The California Supreme Court recently granted review of Richey v. Autonation, Inc., a Court of Appeal case that vacated an arbitration award in favor of the employer. The Court rejected the employer’s argument that it had an “honest belief” that an employee was misusing his CFRA/FMLA leave, and this honest belief justified the employee’s discharge. We previously discussed the Richey case here https://www.thelelawblog.com/2012/11/articles/labor-law/the-continuing-danger-of-terminating-employees-on-leave-an-honest-belief-that-leave-is-being-misused-is-not-always-enough-richey-v-autonation-inc/ on our blog.
Avery Richey, a sales manager at Power Toyota of Cerritos (“Toyota”), went on medical leave under the California Family Rights Act (“CFRA”) due to a back injury. While on leave, Toyota learned Richey was working at a restaurant he owned. Toyota dispatched an employee and a supervisor to Richey’s business, where they observed him sweeping, bending over, using a hammer to hang a sign, taking orders, and acting as a cashier. Toyota’s employee handbook provided: “You are not allowed to accept employment with another company while you are on approved [CFRA] leave.” Toyota believed Richey was violating this policy and misusing his leave and terminated Richey’s employment four weeks before the expiration of his approved medical leave.