While Michael Tilkey and his girlfriend Jacqueline Mann were visiting at her home in Arizona, they got into an argument. Tilkey decided to leave the apartment. When he stepped out onto the enclosed patio to collect his belongings, Mann locked the door behind him. Tilkey banged on the door to regain entry, and Mann called police. Police arrested Tilkey and charged him under Arizona law with criminal damage deface, possession or use of drug paraphernalia, and disorderly conduct, disruptive behavior. Domestic violence charges were attached to the criminal damage and disorderly conduct charges. Tilkey pled guilty to the disorderly conduct charge only; the other two charges were dropped.
After Tilkey completed a domestic nonviolence diversion program, the disorderly conduct charge was dismissed. Before the disorderly conduct charge was dismissed, Tilkey’s company of 30 years, Allstate Insurance Company (Allstate), terminated his employment based on his arrest for a domestic violence offense and his participation in the diversion program. Allstate informed Tilkey it was discharging him for threatening behavior and/or acts of physical harm or violence to another person. Following the termination, Allstate reported its reason for the termination to the Financial Industry Regulatory Authority (FINRA); that information was accessible to any firm that hired licensed broker-dealers like Tilkey. Tilkey sued Allstate for wrongful termination in violation of Labor Code section 432.7 and compelled, self-published defamation. At trial, Allstate presented evidence that it would have terminated his employment based on after-acquired evidence that Tilkey had circulated obscene and inappropriate e-mails using company resources.
The jury returned a verdict in Tilkey’s favor on all causes of action and awarded him $2,663,137 in compensatory damages and $15,978,822 in punitive damages. It advised the court that it did not find Allstate’s after-acquired evidence defense credible, and the court agreed
Allstate appealed, contending: (1) it did not violate section 432.7, so there was no wrongful termination; (2) compelled self-published defamation per se was not a viable tort theory; (3) it did not defame Tilkey because there was not substantial evidence its statement was not substantially true; (4) punitive damages were unavailable in compelled self-publication defamation causes of action; (5) the defamatory statement was not made with malice; and (6) the punitive damages awarded here were unconstitutionally excessive.
Section 432.7 prohibits an employer from considering as a factor in employment decisions including termination of “any record of arrest . . . that did not result in a conviction.” (§ 432.7, subd. (a)(1).)
” ‘[T]he term “conviction” has no fixed definition and has been interpreted by the courts of this state to have various meanings, depending upon the context in which the word is used’ [Citation.]” (People v. Kirk (2006) 141 Cal.App.4th 715, 720). 11 However, here, the statute defines a “conviction” to include “a plea, verdict, or finding of guilt regardless of whether sentence is imposed by the court.” (§ 432.7, subd. (a)(3)(A).) The plain language here makes clear that a judgment is not required because the conviction can exist without respect to sentencing. (See ibid.)
The “gist or sting” of Allstate’s remarks was that Tilkey behaved in a physically violent or threatening manner, and that was why his employment was terminated. (See Campanelli v. Regents of University of California (1996) 44 Cal.App.4th 572, 582.) But the facts do not point to Tilkey threatening Mann, physically harming her, or being violent. Thus, there is substantial evidence to support the jury’s verdict that Allstate’s statement to the contrary was not substantially true, and we will affirm.
For punitive damages, the plaintiff must prove by clear and convincing evidence that the defendant acted with “oppression, fraud, or malice” and that those acts were performed or ratified by an “officer, director or managing agent.” (Civ. Code, § 3294, subds. (a), (b); College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 726.) A company ratifies a managing agent’s decision when it knows about and accepts the decision. (Ibid.; Cruz v. HomeBase (2000) 83 Cal.App.4th 160, 168.)
The Court of Appeal agreed Allstate did not violate section 432.7 when it terminated Tilkey’s employment based on his plea and his participation in an Arizona domestic nonviolence program, and reversed that judgment. The Court also agreed that compelled self-published defamation was a viable theory, and affirmed that judgment. The Court determined the pubitive damages awarded here were not proportionate to the compensatory damages for defamation, and remanded for recalculation of those damages.
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