25
Oct

Man Wins Millions After Firing Over Criminal Charges That Were Dismissed

A San Diego Allstate agent who had worked for the company for 30 years was fired after he was arrested on domestic violence charges. This summer, he won more than $18 million from a jury, nearly $16 million of it in punitive damages. The case highlights a sensitive area for employers: dealing with allegations of criminal conduct that have yet to be substantiated.

In this case, however, the facts for the employer were even worse. Following an argument with his girlfriend, the agent was arrested and charged with possession of marijuana and two domestic violence counts. Two charges were dismissed in 2015, and a third domestic violence charge was dismissed after the agent attended an anger management course, as part of a plea agreement.

Allstate investigated in February 2016, and found no violation of company policy. But in March 2016, after the agent’s ex-girlfriend complained to company management, the company investigated again, and fired him several months later, saying that they conduct that led to his taking the anger-management class was a violation of company policy.

There are several lessons here.

  1. Separate the PR issues from the legal issues. As we know the facts, the company investigated once and found no violation of company policy. Then, when the agent’s girlfriend complained in an emotional email to the Allstate CEO, the company changed its mind and fired the agent. The company seems to have reacted to the possibility of negative publicity, rather than a change in the status of any charges, which by that point had been dismissed.
  2. Document all employment decisions thoroughly. If a company is going to review and reconsider a past decision, all actions must be thoroughly documented. Any change in a decision will be suspect and subject to intense scrutiny. If matters are to be re-opened, everyone needs to tread carefully.
  3. Understand California Labor Code section 432.7. California Labor Code section 432.7 prohibits an employer from asking an applicant or employee to disclose information concerning an arrest or detention that did not result in conviction, or information concerning a referral to, and participation in, any pretrial or post-trial diversion program expressly authorized and described by statute. These types of “ban-the-box” laws are relatively new, and may require specific legal advice to help companies successfully navigate these new employee protections. Always seek legal counsel when these issues arise.

Dealing with any assault charges, but especially with domestic violence allegations, need to be handled carefully by all employers. The size of this verdict is an indication of how juries will react when they feel that workers have been treated unfairly.