The Honest Belief Defense In Inconsistent With Rights Under CFRA

Richey v. AutoNation, Inc.
(Cal. Ct. of App. 2d Dist.), filed November 13, 2012

Avery Richey was a sales manager at Power Toyota of Cerritos.  He went out on medical leave.  Four weeks before the expiration of his approved medical leave under the Moore-Brown-Roberti Family Rights Act (CFRA) (Cal. Gov. Code sections 12945.1, 12945.2) he was fired.  He was fired because his employer believed Richey was misusing his leave by working part-time in a restaurant he owned.

Richey sued Power Toyota’s parent companies, AutoNation, Inc., Webb Automotive Group, Inc., Mr. Wheels, Inc., and his direct supervisor, Rudy Sandoval, alleging his rights under CFRA had been violated.

Richey’s claims were submitted to arbitration under the terms of a mandatory employment arbitration agreement that provided, in part, “[r]esolution of the dispute shall be based solely upon the law governing the claims and defenses set forth in the pleadings.”

The arbitrator denied Richey’s CFRA claim based on the so-called honest belief or honest suspicion defense.  The trial court denied Richey’s motion to vacate the arbitrator’s decision and granted AutoNation’s petition to confirm the award.

The Court of Appeal reversed.  It held that the honest belief defense accepted by the arbitrator was incompatible with California statutes, regulations and case law and deprived Richey of his unwaivable statutory right to reinstatement under Section 12945.2(a).