Hunton Employment & Labor Perspectives

In a time when workplace violence seems to be on the rise, many companies have adopted a strict no tolerance policy even for conduct outside the workplace.  In California, however, employers need to be cognizant of the protections afforded individuals that may make such terminations riskier than the company may expect.  One employer got just such a reminder last week when a California jury returned an $18M verdict against it for terminating an employee after he was arrested for threatening his girlfriend outside of the workplace.

In Fall 2014, Michael Tilkey, a 30-year employee of a large insurance company, was arrested following a domestic dispute.  Police were dispatched after Tilkey’s ex-girlfriend called in claiming Tilkey had been banging forcefully on her door after she locked him out.  Tilkey was subsequently arrested on two counts of domestic violence.  Tilkey did not inform his employer of his arrest. Ultimately, the charges were dismissed.

The employer learned of Tilkey’s prior arrest in late 2015 after intercepting an email sent to Tilkey’s corporate email account from his ex-girlfriend discussing their domestic dispute.  The employer initiated a human resources investigation to determine whether Tilkey had violated any company policies in conjunction with his 2014 arrest.  Upon questioning, Tilkey admitted the details of his arrest to the employer’s HR investigator, explained the circumstances, and informed him that all charges were dropped.

According to Tilkey, the investigator found no violation of company policy relating to Tilkey’s arrest and had no plans to take further action.  One month later, however, Tilkey’s ex-girlfriend sent an email to the employer’s CEO accusing Tilkey of threatening her during the 2014 domestic dispute and asking the company to conduct a further investigation into the incident.

Shortly thereafter, the employer terminated Tilkey’s employment.  When asked for the reason(s) behind his firing, the employer told Tilkey the company had a “strict policy” allowing for the immediate firing of employees “who engage in threats or acts of physical harm or violence.”  According to the employer, “threatening anyone” – including third parties unaffiliated with the company – was against company policy.

Tilkey subsequently sued for wrongful termination, claiming his former employer violated Cal. Labor Code 432.7 by terminating him on the basis of a prior arrest not resulting in a conviction.  On May 14, 2018, the jury returned a verdict in Tilkey’s favor, finding Tilkey’s prior arrest was a substantial motivating reason for his discharge. The jury awarded Tilkey $2.6 million in actual damages and an additional $16 Million in punitive damages. The employer has since indicated it intends to appeal the verdict and jury award.

While terminating an employee for off-duty conduct may generally fit within the at-will doctrine, this case is a cautionary reminder that an employer should consider whether there are any statutory or other exceptions under California law that may weigh against a termination decision before pulling the trigger.