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Failure to Reimburse For Mileage: Grounds For Constructive Discharge Claim


Vasquez v. Franklin Management Real Estate Fund, Inc. - Second District Court of Appeal, CA 

Facts:  Management Real Estate Fund ("Defendant") employed Vasquez ("Plaintiff) as a maintenance technician at $10 per hour for a 40-hour week.  Plaintiff's duties included driving his own vehicle to a hardware store and performing other errands in obtaining items needed in maintaining defendant's apartments.  When Defendant refused to reimburse Plaintiff for the mileage expenses, Plaintiff quit and sued Defendant for constructive discharge in violation of public policy.  Plaintiff claimed he had no choice but to resign after his repeated requests were denied after 15 months on the job.  His suit alleged violation of California Labor Code Section 2802 and that the denial of reimbursement effectively left him with less than minimum wage during his tenure.

The trial court originally dismissed Plaintiff's complaint after concluding that an employer’s failure to pay mileage expenses of $15 per day was not conduct “so intolerable or aggravated that a reasonable person in the employee’s position would have felt no choice but to resign.”  Plaintiff appealed and argued that the employer, in effect, required Plaintiff to use his own wages to pay for the employer’s costs of doing business.  Since Plaintiff only earned $10.00 per hour, the mileage expenses allegedly represented a significant portion of his take-home pay.  The Court of Appeal reversed and held that an employee could state a cause of action for wrongful constructive discharge when an employer refuses to reimburse a low-wage earner for mileage expenses. 

Holding:  The Court of Appeal noted that the existence of a legal violation alone, generally does not establish intolerable work conditions.  However, in this case, Plaintiff alleged not only the statutory violation, but that the assigned duties required such extensive driving that reimbursement represented a significant percentage of his already low salary.  The court also concluded that California’s minimum wage law represents a fundamental policy for purposes of a claim for wrongful termination or constructive discharge in violation of public policy.  Accordingly, the Court of Appeal found the  Plaintiff should be allowed to present evidence to establish these facts from which the triers of fact could find that respondent "knowingly permitted working conditions that were so intolerable or aggravated at the time of the employee's resignation that a reasonable employer would realize that a reasonable person in the employee's position would be compelled to resign." 

Judgment:  The Court of Appeal reversed the trial court and held that an employee could state a cause of action for wrongful constructive discharge when an employer refuses to reimburse a low-wage earner for mileage expenses. 

Majority Opinion Judge:  Judge Manella 

Date:  December 31, 2013 

Opinion:  http://scholar.google.com/scholar_case?case=1874456909018923017

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