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September 2014

Gordon & Rees Employment Team Secures Judgment in Client’s Favor on Appeal

On September 2, 2014, Gordon & Rees partners Mollie Burks-Thomas and Don Willenburg and senior counsel Marc Holmquist won appellate reversal of a $500,000 trial court judgment in a case alleging breach of an implied employment contract against their client, an international oil drilling services and technology company.  California’s Court of Appeal for the Second Appellate District, Division Six, ordered the trial court’s judgment in the plaintiff’s favor reversed, and remanded the case to the trial court with instructions to grant the defendant’s motion for judgment notwithstanding the verdict and to enter judgment in favor of the defendant.

During an April 2013 jury trial that lasted nearly a month, Burks-Thomas and Holmquist established that over the course of his 29 years with the defendant, the plaintiff had signed multiple acknowledgements of his at-will employment status.  The plaintiff pointed to provisions of the employment handbook regarding termination for cause, as well as his belief of the company’s practice of only terminating employees for cause to argue that the company had entered an implied-in-fact contract with him that he would only be terminated for cause.   The company terminated the plaintiff following receipt of a complaint that he had harassed a subordinate female employee, and following the company general counsel’s investigation into that complaint and conclusion that the subordinate employee perceived that a hostile work environment existed. 

Gordon & Rees filed a motion for nonsuit (and later for judgment notwithstanding the verdict).  The trial court denied both, citing what it believed to be an ambiguity between the at-will employment acknowledgements and the termination for cause language in the employment handbook.  The matter went to the jury over the defense’s objections, and the jury found for the plaintiff on the breach of contract claim and awarded the plaintiff just over $500,000 in damages.

Oakland partner Willenburg, chair of the Appellate Practice Group, spearheaded the appellate team, which includes Burks-Thomas and Holmquist of the firm’s Los Angeles and San Francisco offices.  Willenburg was the primary drafter of the appellate brief and conducted the appellate oral argument. 

On appeal, the plaintiff argued that the at-will acknowledgements were not contractual undertakings and that, in any event, references to at-will employment were trumped by the policies related to termination for cause and the employer’s history of not terminating employees without cause.  The Court of Appeal agreed with the position advanced by Gordon & Rees, both on appeal and in the trial court, that the written, signed at-will provisions were controlling, and that the effect of the “for cause” provision was not to say “we can only terminate you for these reasons,” but to say “we can terminate you for any reason, and we will terminate you for these reasons.”  The court noted that a practice of terminating employees only for cause reflects good practice, not an intent to limit an employer’s power to terminate at will.

Don Willenburg