Touchstone Television v. Superior Court: Decision Not To Renew Employee's Contract Does Not Give Rise To Action For Wrongful Termination

Touchstone Television Productions v. Superior Court (Sheridan) (8/16/12) --- Cal.App.4th ---, involves actress Nicollette Sheridan's allegation that her contract on the television show Desperate Housewives was not renewed because she complained about the show's creator.

Touchstone Television Productions hired actress Nicollette Sheridan to appear in the first season of the television series Desperate Housewives. The agreement gave Touchstone the exclusive option to renew Sheridan's services on an annual basis for an additional six seasons. Touchstone renewed Sheridan's services up to and including Season 5. During Season 5, Touchstone informed Sheridan it would not renew her contract for Season 6.  

Sheridan sued Touchstone for wrongful termination in violation of public policy. Sheridan alleged that Touchstone had fired her because she had complained about a battery allegedly committed upon her by Desperate Housewives' creator Marc Cherry. The jury deadlocked on this claim and the trial court declared a mistrial. Touchstone moved for a directed verdict, contending that it had not terminated Sheridan, but rather had simply not renewed her contract for an additional season. The trial court [Los Angeles Superior, Judge Elizabeth Allen White] denied the motion. Slip op. at 2. 

The Court of Appeal reversed.

A cause of action for wrongful termination in violation of public policy does not lie if an employer decides simply not to exercise an option to renew a contract. In that instance, there is no termination of employment but, instead, an expiration of a fixed-term contract. (Daly v. Exxon Corp. (1997) 55 Cal.App.4th 39.) To hold otherwise would require the creation of a new tort for nonrenewal of a fixed-term employment contract in violation of public policy. We decline to do so.

Slip op. at 2. 

In a very unusual move, the Court held that on remand Sheridan could amend to bring a brand new cause of action under Labor Code section 6310, alleging that "Touchstone retaliated against her for complaining about unsafe working conditions (e.g., Cherry's conduct) by deciding not to exercise its option to renew her contract." Ibid. Touchstone apparently did not object at oral argument to Sheridan amending on remand. Slip op. at 8, n. 6.

I honestly cannot remember another opinion in which the appellate court said, "You lose on the cause of action that you brought, but on remand you should bring this cause of action instead." Much more frequently, parties attempt to assert new arguments or theories of recovery on appeal, and the appellate court holds that such arguments have been waived because they were not timely asserted.

The opinion is available here.