Proskauer - California Employment Law

King v. U.S. Bank Nat’l Ass’n, 52 Cal. App. 5th 728 (2020)

Timothy King sued his former employer for defamation, wrongful termination in violation of public policy, and breach of the implied covenant of good faith and fair dealing after he was terminated following an investigation into claims of gender discrimination and harassment that were made against him by a subordinate employee (Kim Thakur) about whom “King had performance concerns.” A jury awarded King $6 million on the defamation claim; $2.5 million on the wrongful termination claim; and $200,000 on the implied covenant claim. The jury also awarded King $15.6 million in punitive damages for a total judgment of $24.3 million. The trial court conditionally granted the Bank’s new trial motion subject to King’s accepting a remittitur, which would reduce the judgment to $5.4 million; King accepted the remittitur.

The Bank then appealed, and King cross-appealed. The Court of Appeal reversed the trial court’s new trial orders and, after conducting its “own independent review,” it concluded King was entitled to a one-to-one ratio of punitive to compensatory damages, resulting in the judgment being increased to $17.2 million ($8.6 million in compensatory and $8.6 million in punitive damages). The Court found the claims supported by substantial evidence, including evidence of Human Resources’ failure to properly investigate and its reliance on sources known to be unreliable or biased against King. Further, the Court found substantial evidence that the Bank wanted to terminate King in order to deprive him of his annual bonus. Morgado v. City & County of San Francisco, 2020 WL 5033169 (Cal. Ct. App. 2020) (after-tax mitigation income earned by wrongfully terminated employee may be deducted from front pay owed by former employer).

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