In Richey v. AutoNation, Inc., the Court held that an employer’s good-faith belief that employee was misusing medical leave did not justify terminating his employment.  The plaintiff, a sales manager at the car dealership, was on medical leave protected by the California Family Rights Act (“CFRA”).  He was terminated four weeks before the expiration of his approved medical leave because his employer believed the plaintiff was misusing his leave by working part time in a restaurant he owned.  He sued for violation of the CFRA and the claims were arbitrated as required by a contract. The plaintiff lost in arbitration; the arbitrator ruled that the employer had “honest belief” defense.  The trial court denied his motion to vacate the arbitrator’s decision and granted the petition to confirm the award. On appeal, the Court ruled that the “honest belief” defense was incompatible with California statutes, regulations and case law and the plaintiff  had an unwaivable statutory right to reinstatement.  The Court ruled that the clear legal error by the arbitrator abridged his statutory rights under CFRA—rights based on, and intended to further, an important public policy.  It concluded that despite limited review by courts of rulings by arbitrators, the arbitration award must be vacated.

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