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Walsworth Attorneys Secure Major Defense Arbitration Award in Complicated Employment Matter

Attorney: Kellie S. Christianson, Shahirah S. Ruddell | Published 9.29.22

Partner Kellie S. Christianson and Senior Associate Shahirah S. Ruddell secured a major defense arbitration award in a wrongful termination case, on behalf of Walsworth client Lithia Motors, Inc., a Fortune 500 company.

Claimant Larry Py was represented by Zachary Cantor, of Cantor Law, and Rodney Mesriani of the Mesriani Law Group. Py alleged causes of action for wrongful termination, disability discrimination, failure to accommodate disability, family and medical leave (FMLA/CFRA) discrimination and retaliation, and whistleblower retaliation. However, the arbitrator (Hon. Joe Hilberman, Ret.) found that the termination of Py’s employment was lawful in all respects and rendered an award in favor of Walsworth’s client on all claims.

Py was an “at-will” employee, residing in Southern California, but traveling to multiple dealerships in various states on temporary assignments as a General Manager. He was tasked with improving performance and staffing. In June of 2018, he took paid time off for cancer treatment and recovery, and subsequently returned to work. Sometime in the Fall of 2018, Py had a conversation with his supervisor, which formed the basis of his case. Py claimed that this conversation was merely a request for additional time off in order to obtain follow-up medical care for his cancer. Py’s attorneys argued that this conversation constituted “notice” to Respondent of Py’s right to unpaid medical leave under FMLA/CFRA. Py testified that he was shocked to realize in January that his employment had been terminated, effective November 30. Py’s attorneys argued that the supervisor’s report of a voluntary resignation was false, and that the true motive for his termination was retaliation for exercising his FMLA/CFRA rights and/or for reporting unfair business practices. Py also alleged that he had a post-termination conversation with his former supervisor in January, 2019, wherein Lithia represented that Py would be reinstated in exchange for dismissing his claims. He sought special damages in excess of $2,000,000, and punitive damages.

The undisputed facts showed that Py’s temporary assignment at his last dealership was scheduled to end on November 30, 2018, and that prior to the disputed conversation, Py’s supervisor had no criticisms of his performance. Py’s supervisor testified that during the disputed conversation, Py unequivocally stated that he was “done” with work-related travel. Both men knew that there were no further assignments available for Py that would not have involved travel. Accordingly, the supervisor reported the conversation as a “voluntary resignation for personal reasons.”

Walsworth’s attorneys argued that there was no evidence to support the claims of discrimination, pretext or retaliation. Even giving Py the benefit of any doubt surrounding the disputed conversation, the worst that could be found was that a reasonable mutual mistake had occurred between Py and his supervisor. Honestly mistaking an employee’s intent to convey a resignation is not actionable, and if the November termination was not wrongful, then there was no duty to reinstate.

Furthermore, Py received his “final” paycheck and COBRA enrollment in mid-December 2018. Py testified that he did not respond because he thought this was an administrative error and that he was on “approved time off” in December. Walsworth’s attorneys argued that as an experienced General Manager, Py would have recognized the significance of a paycheck designated as “final”, particularly when it had been sent with a COBRA enrollment package. Yet, Py took no action to communicate any desire to rescind or correct his resignation. Moreover, Py’s written compensation plan provided him with unlimited paid time off, which Walsworth attorneys argued was a better benefit than the limited unpaid time off provided under FMLA/CFRA statutes. The evidence showed that Py was given unlimited paid time off for his cancer treatment in June of 2018, and he would have been given the same benefit for follow-up treatment. Finally, the evidence showed that Py never scheduled or received the follow-up cancer treatments he claimed he requested in his Fall 2018 conversation with his supervisor.

If you have additional questions about this matter, or want to learn more about our employment practice, contact Kellie S. Christianson or Shahirah S. Ruddell.