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Ruling Expected : When Can Employee Be Fired?

July 28, 1987|JOHN SPANO | Times Staff Writer

Ruth Thomas' executive position with Alpha Beta disappeared in a corporate reshuffle.

Virginia Rulon-Miller lost her job with IBM because she was dating an employee of a rival firm.

Michael E. Gray was fired for writing a rebuttal to a performance review on company time.

Daniel Foley was replaced for "performance reasons" after he inquired about rumors that his boss was suspected of embezzlement.

All of them sued, and their cases have become pieces of a growing legal jigsaw puzzle.

Thomas lost at trial in Santa Ana, with the jury finding for Alpha Beta after the judge refused twice to accept a $500,000 verdict for her. An appeal has been filed.

Rulon-Miller won $300,000 from a jury that decided she had been wrongfully terminated, and an appellate court in San Francisco upheld the award.

Forced Into Bankruptcy

Gray is still awaiting his trial and said recently he had been forced into bankruptcy, unable to find a job as a computer programmer after being fired by Cipher Data Products in San Diego.

In Foley's case against Interactive Data Corp., a trial judge in Los Angeles ruled against him because he did not have a written contract. An appellate court upheld that ruling and the case is now before the California Supreme Court.

Today in California, an employee's legal right to his job is in a state of confusion.

Before the 1980s, the rules were simple: If you were not protected by a union and had no written employment contract, you could be fired from your job any time and for any reason--or for no reason at all--as long as no anti-discrimination laws were violated. But in the last seven years, California appellate courts have attacked that tradition with a vengeance.

'Unbelievable Turnaround'

"Seven years ago, I'd stand up in front of any audience and say that 'unless race, color, sex or age is involved, you can fire for a good cause, a bad cause or no cause,' " said Paul Grossman, a lawyer for the California Employment Law Council, a group of large California employers concerned about the trend. "There's been an unbelievable turnaround."

Some courts have ruled that employees with long and good work records have a special shield against being fired arbitrarily. Employer-employee relationships, those courts say, lead to implied contracts over time that prohibit termination without a good reason, regardless of whether the employee has a written employment contract.

The result of those rulings is a stream of imponderables. How long must a good work record be before the courts will find an implied promise by the employer to terminate only for good cause? How long before a worker has the right to have a jury decide whether an employer acted in bad faith and therefore should pay punitive damages? What constitutes bad faith?

"I don't know that anyone clearly understands what the courts are saying," defense lawyer Dwight Armstrong said. "Quite frankly, in many cases I'm not sure, and if we lawyers don't understand bad faith, how is the jury supposed to understand it? How is the judge supposed to guide them? It's all a roll of the dice either way."

Now, there are efforts under way in Sacramento to end the confusion through legislation, even as lawyers eagerly await the first word on the subject from the newly reconstituted California Supreme Court. That court, headed by Chief Justice Malcolm Lucas, is expected to hand down a decision in Daniel Foley's case any day that could dramatically affect employees' rights throughout the state.

Business groups hope that, with the departure of former Chief Justice Rose Elizabeth Bird and two other justices after last November's elections, the Supreme Court now will uphold the 2nd District Court of Appeal decision in Foley's case. Such a ruling would bar lawsuits by employees who cannot produce contracts in writing.

Said Louis A. Custrini, vice president of the Merchants and Manufacturers Assn., "Now with Rose Bird out, it may be a more favorable environment, or at least a more equitable environment, we feel."

Thomas, the first woman vice president for Alpha Beta, had the unusual experience of winning a jury trial twice in the same day.

Two times, an Orange County jury found she had been mistreated by her corporate bosses and voted her $500,000 in damages. Both times, the judge rejected the verdicts, ruling the jurors were confused about the law. After further deliberations, jurors found for Alpha Beta.

Thomas' troubles began when Alpha Beta changed ownership in 1980. The new owners decided to merge some management functions with those of other retail operations. Her job was targeted for extinction in the shuffle.

Offered a Demotion

Thomas was told her job was being eliminated, and she was offered a demotion and half of her previous pay. She refused and sued. Her lawsuit, which claimed that her employer did not deal with her in good faith and also alleged age and sex discrimination, is now on appeal.

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