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Employer’s Decision not to Re-New a Fixed Term Employee Contract Upon its Expiration is not Subject to a Wrongful Termination in Violation of Public Policy Claim

In a new decision by the California Court of Appeal in Touchstone Television Productions v. Superior Court (Sheridan) – B241137, filed August 16, 2012, the court held that employer’s failure to renew employee’s fixed-term contract does not give rise to a claim for wrongful termination in violation of public policy. However, the non-renewal may be retaliatory under other statutory protection. The decision followed a line of other California case law, primarily Daly v. Exxon Corp. (1997) 55 Cal.App.4th 39 (Daly). The court stated: “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; in that instance, there is no termination of employment but instead an expiration of a fixed-term contract. Plaintiff, who alleged that her contract was not renewed because she complained of being assaulted by a coworker, should have been granted leave to plead a cause of action under Labor Code Sec. 6310(b), which permits an action for damages if the employee is discharged, threatened with discharge, or discriminated against by his or her employer because of the employee’s complaints about unsafe work conditions.”

The full text of the decision can be found here.