An employer did not violate California’s Family Rights Act (“CFRA”) by terminating an employee who engaged in outside employment while out on CFRA medical leave, conduct prohibited by the employer’s policy, the California Supreme Court has ruled. Richey v. AutoNation Inc., No. S207536 (Cal. Jan. 29, 2015).

The Court said the plaintiff had “no greater right to reinstatement or to other benefits and conditions of employment than if [he] had been continuously employed” during the statutory leave period. The Court also found that, although the arbitrator, who heard the matter and rendered an award in the employer’s favor, may have erred in applying to the CFRA the “honest belief” defense used in cases under the federal Family and Medical Leave Act (“FMLA”), the employee suffered no prejudice because the arbitrator concluded the employer terminated him for violating company policy. This finding was sufficient to uphold the arbitration award, the Court said. (The defense allows employers to avoid liability under the FMLA when the allegedly discriminatory or retaliatory action is based on an honest, but mistaken, belief about an employee’s misconduct.) Accordingly, the Court ruled the Court of Appeal erred in vacating the arbitrator’s award.
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