Discharge in Violation of Public Policy against Age Discrimination
Employment termination cases begin with the rule that employment is presumed
terminable “at will.” Labor Code § 2922. Unless they agree otherwise, either the
employer or the employee may terminate the employment relationship and neither needs
good cause to do so.
To overcome the presumption, the employee alleging a wrongful termination
("tortious discharge") must prove a recognized exception. One exception was recognized
by the California Supreme Court in Tameny v. Atlantic Richfield Co., 27 Cal. 3d 167
(1980)-- a discharge that violates fundamental public policy. Not just any policy will do,
however. The policy in question must affect society at large, be "well- established,"
"fundamental," and "substantial." Gantt v. Sentry Ins., 1 Cal. 4th 1083, 1090 (1992).
The Fair Employment and Housing Act (“FEHA”) makes it an unlawful
employment practice "[f]or an employer, because of the... age.. of any person, to...
discharge the person from employment." Gov't Code § 12940(a). As applied to
employers regularly employing five or more workers, the policy prohibiting age
discrimination in the FEHA satisfies the Gantt criteria and supports a common law action
for tortious discharge. Stevenson v. Superior Court, 16 Cal. 4th 880 (1997). This is so
even though the employee has a direct remedy under the FEHA,1 and the employee need
not show exhaustion of administrative remedies (as required to file a cause of action
directly under the statute) to bring the common law Tameny claim. See id. The FEHA,
however, circumscribes the public policy and therefore the common law cause of action.
As a result, when the defendant is not an "employer" under the FEHA a plaintiff has
1
A common law cause of action for discharge in violation of public policy is, in effect,
an independent alternative to a FEHA administrative claim and subsequent cause of
action under the act. See Stevenson v. Superior Court, 16 Cal. 4th 880, 905 (1997) (“An
employee, of course, may elect to waive the statutory cause of action and remedies and
proceed directly to court on the common law claims"); Mathieu v. Norrell Corp. 115 Cal.
App. 4th 1174, 1189-1190 (2004).
neither a FEHA claim nor a Tameny claim for employment discrimination. E.g. Reno v.
Baird, 18 Cal. 4th 640 (1998) (supervisors not liable individually); Jennings v. Marralle,
8 Cal. 4th 121 (1994) (defendant did not regularly employ five or more workers as
required, under Section 12926(d), for a person to be an "employer" under the FEHA).
"The tort for wrongful termination is premised on the wrongful termination of an
employment relationship." Miklosy v. Regents of the University of California 44 Cal. 4th
876, 900 (2008). If an employer terminates an employment relationship for a reason that
contravenes some fundamental public policy, then the employer breaches a general duty
imposed by law upon all employers and the employee’s remedy therefore sounds in tort."
Miklosy v. Regents of the University of California 44 Cal. 4th 876, 900 (2008). "An
individual who is not an employer cannot commit the tort of wrongful discharge in
violation of public policy; rather he or she can only be the agent by which an employer
commits that tort." Id.; Khajavi v. Feather River Anesthesia Med. Group 84 Cal. App. 4th
32, 53 (2000) ("As a matter of law, only an employer can be liable for the tort of
wrongful discharge in violation of public policy") "[I]t is the employer’s adverse
employment action that constitutes the substance of the tort, and the supervisor’s action
merges with that of the employer." Lloyd v. County of Los Angeles 172 Cal. App. 4th
320, 330 (2009). Therefore "a common law Tameny cause of action for wrongful
termination... lies only against an employer, not against the supervisor through whom the
employer commits the tort." Id. at 330. The proper defendant in any wrongful
termination suit is the employer.
As the duty is imposed only against the employer (and not its employees), suits
relying on elaborate tort doctrines that assume a defendant has a duty to some coemployee are irrelevant. Employees cannot be subjected to liability on conspiracy or
other theories of concerted action. E.g. Reno v. Baird, 18 Cal. 4th 640, 663 (1998);
Applied Equipment Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 4th 503, 510 (1994)
(citation omitted) ("Acting in concert does not destroy the immunity of defendants");
Hardy v. Vial, 48 Cal. 2d 577, 583-84 (1957) (refusing to impose liability on defendants
for tort they could not commit acting alone); cf. Doctors Co. v. Superior Court, 49 Cal.
3d 39, 44 (1989) (defendant was not personally bound by the duty violated by
wrongdoing and could not be held liable on conspiracy theory; insurer's agent not liable
where "duty is imposed by statute solely upon persons engaged in the business of
insurance"); Jacobs v. Universal Development Corp., 53 Cal. App. 4th 692 (1997) (fellow
employees cannot be held accountable for tortious discharge on a conspiracy theory).
Individual employees cannot even be held liable for age discrimination directly
under the FEHA. The FEHA defines an “employer” to include “any person regularly
employing five or more persons….” Gov’t Code § 12926(d). Individuals who do not
themselves qualify as employers may not be sued under the FEHA for alleged
discriminatory acts or be held liable for discharge in violation of public policy for
discrimination relating to personnel management decisions. Reno v. Baird, 18 Cal. 4th
640, 663 (1998); cf. Stern v. California State Archives, 982 F. Supp. 690, 692 (E.D. Cal.
1997) (“[t]here is no individual liability even where the supervisor is the employer's
‘agent’ ”). In fact, a former employee cannot sue his or her former coworkers under any
legal theory (such as IIED) based on their conduct relating to personnel actions.
Sheppard v. Freeman, 67 Cal. App. 4th 339, 347 (1999); Janken v. GM Hughes
Electronics, 46 Cal. App. 4th 55, 80 (1996) (no IIED liability).
This rule does not depend on whether the defendant employee was acting within
the scope of employment while engaged in conduct relating to the personnel action.
Sheppard, 67 Cal. App. 4th at 347-48. Personnel decisions are made for the benefit of
the enterprise-- the employer-- and it is the employer, not the individual employees, that
must bear the attendant risks. Id. at 346. It is contrary to public policy to subject
individual employees to the threat of suits for making such decisions. See id.
Breach of Implied Covenant of Good Faith & Fair Dealing
The presumption of at-will employment may also be rebutted by showing a
promise of permanent employment-- that the employment relationship will continue
indefinitely and will not be terminated except for good cause. Foley v. Interactive Data
Corp., 47 Cal. 3d 654, 677 (1988).
The promise may be oral, but to overcome the at-
will presumption this oral promise must be sufficiently definite. Pugh v. See’s Candies,
Inc., 116 Cal. App. 3d 311, 329 (1981) (“oblique language will not, standing alone, be
sufficient to establish agreement”) , disapproved on other grounds in Guz v. Bechtel
Nat’l, Inc., 24 Cal. 4th 317 (2000).
The law implies in every contract a duty of good faith and fair dealing in the
contract's performance and enforcement. A party, however, may not put the cart before
the horse. There is no implied covenant of good faith and fair dealing if there is no
contract. E.g. Smith v. City and County of San Francisco, 225 Cal. App. 3d 38, 49
(1990). Assuming a contract, the scope of conduct prohibited by the implied covenant is
circumscribed by the purpose of the express terms of the contract. This is so because the
implied covenant is read into contracts to protect the express covenants or promises of the
contract, not to protect some general public policy interest not directly tied to the
contract's purpose. Carma Developers (Cal.), Inc. v. Marathon Development California,
Inc., 2 Cal. 4th 342, 371-73 (1992). The implied covenant exists merely to prevent one
party from unfairly frustrating the other party’s right to receive the benefits of the
agreement actually made. Guz v. Bechtel Nat’l, Inc., 24 Cal. 4th 317, 349 (2000).
Assuming an employee has been discharged in breach of a contract to discharge only for
good cause, the covenant is breached when the employer discharges an employee without
a good faith belief that there exists good cause for termination. See Pugh v. See’s
Candies, Inc., 203 Cal. App. 3d 743, 770 (Pugh II).
Agents for disclosed or known principals do not have liability in contract, as
“contracts” made by agents of disclosed principals are presumed to be the contracts of the
principal. Filippo Industries, Inc. v. Sun Ins. Co. of New York, 74 Cal. App. 4th 1429,
1443 (1999); Bayuk v. Edson, 236 Cal. App. 2d 309, 319-20 (1965). Not surprisingly,
the only proper defendant in an action for breach of an employment contract or breach of
the covenant of good faith and fair dealing is the employer – the other party to the
employee’s alleged employment agreement. See Cleary v. American Airlines, Inc, 111
Cal. App. 3d 443, 456 (1980) disapproved on other grounds in Guz v. Bechtel Nat'l, Inc.,
24 Cal. 4th 317, 351 (2000); cf. Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566, 576 (1973)
(non-insurer defendants were not parties to the agreements for insurance and therefore
not subject to an implied duty of good faith and fair dealing).