Yau v. Santa Margarita Ford
229 Cal. App. 4th 144
Cal. Ct. App.2014Background
- Yau, a longtime Santa Margarita Ford mechanic and later service manager, was terminated in February 2009 after reporting alleged fraudulent warranty claims to management.
- Alleged scheme involved supervisor Selff and others drafting fictitious warranty repairs and manipulating parts and customer data to inflate warranty revenue.
- Yau signed warranty repair orders under the supervisor’s direction, later complained, and was pressured to continue signing; he ultimately refused to participate further.
- Yau filed a third amended complaint alleging the termination violated public policy tethered to theft, fraud, and other statutes, plus FEHA-based discrimination allegations related to race, ancestry, and age.
- The trial court sustained demurrers without leave to amend; on appeal, the court reversed in part (wrongful termination) and remanded, while affirming the dismissal of the intentional infliction of emotional distress claim against individuals due to workers’ compensation preemption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Yau adequately pleaded wrongful termination in violation of public policy against Santa Margarita Ford | Yau pleads policy-based termination tied to theft/fraud statutes. | Policy not sufficiently tethered to public law; no nexus shown. | Yes; properly pleaded tethered public policy causing the reversal/remand as to the employer. |
| Whether the public policy claim has a valid statutory/public policy grounding | Claims grounded in Penal Code theft and fraud statutes support public policy. | Policy was not publicly oriented or tethered to statutory provision. | Yes; tethered to theft/fraud statutes, sufficient for public policy claim. |
| Whether the intentional infliction of emotional distress claim was properly dismissed | Distraction from public policy; preemption not complete given conduct. | Preempted by workers’ compensation; not viable separate claim. | Preempted; claim against individuals properly dismissed. |
| Whether FEHA discrimination theories were required or properly considered | FEHA-based retaliation/discrimination could support public policy claim. | Plaintiff failed to exhaust or plead FEHA as separate action. | Not required as basis since public policy tied to theft/fraud sufficiently pleaded; FEHA not decided separately. |
Key Cases Cited
- Casella v. SouthWest Dealer Services, Inc., 157 Cal.App.4th 1127 (Cal. Ct. App. 2007) (public policy tethered to statutory authority; four-part test for policy)
- Haney v. Aramark Uniform Services, Inc., 121 Cal.App.4th 623 (Cal. Ct. App. 2004) (public policy tethered to theft/fraud; nexus to termination)
- American Computer Corp. v. Superior Court, 213 Cal.App.3d 664 (Cal. Ct. App. 1989) (employer-focused public policy; later criticized/limited)
- Collier v. Superior Court, 228 Cal.App.3d 1117 (Cal. Ct. App. 1991) (public interest in deterring crime; expands public policy grounds)
- Rojo v. Kliger, 52 Cal.3d 65 (Cal. 1990) (public policy claims not limited to coercion; broader scope)
- Miklosy v. Regents of Univ. of California, 44 Cal.4th 876 (Cal. 2008) (exception to workers’ comp preemption for public policy violations)
- Franklin v. The Monadnock Co., 151 Cal.App.4th 252 (Cal. Ct. App. 2007) ( workplace safety/public policy grounded in statutory provisions)