Law Office of Arkady Itkin 

California Labor Code 1102.5 prohibits discharging an employee for disclosing an alleged violation of a statute of public importance to a government or a law enforcement agency. Such a discharge may be grounds for a claim of wrongful discharge in violation of public policy.
The following are examples of "whistleblowing" cases in which such a claim was upheld:
* Reporting to management that the company was not paying overtime wages due to certain of its employees. 
* Reporting to governmental agency the employer's improper billing practices with respect to governmental contract. 
* Reporting to management that certain executives shipping promotional records were violatating laws prohibiting bribery, kickbacks, embezzlement and tax evasion. 
* Reporting discrimination against women and minorities.  
* Reporting health and safety violations by an employer. 
* Reporting violations of consumer protection laws and immigration laws. 

It's important to note that an actual violation is not required for a legitimate whistleblower action. Under the code, an employee's reasonable suspicion of violation is sufficient. In other words, an employee does not need to prove that his employer actually violated the law; it is sufficient if the employer fired the employee for reporting hi "reasonably based suspicion" of illegal activity. 

A plaintiff in a whistleblower retaliation/termination may recover a full measure of tort damages in an action for wrongful discharge in violation of public policy, including, in appropriate cases, damages for emotional distress and punitive damages.

Constructive discharge occurs when an employer engages in conduct that effectively forces the employee to resign or retire. Although the employee may say “I quit,” the employer relationship is actually terminated by the employer’s acts against the employee’s will. As a result, a constructive discharge is legally considered as a firing by the employer rather than a voluntary resignation or retirement by the employee.

To establish a constructive discharge claim, an employee must prove that the employer either intentionally created or knowingly permitted working conditions that were so intolerable or aggravated that a reasonable employer would realize that a reasonable person in the employee’s position would be compelled to resign. In determining whether a reasonable employee would feel compelled to resign, courts consider such factors as demotion, reduction in salary, reduction in job responsibilities, reassignment to degrading work, badgering, harassment or humiliation by the employer intended to encourage the employee to resign, offers of early retirement or continued employment on terms less favorable than the employee’s former status.  The employee must further notify someone in a position of authority of intolerable conditions before he may prevail on a constructive discharge claim. Such notice prevents employers from closing their eyes to wrongdoing and permits employers who are unaware of any wrongdoing to correct a potentially destructive situation.

It is important to remember that this standard is objective, and employee’s subjective feeling of disappointment is not enough to claim constructive discharge. An employee is not permitted to quit and sue simply because he doesn’t like something at his workplace.

So, which working conditions are considered “intolerable” and thus grounds to claim constructive discharge? Intolerable working conditions are those which either are unusually aggravated or amount to a continuous pattern of objectionable conduct. For instance, continuous course of harassment, uncorrected by management, can constitute objectively intolerable working conditions.

Normally, a single or isolated acts are generally insufficient to support a constructive discharge claim. But in some cases, even a single incident may be held to be “aggravated” misconduct by the employer; e.g., a crime of violence against the employee, or an ultimatum that the employee commit a crime.

The following conditions have been found to be “intolerable:”

continued harassment of an employee due to his sexual orientation (repeated gay jokes and other remarks);
a supervisor’s continuous “yelling and screaming,” unfair and harsh criticism and threats to fire an employee, uncorrected by management, may constitute objectively intolerable working conditions;
a supervisor’s extended campaign to get an employee fired, including repeated efforts to invent documentation for her termination, frequent reorganization of her duties and demands that she process unlawful orders, may constitute “intolerable” working conditions when the employee’s medical condition is exacerbated by stress.
The following conditions have been found to NOT be “intolerable:”

severe verbal abuse of employee (harsh, unfair criticism) in front of other employees and threats to terminate or demote are not intolerable working conditions unless a continuous course of such conduct is involved;
a poor performance rating or demotion, even when accompanied by a pay cut does not constitute an intolerable working condition necessary to support a claim for constructive discharge;
failure to promote over a long period of time is normally not enough to show “intolerable” working conditions.
The claim of constructive discharge is not applicable to at-will employment. There is no constructive discharge where there is no contractual right to continued employment. In other words, if you are an at-will employee (and you are presumed to be in the absence of a contract between you and your employer or any other evidence of your employer’s promise to continuously employ you for a certain period of time), you cannot have a claim of constructive discharge.

General Rules and Limitations Regarding Non-Compete Agreements

Under California Business and Professions Code section 16600, any agreement entered into with the purpose of limiting trade or business of any kind is to that extent void and unenforceable. California courts have consistently declared this provision an expression of public policy to ensure that citizens shall retain the right to purpose any lawful employment and enterprise of their choice. The interest of employees in their own mobility and betterment are deemed paramount to the competitive business interests of employers. 

This means that despite having agreed not to compete, a former employee has the right to enter into competition with his former employer, even for the business of those who had formerly been customers of the former employer. It makes no difference that the covenant not to compete is reasonably limited in time and geographic scope.  

In one case, an employment agreement provided in part: “Employee will not render services, directly or indirectly, for a period of one year after separation of employment with Employer to any person or entity in connection with any “competing product.” This agreement was held to violate Bus. & Prof. C. section 16600 and was therefore found void and unenforceable. 

Parties cannot avoid the above section by including provision designating another state’s law as governing their employment agreement. 

The only limitation is that the former employee’s competition must be fairly and legally conducted. Thus, disclosure of former employer’s trade secrets of other confidentially information may be regarded as unfair competition.   

The only times when covenants not to compete are upheld are when the restrained imposed is narrow in scope, leaving a substantial portion of the market available to the employee. Thus, a covenant not to solicit to specific customers was one held valid because it limited access only to a “narrow segment” of the relevant market. 
 
The Sale of Business Exception   

Non-compete agreements may be enforceable when give by anyone selling the goodwill of a business. The seller of a business and its goodwill may agree to refrain from carrying on a similar business within a specified county or counties, city or cities, or a part thereof, so long as the buyer or any person deriving title to the good will carries on a like business therein.

There are several requirements that must be satisfied in order for such an agreement to be valid. First, a covenant not to compete must be reasonable in scope. The covenant must be shown to be reasonable and necessary to protect the business buyer’s interest in terms of duration, activity and territory. Secondly, the duration of time for which the given agreement not to compete prohibits competition is also a factor in determine the reasonableness of such an agreement. In other words, the shorter the period of time for which an agreement limits competition, the more likely such an agreement to be valid and enforceable. 

Interestingly enough, covenants not to compete given in connection with the sale of business or partnership interest may be reformed by the court if unreasonable in scope. This means that the court may edit those portions of the agreement that are unreasonable and enforce the covenant only to the extent that it is deemed reasonable. At the same time, the courts will not reform a broad, illegal covenant not to compete into one that merely bars theft or confidential customer information.  

Suppose, you sign up with a temp employment agency to find a job, the place you in a temporary assignment at one of their clients’ sites where you end up being a victim of sexual harassment. How would be liable in this situation - the company where you were temporarily employed, the temp agency or both?

Under Mathieu v. Norrell Corp., 115 Cal.App.4th 1174 (2004), in the context of an individual who is employed by a temporary agency and assigned to work on the premises of the agency’s client, the prupose of the Fair Employment and Housing Act (FEHA) to safeguard an employee’s right to hold employment without experiencing discrimination is best served by applying the traditional labor law doctrine of “dual employers,” which holds that both the agency and the client are employers, and considers harassment by an employee of the client to be coworkers harassment rather than harassment by a third party. This means, that a temporary agency may be liable for the sexual harassment that took place at one of it’s clients’ sites.

Like other defendants, the temporary agency may avoid liability for sexual harassment claim under FEHA by demonstrating that (i) it responded appropriately to claims of harassment made by the employee; (ii) the agency was not aware of the alleged sexual harassment at the company until it had ceased.