Key Decisions

February 2013 – Employee’s Termination Was Not Wrongful

(filed under: Key Decisions Archive | February 22, 2013)

Employee’s Termination Was Not Wrongful

McGrory v. Applied Signal Technology, Inc.
(Cal. Ct. of App., 6th Dist.), filed January 24, 2013 


John McGrory worked for Applied Signal Technology, Inc.  He was hired as a section manager and promoted to department manager, reporting directly to the chief financial officer.  A dozen employees reported directly to McGrory.

McGrory gave one of the employees who reported to him, Dana Thomas, a written warning over poor work performance.  Thomas responded to the warning by filing a complaint accusing McGrory of discriminating against her based on her gender and sexual orientation.  She did not complain of sexual harassment.

Applied Signal Technologies engaged an outside attorney to investigate the complaint.  She concluded that McGrory had not discriminated against Thomas on the basis of her gender or sexual orientation.  However, she also concluded that in other ways McGrory had violated Applied Signal Technology’s policies on sexual harassment and business and personal ethics and he had been uncooperative and deceptive during the investigation.  Based on this latter finding, Applied Signal Technologies fired McGrory.

McGrory sued for wrongful termination and defamation.

Applied Signal Technology filed a motion for summary judgment or summary adjudication.  It asserted there was no evidence that it terminated McGrory for an impermissible reason and that it could not be liable in defamation for privileged statements of opinion on a topic of mutual interest.  The trial court granted summary judgment.


The Court of Appeal affirmed.

As an at-will employee, McGrory could be terminated by Applied Signal Technology, except for a reason that violates a fundamental public policy recognized in a constitutional or statutory provision.  One of these is on the basis of sex.

There was no evidence that McGrory was fired because of his sex.

Being uncooperative or deceptive in an employer’s internal investigation is not a protected activity under state or federal law.  Therefore, Applied Signal Technology was within its rights and the law to fire McGrory for being uncooperative in connection with its investigation of Thomas’ complaint.


Many employees believe that unfair or bad termination decisions justify lawsuits.  This case reminds us that when employment is at-will, only terminations that violate public policy will typically sustain a lawsuit.