Yau v. Santa Margarita Ford: Employee States Cause of Action for Wrongful Discharge, but not IIED

In Yau v. Santa Margarita Ford, Inc. (8/26/14) --- Cal.App.4th ---, Eddie Yau sued his former employer, Santa Margarita Ford (SM Ford) for wrongful termination in violation of public policy (WTVPP), alleging that he was terminated after complaining about allegedly fraudulent warranty repair claims being filed. He also sued several coworkers and supervisors for intentional infliction of emotional distress (IIED). The trial court sustained demurrers without leave to amend and dismissed the case. The Court of Appeal reversed in part and affirmed in part, holding as follows:

Yau stated a cause of action for WTVPP against SM Ford by alleging that it terminated him because he complained to his superiors that his supervisor and coworkers were submitting fraudulent warranty claims. Slip op. at 10-18. If true, Yau’s allegations "could be construed" as complaints of potential violations of criminal statutes proscribing theft and fraud.

Yau did not state a cause of action for IIED, which he alleged only against the individual defendants. Slip op. at 19-21. The claim was barred by the exclusivity provisions of the Workers’Compensation Act. California law no longer recognizes an exception for emotional distress caused by conduct that violates a fundamental public policy.

The opinion is available here.