Termination for Good Faith but Mistaken Belief of Overtime Entitlement Violates Public Policy

In Barbosa v. IMPCO Technologies, Inc., the California Court of Appeals for the Fourth District held that terminating an employee for exercising his statutory right to overtime wages out of a reasonable, good faith belief of entitlement to it, (notwithstanding the subsequent discovery that he was wrong), was contrary to California public policy.

Manuel Barbosa worked as a cell leader supervising a group of up to eight carburetor assemblers for IMPCO Technologies, Inc. After receiving complaints of missing overtime hours from employees he supervised, Barbosa believed he too was owed overtime and informed the company’s payroll administrator about the discrepancy. Barbosa told payroll administrators that he thought there must be something wrong with the time clock. The employees and Barbosa were then credited the overtime hours they sought. Approximately two weeks later, the payroll administrator examined the time cards and determined that no overtime had actually been due. The company’s human resources manager also compared the time cards to a gate scan report and found that employees could not have worked overtime as represented by Barbosa.

Subsequent to the determination that there was nothing wrong with the time clock, human resources, payroll administration and the operations manager called a meeting to discuss the issue of overtime. At the meeting, Barbosa reiterated that he and his employees had in fact worked the extra overtime that he claimed. A week later, Barbosa was terminated for falsifying time records. None of the other employees who received disputed wages was similarly terminated.

In his lawsuit, Barbosa alleged he was terminated because he had made a good faith, albeit mistaken, claim to overtime, not because he had falsified time records. The trial court sided with IMPCO Technologies and found that there was no public policy protecting a mistaken but good faith claim to overtime wages. On appeal, the Fourth District Court of Appeal reiterated that an at-will employee can raise a viable legal claim when his termination violated public policy. The court of appeal then acknowledged that the duty to pay overtime was “a well-established fundamental public policy” and emphasized that an allegation of employer wrong-doing need not be correct to sustain a wrongful termination action.1 In reversing the trial court’s granting of non-suit to the employer, the court of appeal concluded that Barbosa had presented sufficient evidence (e.g., coworkers’ beliefs that they were owed overtime and errors with previous timekeeping system) to demonstrate that he possessed a reasonable, good faith belief of entitlement to overtime. Accordingly, the court ruled that Barbosa was entitled to a jury determination of whether he had been terminated for asserting his mistaken yet good faith belief that he had a statutory right to overtime or for falsifying time cards. 


This entry was written by Stacey James.

1 Collier v. Supreme Court, 228 Cal. App. 3d 117 (1991) (employee’s good faith but mistaken belief offered protection from employer retaliation in whistleblower context); Green v. Ralee Engineering Co., 19 Cal. 4th 66 (1998) (employee only needed to prove that termination was due to reasonably based suspicions of illegal activity).

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.