On August 16, 2012, the California Court of Appeal held in Touchstone Television Productions v. Superior Court, Case No. B241137, that a cause of action for wrongful termination in violation of public policy does not lie if an employer decides not to exercise an option to renew a contract, even if the decision is based on an employee’s complaints about unsafe working conditions.
Touchstone hired plaintiff Nicollette Sheridan to play a character for the first season of the television series Desperate Housewives, reserving the exclusive right to renew her contract on an annual basis for up to six seasons. During filming of season five, Sheridan complained to Touchstone of an incident in which the series’ creator allegedly battered her. Touchstone subsequently informed Sheridan it would not exercise the season six renewal option. Sheridan appeared in three more season five episodes and contract-required publicity, and Touchstone paid her in full.
Relying on Daley v. Exxon Corp. (1997) 55 Cal.App.4th 39, the Court of Appeal vacated the trial court’s denial of the employer’s motion for a directed verdict on Sheridan’s wrongful termination cause of action, reasoning that there was “no termination of employment but, instead, an expiration of a fixed-term contract.” The Court found it inapposite that Touchstone’s decision may have been influenced by Sheridan’s complaints on the alleged battery incident. The Court also directed the trial court to permit Sheridan to amend her complaint to assert a cause of action under Labor Code section 6310(b) for lost wages and work benefits.
For employers of contract labor, Touchstone’s practical effect is to limit the potential exposure from non-renewal of fixed-term employment contracts to lost wage and work benefit claims under Labor Code section 6310.
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