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Lost Equity As Part of Damages in A Wrongful Termination Case

8/22/2021

 
recovering equity wrongful termination case
An empoyee who prevails in a wrongful terminaton case, based on discrimination, retaliation or harassment claim, is entitled to recover unvested stock options among other damages. Scully v. US WATS, Inc. (3d Cir. 2001) 238 F.3d 497. Just like lost future salary, the value of stock can be considered compensation that the employee would have received in the future, had he not been illegally fired. Having a schedule of vesting is of course helpful in calculating that part of employee's damages. The California Supreme Court also recognized that stock awards are considered wages under California law. Schachter v. Citigroup (2009) 47 Cal. 4th 610, 619.     

Courts have developed methods for assigning value to stock in both employment cases as well as business disputes. Valuation methods include using the stock's highest market value within a reasonable period or valuing the stock on the date of the breach of the obligation or wrongful termination. Some courts take a combined approach, basing the value of the equity as the market price of the shares on the date the employee tried to exercise their shares. In other cases, the courts have denied employees' lost equity beause it was too speculative, where, for instance, the date of potential sale of a stock that never took place is virtually impossible to determine. Jaros v. LodgeNet Entm’t Corp. 294 F.3d 960 (8th Cir. 2002).

In some cases, an employer can be ordered by court to issue equity due. This particularly applies to closely held corporations that issue their employees equity of value that cannot be ascertained and where the stock is not publicly traded. 
Kramer v. Puracyp, Inc. (Cal. Ct. App. Mar. 17, 2017) 

In disovery, it is important to seek information from the employer regarding the valuation of the company, including any 409A valuations conducted by the company, and valuation of the company provided for insvestors.  If a court is unable to determine the value of the stock, the law provides the alternative of specific performance. This is particularly appropriate where the company's stock is not publicly traded. 

Workplace Rights and Immigration Status

4/9/2017

 
workplace rights and immigration status in California
Many employees and employers believe that workers who work illegally or whose residence or immigration papers are otherwise not in order and do not allow them to lawfully work in the us cannot enforce their employment rights, such as filing claims for discrimination, wrongful termination, unpaid wages and other workplace violations. This is not correct.

​Like with most other civil rights, immigration status has no relevance to a person's ability to make a claim against his or her employer.  Under California law, “all protections, rights, and remedies available under state law, except any reinstatement remedy prohibited by federal law, are available to all individuals regardless of immigration status who have applied for employment, or who are or who have been employed, in this state.” Cal. Lab. Code § 1171.5(a). The California courts has emphasized that California “statutes leave no room for doubt about this state’s public policy with regard to the irrelevance of immigration status in enforcement of state labor, employment, civil rights, and employee housing laws.” Hernandez v. Paicius (2003).  

Therefore, any employer who thinks that he can get away with discriminating, harassing, retaliating or not paying correct to an employee whose visa has expired or wasn't approved risks being sued by that employee in exactly the same way as he would be by a US citizen or a permanent resident. It's important to remember the following distinction: it's true that it's illegal to hire or be hired for work without proper employment authorization. However, if an employee who is not authorized to work in the US was hired to work, then he has virtually the same rights as any other employee. 

When You Are Placed On A Performance Improvement Plan (PIP)

3/15/2016

 
performance improvement plan
Our experience working on many discrimination and wrongful termination cases clearly suggests that in many cases  being placed on a PIP means that your employer has already made the decision to terminate you, and they are using the performance improvement plan process to just make it look like they are giving you another chance. Often, the same employee who is placed on PIP doesn't even have a chance to finish that 30-day, 60-day, or 90-day plan, and they are terminated way before.  In rare cases, the employer is genuine about their desire to have you improve your performance.

So, what should you do when you are placed on PIP?   
​
- The first question is whether there is any evidence that the real reason for your PIP or (upcoming) termination is illegal - i.e. the potential firing will be discriminatory or retaliatory.  Do you have grounds to believve that PIP is just an excuse to get rid of you because of your race, age, disability, filing a workers comp claim, complaining about harassment or some other unlawful reason? If so, you should consult an experienced employment attorney to determine what your best legal and practical options are for dealing with the situation.
​
If there is no evidence that your employer is trying to fire you for illegal reasons and it's a matter of not getting along with them personally, then the only thing you can and should consider doing is looking for a new job before you are terminated, and at the same time look at other options, such as resigning in exchange for some type of severance in an appropriate situation when this can be an option.

​What if you performance improvement plan is unfair and unjustified?

​Most employees disagree with the PIP they receive. This alone however has no legal bearing or relevance to your situation. Your manager is entitled to his subjective opinion of your performance, however harsh it might be.  

Should you write a rebuttal to your PIP?   

​Generally, writing rebuttals to PIP's is pretty much pointless and it doesn't have any legal or another significance. A very agressive rebuttal can also make things worse. For instance, if you "fire back" accusing the employer of being dishonest or incompetent, etc... this will only make your relationships with your employer worse.

FMLA/ADA Protection and Lay Offs / Termination

8/24/2014

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An employee who exercises his FMLA/CFRA or ADA/FEHA rights due to a qualifying disability or serious medical condition is considered to be in a "protected" class. This means that it is illegal for an employer to treat that employee differently because of his exercise the above workplace disability rights.   

Being "protected" does not mean, however, that an employee is protected from any employment action and enjoys some kind of immunity because of his FMLA or ADA status. For instance, when a lay-off takes place, and employee who is on FMLA or ADA leave is subject to lay-off just like any other employee. It would only be illegal to choose an employee for lay-off because of his FMLA /ADA status.   

The same applies to employment terminations. A disabled employee who engages in some kind of misconduct or violates an employer's policy can be lawfully terminated just like any other employee who never applied for FMLA leave or ADA/FEHA leave or other accommodations. Being in a "protected" class is not a shield against all harm. It's only a legal remedy against being treated differently because you are a member of that class. 
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Consult with an Attorney Before Resigning from Your Employment

8/21/2013

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Some workers turn a potentially good discrimination or wrongful termination into a no case by prematurely resigning or quitting their job. This usually happens when an employee is treated unfairly and he feels extremely unhappy at work. When quitting, that worker might believe that he is being constructively discharged. In most cases, however, bad or hurtful treatment of that employee does not rise to the level of constructive discharge, which is objectively intolerable working conditions that would force a reasonable employee resign.     

Here is a typical example of a situation where resignation would be premature and would make the potential wrongful termination and disability discrimination case more difficult to prove. Suppose you are off work on disability leave till April 30. On April 10, your employer tells you that you have to return to work by April 20 or you will be fired, and they don't care that your doctor's note instructs you to stay off till the end of the month. This is a situation where you are much better off letting the employer termination you then resigning before April 20, like some employee would choose to do. Here, resigning might completely eliminate a wrongful termination claim, since you actually haven't been terminated. Resigning may also create problems in obtaining unemployment benefits. 

If you are thinking of resigning and taking legal action against your employer for discrimination, retaliation or wrongful termination, consult a knowledgeable employment attorney in your area before you actually resign. Your attorney may be able to help enhance your case or even prevent those mistakes that will turn a good case into a not-so-great case or no case at all.   

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California State Employees: Should You Appeal Your Dismissal through State Personnel Board Hearing?

10/20/2012

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Employees of California State agencies and some other public employees have certain appeal rights with regard to a disciplinary action or employment termination they might facing, which includes a hearing in front of the SPB board. This kind of hearing has four distinct advantages over bringing a lawsuit in court over the same issue/termination. First, the SPB hearing process is much quicker. You don't have to go through discovery, be deposed, wait for trial date and face a number of other phases in litigation that can easily make the process last well over a year. You are likely to have your full evidentially hearing in front of the SPB within just a few months or even sooner. Secondly, the SPB administrative law judge, beyond awarding backpay, can also order your reinstatement, if you were terminated. On the other hand, reinstatement is not a remedy that's generally avilable in court. You may be awarded damages for lost wages and emotional distress in court, but no judge or jury can force your employer to take you back to work. Further, the SPB hearings are free of charge, while litigation can be costly, although it depends on the nature of your case and the arrangement you have with your attorney. Finally, unlike in court, where the burden of proving the case is at all times on the aggrieved employees, at the SPB hearings the burden of proof is generally on the employer (except AWOL cases and a limited number of other exceptions).

The SPB hearings also have major disadvantages: if you have a strong discrimination case and you lose your SPB hearing for whatever reason, that decision will be binding on any subsequent discrimination lawsuit, unless you set aside the adverse SPB decision through Writ of Mandate - a process which will significantly delay going straight to court and filing a discrimination lawsuit.  

So, when should you appeal your termination through SPB first and when is it better to skip the SPB hearing and file a lawsuit in court? While there is no clear cut answer or a definitive rule to always know what's the best way to handle your situation, the following "classic" examples should provide you with a useful guideline:

* If your discipline or termination is not based on unlawful discrimination based on a protected classes, and it involves whether you were terminated for just case, or whether your termination was imposed fairly, then you should definitely appeal your dismissal through SPB, because you probably don't have a basis to sue in court anyway. You will have all the more reasons to to trough the SPB process is you are interested in keeping your job and being reinstated. The more witnesses you have that will support your side of the story, the more chances you have to prevail at the SPB hearing. 

* If, on the other hand, you believe you have a strong discrimination case based on disability, race, etc... and especially if your termination involves a more complicated ADA issue, such as
failure to provide reasonable accommodations, retaliation for asserting disability rights, etc.., you are better off skipping the SPB process and not risking forfeiting your rights to sue for wrongful termination based on discrimination in court becasue of the adverse SPB ruling. 

For more information on public employee rights in California, please visit our
Sacramento Labor and Employment Law Blog.

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Frequently Asked Questions about California Employment Law and Wrongful Termination Lawsuits

2/13/2011

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1. What does "Employment at Will" mean?    
Employment-at-will means that an employee can leave his/her job or be terminated from the same job for any reason, no reason or arbitrary reason except that the employee cannot be terminated for an illegal reason, such as discrimination or retaliation. There is a basic presumption in California that in the absence of a contract or some kind of agreement to be employed for a specified period of time or not be terminated unless there is (just) cause (such as in the case of workers who are union members, permanent civil service employees, and certain groups of licensed professionals), all other employees are considered to be employed "at will."  

2. How much is my wrongful termination case worth?  
There is never a precise answer to this question for several reasons. First, no attorney can or should guarantee an outcome of any claim due to the inherently unpredictable nature of most employment related cases. Some of the factors that affect the outcome of the case and the potential size of the settlement / verdict are: your rate of compensation while working for the employer sued; how many years you worked for the employer-defendant; your age - older people tend to be more sympathetic in front of the jury, although this is not always the case; your personality - the court/jury tends to be more generous to those claimants who are likable and charismatic; the specific facts of your case and the egregiousness of the employer's conduct against you; availability of witnesses to prove your allegations, such as your former co-workers,; the extent of your emotional distress as documented in medical records and can be evidence from your life's circumstances, the amount of time you have been unemployed as a result of wrongful termination, the size of the employer and their philosophy on fighting employee claims vs settling them sooner rather than later; and your lawyer's approach to your case - when the other side sees that your lawyers knows what he is doing, and he is not an novice in the employment law arena, they will take your case more seriously and are likely to be more forthcoming during settlement negotiations.  

3. What does "workplace harassment" or "hostile work environment" really mean? 
I believe that the above concepts are some of the most misunderstood legal terms by the common public. Most people believe that just because their manager or a supervisor is not nice to them, or is being rude, unfair, abrupt or overly critical in evaluating their performance, he is being "hostile." This is not the case however. Under the law, hostile work environment or harassment claim arises when the employment conditions of the victim are so objectively intolerablethat they would actually alter the working conditions to cause a reasonable person in the victim's place to quit. This means that typical, common job related conflicts or stress are clearly not enough to assert a hostile environment claim, and generally, such claims arise when someone is mistreated for discriminatory reason. For example, if a manger repeatedly calls his female subordinate a bitch, this alone will likely not give rise to a hostile work environment claim, as this is merely an insult that has no inherent discriminatory animus (although one could argue somewhat subjectively that the term "bitch" suggest hostility toward women). On the other hand, if the same manager makes degrading ageist comments to an older workers, such as "old fart," "it's time to retire," "we need fresh blood," etc... this would likely give rise to a harassment and discrimination claim, similarly to a situation where a disabled worker is being degraded verbally with negative references to his disability. 

4. How long will it take for my discrimination / wrongful termination case to resolve?  
I have had cases resolve after writing one letter to an employer, which explained why the termination was unlawful, and in which case the employer agreed that their conduct was illegal and they were eager to settle case and avoid litigation. In the vast majority of cases, however, the employers deny liability, as there are so many ways to put a different spin on the facts of what seems to be an illegal termination, and it can take anywhere between 3 months to 1.5 half to work up the case and bring the case to a resolution through or before trial. 

5. I filed a union grievance against my employer. Should / can I still pursue a lawsuit in court?  
It is important to understand that filing a grievance is different from filing a lawsuit in court in several important regards. First, grievances arise out of employer's violation of the Collective Bargaining Agreement between the union and the employer and not out of legal violation. For example, an employee who was terminated because of filing for workers compensation benefits of using disability leave may file a grievance for being termination for just cause, and at the same time file a lawsuit in court for disability discrimination and retaliation for asserting workers compensation rights. Filing a grievance does not have any bearing on the employee's rights in court. Winning or losing a grievance also does not have a whole lot of bearing on the aggrieved employee's civil case. Often, filing both the grievance and the lawsuit in court has a number of strategic advantages: (a) the employer will experience more financial pressure of having to defend both the union and the grievance and is likely to agree to a global settlement more than to just a settlement of either the grievance or a civil lawsuit; (b) if you are ready and willing to return to you workplace, union action is the only way that your employer might be able to be ordered to reinstate you; (c) unions are notoriously slow in pursuing grievances due to being understaffed, having too many claims and due to different political issues. Having a parallel court action at the same time provides you with additional and often faster and more aggressive way of recovering compensation for violation of your rights. 

6. Will the settlement of my wrongful termination case be taxable?   
Yes, generally - settlements of employment related claims are considered taxable income and they are taxed at a regular rate as your wages would be taxed and are subject to the same common deductions as any other income.


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Lessons from Defeat - Retaliation and Discharge in Violation of Public Policy Claims

6/14/2010

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On Friday, June 11, 2010, the Eastern District Court granted the defendants' motion to dismiss my client's case. I had a feeling that it was going to happen but was willing to give it a shot, hoping that perhaps the judge will have a more liberal view of the claims asserted than he actually did. 

My client was a loss prevention agent, working for one of the large security companies at a department store in Sacramento. He was terminated shortly after complaining to the corporate management about his co-workers and his immediate supervisor's time clock fraud and reporting false apprehensions of shoplifters that didn't actually happen. The formal reason for terminating my client was his "failure to meet apprehension goals" which is inherently nonsensical, as a loss prevention agent has no control over how many people actually try to steal merchandise from the store. The court found that preventing internal fraud that only affects the private employer and not public interest at large is not sufficient to give rise to a public policy retaliation and wrongful termination claim. 

I was disappointed at the impunity that the employer will enjoy in this case, even though a number of witnesses informed me that my client's termination was orchestrated and there was a significant concern about him knowing about the misrepresentation.

Below is the court's order which includes the brief factual background of the case and the court's decision and analysis.

 
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Union Grievance Process v. Legal Action in Court in California

11/15/2009

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Recently, I met with a client who I believe had strong wrongful termination claims under FEHA (Fair Employment and Housing Act) as he was terminated shortly after filing a workers compensation claim for his industrial injury, and there was strong evidence that his manager was very unhappy about him requesting reasonable accommodations.

Unfortunately, I was not able to help the aggrieved employee because the statute of limitations has run on all his claims. I was curious to find out why he waited for over 2 years to contact an attorney. His answer was astounding to me - it was because his Union representative told him that he has to wait for the union grievance/arbitration to be completed before he can file an action in court. That was a terrible advice as the contract that governs the employment relationship between the employer and its employees - union members (collective bargaining agreement) only preempts and forces the parties to arbitrate out of court those disputes that CBA covers. The Ninth Circuit Court of Appeals addressed the issue of preemption of FEHA claims by CBA in several cases, one of which is Jimeno v. Mobil Oil Corp. (9th Cir. 1995) 66 F.rd 1514. In that case, the court concluded that the FEHA discrimination / retaliation claims required a pure factual inquiry, not requiring consultating with the collective bargaining agreement. Therefore, the employee's claims for disability discrimination in employment was not preempted.   

Orindarily, issues that are covered by, and therefore also pre-empted by CBA, are whether the employee was terminated for "just cause" as well as working condition, wages, time off, and other terms of employment.

I hope this article will be of help those workers who submit a union grievance and will help them protect their rights to file a lawsuit in court.
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Mediating a Wrongful Termination Claim

5/21/2009

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One of the most common ways in which wrongful termination, discrimination, harassment and other employment related claims are resolved is private mediation.  Mediation is an informal conference between the parties who submit their case to the mutually agreed upon third-party neutral evaluator - usually an experienced attorney in the subject area of law who also works as a mediator or a former judge, experienced in presiding over employment and wrongful termination cases. 

The mediation hearing itself usually consists of a brief face to face meeting where the mediator might listen to a brief opening statement from the employer and the employee, after which the mediator will separate the parties into two different rooms and will basically go back and forth from one room to another, trying to convince the parties to compromise by moving closer to each other's position. The mediator will point out to the employer why their settlement offer is too low considering the evidence and the risks they are facing if the case is not settled, and will also try to persuade the employee that his expectations are too high in light of the weaknesses of his or her case. Usually, the parties start quite far apart from each other in terms of settlement figures but throughout the day, they make small steps toward each other and hopefully, at the end of the process they manage to agree on a settlement number. As a result, this hearing can last anywhere between 3 hours and all day or even longer, and it's not uncommon for some of the best mediators to not let the parties leave the negotiation table till the late hours of the night.

The three main advantages of mediation are as follows: 

First, mediation is a great opportunity to get an objective and invaluable opinion from a mediator who used to be a judge, working on similar case and not rely just on one's own opinion about the case. An experienced mediator will not only evaluate the case, but will also assess the likelihood of the parties to prevail at trial as well as the jury appeal of the case. 

Secondly, mediation is a "risk free" hearing. The parties do not have to settle at the end of the day if they don't want to, but they will at least both know where each stands as far as the figure which they are willing to pay/accept to settle the claims.   

Lastly, a settlement reached at mediation is confidential (unlike court judgments which become a public record). This means that no one, except the parties and the mediator, will have knowledge of the settlement terms and conditions agreed upon at the conclusion of the mediation hearing.

Statistically, most mediations are successful and lead to settlement unless one of the parties or both sides are unreasonable stubborn and are not open-minded about the settlement possibility as they should be. 

The most significant disadvantage of a mediation hearing is its cost, which may may range these days in San Francisco Bay Area between $1,500 and $3,000 per party.  

It is important to have the right mindset when submitting a case to the mediation: mediation is an attempt to negotiate a settlement and it's all about compromise. Successful that leads to settlement means that both parties are somewhat unhappy. The employee often gets much less than what he thought he will or he deserves, and the employer pays more than he believes is right. In exchange, however, both parties get the certainty and the opportunity to move on with their lives and business and close that chapter without it hanging over their head and without the risk of losing at trial. 

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Law Office of Arkady Itkin - San Francisco & Sacramento Injury and Employment Lawyer
We represent employees and employers in employment and wrongful termination cases, as well as victims of serious injuries in San Francisco, Oakland, Sacramento, San Jose, Palo Alto, San Mateo and throughout Northern California. 


57 Post Street, Suite 812, San Francisco, CA 94104; Tel. (415) 295-4730; Fax. (415) 508-3474; arkady@arkadylaw.com
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