CACI 2513 Business Judgment

California Civil Jury Instructions CACI

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.

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.)

“An employment decision based on political concerns, even if otherwise unfair, is not actionable under section 12940 so long as the employee’s race or other protected status is not a substantial factor in the decision.” (Diego v. City of Los Angeles (2017) 15 Cal.App.5th 338, 355 [223 Cal.Rptr.3d 173].)

“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 (11th ed. 2017) Agency and Employment, § 244 et seq.
8 Witkin, Summary of California Law (11th ed. 2017) Constitutional Law, §§ 1017–1021
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)