Employers, beware: Employees fired with malice can win millions in court

In a recent California case, the jury awarded an employee who was allegedly terminated with malice $7,068,717 in damages, including $6 million in punitive damages, $368,717 in economic damages, and $700,000 in non-economic damages.

Alki David Productions, Inc. (ADP), an entertainment and media company focused on hologram technology, employed the plaintiff from 2013 to 2017. In September 2017, he started working at a property on Hollywood Boulevard that ADP was converting from a church to a theater. He was responsible for installing the equipment for creating the hologram.

Four inspectors of Los Angeles City arrived at the worksite. They pointed out municipal code deficiencies and refused to approve the work performed. The Los Angeles Department of Building and Safety issued a correction notice identifying violations of municipal code provisions.

The next day, the plaintiff told ADP’s senior vice president of operations about his concerns, which he intended to relay to the fire inspector. Specifically, the plaintiff was concerned about the plumbing and electrical work for the equipment that he had to install, about the integrity of the ceiling and floor, and about the possibility that equipment could fall on theater attendees.

The plaintiff reached out to the fire inspector. He ended the first call because he was nervous about “ratting out” his boss and his coworkers. He then called a second time and talked to a receptionist without revealing his name.

ADP’s principal and owner arrived at the theater and asked why no work was being done. The plaintiff said numerous times that the work being performed was unsafe. This enraged the principal, who shouted at the plaintiff and informed him that he was fired.

In November 2017, the plaintiff sued ADP and its principal under California’s Labor Code. The jury found ADP liable for violating subdivisions (b) and (c) of section 1102.5 and liable for whistleblower retaliation under section 232.5(c).

Read more: Why employers should never threaten whistleblowers

ADP wrongfully terminated the plaintiff’s employment after he refused to resume his job duties because he reasonably believed that the work was against the law, the jury said. ADP fired him with malice, oppression, or fraud, the jury added. The defendants appealed.

Findings on employer’s violations upheld

In the case of Zirpel v. Alki David Productions, Inc., the California Court of Appeal for the Second District affirmed the judgment of the trial court in the plaintiff’s favor.

First, the appellate court found a violation of section 1102.5(c) of the Labor Code, which prohibited an employer from retaliating against an employee who refused to participate in an activity that would breach the law.

The plaintiff’s continued work at the theater would have violated a statute, rule, or regulation, the appellate court said. The correction notice cited multiple municipal code violations, the appellate court noted.

Second, the appellate court found a violation of section 1102.5(c) of the Labor Code, which prohibited an employer from retaliating against an employee who disclosed information reasonably believed to be a violation of law.

The plaintiff reasonably thought that he was disclosing unsafe working conditions and municipal code violations to ADP and to the city inspectors, the appellate court explained.

Third, there was a violation of section 232.5(c) of the Labor Code, which prohibited an employer from discharging an employee who disclosed information about the employer’s working conditions, the appellate court said.

The plaintiff’s disclosure was a substantial motivating reason for his termination, the appellate court ruled. The evidence showed that the plaintiff repeatedly told the principal about the unsafe working conditions, which angered the principal and which made him tell the plaintiff that he was fired.

Lastly, the appellate court did not find the punitive damages awarded excessive. Substantial evidence supported that ADP and its principal committed reprehensible conduct and that the principal acted with malice when terminating the plaintiff’s employment.

Specifically, the evidence showed that the principal:

• disregarded the health and safety of others when they ignored the plaintiff’s repeated disclosures about possibly hazardous conditions at the theater
• screamed obscenities at the plaintiff in front of his coworkers when he raised workplace safety concerns
• stood so close that spittle flew onto the plaintiff’s face
• called the plaintiff a “faggot” and told him to “suck my dick”
• followed the plaintiff out of the theater and kept yelling at him