California Employment Law Notes - September 2012

Desperate Housewife's Wrongful Termination Claim Should Have Been Dismissed

Touchstone Television Prods. v. Superior Court, 208 Cal. App. 4th 676 (2012)

Touchstone had an agreement with actress Nicollette Sheridan that gave it the exclusive option to renew Sheridan's contract on an annual basis for an additional six seasons (after the first season) of the television show "Desperate Housewives." Sheridan sued Touchstone for wrongful termination in violation of public policy, claiming she had been fired because she had complained about a battery allegedly committed upon her by Marc Cherry, the creator of the show. When the jury deadlocked on this claim, Touchstone moved for a directed verdict, contending that it had not terminated Sheridan, but rather had simply not renewed her contract for an additional season. The trial court denied the motion, but the Court of Appeal issued an alternative writ of mandate compelling the trial court to grant the directed verdict motion on the ground that a cause of action for wrongful termination in violation of public policy does not lie if an employer decides simply not to exercise an option to renew a contract. The Court also ordered the trial court to permit Sheridan to file an amended complaint alleging a cause of action under Labor Code § 6310(b) (prohibiting retaliation against an employee who complains about unsafe working conditions, etc.) See also Howard Entertainment, Inc. v. Kudrow, 2012 WL 3704928 (Cal. Ct. App. 2012) (entertainer's former personal manager could proceed with breach of contract claim in which he seeks a percentage of the entertainer's income from the services rendered during the period of his retention).

Post-Employment Non-Compete Covenant Could Not Be Enforced Against Seller/Employee Of Company

Fillpoint, LLC v. Maas, 2012 WL 3631266 (Cal. Ct. App. 2012)

Michael Maas sold his stock in Crave Entertainment Group, Inc. to Handleman Company and signed a stock purchase agreement that contained a three-year covenant not to compete. Maas signed a separate employment agreement with Crave that contained a one-year covenant not to compete, which would become operative when Maas's employment with Crave ended. Maas resigned from Crave three years after the acquisition and, approximately six months later, began working for a competitor of Crave. Fillpoint, which had acquired Crave from Handleman, sued Maas for breach of the non-compete covenant contained in the employment agreement and also sued Maas's new employer for interference with contract. The trial court granted defendants' motion for nonsuit, and the Court of Appeal affirmed, holding that the post-employment non-compete/non-solicitation covenants were void and unenforceable under California law because they "targeted an employee's fundamental right to pursue his or her profession."

Former Church Ministers May Not Proceed With Trafficking Victims Protection Act Claims

Headley v. Church of Scientology Int'l, 687 F.3d 1173 (9th Cir. 2012)

Marc and Claire Headley were ministers in the Sea Organization ("Sea Org"), which is an elite religious order of the Church of Scientology. The Sea Org demands much of its ministerial members, renders strict discipline, imposes stringent ethical and lifestyle constraints and goes to great efforts to retain clergy and to preserve the integrity of the ministry. The Headleys claimed they worked more than 100 hours per week and that each received a $50 weekly stipend as well as room and board at the Church's...