Alki David Productions, Inc. (ADP) is an entertainment and media company owned by its principal, Alkiviades David. ADP initially produced internet programming, but in 2014 it began focusing on hologram technology, by which images are projected onto a screen and reflected for audience viewing.

Karl Zirpel was employed by ADP from 2013 to 2017. During his employment, Zirpel became heavily involved in hologram production. He learned the technology, how to install the equipment, and how to stage productions that ADP created for television shows, concerts, and museums. Zirpel became ADP’s vice president of operations in March 2014. His annual salary at the time ADT terminated his employment was $72,800.

In September 2017, Zirpel began working at a church on Hollywood Boulevard that ADP was converting into a theater for hologram productions. Zirpel was responsible for installing production equipment used to create the hologram.

Zirpel was at the theater on September 25, 2017, when four different Los Angeles City inspectors arrived. He learned of approximately 20 code violations, including plumbing and electrical violations.

Zirpel was concerned about the plumbing and electrical work in relation to the hologram equipment he was to install. Projection equipment weighing 700 pounds would be installed in the ceiling directly over the audience. Zirpel was concerned about the integrity of the ceiling and the floor and whether the equipment could fall on the theater attendees.

ADP had scheduled a private, invitation-only special event at the theater for celebrities and potential investors to take place on September 28, 2017 After the inspectors finished their September 25, 2017 walk throughs, Zirpel asked two of the inspectors whether ADP could obtain approval of the completed work before the event. Both inspectors told Zirpel that approvals would be impossible given their respective schedules and the amount of work to be done at the theater.

Zirpel and David had conversations about safety concerns, with Zirpel suggesting that the event be postponed. David “immediately blew up,” and told Zirpel to shut up and “go with the program,” Zirpel kept repeating what they were doing was not safe. David went into a “fit of rage,” yelled in Zirpel’s face, and using numerous obscenities as he fired Zirpel. One of the comments made by David revealed that Zirpel was gay.

Zirpel found the situation “traumatic,” because he “wasn’t out to a lot of people,” including many with whom Zirpel worked in a very masculine construction environment. Zirpel had also trusted David, one of the few people who knew Zirpel was gay.

Zirpel sued David and alleged his termination constituted retaliation under Labor Code section 1102.5, subdivision (b), for disclosing to ADP information Zirpel reasonably believed evidenced a violation of a statute, rule, or regulation, and under Labor Code section 232.5, subdivision (c) for disclosing information about the employer’s working conditions.

A jury found ADP liable for whistleblower retaliation under Labor Code section 232.5, which prohibits an employer from discharging an employee who discloses information about the employer’s working conditions, and section 1102.5, subdivisions (b) and (c), which prohibits an employer from retaliating against an employee who refuses to participate in an activity that would violate the law or who discloses information the employee reasonably believes would disclose a violation of law. The jury awarded Zirpel $7,068,717 in damages (consisting of $368,717 in economic damages, $700,000 in non-economic damages, and $6 million in punitive damages).

David appealed. The Court of Appeal affirmed the judgment in the published case of Zirpel v. Alki David Productions, Inc -B317334 (July, 2023).

One of David’s contentions on appeal was that the punitive damages award should be reversed because it was unconstitutionally excessive.

The Court of Appeal noted that of the guideposts for determining the constitutionality of a punitive damages award, reprehensibility is the most important factor. In the case of State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408, 419) the United States Supreme Court has instructed courts to determine the reprehensibility of a defendant’s conduct by considering whether “the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.” (Ibid.) A reviewing court must consider the totality of the circumstances when determining the reprehensibility of a defendant’s conduct. (Ibid.)

“There is substantial evidence of reprehensible conduct on the part of ADP and its principal, David. David and Zirpel’s superiors ignored Zirpel’s repeated disclosures of potentially hazardous conditions at the theater, evincing a disregard of the health and safety of others. Conscious disregard of the safety of others can also constitute malice for purposes of a punitive damages award.”

Despicable conduct is conduct that is so “base, vile or contemptible” that it would be despised and looked down upon by ordinary people. (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1228.) There is substantial evidence David acted with malice when terminating Zirpel’s employment. When Zirpel voiced his concerns regarding workplace safety, David yelled and screamed obscenities at Zirpel in front of his coworkers.

After telling Zirpel he was fired, David followed Zirpel out of the theater building and continued to scream at him. The totality of the circumstances here supports a finding of reprehensible conduct.