The case of former Desperate Housewife, Nicolette Sheridan, illustrates a simple legal concept that escapes many attorneys and their clients.
Your case has to make sense.
As you probably heard, Sheridan claimed she was wrongfully terminated in violation of public policy, in retaliation for a battery claim she made against the show’s creator, Marc Cherry. Much of the trial turned on whether he had reasonably touched her as part of directing her acting, as he claimed, or had struck her about the head in a violent manner out of frustration, as she claimed.
But here’s the thing. You can’t sue for wrongful termination if you were not terminated. Sheridan was not terminated. Rather, her contract simply wasn’t renewed. Although the case ended in a mistrial, defense counsel brought a post-trial motion for judgment in defendants’ favor based on that simple fact. It went over the judge’s head, but the Court of Appeal recognized that you can’t be wrongfully terminated if you were not terminated. As Justice Thomas Willhite Jr. wrote:
"A cause of action for wrongful termination in violation of public policy does not lie if an employer decides simply not to exercise an option to renew a contract. In that instance, there is no termination of employment, but instead an expiration of a fixed-term contract."
On that seemingly apparent basis, the Court agreed that judgment should have been entered in favor of defendants on the wrongful termination claim. So, although the case originally ended in a mistrial because the jurors could not agree, the wrongful termination claim is now dead and buried.
However, the Court of Appeal did throw Sheridan a life line. It concluded that she might be able to amend her complaint to add a cause of action under Labor Code § 6310. That code section provides that an employer cannot discriminate against an employee who has complained about unsafe working conditions. In other words, if she can show that her contract would have been renewed but for the complaint about Cherry’s directing techniques, that would be a form of discrimination and would entitle her to damages.
At first blush it may appear to be a distinction without a difference, but the difference in damages is huge. Section 6310 provides only for recovery of "lost wages and work benefits . . . ." That could still be some serious coin for Sheridan, but it takes any emotional distress and punitive damages out of the equation.
Lesson for all businesses: Many lawyers think too much like lawyers, and can't see the conceptual problems with a case. I’ve had two other cases with this same legal issue, where the employee’s attorney tried to argue that failing to renew a contract was a wrongful termination. The employee quite properly lost in both cases because there can be no wrongful termination without a termination. But the bigger lesson here is, don’t let your attorney take you for an expensive ride on some legal theory, unless it passes your own common sense test.