Firing Employees for Filing Overtime Claims Violated Public Policy, Calif. Appeals Court Rules

Court upholds $600,000 jury verdict

By Joanne Deschenaux April 20, 2017
Firing Employees for Filing Overtime Claims Violated Public Policy, Calif. Appeals Court Rules

​A newspaper that terminated three workers in its printing department after they filed a lawsuit seeking unpaid overtime compensation was liable for wrongful discharge in violation of public policy as well as liable for the unpaid overtime, the California Court of Appeal ruled. In California, an employer's ability to terminate an at-will employee is circumscribed by public policy, and the duty to pay overtime wages is a well-established fundamental public policy in the state, the appellate court said.

Joong-Ang publishes the Korea Daily, a Korean language newspaper, in California. Sun Byun, Hyub Choi and Ju Hun Min worked at Joong-Ang's printing facility in Cerritos. On June 7, 2013, Byun, Choi and Min filed a lawsuit against Joong-Ang for failure to pay overtime wages. The three workers were terminated on Aug. 15, 2013, and asked to leave the premises the same day.

[SHRM members-only how-to guide: How to Calculate Daily and Weekly Overtime in California]

The remaining printing department employees were also given notice on Aug. 15, but were allowed to remain until the department closed on Sept. 30. At that time, another publishing facility, Berit Publishing, took over printing the Korea Daily for Joong-Ang. Berit hired all the Joong-Ang employees who applied for jobs, but Byun, Choi and Min had not been told about the opportunity with Berit.

The three employees subsequently added claims for wrongful termination in violation of public policy to their pending lawsuit. The jury awarded them $584,612 in damages, and Joong-Ang appealed the decision to the Court of Appeal.

On appeal, Joong-Ang claimed:

  • Firing an employee for filing a lawsuit against the employer does not violate public policy.

  • The lawsuit was not the primary reason for the workers' termination.

  • In any event, the workers could not be awarded damages beyond Sept. 30, 2013, when the entire printing department was closed.

Wrongful Termination in Violation of Public Policy

Under Labor Code Section 1199, it is a crime for an employer to fail to pay overtime wages as fixed by the Industrial Welfare Commission, the court noted. Therefore, if an employer discharges an employee for exercising his or her right to overtime wages, the worker may be entitled to damages for wrongful termination.

The appellate court distinguished other cases where businesses legally discharged employees who had sued the company, noting that those employees had not sued for wage and hour violations. "Plaintiffs do not allege they were terminated simply because they filed a lawsuit against Joong-Ang. Plaintiffs alleged they were terminated because they sued Joong-Ang for unpaid overtime and other wage claims. This is a fundamental public policy, which gives rise to a wrongful discharge claim."

The court also rejected Joong-Ang's claim that the lawsuit was not the motivating factor behind the workers' termination because they were not immediately discharged upon the filing of the lawsuit. Instead, they were fired 70 days after initial complaints were filed.

Joong-Ang's CEO testified at trial that the workers were terminated 45 days before their colleagues due to their lawsuit. Based on this testimony alone, substantial evidence supported the jury's conclusion that the wage and hour claim was a motivating factor leading to the workers' termination, even if other factors contributed to it as well, the court said.

Finally, the court rejected Joong-Ang's argument that the workers would have lost their jobs anyway due to the closure of the entire printing department. Berit's CEO, who previously headed Joong-Ang's printing department, testified that he posted a job notice at the Cerritos location and hired all of the Joong-Ang employees who applied. Printing of the Korea Daily was uninterrupted when Berit took over. Only the three workers who had filed the lawsuit were not given the opportunity to go to work for Berit.

The appellate court affirmed the award of damages to the three workers.

Byun v. Joong-Ang Daily News California Inc., Calif. Ct. App., No. B270539 (March 23, 2017).

Professional Pointer: Although an employer can terminate an at-will employee for almost any reason or no reason at all, if the discharge is motivated by an attempt to keep the employee from exercising his or her legal rights, the employer may be subject to liability for wrongful discharge in violation of public policy.

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.

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