November 24, 2014

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November 21, 2014

Wrongful Termination Claim Too Desperate for Ex-Desperate Housewives Star

A California appellate court recently rejected an attempt by Desperate Housewives star, Nicollette Sheridan, to sue for wrongful termination in violation of public policy when Touchstone failed to renew her contract past Season 5. The appellate court found that Sheridan’s claim stated a legally impossible theory, but recognized that a more limited statutory claim under the Labor Code for unlawful retaliation might still be available.

Like most television series, Sheridan’s contract for Desperate Housewives was only for the first season, with Touchstone having an exclusive option to renew Sheridan’s contract on an annual basis for six additional seasons. With Sheridan playing the character of Edie Britt, Touchstone did renew the contract for Seasons 2, 3, 4 and 5. However, during the filming of a Season 5 episode, Sheridan reported to Touchstone an alleged battery by Desperate Housewives’ creator Marc Cherry. Subsequently, while Season 5 was ongoing, Touchstone notified Sheridan that her character would be killed in a car accident that season, and that Touchstone would not be exercising its option to renew her contract for an additional year. Touchstone and Sheridan both fulfilled their remaining contractual obligations for Season 5.

Sheridan filed suit, alleging wrongful termination in violation of public policy, and seeking $20 million in compensatory damages as well as punitive damages. The jury deadlocked on the claim for wrongful termination, and a mistrial was declared. On review, the appellate court agreed with the finding of a 1997 decision, Daly v. Exxon Corp. (1997) 55 Cal. App. 4th 39, which held that a decision not to exercise an option to renew a fixed-term contract did not equate to a tort claim for wrongful termination in violation of public policy. Quite simply, expiration of a fixed-term contract did not constitute a “termination.” Id. However, the appellate court did not leave Sheridan without a possible remedy. The appellate court remanded the case to the lower court with instructions to allow Sheridan to amend her complaint to state a statutory claim under Labor Code section 6310(b). Under Daly, Sheridan could allege an action for damages (in the form of lost wages and work benefits) under Labor Code section 6310(b).[1]  A Section 6310(b) claim would require Sheridan to allege that Touchstone discriminated or retaliated against her by not renewing her contract as a result of her complaints about an unsafe work condition (e.g., Cherry’s purported battery). The appellate court was careful not to express an opinion on the strength of such a claim.

In reaching its decision, the appellate court rejected various arguments by Sheridan, including her attempt to convince the appellate court that Touchstone’s decision not to renew her option for another season during Season 5 was analogous to an employer terminating an at-will employee in violation of public policy. The appellate court reasoned that unlike an at-will employee whose contract could remain in force indefinitely, Sheridan’s contract was for a set term that had expired. Touchstone did not terminate Sheridan, but rather simply chose not to rehire her for another fixed-term contract.

As the law now stands under Daly and this most recent employment decision, where an at-will employee is terminated for reporting unsafe working conditions and a fixed-term employee suffers non-renewal for the very same report, only the at-will employee may pursue a wrongful termination claim in violation of public policy (and the emotional and punitive damages that are recoverable for that claim). Both types of employees, however, may still pursue Section 6310 claims against the employer, with the employer’s exposure limited under such claims to statutory damages of lost wages and benefits, as well as possible reinstatement. This case law should be considered when deciding whether a fixed-term contract or at-will contract makes sense for a given situation.


1 Labor Code section 6310(b) states:

“Any employee who is discharged, threatened with discharge, demoted, suspended, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because the employee has made a bona fide oral or written complaint to the division, other governmental agencies having statutory responsibility for or assisting the division with reference to employee safety or health, his or her employer, or his or her representative, of unsafe working conditions, or work practices, in his or her employment or place of employment, or has participated in an employer-employee occupational health and safety committee, shall be entitled to reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer. Any employer who willfully refuses to rehire, promote, or otherwise restore an employee or former employee who has been determined to be eligible for rehiring or promotion by a grievance procedure, arbitration, or hearing authorized by law, is guilty of a misdemeanor.”

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Harvey Saferstein, Antitrust, Intellectual Property, Attorney, Mintz Levin
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Harvey is the Managing Member for the firm’s Los Angeles office. His practice includes antitrust, intellectual property counseling and litigation, white collar defense, as well as complex commercial and business litigation.

With an extensive litigation background, Harvey has experience as trial and appellate counsel in antitrust cases and class actions within federal and state courts. In antitrust and consumer protection investigations, he has represented numerous businesses, advising them on how to comply with state and federal antitrust laws (such as the Robinson-Patman Act...

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Micha "Mitch" Danzig, Patent Attorney, Mintz Levin law Firm
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Mitch is a member of the firm’s Policy Committee. He has extensive experience in employment law and in intellectual property litigation and complex commercial litigation.

His work has focused on litigation in the areas of trade secrets, complex commercial litigation, employee mobility, wrongful termination, discrimination, harassment, contracts, defamation, wage and hour, and unfair competition. As part of his counseling practice, Mitch has performed management training for employers and rendered employment advice on employment-related issues, including those associated...

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Nada Shamonki, Commercial Litigation Attorney, Mintz Levin, Law Firm
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Nada is of counsel in the Los Angeles office, practicing in the Litigation Section.  Her practice encompasses all aspects of complex commercial litigation and counseling, including trademark, trade secret and copyright cases, contract-related disputes, labor and employment issues, real estate, insurance coverage, and finance-related matters.  Nada has experience with all aspects of state and federal litigation, from the initial investigation of a claim to the enforcement of a judgment.  In addition to her litigation work, she has handled numerous mediations and arbitrations...

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Ben Wagner, Intellectual Property, Patent, Trademark, Copyright, Attorney, Mintz
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Ben’s practice is focused on patent, trademark, false advertising and copyright litigation. He also handles other complex litigation, unfair business practices, and real estate disputes. In addition, Ben prosecutes trademarks before the US Patent & Trademark Office.

His litigation experience includes trademark infringement, including licensing disputes, trademark and patent enforcement programs, Internet-use disputes, competitor disputes, and international trademark disputes; copyright infringement, including software disputes, website content disputes, and disputes over...

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