Employee Fired For Discussing Bonus System Can Proceed With Claim For Wrongful Termination

In Grant-Burton v. Covenant Care, Inc., 2002 WL 1472285, the California Court of Appeal considered whether an employee could pursue a claim against her ex-employer for wrongful termination when she was fired for discussing her bonus structure with other employees.

Facts

Sharron D. Grant-Burton was the marketing director at Candlewood Care Facility, a skilled nursing and assisted-living facility owned by Covenant Care. She attended a meeting of other Covenant Care marketing directors, where she participated in a discussion about the fairness of its bonus system. Six days later, the executive director of Candlewood Care fired Grant-Burton, giving as her reason Grant-Burton’s statements at the meeting of marketing directors.

Grant-Burton sued Covenant Care for wrongful termination in violation of public policy, among other things. The trial court concluded that Grant-Burton had not presented evidence to support her claim and granted summary judgment against her. Grant-Burton appealed.

Court of Appeal’s Decision

The Court of Appeal concluded that Grant-Burton should have been allowed to proceed with her claim for wrongful termination in violation of public policy. The Court began with the observation that employment in California is generally terminable at will and that an employee can be fired with or without good cause, even for an arbitrary or irrational reason. However, an employee cannot be fired for an unlawful reason or one in contravention of a fundamental public policy.

Because “public policy” is so indefinite, the California Supreme Court has established guidelines for courts to use in determining whether a policy will support a wrongful discharge claim. First, constitutional, statutory, or regulatory provisions must support the policy. Second, it must benefit the public, not merely the individual. Third, it must be well-established at the time of the discharge. Finally, it must be fundamental and substantial.

Grant-Burton argued she was discharged in violation of the public policy that protects employee’s discussions about their wages. The Court concluded that a specific state law, Labor Code § 232, supported her claim: “No employer shall . . . [d]ischarge . . . an employee who discloses the amount of his or her wages.” Second, the policy benefited the public, since employees must be able to discuss the amount of their compensation to equalize their bargaining power with employers. Third, the policy was well established when Grant-Burton was fired. Finally, the policy was both substantial and fundamental.

Because Grant-Burton had presented evidence in support of her claim that she was fired in violation of public policy and Covenant Care had not presented undisputed evidence that it would have fired her anyway, she was entitled to a trial on her claim.