©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 97 The Court of Appeal reversed the trial court’s stay order because the employer had “failed to show a Texas court would apply California law, and therefore the Texas-based company failed to meet its burden to show enforcing the forum selection clause would not diminish the unwaivable statutory rights on which [the plaintiff] bases her claims.”154 5.4 Public Policy Claims for Wrongful Employment Actions California permits employees to seek economic, non-economic, and punitive damages from employers who have fired or demoted them in violation of public policy. 5.4.1 Broad definition of public policy Admitting that “public policy” is “inherently not subject to precise definition,”155 the California Supreme Court has sought to put some defining boundaries around it. First, the public policy must be clearly established and substantial, and stem from a constitution, a statute, or an administrative regulation. Second, the policy must be established for the benefit of the public as a whole, and not just for the individual.156 Third, the policy must sufficiently describe prohibited conduct to give employers adequate notice.157 Nonetheless, as seen below, these limits encompass a broad variety of lawsuits. 5.4.2 Examples of absence of public policy Can employers insist on arbitration agreements to the point of firing employees who refuse to sign? A California appellate court rejected the wrongful termination claim of an employee fired for refusing to sign an arbitration agreement. The Court of Appeal rejected the plaintiff’s argument that the employer violated public policy by requiring employees to waive the right to jury trial, because the parties could, consistent with public policy, agree to waive a jury trial as part of an arbitration agreement.158 This argument gained renewed vitality in light of Labor Code section 432.6, which was to go into effect in 2020 and would have forbidden employers from requiring employees to waive any right, forum, or procedure with respect to a Labor Code or FEHA claim. A federal district court partly enjoined enforcement of the law, and after further proceedings, the Ninth Circuit on February 15, 2023 held that the FAA fully preempted section 432.6 because it obstructed the FAA’s policy of encouraging arbitration.159 As such, California employers may continue to require employees to arbitrate disputes pursuant to agreements covered by the FAA. However, given the ever-changing developments in the laws on arbitration, this is unlikely to be the last word on the issue. Employers not liable for tort actions for unlawful denial of hire? The Court of Appeal held that, absent an employment relationship, a business does not owe an individual a duty of care with respect to his hiring, and so an individual denied employment because of his race has only statutory remedies and no tort claim for an unlawful failure to hire.160 No general public policy favoring lawsuits. The Court of Appeal rejected the wrongful termination claim of an employee who sued a client of the employer, as no public policy (even in California) generally favors the prosecution of a lawsuit.161 No public policy against advising high schoolers to gain weight. The Court of Appeal reversed a jury verdict in a wrongful termination claim by a high school teacher fired for reporting a football coach’s advice to students to use creatine. Displaying a rare exercise of Californian judicial restraint, the Court of Appeal noted that while there may be “sound policy reasons” to bar coaches from recommending weight-gaining substances to students, “any such prohibition must be enacted explicitly by the Legislature, not implicitly by the courts.”162 Workers’ compensation remedies for retaliation are exclusive. The Court of Appeal has held that a worker fired for filing a workers’ compensation claim could not sue for the tort of wrongful termination on that basis,
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