Violations of public policy generally fall into four categories:

• Termination for refusing to violate a statute
• Termination for performing a statutory obligation
• Termination for exercising a statutory right or privilege
• Termination for reporting an alleged violation of a statute of public importance 1

These claims often arise when an employee refuses a supervisor’s sexual advances, reports the employer to health and safety officials or makes a wage claim to the state Labor Commissioner. Even if a lawsuit shows that the subsequent termination was unrelated to these actions, a claim for wrongful termination in violation of public policy may follow and prove extremely costly to defend.

Foley v. Interactive Data Corp. is the most important termination in violation of public policy case. In Foley, the California Supreme Court ruled that an employee must show that the violated public policy is fundamental and of benefit to the general public, rather than just to that employee or employer.2

Following Foley, the California Supreme Court added another requirement for plaintiffs attempting to prove wrongful termination in violation of public policy. In Gantt v. Sentry Insurance, the court ruled that a plaintiff must show that the public policy involved comes from the state or federal Constitution or a state or federal statute. In Gantt, an employee claimed that he was terminated for supporting and testifying in his co-worker’s sexual harassment claim. Because the California Constitution and FEHA prohibit discrimination/harassment on the basis of race/color, religious creed, national ancestry/origin, physical disability, mental disability, genetic information, medical condition, marital status, sex, gender identity, age and sexual orientation provided a basis for his claim, he prevailed in the lawsuit against the employer.3

Termination for refusing to violate a governmental regulation can also be the basis for a claim, if the regulation states a fundamental public policy and is authorized by statute.

In Green v. Ralee Engineering Co., the California Supreme Court held that administrative regulations can also serve as a source of fundamental public policy, limiting an employer’s right to discharge an at-will employee. In Green, a quality control inspector for an aircraft parts manufacturer alleged that he was terminated for objecting when the employer shipped parts that failed to pass inspections. The court found that the administrative regulations that implement the Federal Aviation Act of 1958 constituted a source of public policy that could support a wrongful termination claim.4

In Scott v. Phoenix Schools, Inc., a jury awarded a preschool director more than $1 million in compensatory damages from her former employer. She was terminated because she would not violate teacher-student ratios by enrolling a new pupil.5 The termination violated a substantial and fundamental public policy of ensuring children’s safety. The court did not award punitive damages because there was insufficient evidence of malice, fraud or oppression.6 The court stated that the public policy in the regulation is fundamental and is similar to public policies that the courts have found sufficient to sustain claims in other cases.

Some examples of cases where terminated employees successfully proved wrongful termination in violation of public policy include:

• Collier v. Superior Court, termination for reporting to the employer that other employees engaged in bribery, kickbacks or tax evasion7
• Semore v. Pool, termination for refusing to submit to drug testing, which violates the right to privacy created by the California Constitution8
• Petermann v. International Brotherhood of Teamsters, an employee who refused to perjure himself at a hearing despite his employer’s insistence that he do so to protect the organization9
• Rojo v. Kliger, an employee who was forced to resign after refusing to enter into a sexual relationship with her supervisor10
• Garibaldi v. Lucky Food Stores, Inc., an employee who reported adulterated milk to health officials11

In Hentzel v. Singer Co., the court upheld a claim that termination was in violation of public policy because the employee was terminated after complaining about other employees who smoked in the workplace. The court found that employees’ safety in the workplace was a fundamental and substantial public purpose.12 In Eisenberg v. Insurance Co. of N. Am., the court held that an employee who was terminated in retaliation for complaints that the company required its employees to manage too many insurance claims was in violation of public policy.13

1. Gantt v. Sentry Insurance, 1 Cal. 4th 1083 (1992)

2. Foley v. Interactive Data Corp., 47 Cal. 3d 654 (1988)

3. Gantt v. Sentry Insurance, 1 Cal. 4th 1083 (1992)

4. Green v. Ralee Engineering Co., 19 Cal. 4th 66 (1998)

5. 22 CCR sec. 101216.3

6. Scott v. Phoenix Schools, Inc., 175 Cal. App. 4th 702 (2009)

7. Collier v. Superior Court, 228 Cal. App. 3d 1117 (1991)

8. Semore v. Pool, 217 Cal. App. 3d 1087 (1990)

9. Petermann v. International Brotherhood of Teamsters, 174 Cal. App. 2d 184 (1959)

10. Rojo v. Kliger, 52 Cal. 3d 65 (1990)

11. Garibaldi v. Lucky Food Stores, Inc., 726 F.2d 1367 (9th Cir. 1984)

12. Hentzel v. Singer Co., 138 Cal. App. 3d 290 (1982)

13. Eisenberg v. Insurance Co. of N. Am., 815 F.2d 1285 (9th Cir. 1987)