Campbell v. Ford Industries, Inc.

• Decision Date: 12 February 1976
• Citation: 274 Or. 243,546 P.2d 141
• Parties: , 115 L.R.R.M. (BNA) 4837, 84 A.L.R.3d 1093 H. Albert CAMPBELL, Jr., Appellant, v. FORD INDUSTRIES, INC., et al., Respondents.
• Court: Oregon Supreme Court

Page 141

546 P.2d 141

274 Or. 243, 115 L.R.R.M. (BNA) 4837,

84 A.L.R.3d 1093

H. Albert CAMPBELL, Jr., Appellant, v. FORD INDUSTRIES, INC., et al., Respondents.

Supreme Court of Oregon.

Argued and Submitted Dec. 3, 1975.

Decided Feb. 12, 1976.

[274 Or. 244-A] Charles Robinowitz, Portland, argued the cause for appellant. With him on the briefs was Henry A. Carey, Jr., Portland.

James H. Clarke, of Dezendorf, Spears, Lubersky & Campbell, Portland, argued the cause for respondents. Also on the brief were Wayne Hilliard and Richard H. Williams, Portland.

TONGUE, Justice.

This is an action for damages for wrongful discharge of plaintiff from his employment with Ford Industries, Inc., and in the alternative, for wrongful interference by the defendants with his employment relationship with Ford Industries. ¹ The trial court sustained defendants' demurrer to plaintiff's second amended complaint. Plaintiff declined to plead further and appeals from the resulting judgment in favor of the defendants.

By this appeal plaintiff asks this court to decide the following questions:

(1) Whether plaintiff is entitled to damages for wrongful discharge from his employment where the discharge was allegedly motivated because of the plaintiff's exercise of a statutory right, and

(2) Whether an alternative cause of action for wrongful interference with plaintiff's employment relationship resulting in his discharge, as alleged in his second amended complaint, 'relates back' to his original complaint for wrongful discharge, so as not to be barred by the statute of limitations.

1. Plaintiff's complaint failed to allege facts sufficient to show that his discharge was wrongful.

Plaintiff's primary contention is that '(a)n employer may not discharge an employee in retaliation for exercising a legal right specifically expressed in a legislative statute' and that '(i)n the instant case, the defendants discharged the plaintiff for requesting corporate information in accordance with ORS 57.246.'

ORS 57.246, upon which plaintiff relies, provides that stockholders have the right to examine the books and records of a corporation under conditions provided by the terms of that statute. ²

Plaintiff's complaint alleged as its first cause of action that:

'I

'At all times relevant herein, plaintiff was employed as a mechanical engineer of defendant Ford Industries, Inc.; and was an owner of common stock in Ford Industries, Inc.

'* * *

'III

'In May, 1971, plaintiff requested certain corporate information from defendant Ford Industries relative to the value of his stock in Ford Industries and whether any of the defendants were engaged in any corporate misdealing.

'IV

'In retaliation for plaintiff's request and to deter plaintiff and others from requesting corporate information alleged above, defendants fired plaintiff from his employment with defendant Ford Industries on or about May 28, 1971.'

The complaint then alleged that 'the firing of plaintiff by defendants was intentional and malicious' and sought both actual and punitive damages, including $250,000 for loss of earnings, among other things.

Defendants contend that plaintiff's complaint does not allege facts sufficient to show that his request was made pursuant to ORS 57.246. There may be a serious question whether the allegations of plaintiff's complaint are sufficient for that purpose. For the purposes of this case, however, we shall nevertheless assume that plaintiff's request was made under the terms of that statute; that he had a right under its terms to examine the books and records of defendant Ford Industries and that he was discharged by defendants in retaliation for the attempted exercise of that right.

In Campbell v. Ford Industries, Inc., 266 Or. 479, 485, 513 P.2d 1153 (1973), we affirmed the sustaining of a demurrer in a previous action involving the same plaintiff and most of the same defendants and also involving plaintiff's discharge on or about the same date and said that:

'In seeking to resolve this question we must consider what has normally been recognized to be the unqualified right of an employer to discharge an employee for any reason and regardless of cause or motive, in the absence of limitations on their right imposed by provisions of statute or contract. * * *' ³

Plaintiff contends that since our decision in that case it has been held by this and other courts that 'an employer may not discharge an employee where the grounds for discharge would tend to frustrate a public policy' or 'would violate a legislative statutory scheme,' citing Nees v 108 (9th Cir. 1974); Monge v. Beebe Rubber Company, 114 N.H. 130, 316 A.2d 549 (1974); and Frampton v. Central Indiana Gas Company, 260 Ind. 249, 297 N.E.2d 425, 63 A.L.R.3d 973 (1973). Plaintiff also cites Montalvo v. Zamora, 7 Cal.App.3d 69, 86 Cal.Rptr. 401 (1970); and Glenn v. Clearman's Golden Cock Inn, Inc., 192 Cal.App.2d 793, 13 Cal.Rptr. 769 (1969), as well as cases not involving claims of wrongful discharge.

Based upon these authorities, plaintiff contends that:

'If an employer may fire an employee with impunity because the employee, as a stockholder, pursued certain legal rights, this would frustrate the purpose of ORS 57.246 for those corporate employees who acquired stock either by investment or through corporate stock option plans. That stockholder would have a choice of pursuing a 10 percent penalty, less attorney's fees, and a new job or letting matters rest, and for most if not all, the choice would be clear. No one would pursue any remedies under ORS 57.246, and the statute would be effective only for those stockholders who were not employees of the company.'

Different considerations might be involved in a case involving the discharge of an employee for exercising rights under ORS 57.246 when that employee has acquired the stock under an employee stock ownership plan. ⁴ No such facts, however, are alleged by this complaint.

As stated in an annotation in 62 A.L.R.3d 271 (1975), citing many cases:

'Despite its sometimes harsh operation and the obvious opportunities for abuse it affords an unscrupulous employer, few legal principles would seem to be better settled than the broad generality that an employment for an indefinite term is regarded as an employment at will which may be terminated at any time by either party for any reason or for no reason at all. * * *'

However, in Nees v. Hocks, supra, we held (at 536 P.2d 515), that:

'* * * (T)here can be circumstances in which the employer discharges an employee for such a socially undesirable motive that the employer must respond in damages for any injury done. * * *'

In Nees we also held, in effect, (at 516), that 'the community's interest in having its citizens serve on jury duty' was of such importance that 'an employer, who interferes with that interest by discharging an employee who served on a jury, should be required to compensate his employee for any damages she suffered.' In that same opinion we distinguished our previous decision in Campbell v. Ford Industries, Inc., 266 Or. 479, 513 P.2d 1153 (1973), upon the ground that 'the interest of the employee' in that case 'was purely private and not of general public concern.'

We are still of the same view. Although there may be reasons of public policy why the stockholders of a corporation should have the right to examine its books and records, ⁵ the primary basis for that right is not one of public policy, but the private and proprietary interest of stockholders, as owners of the corporation. Thus, as stated in 4 Fletcher, Cyclopedia Corporations 784--85, § 2213 (Perm.ed.1967):

'* * * the stockholders' right of inspection of the corporation's books and records rests upon the underlying ownership by them of the corporation's assets and property; the right is an incident of ownership of the corporate property * * *.' ⁶

This court has adopted the same view. See Bernert v. Multnomah Lbr. & Box Co. et al., 119 Or. 44, 48, 247 P. 155, 248 P. 156 (1926). See also Meyer v. Ford Industries, 272 Or. 531, 535, 538 P.2d 353 (1975), and Rosentool v. Bonanza Oil and Mine Corp., 221 Or. 520, 533, 352 P.2d 138 (1960).

It follows, in our opinion, that because the primary basis for the right of inspection of the books and records of a corporation by its stockholders, as provided by ORS 57.246, is the protection of their private and proprietary interests as owners of the corporation, any additional reasons of public policy as the basis for such a right are far less compelling, as a matter of 'community interest,' than the 'community interest in having its citizens serve on jury duty,' as involved in Nees v. Hocks, supra.

In addition, we believe it to be significant that the conduct of the plaintiff for which she was discharged in Nees (her refusal to request that she be excused from jury duty in order that she might perform her duties as an employee) related much more directly to her rights as an employee than did the conduct of the plaintiff in this case. His demand to inspect corporate books and records was an attempt to exercise his rights as a stockholder, and had no direct relation to his rights as an employee.

Upon examination of the remaining authorities cited by plaintiff in support of his position, we find that they are distinguishable on either similar or other grounds. ⁷

Perhaps the most comparable case on its facts is Becket v. Welton Becket & Associates, 39 Cal.App.3d 815, 114 Cal.Rptr. 531 (1974). In that case plaintiff was employed by a corporation of which his father owned all of the stock and died. Plaintiff was appointed co-executor of his father's estate. He was also the largest legatee. Plaintiff, as co-executor, brought a suit against the corporation and his co-executor alleging breach of fiduciary duties, corporate waste and improper usurpation of control of the corporation. He was then informed that unless he dropped the suit he would be discharged. Plaintiff refused to...