Court of Appeal clarifies limits on tort damages in wrongful termination cases: Hearn v. Pacific Gas & Electric Co.

In Hearn v. Pacific Gas & Electric Co.,           Cal.App.5th           (Jan. 28, 2025), the Court of Appeal (First Appellate District, Division Three) held 2-1 that wrongful termination plaintiffs cannot recover in tort for the same harm caused by their termination.

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Plaintiff allegedly experienced retaliation after expressing safety concerns. Plaintiff was then suspended for potentially falsifying time cards and terminated based on the results of an internal investigation. Plaintiff sued. The jury found for Defendant on Plaintiff’s whistleblower retaliation claim, finding Defendant did not take adverse actions against him based on his protected disclosures. However, the jury found for Plaintiff on his defamation claim, finding that an investigator for Defendant published false statements about Plaintiff with malice. Defendant appealed after moving unsuccessfully for JNOV, and plaintiff cross-appealed. 

On appeal, the Court of Appeal reversed the defamation judgment and affirmed the retaliation judgment. Following Lazar v. Superior Court (1996) 12 Cal.4th 631 and Hunter v. Up-Right, Inc. (1993) 6 Cal.4th 1174, the court held that tort claims must arise from conduct separate from the termination and seek damages not solely resulting from the termination. Here, the defamation claim arose from the same report that led to the termination, and Plaintiff did not identify any damages unrelated to his termination, such as reputational damage. Defendant’s conduct did not therefore constitute an actionable tort. Regarding the retaliation claim, the court, citing Estes v. Eaton Corp. (2020) 51 Cal.App.5th 636, found that Plaintiff did not establish he was entitled to prevail as a matter of law. Even if the jury should have found that the termination was an adverse employment action, it did not address whether Plaintiff’s protected disclosures contributed to his termination. The court also found no abuse of discretion in the trial court’s evidentiary rulings.

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