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Wrongful Termination May Occur When Employee Fired for Refusing to Violate Public Policy
Description Appeals court held that a suit for wrongful termination may proceed against an employer who fired an employee for refusing to sign an agreement that contained a covenant not to compete, which is illegal in California. The covenant would violate public policy, so the employee has a cause of action.
Topic Employment Law
Key Words Covenant Not to Compete; Wrongful Termination
C A S E   S U M M A R Y
Facts D'Sa sued his employer for wrongful termination, contending the company fired him for refusing to sign a confidentiality agreement that contained a covenant not to compete that violated public policy in California. The trial court granted summary judgment to the employer because it found that the covenant not to compete was part of a broader contract that included a choice of law clause, and so did not involve the public policy of California. D'Sa appealed.
Decision Reversed. While an employer has the right to fire an at-will employee for any or no reason, an employee may not be terminated for an unlawful reason or a purpose that violates fundamental public policy. An employee has a tort cause of action against an employer for firing them for refusing to do something that public policy would condemn. Here the employer attempted to shield an illegal covenant not to compete under the guise of a confidentiality agreement and other legal clauses. That is not allowed. A confidentiality agreement to protect trade secrets is not related to the rest of the agreement attempted here.
Citation D'Sa v. Playhut, Inc., 102 Cal.Rptr.2d 495 (Ct. App., Calif., 2000)

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