Holding Corporations Liable for Wrongful Termination

In California, a corporate employer cannot be liable for punitive damages for wrongful termination unless an officer, director or managing agent:

  • Had advance knowledge of the unfitness of the employee who wrongfully terminated the claimant and employed him/her with a conscious disregard of the rights or safety of others.
  • Authorized or ratified the wrongful conduct for which the damages are awarded.
  • Was personally guilty of oppression, fraud or malice.1

In White v. Ultramar, Inc., the California Supreme Court ruled that the mere ability to hire and fire employees does not elevate a supervisory employee to a position of managing agent for the corporation. “Managing agent” includes only those corporate employees who exercise substantial independent authority and judgment in their corporate decision making. Further, their decisions ultimately determine corporate policy. The scope of a corporate employee’s discretion and authority under this definition is a question that must be decided on a case-by-case basis.2


1. Civ. Code sec. 3294 (b)

2. White v. Ultramar, Inc., 21 Cal. 4th 563 (1999)