The California Supreme Court issued a recent decision on whether courts may vacate (toss out) an arbitration award in which the arbitrator applied the “honest belief” defense to uphold the employer’s termination of an employee for engaging in outside employment in violation of company policy while on an approved leave of absence under the California Family Rights Act (CFRA).
Attorney Cathleen Yonahara of Freeland Cooper & Foreman LLP in San Francisco explains the case.
Employee Fired for Outside Employment
In 2004, Power Toyota Cerritos hired Avery Richey as an at-will employee. Richey was required to sign an arbitration agreement as a condition of hire, and the dealership’s employee manual provided that outside work while on approved leave was prohibited.
In February 2008, Richey opened a local seafood restaurant while working full-time at Power Toyota. On March 10, he injured his back while moving furniture at his home. On March 21, he requested leave based on his physician’s certification that he was medically unable to work. Power Toyota granted his medical leave and extended it on several occasions.
You may think you’re up on all the nuances of family and medical leave-related issues, but there’s a lot to keep track of. Get on the right track for 2015 with our 1-day FMLA/CFRA Master Class specifically for California employers. Learn more.
On April 11, a supervisor sent Richey a letter stating that employees weren’t allowed to pursue outside employment while on leave and that he should call if he had any questions. Richey ignored the letter because he believed the policy didn’t apply to him since he hadn’t accepted employment with another company but rather was working as the owner of his own business.
Power Toyota was informed that Richey was working at his restaurant while on leave. In response, the company sent an employee to observe the restaurant on April 18. The employee saw Richey sweeping, bending over, and hanging a sign using a hammer. Richey admitted that he handled orders and answered the phone at the restaurant while on leave, but he claimed those tasks were consistent with the limited light duties his doctor authorized.
Power Toyota fired Richey on May 1, 2008, for engaging in outside employment while on a leave of absence in violation of company policy.
What happened next? Tune in tomorrow to find out.
Download your copy of Notice Requirements for CFRA and FMLA: California Labor Laws today!
Perhaps this issue will be addressed in the upcoming revised CFRA regulations.