When an employee complains about illegal conduct, or refuses to engage in unlawful conduct, an employer may not retaliate by terminating the employee. Such a termination violates public policy and can give rise to a lawsuit for wrongful termination.
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Employment Law Litigation
School Wrongfully Terminates Administrative
Employee Over Class Size Violation
By Christopher W. Olmsted
When an employee complains about illegal conduct, or refuses to engage in unlawful conduct, an employer may not retaliate by terminating the employee. Such a termination violates public policy and can give rise to a lawsuit for wrongful termination. What exactly does it take for an employer to cross the line and terminate in violation of public policy? In a recent case titled Scott v. Phoenix Schools, Inc. provides a useful illustration.
“Sorry, The Class Is Full”—Or Is It?
Jennifer Scott was employed by Phoenix Schools, Inc. as the director of its Rocklin, California preschool. Among other duties, she had the responsibility of assigning personnel to comply with the state regulations that set the minimum teacher-student ratios for child care centers.
When the parents of a preschool aged child came to tour the campus, Ms. Scott told them that the class was full, but that they could place their child on a waiting list.
Ms. Scott was concerned about a California law regulating student-teacher ratios. She believed that adding the new child to the student roster would violate California Code of Regulations, title 22, section 101216.3. Subdivisions (a) and (b) of that section provide that for students of this grade level, there must be one teacher for every 12 children, but if the teacher is fully qualified, one teacher and one aide may supervise no more than 18 children. Ms. Scott believed that adding the student would cause the class size to exceed 18 and no additional teachers were available. She told the parents they would have to wait.
When the parents returned and spoke to another administrator, they were told that the child could immediately enroll.
Phoenix Schools terminated Ms. Scott shortly thereafter, in part due to her failure to enroll the child.
“You Fired Me Because I Wouldn’t Break The Law”
Ms. Scott sued the school, alleging that her termination was unlawful because it violated public policy. She alleged that she refused to break the class size law, and was fired for taking a stand.
She went to trial and won. The jury awarded her $1,108,247.00 in compensatory and $750,000.00 in punitive damages.
On appeal, the court considered whether the termination was in fact a violation of public policy.
Lesson One: Wrongful Termination
In Violation Of Public Policy
An employer can normally terminate an employee at will—for any reason or no reason at all. However, an employer may be liable discharging an employee for refusing to violate the law.
So what counts as a public policy violation? Courts have grappled with the issue for years. Basically, determining whether a claim involves a matter of public policy as opposed to an ordinary dispute between the employer and employee depends on whether the matter affects society at large, whether the policy is sufficiently clear, and whether it is fundamental, substantial, and well established at the time of the termination.
Violations of public policy generally fall into four categories: (1) termination for refusing to violate a statute, (2) termination for performing a statutory obligation, (3) termination for exercising a statutory right or privilege, or (4) termination for reporting an alleged violation of a statute or regulation of public importance.
In this case, Ms. Scott alleged that she was terminated for refusing to violate California law regarding class size.
School Gets an “F” In Legal Compliance
The court found that verdict was supported by evidence, and it upheld the result. Ms. Scott presented evidence of a shortage of teachers, and that the only staff available to relieve this shortage was short-term and transitory.
“Because of the fluid nature of staffing at the school, it is difficult to determine whether the addition of one more student would have made it impossible to adequately staff the class,” wrote the court, “but given the fact the class was already operating at times in violation of the staffing ratios, and that the school was short-staffed, the jury's conclusion that the addition of one more child would have caused the classroom to operate out of compliance was a reasonable inference. That is sufficient to sustain the verdict.”
The court further determined that the school was aware of the violation, because Ms. Scott frequently complained to her managers.
The court also determined that class size regulation was a substantial and important public policy worthy of protection. “Manifestly, the purpose of the teacher-student ratios is to protect the safety and ensure the educational development of the children by ensuring they are adequately supervised.”
No Punitive Damages
The court did give the school one break. It determined that the $750,000 punitive damages award was improper.
Punitive damages can be awarded where the defendant has engaged in despicable conduct, with malice or oppression.
In taking away the award, the court wrote: “The only evidence of wrongful conduct directed toward Scott was her termination for an improper reason. This evidence was insufficient to support a finding of despicable conduct, because such action is not vile, base or contemptible.”
“There was no evidence Phoenix attempted to hide the reason it terminated Scott,” observed the court. “It admitted to terminating her because she would not enroll the … child. Likewise, there was no evidence Phoenix engaged in a program of unwarranted criticism to justify her termination. Because there was nothing more than a wrongful termination here, punitive damages were not warranted, and the trial court should have granted defendant's motion for judgment notwithstanding the verdict on the issue of punitive damages.”
Practical Tips
Know Your Public Policy Issues. What laws and regulations apply to your workplace? Are there OSHA safety issues? Federal financial regulations? Product safety laws? Military secrets? This list can be endless. But know what the “hot button” legal issues may be, and take extra care to be on alert for employee complaints.
Chanel Complaints. Terminations happen for a variety of legitimate reasons, and an employer may not be aware of an employee’s complaint at the time. But bad timing can create the wrong assumptions, and lead to lawsuits. Employees should be instructed to bring any concerns to the appropriate company representative. This ensures that complaints are known and can be addressed.
Promptly Investigate. Employers should promptly address complaints relating to violations of the law. Issues left hanging will make legitimate terminations look fishy.
Get Legal Advice. Well, you know a lawyer is always going to recommend getting good advice, but here the stakes are high and it is especially important. If an employee has recently been involved in a complaint relating to violations of law or other public policy, protect the company by seeking legal advice before acting.
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This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2009 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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