Tilkey v. Allstate Ins. Co.Annotate this Case
While Michael Tilkey and his girlfriend Jacqueline Mann were at her home in Arizona, the two got into an argument. Tilkey decided to leave. When he stepped out onto the enclosed patio to collect his things, Mann locked the door behind him. Tilkey banged on the door to regain entry, but Mann called police. Police arrested Tilkey and charged him under Arizona law with criminal damage deface and other charges; domestic violence charges were attached to the criminal damage and disorderly conduct charges. Tilkey pled guilty to the disorderly conduct charge only, and the other charges were dropped. After Tilkey completed a domestic nonviolence diversion program, the disorderly conduct charge was dismissed. Before the disorderly conduct charge was dismissed, Allstate Insurance Company (Allstate), for whom Tilkey had worked for over 30 years, terminated his employment based on his arrest and his participation in the diversion program. Allstate informed Tilkey it was discharging him for threatening behavior and/or acts of physical harm or violence to another person. Following the termination, Allstate reported its reason for the termination on a Form U5, filed with Financial Industry Regulatory Authority (FINRA) and accessible to any firm that hired licensed broker-dealers like Tilkey. Tilkey sued Allstate for wrongful termination in violation of California Labor Code section 432.7 and compelled, self-published defamation. At trial, Allstate presented evidence that it would have terminated his employment based on after-acquired evidence that Tilkey had circulated obscene and inappropriate e-mails using company resources. A jury returned a verdict in Tilkey’s favor on all causes of action. Allstate appealed, contending: (1) it did not violate section 432.7; (2) compelled self-published defamation per se was not a viable tort theory; (3) it did not defame Tilkey because there was not substantial evidence its statement was not substantially true; (4) punitive damages were unavailable in compelled self-publication defamation causes of action; (5) the defamatory statement was not made with malice; and (6) the punitive damages awarded here were unconstitutionally excessive. The Court of Appeal agreed Allstate did not violate section 432.7 when it terminated Tilkey’s employment based on his plea and his participation in an Arizona domestic nonviolence program and reversed that judgment. However, the Court concluded compelled self-published defamation was a viable theory, and substantial evidence supported the verdict that the statement was not substantially true, so the Court affirmed that portion of the judgment. While the Court concluded punitive damages were available in this instance, the punitive damages awarded here were not proportionate to the compensatory damages for defamation. The Court remanded this matter to the trial court with directions to recalculate punitive damages.