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Between California’s Prop 64 and the Republicans’ renewed hold on Congress and the White House, last week’s news was generally bad for the plaintiff bar. But the day before elections, a little-noticed California Supreme Court decision gave encouragement to employment attorneys by making it harder for employers to defend wrongful firing cases. In Stockett v. Association of California Water Agencies Joint Powers Insurance Authority, 04 C.D.O.S. 9774, former state employee Jerry Stockett claimed he was wrongfully fired in 1995 for supporting another employee’s sexual harassment claim. As required by state law, Stockett provided a notice of the tort claim to his employer, and, upon being told that the Insurance Authority would not settle the case, he sued. Stockett’s suit not only repeated the sexual harassment retaliation charge, but also added claims that his firing was related to several other whistleblower actions and speech protected by the First Amendment. The trial court agreed with his claim, awarding $4.5 million in damages. But the Insurance Authority successfully appealed, saying it was blindsided when Stockett brought the new charges and that by not naming them in his tort claim, he did not exhaust his administrative remedies. The Supreme Court’s reversal of the appeal was not welcomed by the defense bar, which frequently — and successfully — defends employers on the grounds that litigants have not exhausted administrative remedies. Stockett’s new charges were “a bait and switch,” said Peter Abrahams, the Horvitz & Levy partner who defended the Insurance Authority. “You can file a very general claim, and then in trial bring up theories very different from what was brought up in the claim.” Steven Tindall, a partner at Lieff Cabraser Heimann & Bernstein who specializes in employment law, said the decision was encouraging. “It certainly helps the government employees,” he said, adding that plaintiff attorneys will likely cite it in cases against private employers when courtroom arguments differ from an Equal Employment Opportunity Commission claim that preceded trial. “It’s a pushback from the Supreme Court saying technical defenses are going to be less supported,” said Garry Mathiason, a Littler Mendelson partner who defends public agencies in employment claims. He added that the opinion will also help plaintiffs by giving employers an incentive to settle a wrongful termination claim rather than face new charges in trial. Jay-Allen Eisen, the Sacramento appellate attorney who represented Stockett, said he was happy both with the precedent and the $4.5 million verdict for his client. “It’s a big thrill. It’s a sizeable verdict that went away in appeals court,” he said.

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