California Civil Jury Instructions (CACI) (2017)

2513. Business Judgment

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2513.Business Judgment
In California, employment is presumed to be “at will.” That means that
an employer may [discharge/[other adverse action]] an employee for no
reason, or for a good, bad, mistaken, unwise, or even unfair reason, as
long as its action is not for a [discriminatory/retaliatory] reason.
New December 2013
Directions for Use
Give this instruction to advise the jury that the employer’s adverse action is not
illegal just because it is ill-advised. It has been held to be error not to give this
instruction. (See Veronese v. Lucasfilm Ltd. (2012) 212 Cal.App.4th 1, 20–24 [151
Cal.Rptr.3d 41].)
Sources and Authority
• At-Will Employment. Labor Code section 2922.
“[A] plaintiff in a discrimination case must show discrimination, not just that
the employer’s decision was wrong, mistaken, or unwise. . . . ‘ “The employer
may fire an employee for a good reason, a bad reason, a reason based on
erroneous facts, or for no reason at all, as long as its action is not for a
discriminatory reason. . . . ‘While an employer’s judgment or course of action
may seem poor or erroneous to outsiders, the relevant question is . . . whether
the given reason was a pretext for illegal discrimination. The employer’s stated
legitimate reason . . . does not have to be a reason that the judge or jurors
would act on or approve.’ ” ’ ” (Veronese, supra, 212 Cal.App.4th at p. 21,
internal citation omitted.)
• “[I]f nondiscriminatory, [defendant]’s true reasons need not necessarily have
been wise or correct. While the objective soundness of an employer’s proffered
reasons supports their credibility . . . , the ultimate issue is simply whether the
employer acted with a motive to discriminate illegally. Thus, ‘legitimate’
reasons in this context are reasons that are facially unrelated to prohibited bias,
and which, if true, would thus preclude a finding of discrimination.” (Guz v.
Bechtel National, Inc. (2000) 24 Cal.4th 317, 358 [100 Cal.Rptr.2d 352, 8 P.3d
1089], original italics, internal citations omitted.)
• “[U]nder the law [defendant] was entitled to exercise her business judgment,
without second guessing. But [the court] refused to tell the jury that. That was
error.” (Veronese, supra, 212 Cal.App.4th at p. 24.)
• “What constitutes satisfactory performance is of course a question ordinarily
vested in the employer’s sole discretion. An employer is free to set standards
that might appear unreasonable to outside observers, and to discipline
employees who fail to meet those standards, so long as the standards are
applied evenhandedly. But that does not mean that an employer conclusively
establishes the governing standard of competence in an employment
discrimination action merely by asserting that the plaintiff’s performance was
less than satisfactory. Evidence of the employer’s policies and practices,
including its treatment of other employees, may support a contention, and an
eventual finding, that the plaintiff’s job performance did in fact satisfy the
employer’s own norms.” (Cheal v. El Camino Hospital (2014) 223 Cal.App.4th
736, 742–743 [167 Cal.Rptr.3d 485].)
• “The central issue is and should remain whether the evidence as a whole
supports a reasoned inference that the challenged action was the product of
discriminatory or retaliatory animus. The employer’s mere articulation of a
legitimate reason for the action cannot answer this question; it can only dispel
the presumption of improper motive that would otherwise entitle the employee
to a judgment in his favor.” (Cheal, supra, 223 Cal.App.4th at p. 755.)
Secondary Sources
3 Witkin, Summary of California Law (10th ed. 2005) Agency and Employment,
§231 et seq.
8 Witkin, Summary of California Law (10th ed. 2005) Constitutional Law, §§ 915,
916, 918
Chin et al., California Practice Guide: Employment Litigation, Ch. 4-A,
Employment Presumed At Will, ¶ 4:25 (The Rutter Group)
Chin et al., California Practice Guide: Employment Litigation, Ch. 7-A, Title VII
And The California Fair Employment And Housing Act, ¶¶ 7:194, 7:200–7:201,
7:356, 7:391–7:392, 7:530, 7:531, 7:535 (The Rutter Group)
4 Wilcox, California Employment Law, Ch. 60, Liability for Wrongful Termination
and Discipline, § 60.01 et seq. (Matthew Bender)
21 California Forms of Pleading and Practice, Ch. 249, Employment Law:
Termination and Discipline, § 249.11 (Matthew Bender)
10 California Points and Authorities, Ch. 100, Employer and Employee: Wrongful
Termination and Discipline, § 100.23 (Matthew Bender)
2514–2519. Reserved for Future Use