98 | 2024 Cal-Peculiarities ©2024 Seyfarth Shaw LLP www.seyfarth.com 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.164 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.165 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.166 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.”167 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, because the Labor Code provision forbidding retaliation for such a filing also limits the remedy for that retaliation. The Court of Appeal reasoned that allowing a plaintiff to sue in tort for a violation of that provision would permit remedies and procedures broader than those provided by the statute itself, and thus concluded that the Labor Code provision cannot serve as the basis for a tort claim of wrongful termination in violation of public policy.168 5.4.3 Retaliatory discharge claims Retaliatory discharge claims generally arise in one of four situations: the employee was fired or demoted for (1) performing a statutory obligation (e.g., jury duty), (2) refusing to break the law (e.g., committing perjury), (3) exercising (or refusing to waive) a statutory or constitutional right or privilege, or (4) reporting in good faith an alleged violation of a statute of public importance.169 Here are examples of permitted wrongful termination claims. Performing a statutory obligation. California employees can sue for breach of public policy when they are fired or demoted for taking time off to serve as an election officer.170 Refusing to break the law. California employees can sue for breach of public policy when fired or demoted for refusing to engage in illegal price-fixing,171 refusing to implement a fraudulent pricing scheme,172 or defying an employer’s instruction to commit perjury.173 Exercising a constitutional or statutory right. California employees can sue for breach of public policy when fired or demoted for accepting employment in breach of an invalid noncompete covenant with a prior employer,174
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