Before Medical Leave – Good Working Relationship

Maria Teresa Lopez (Lopez) worked for CIA Wheel Group (CWG) as a salesperson for about 17 months before she was diagnosed with cancer and took a three-month medical leave. Prior to her leave, Lopez did not have any warnings or disciplinary actions and was the highest producing salesperson in CWG’s Los Angeles Office. Her supervisor, A.J. Russo (Russo), also praised Lopez’s work and was agreeable when she asked for time off. They had a good relationship.  

After Medical Leave – Alleged Poor Performance

When Lopez retuned from leave, the relationship allegedly deteriorated. Russo made negative comments to Lopez and other employees about her taking time for medical appointments; complained about her morning coffee breaks (which were not a problem before the leave); required her to complete work assignments that were not requested of other salespeople; and even took credit for her sales despite Lopez’s protests.

Lopez complained to HR about Russo but was told she should not “bump heads” with him.

Defense Claim – Lopez Had Poor Sales Numbers

Russo decided to terminate Lopez; he told HR and the Executive Vice President of CWG the basis for the termination was Lopez’s low sales. Neither HR nor the VP questioned the accuracy of that claim. 

During litigation, Russo gave varying reasons for the termination. Initially, he stated that Lopez was terminated because “her performance was slipping” and that her “sales numbers were going down…” He later testified Lopez was terminated because “the effort put in towards gaining more business and being a salesperson was declining” and that Lopez “was not meeting her ability to cold call and to close new customers.”  

Russo also denied “knowing” Lopez had cancer, despite witness testimony to the contrary.

The trial court found CWG’s conduct warranted punitive damages and eventually awarded plaintiff $500,000 in punitive damages.

CWG appealed and contended the punitive damages award was excessive.

The Court of Appeal affirmed the award, reasoning in part, that CWG’s conduct was reprehensible:

• Falsely telling a hard-working, competent employee that she is being fired for poor performance would affect the employee’s emotional well-being.  The conduct is particularly callous when the person is suffering from cancer.
• Lopez’s fair degree of financial vulnerability when she was terminated, supports a high assessment of reprehensibility.
• The involvement of two high ranking officers in the termination, who independently approved of or acquiesced with Russo’s claims – somewhat supported an assessment of reprehensibility.
• Russo’s changed emphasis on the type of Lopez’s poor performance and CWG’s failure to produce records regarding Lopez’s sale numbers support a finding that CWG did act with intentional malice.    

Accordingly, given the reprehensibility of CWG’s conduct (“more reprehensible than average”), the Court found the award of punitive damages was permissible.  

Takeaways 

The most apparent lesson from this case is: Do not terminate an employee due to disability or a medical condition!

Additionally, don’t make up arbitrary rules that only apply to the sick, disabled, or other protected groups. Have a discussion with the employee to determine if accommodations can be provided or provide additional leave if possible. It may also be helpful to “audit” a supervisor’s decision to separate from an employee – to confirm the decision is based on legitimate, non-discriminatory reasons.

When in doubt, contact an employment law attorney who can assist with the process. No employer wants to pay $500,000 (in addition to other penalties and litigation costs) for avoidable mistakes.