Barbosa v. IMPCO: Employer Cannot Terminate Employee Who Makes Good Faith But Mistaken Claim for Overtime

In Barbosa v. IMPCO Technologies, Inc. (November 30, 2009) 179 Cal.App.4th 1116, the Court of Appeal held that the public policy in favor of an employer’s duty to pay overtime wages protects an employee from termination for making a good faith but mistaken claim to overtime.

Manuel Barbosa was a shift leader who was paid by the hour. Two of the employees whom he supervised approached him and stated that they had not been paid for two hours of overtime work. Mr. Barbosa complained to management, who paid him and the other employees for the two hours of overtime. Upon investigation, the employer found that Mr. Barbosa and the other employees had not worked the overtime and terminated Mr. Barbosa, even though he offered repeatedly to pay the money back.

Mr. Barbosa sued for wrongful termination in violation of public policy. At trial, the court granted the employer's motion for non-suit after Mr. Barbosa rested. The Court of Appeal reversed.

After noting that the common law recognizes a tort for wrongful termination in violation of public policy (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 178), the Court stated: "The duty to pay overtime wages is a well-established fundamental public policy affecting the broad public interest." Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1148-1149. The Court then cited a long line of cases holding in other contexts that an employee's good faith but mistaken belief is protected from employer retaliation in the whistleblowing context. Collier v. Superior Court (1991) 228 Cal.App.3d 1117; Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66; and Freund v. Nycomed Amersham (9th Cir. 2003) 347 F.3d 752. Finally, the Court applied these precedents to the present case, holding that this public policy protected Mr. Barbosa's mistaken but good faith claim to overtime compensation.

Barbosa presented evidence that he had a reasonable good faith belief he was entitled to overtime. Under the previous time clock system, mistakes in timekeeping had been made; the new system had been in place less than a month. Barbosa's co-workers convinced him the overtime was unpaid, and he in turn convinced DeSantos. He testified he was confused. In fact, the trial court acknowledged Barbosa had presented sufficient evidence to support a good faith belief when it granted the nonsuit.

IMPCO argues Barbosa cannot prove he was terminated for making a claim for overtime, asserting he was terminated for misrepresenting that he worked overtime when he did not. IMPCO contends it is not a violation of public policy to fire an employee for lying and cheating his employer. IMPCO misses the point. Barbosa must prove he had a reasonable good faith belief he was entitled to overtime wages and that IMPCO terminated him because he claimed overtime based on that reasonable good faith belief. If Barbosa proves he had a reasonable good faith belief in his right to overtime, ipso facto he did not attempt to cheat IMPCO. Because Barbosa presented sufficient evidence to support both elements in his case-in-chief, the case should have been allowed to progress to its conclusion and be submitted to a jury.