San Francisco Employment Law Firm Blog

The recent Silguero v. Creteguard, Inc., appellate decision from the Second Appellate district (Los Angeles County) is instructive on a less common issue arising out of the attempt by an employer to follow a non-compete agreement that the subject claimant signed with his former employer. In that case, shortly after claimant was terminated by his first employer, with whom he signed the non-compete agreement, she found employment with the defendant company. The first employer contacted the defendant and requested “cooperation” in enforcing the non-compete. As a result, claimant’s employment was terminated by the defendant.

While the new employer had the best intentions of acting honestly and ethically toward the other company (previous employer) and trying to do the right thing, even though they suspected that the non-compete agreement might be unenforceable in California, the court still found that the future employer was liable for wrongful termination. The court’s analysis largely relied on a very significant, and long standing public policy in California that protects the important legal right of persons to engage in businesses and occupations of their choosing and discourages circumvention of freedom to seek employment anywhere in the state.

The Court of Appeal further reminded the defendant-employer that a competitor may solicit another competitor’s employees if they do use unlawful means or engage in acts of unfair competition. Thus, no actionable wrong is committed by a competitor who hires away his competitor’s employees who are not under contract, as long as the inducement to leave the first employer is not accompanied by unlawful conduct.

Decisions concerning medical staff membership and privileges are made through a process of hospital peer review. Every licensed hospital is required to have an organized medical staff responsible for the adequacy and quality of the medical care rendered to patients in the hospital. Arnett v. Dal Cielo 14 Cal.4th 4, 10 (1996). The medical staff must adopt written bylaws which provide formal procedures for the evaluation of staff applications and credentials, appointments, re-appointments, assignment of clinical privileges, appeals mechanisms and such other conditions which the medical staff and governing body deem appropriate.

The medical staff acts mainly through peer review committees, which, among other things, investigate complaints about physicians and recommend whether staff privileges should be granted or renewed. California has codified the peer review process in Business and Professions Code section 809 et seq. The primary purpose of the peer review process is to protect the health and welfare of the people of the state by excluding through the peer review those medical practitioners who provide substandard care or who engage in professional misconduct. This process also allows hospitals to remove incompetent physicians from a hospital’s staff to reduce exposure to possible malpractice liability. Kibler v. Northern Inyo County Local Hospital Dist. 39 Cal.4th 192, 199 (2006). Another purpose which is equally important is to protect the employment and the rights of competent medical doctors from being barred from practical of medicine for arbitrary and discriminatory reasons. As one court noted, peer review that is not conducted fairly and results in the unwarranted loss of a qualified physician’s right or privilege to use a hospital’s facilities deprives the physician of a property interest directly connected to the physician’s livelihood. Anton v. San Antonio Community Hosp. 19 Cal.3d 802, 823 (1977).

The effect of denying staff privileges extends beyond reducing or eliminating a doctor’s access to the facility that denies the privileges. The same hospital is required by section 805(b) to report certain disciplinary actions to the Medical Board. A hospital considering whether to grant or renew a physician’s staff privileges must contact the Medical Board to learn if some other facility has reported a disciplinary action involving the physician as per section 805.5(a). A hospital is also usually required to report disciplinary actions to the National Practitioner Data Bank, established for the purpose of tracing the activities of incompetent physicians. 42 U.S.C. 11133(a). Thus, a hospital’s decision to deny staff privileges may have the effect of ending the physician’s career. Mileikowsky v. West Hills Hosp. and Medical Center (2009).

The most typical defense that city police departments assert when a terminated police officer files a lawsuit for wrongful termination, defamation, and related claims is governmental immunity. The good news for the aggrieved police officers and other public employees that might be in a similar situation is the fact that this immunity is available not nearly as often as the public employers believe.

One leading case on the issue is the California Supreme Court decision in Barner v. Leeds 24 Cal.4th 676 (2000). In that case, an innocent man who was wrongfully convicted of robbery, filed a legal malpractice action against his lawyer – public defender.

Under California Tort Claims Act (Gov. Code section 810 et seq), public employees are liable for their torts unless a statute provides otherwise. One exception is immunity for discretionary acts performed within the scope of the public employee’s authority. The immunity, however, only applies to the basic public policy decisions and not the “operational” actions performed after the basic public policy function is performed. For instance, one court concluded that while deciding whether to provider a job reference is a policy decision that enjoys immunity, the contents of the reference itself is an operational action, which is not immune from liability that might result from its contents (i.e. – defamatory publications, containing slander/libel).

Most labor and employment attorneys know that their client’s deposition testimony is likely the most important part and stage of the case. Few aggrieved employees win a case just because they do well at a deposition, but many lose their case or substantially decrease the value of their case because of how they testify or how they present to the opposing counsel. This is exactly why it is so important that you understand how the deposition works and learn to do well.

If your attorney does not plan to spend at least a few hours with you before your deposition because he doesn’t think it’s necessary or because he is too busy, request that your deposition be postponed, so your attorney can thoroughly prepare you for your testimony. Your attorney should explain to you the purpose of deposition, the basic rules, what to expect from the opposing side, and the common mistakes that deponents make that you should avoid.

My experience suggests that the most confident and calm people become very nervous during their deposition, especially if they testify for the first time. One of the best ways to eliminate the nervousness is for a client to see a video of a deposition, so he/she knows exactly what’s going on during those proceedings, and what kinds of questions are being asked.

For years, I believed that since the whole purpose of establishing and running non-profit companies in California is providing some kind of service for the public good and not for profit. As a result, I assume that working in non-profit organizations must be a fulfilling experience on more levels and that the relationships between employees and the way the employees are treated by their management is also superior to the for-profit sector.

However, a number of claims I worked on reflect a different reality. Workplace Retaliation in non-profit agencies is quite common. One of the more common forms of retaliation is against a mid-level managers. A manager might suspect or even witness how funds provided to the employer by the government agencies or through other fund raising efforts are mishandled or even embezzled. That manager makes an internal complaint to his boss. That superior manager might be involved directly or indirectly in the unlawful and unethical handling of the funds and thus he tries to push the issue under the rug or starts building a paper trail of unsubstantial allegations of performance issues or insubordination to “lawfully” terminate the whistleblower.

Such retaliation claims are not easy prove that the year certainly worth investigation, as with proper documentation and witnesses to both – the unlawful activity and the retaliation, such claims can result in both substantial settlement or trial verdicts and changes in the company that assure fair proper management of funds.