Touchstone Television Productions (Touchstone) hired actress Nicollette Sheridan (Sheridan) to appear in the first season of the television series Desperate Housewives. The agreement gave Touchstone the exclusive option to renew Sheridan‟s services on an annual basis for an additional six seasons. Touchstone renewed Sheridan's services up to and including Season 5. During Season 5, Touchstone informed Sheridan it would not renew her contract for Season 6.In case you hadn't heard about this, Sheridan sued for wrongful termination and other torts, claiming that
Then, Touchstone decided not to renew Sheridan for the final season, killed her character, but had her return as a ghost. Yes, I did not make this up. No, I never watched an episode.
During the September 24, 2008 filming of a Season 5 episode of Desperate Housewives, an incident occurred between Sheridan and Cherry, the series‟ creator. Sheridan claims that Cherry hit her. Thereafter, Sheridan complained to Touchstone about Cherry‟s (alleged) battery.
A jury deadlocked on whether Touchstone wrongfully terminated Sheridan in violation of public policy (retaliation for her complaint she was battered). The trial court repeatedly rejected Touchstone's argument that non-renewal of annual contracts do not give rise to wrongful termination claims.
The Court of Appeal, however, disagreed: "Decisional law does not allow a plaintiff to sue for wrongful termination in violation of public policy based upon an employer‟s refusal to renew an employment contract. "
Like every good story, though, this one has a twist. The Court of Appeal permitted Sheridan to sue under Labor Code Section 6310(b):
(b) Any employee who is discharged, threatened with discharge, demoted, suspended, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because the employee has made a bona fide oral or written complaint to the division, other governmental agencies having statutory responsibility for or assisting the division with reference to employee safety or health, his or her employer, or his or her representative, of unsafe working conditions, or work practices, in his or her employment or place of employment, or has participated in an employer-employee occupational health and safety committee, shall be entitled to reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer. Any employer who willfully refuses to rehire, promote, or otherwise restore an employee or former employee who has been determined to be eligible for rehiring or promotion by a grievance procedure, arbitration, or hearing authorized by law, is guilty of a misdemeanor.
So, why is this important? Because the statute allows for "non-renewal" of employment as a basis for a claim. But the statute only allows for "reinstatement and reimbursement for lost wages and work benefits . . .. " So, in Ms. Sheridan's case, she would be entitled to the one-year contract fee and related benefits, but not to emotional distress, front pay, or punitive damages.
For a minute, employers may have become interested in entering into six-month contracts with employees. But, as you can see, statutes may provide remeides, even if the common law does not. On the other hand, these contracts, if done right, could limit exposure on the lost wages measure of damages .... maybe? Another day and another case...
The case is Touchstone Television Productions v. Superior Court and the opinion is here.