination decision which was made a month before Ramijak was let go.
Huge Verdict
A Los Angeles jury, however, sided with Ramijak, awarding him a whopping $2.7 million. The parties then settled for an undisclosed amount, before the jury determined whether to impose punitive damages on FileNet, in addition to attorney’s fees and wage claim penalties.
Preventing Problems
This case demonstrates that retaliation claims against employers are extremely dangerous—and they can surface any time an employee files a complaint with a government agency or objects to your business practices. Here are some tips to avoid trouble:
- Be consistent. It’s essential not to take adverse action against a worker who has complained without scrupulously adhering to your policies and past practices. In this case, FileNet’s alleged failure to follow its moonlighting policy with respect to Ramijak probably helped convince the jury that retaliation motivated the discharge.
- Watch your timing. Let plenty of time pass between the employee’s complaint and any adverse action, even if you have legitimate grounds for the discipline or termination.
- Pay attention to investigative report rules. There are strict California and federal rules that require you to notify an employee before taking any adverse action based on an investigative consumer report. Failure to comply could leave you open to a lawsuit for damages, including punitive damages and attorney’s fees. For more details on your obligations.