The UCL Practitioner
Tuesday, August 03, 2004
The UCL and wrongful termination
Can your employer fire you for refusing to defraud your customers in violation of the UCL? In Haney v. Aramark Uniform Services, Inc., ___ Cal.App.4th ___ (Jul. 12, 2004), the Court of Appeal came very close to answering that question. After holding that the Labor Management Relations Act did not preempt the union-member plaintiff's wrongful termination claim, the Court of Appeal held that "when an employer discharges an employee who refuses to defraud a customer, the employer has violated a fundamental public policy and may be liable in tort for wrongful discharge." Slip op. at 17. The UCL was one of the statutes the plaintiff cited in support of the argument that consumer fraud is illegal and therefore contravenes California public policy. Id. at 15-16 & n.12. The primary basis for the Court's decision, however, was "the fact that theft through fraudulent representation or pretense has long been defined as a crime by statute in California." Id. at 17 (emphasis added). While the UCL provides for civil penalties, it does not criminalize fraudulent misconduct in the same way, for example, its neighbor the Unfair Practices Act does. See Bus. & Prof. Code §17100. (UPDATE: Business & Professions Code section 17500, which prohibits false advertising, also has a criminal enforcement provision. See Bus. & Prof. Code §17534.) Nonetheless, a decent argument might be made under Haney that an employee who is fired for refusing to violate the UCL has a viable wrongful discharge claim.

This law firm practice article (dated July 30, 2004) has a more detailed discussion of the labor law aspects of the Haney case. And many thanks to the friend who wrote to point out the UCL component of the decision.

UPDATE: On August 11, 2004, the Court of Appeal issued an amended opinion on rehearing. The language about the UCL, discussed above, does not appear to have changed.
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