California Court Rejects Honest-Belief Defense To CFRA “Interference” Claim

Richey v. AutoNation, Inc., 2012 Cal.App. LEXIS 1177 (November 13, 2012)

Earlier this month, a California appellate court rejected an employer’s honest-belief defense to a California Family Rights Act (“CFRA”) claim, holding that an employer seeking to terminate an employee for abusing medical leave must prove that the employee actually abused the leave. 

In Richey, the Second Appellate District reviewed an arbitrator’s decision upholding Avery Richey’s termination during a medical leave based on his employer’s “honest belief” that Richey violated a company policy prohibiting work during his leave.  The arbitrator concluded that, “[a]n employer who honestly believes that it is discharging an employee for misusing [medical leave] is not liable even if the employer is mistaken.”

The Second Appellate District rejected this reasoning.  The court held that an employer bears the burden of “adequately investigating and developing sufficient facts to establish the employee had actually engaged in misconduct warranting dismissal.”

In Richey, in the underlying arbitration decision, the arbitrator had denied Richey’s CFRA claim despite finding that: (1) the company’s policy barring work during leave was “poorly written”; (2) Richey did not believe he was violating company policy; (3) the employer had made exceptions to the rule based on the nature of the outside activity; (4) Richey’s activities at the restaurant conformed to his doctor’s limitations; and (5) the employer admitted its investigation was “superficial.”  To the arbitrator, the employer’s honest belief was sufficient.

In rejecting the arbitrator’s conclusion, the Second District distinguished a 2003 California decision, McDaneld v. Eastern Municipal Water Dist. (2003) 109 Cal.App.4th 702, where the court had affirmed the discharge of an employee who played golf and worked on his lawn when he was supposedly caring for his injured father.  The Richey court noted that in McDaneld, the employee had “in fact, engaged in activities incompatible with the intended purpose for his leave (caring for his injured father) and lied about his actions.”

Reminder to Employers

Although this case reaffirms existing law, it stands as an important reminder to employers of the need to carefully investigate and document a supervisor’s allegations of medical-leave abuse before taking adverse action.  A supervisor’s “honest belief” alone will be insufficient.  Should an employee later bring a CFRA interference claim, the employer will be required to demonstrate sufficient evidentiary facts to prove that the employee in fact abused CFRA leave.