Proven Results · Employment · Jury verdict, later settled confidentially
Over $6 Million Wrongful Termination Jury Verdict: Two Employees Fired for Reporting Harassment and Unlawful Conduct
Case summary: A California jury awarded two fired employees over $6 million in economic damages in a wrongful termination and whistleblower retaliation case. The employees had reported harassment and other unlawful conduct by their company’s lead executive. The company fired them two weeks later, then sued them. The jury decided every claim submitted to it in the employees’ favor, found that the company and its executive acted with malice, oppression or fraud, and rejected each of the company’s cross-claims. The case then settled confidentially before the punitive damages phase.
Results disclosure. The “over $6 million” figure is a jury’s finding of economic damages. It is not the amount the clients received. The case settled confidentially after the verdict, and the settlement amount is not disclosed. Attorney fees and litigation costs are not reflected in any figure on this page. Prior results do not guarantee, warrant, or predict the outcome of any other case. Every case depends on its own facts and law.
- Claims: whistleblower retaliation (Labor Code § 1102.5), retaliation under the Fair Employment and Housing Act (FEHA), wrongful termination in violation of public policy, hostile work environment harassment, and failure to prevent harassment
- Jury verdict: over $6 million in economic damages (a verdict finding, not an amount received)
- Punitive damages findings: malice, oppression or fraud found against both the company and its lead executive
- Cross-complaint: the jury rejected the company’s claims for trade secret misappropriation, breach of contract and defamation
- Time to verdict: about seven years from filing
- Final outcome: confidential settlement before the punitive damages phase; the amount is not disclosed
- Counsel: Adam P. Zaffos of Fernald & Zaffos served as co-lead trial counsel
Background: What the Employees Reported
The plaintiffs were senior employees and owners of a California company. Over roughly a year, they came to believe the company’s lead executive was engaged in serious misconduct. They reported:
- sexual harassment of an administrative assistant
- racist and demeaning remarks about employees
- falsified business records submitted to an outside organization
- a cash transaction handled without a required federal report
- misleading sales recordkeeping
They raised these concerns at a meeting of the company’s owners. The owners voted to remove several of the executive’s responsibilities, including supervising the assistant and overseeing trade bookkeeping.
The Termination
Two weeks after that meeting, the company called both plaintiffs into a meeting without notice, handed them termination letters and walked them out. The company said it fired them for cause, citing insubordination, workplace disruption and unexcused absences. The plaintiffs said those reasons were a pretext. They said their absences were for medical conditions, family illness and court appearances, and that the conduct the company described was the conduct of the executive they had reported.
The Employer’s Countersuit
The employees filed suit. The company responded with a cross-complaint alleging that they took confidential customer information, breached their confidentiality agreements, and defamed the company and its executive to customers. It sought damages, punitive damages and an injunction.
The Jury Verdict
After trial, a California jury returned its verdict. It found that:
- both plaintiffs reported, or the company believed they might report, conduct they reasonably believed was unlawful, and that this was a contributing factor in their termination (Labor Code § 1102.5)
- reporting harassment or racism was a substantial motivating reason for the terminations (FEHA retaliation, Gov. Code § 12940(h), and wrongful termination in violation of public policy)
- the workplace harassment was severe or pervasive, and the company and its executive took part in it (Gov. Code § 12940(j))
- the company failed to take all reasonable steps to prevent the harassment (Gov. Code § 12940(k))
- the plaintiffs’ economic damages totaled over $6 million
- the company and its executive acted with malice, oppression or fraud, by clear and convincing evidence, the finding that opens the door to punitive damages under Civil Code § 3294
The jury also rejected each of the company’s cross-claims. It found that the plaintiffs did not acquire or use the company’s customer list by improper means, did not breach their employment contracts, and did not make the alleged defamatory statements.
What Happened After the Verdict
The punitive damages phase was set to begin the following week. The parties settled before it began. The settlement terms are confidential, and the amount the clients received is not disclosed. The verdict figure above is the jury’s finding and was not paid as a judgment.
What This Case Shows
- Timing is evidence. The employees were fired two weeks after their reports reached company leadership, and the jury found the reports were a motivating reason for the firings.
- An employer can countersue, and the countersuit can fail. The company’s cross-claims did not survive trial.
- Reports to an employer are protected. California law covers employees who report suspected violations to someone with authority to investigate or correct them, not only to government agencies.
Frequently Asked Questions
Can my employer fire me for reporting illegal conduct at work?
No. Labor Code § 1102.5 prohibits retaliation against an employee who reports, or whom the employer believes may report, conduct the employee reasonably believes violates a law or regulation. The report can go to a government agency or to a person at the company with authority to investigate or correct the problem.
Do I have to prove my employer actually broke the law?
No. Under § 1102.5, the employee must have reasonable cause to believe the reported conduct was a violation. In this case, the jury was asked whether the plaintiffs had reasonable cause to believe so, and it answered yes.
Can an employer sue an employee who reports wrongdoing or files a claim?
An employer can file claims against a former employee, as happened here. The claims still have to be proven at trial. In this case, the jury rejected every cross-claim.
Was the $6 million verdict what the clients received?
No. It was the jury’s finding of economic damages. The case settled confidentially after the verdict, and the settlement amount is not disclosed.
What does a “malice, oppression or fraud” finding mean?
It is the finding California law requires before a jury can award punitive damages. The plaintiffs had to prove it by clear and convincing evidence, a higher standard than most civil claims require. Here, the jury made that finding against both the company and its lead executive.
How long does a wrongful termination case take?
It varies widely. This case took about seven years from filing to verdict. Many cases resolve sooner, often through settlement.
About the Legal Team
Fernald & Zaffos represents employees in California wrongful termination, whistleblower retaliation and workplace harassment matters. Adam P. Zaffos served as co-lead trial counsel in this case.
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Attorney advertising. Prior results do not guarantee, warrant, or predict a similar outcome. Every case depends on its own facts and law. This page describes a specific matter drawn from the public trial record; party names and identifying details are omitted. The verdict amount is not the amount received by the clients. This page is general information, not legal advice.
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