Metropolitan News-Enterprise


Wednesday, November 14, 2012


Page 1


Court of Appeal Rules:

Firing Not Justified by Belief Employee Was Misusing Leave


By a MetNews Staff Writer


A man who went on medical leave and who, during that period, worked at his own fish market, may have been wrongfully denied restoration of his job, this district’s Court of Appeal ruled yesterday.

Div. Seven, in an opinion by Presiding Justice Dennis Perluss, said that a good-faith belief on the part of the employer, AutoNation, Inc., that its Power Toyota of Cerritos sales manager, Avery Richey, was misusing his leave time by working elsewhere was not enough to justify firing him.

The decision reverses Los Angeles Superior Court Judge Malcolm Mackey’s denial of Richey’s motion to vacate an arbitrator’s award in favor of the employer.

Mackey said the “critical issue is whether the employer maintained a good-faith, reasonable belief” that Richey had abused his medical leave under the California Family Rights Act (“CFRA”) and the federal analogue. Such a belief, he concluded, was established, and was “enough to justify the employee’s discharge.”

He recited:

“Richey was operating his own fish market business at the time he claimed he was disabled. There is no showing that he was unable to do his job as sales manager if he could work at a fish market and there was no showing that he was severely disabled. It appears that he just had a back sprain from lifting furniture and was being treated by a chiropractor.”

Appeals Court’s View

Perluss saw it differently. He declared:

“[A]n employer may not, in terminating or failing to reinstate an employee who has been granted CFRA leave, defend a lawsuit from that employee based on its honest belief the employee was abusing his or her leave.”

The jurist wrote:

“The honest belief defense accepted by the arbitrator is incompatible with California statutes, regulations and case law and deprived Richey of his unwaivable statutory right to reinstatement under [Government Code] section 12945.2, subdivision (a). This clear legal error abridged Richey’s statutory rights under CFRA—rights based on, and intended to further, an important public policy.”

That section provides that the employer must not only grant a medical leave, where the employee qualifies for it, but must provide “a guarantee of employment in the same or a comparable position upon the termination of the leave.”

Employer’s Handbook

The employer’s handbook provided:

“You are not allowed to accept employment with another company while you are on approved [CFRA] leave”

Richey was advised, by letter, while on leave, that he was in violation of the policy. He did not respond to the letter, however, apparently convinced that it did not apply to him as owner of the business.

An AutoNation employee was dispatched to Richey’s business and found him working there.

Under yesterday’s decision, the legitimacy of the termination must be decided without reference to the employer’s good-faith belief, putting the burden on the employer to justify its refusal to restore Richey to his job.

Perluss said that “[a]lthough an employer is permitted to terminate an employee and deny reinstatement when the employee’s employment otherwise would have ceased, it bears the burden of establishing the employee would not otherwise have been employed at the time of reinstatement.”

Remand to Mackey

The case was remanded to Mackey “with directions to deny the petition to confirm the arbitration award, grant the petition to vacate the award and to conduct further proceedings not inconsistent with this opinion, including, if appropriate, an order requiring binding arbitration before either a new or the original arbitrator.”

Among issues unresolved by the arbitrator, Perluss said, were “whether Richey was given adequate notice of Power Toyota’s policies regarding CFRA leave…; whether Power Toyota’s policy barring secondary employment during an employee’s CFRA leave differed from the policy pertaining to secondary employment held by employees who were not on CFRA leave; whether, as a result, the policy itself violated CFRA; whether Richey’s activities at the restaurant exceeded the limitations imposed by his physician, thus rising to a level of activity that could be found to constitute abuse of his leave; and whether Power Toyota carried its burden of proof on these issues.”

Joining in Perluss’s opinion were Justice Frank Jackson and Acting Justice John Segal, on assignment from the Los Angeles Superior Court.

Long Beach attorney Scott O. Cummings represented Richey. Richard A. Derevan and Christopher B. Pinzon of Snell & Wilmer argued for AutoNation, Inc.

The case is Richey v. AutoNation, Inc., 12 S.OS. 5793.


Copyright 2012, Metropolitan News Company