Lawsuit threatens to put 300 out of work

Pasadena Star News

By: Cynthia Kurtz

Posted 7/16/2013

We have a great legal system. We probably use it too often to settle disagreements that could be resolved by getting everyone in the same room at the same time. But sometimes it is necessary to hand a matter to the lawyers. It is nice to know that our legal system is there in case you ever do need to use it.

By and large, I think the courts find reasonable ways to handle the business and employment grievances put before them. However, once in a while you hear of a case and wonder how can that be fair?

The case in point is a recent judgment against a company in the San Gabriel Valley. What started as a dispute over a single termination might end up impacting 300 employees and their families. The company is Valley Vista Services, a family owned solid waste and recycling company that has served the San Gabriel Valley since 1957.

This case began when one of Valley Vista’s female employee became ill and wasn’t able to work. After using sick leave and vacation time, she still wasn’t back at work. Valley Vista tried to contact her but she didn’t respond and so the company terminated her for job abandonment.

Her lawyer says Valley Vista’s action was a wrongful termination and that the company didn’t try hard enough to accommodate her special needs - panic attacks.

I didn’t hear the trial and I don’t know all the details so I make no judgment on whether the employee was treated fairly or unfairly. The court’s determination was that she deserved monetary compensation. So let’s accept that and say that Valley Vista Services should pay the employee damages. 

First, she was awarded $5.2 million in compensatory damages. These are intended to make her whole for the loss of her job. She was also awarded punitive damages. Punitive damages are intended to punish the “wrongdoer.” California doesn’t have any caps on punitive damage awards in these types of cases. Twenty-two of the 45 states that allow punitive damages set limits.

California does allow the court to look at the company’s value before setting the damages. In this case the plaintiff’s attorney argued that the company’s value should not be based on revenues but on the value of the company if everything was liquidated. 

Yes, I said liquidated. Everything sold, piece by piece, no more company. The court accepted this argument and Valley Vista Services was hit with an additional $16.5 million judgment. The $21.7 million penalty is the largest employment related award of its kind in Los Angeles County history. Unless it is overturned on appeal, it will put Valley Vista Services out of business and put 300 employees out of work. 

We’ll see if an appeal of the case changes the outcome. But if it doesn’t, taking away the jobs of 300 people who were not the “wrong doers” as a way of righting the wrong to one employee just doesn’t make sense to me.