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Employers, beware: Employees fired with malice can win millions in court

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Employee awarded $7M in damages for termination

In a recent California case, an employee who claimed to have been terminated with malice was granted $7,068,717 in damages by the jury. The damages awarded included $6 million in punitive damages, $368,717 in economic damages, and $700,000 in non-economic damages.

The plaintiff had worked for Alki David Productions, Inc. (ADP), an entertainment and media company specializing in hologram technology, from 2013 to 2017. In 2017, he was assigned to work at a property on Hollywood Boulevard, which ADP was converting into a theater using hologram equipment.

During the project, four inspectors from the Los Angeles City visited the site and identified municipal code deficiencies, leading to a refusal to approve the work. The Los Angeles Department of Building and Safety issued a correction notice indicating violations of the municipal code provisions.

The plaintiff expressed his concerns to ADP’s senior vice president of operations about potential hazards related to the installation of equipment, such as plumbing and electrical issues, ceiling and floor integrity, and the risk of equipment falling on theater attendees. He also contacted a fire inspector to report his concerns, though initially, he was hesitant due to fear of backlash.

ADP’s principal and owner arrived at the theater and became angry upon learning that work was halted due to safety concerns. The plaintiff insisted on the unsafe nature of the work, which resulted in the principal firing him.

The plaintiff filed a lawsuit against ADP and its principal under California’s Labor Code, claiming retaliation for refusing to participate in unlawful activities. The jury found ADP liable for violating relevant sections of the Labor Code and for whistleblower retaliation. They believed ADP fired the plaintiff with malice, oppression, or fraud. The defendants appealed the decision.

The California Court of Appeal for the Second District, in the case of Zirpel v. Alki David Productions, Inc., upheld the trial court’s judgment in favor of the plaintiff.

The appellate court agreed that there were violations of section 1102.5(c) of the Labor Code, which prohibits employers from retaliating against employees who refuse to engage in unlawful activities. The plaintiff’s continued work at the theater would have violated statutes, rules, or regulations, as indicated by the municipal code violations mentioned in the correction notice.

The court also found a violation of section 1102.5(c) of the Labor Code, which prohibits employers from retaliating against employees who disclose information reasonably believed to be a violation of the law. The plaintiff had reasonable grounds to believe that he was reporting unsafe working conditions and municipal code violations to both ADP and the city inspectors.

Furthermore, the court identified a violation of section 232.5(c) of the Labor Code, which prohibits employers from terminating employees who disclose information about the employer’s working conditions. The plaintiff’s disclosure of unsafe working conditions was a significant factor in his termination, as evidenced by his repeated attempts to inform the principal.

Finally, the appellate court deemed the punitive damages awarded as appropriate, as there was substantial evidence to support ADP and its principal’s reprehensible conduct and the principal’s intentional actions.

In conclusion, the plaintiff’s allegations were upheld by the California Court of Appeal, confirming the validity of the damages awarded by the jury in the case against Alki David Productions, Inc.

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