Delaney v. Taco Time Intern., Inc.

• Decision Date: 24 April 1984
• Parties: , 116 L.R.R.M. (BNA) 2168, 105 Lab.Cas. P 55,606, 1 IER Cases 367 Reginald DELANEY, Petitioner on review, v. TACO TIME INTERNATIONAL, INC., An Oregon corporation, Respondent on review. A8006-03371; A25912; S30172.
• Court: Oregon Supreme Court

Page 114

681 P.2d 114

297 Or. 10, 116 L.R.R.M. (BNA) 2168,

105 Lab.Cas. P 55,606,

1 IER Cases 367

Reginald DELANEY, Petitioner on review, v. TACO TIME INTERNATIONAL, INC., An Oregon corporation Respondent on review.

A8006-03371; A25912; S30172.

Supreme Court of Oregon In Banc.

Argued and Submitted March 6, 1984.

Decided April 24, 1984.

John P. Manning, Portland, argued the cause and filed the petition and brief for petitioner on review.

Gary V. Abbott, Portland, argued the cause for respondent on review. With him on the briefs were Emil R. Berg and Wolf, Griffith, Bittner, Abbott & Roberts, Portland.

JONES, Justice.

This case presents the question whether plaintiff proved the common-law tort of wrongful discharge. A jury awarded plaintiff damages for lost wages, emotional distress and punitive damages. Defendant appealed and the Court of Appeals reversed. We allowed review and reverse the Court of Appeals, 65 Or.App. 160, 670 P.2d 218, and affirm the trial court judgment.

Much of the evidence is in dispute in this case. Because the jury's verdict was for plaintiff, we review the evidence in the light most favorable to plaintiff. Green v. Uncle Don's Mobile City, 279 Or. 425, 427, 568 P.2d 1375 (1977).

In December, 1979, plaintiff managed one of defendant's Portland restaurants. Plaintiff asked his district manager, Ledbetter, how to handle Ms. White, a black employe with whom plaintiff had been having trouble. Ledbetter advised plaintiff to talk with White, which he did, and plaintiff believed the problems were resolved.

During the same time, Ledbetter, who also had been manager of this restaurant, received comments from customers about the restaurant. The customers complimented the service and food but reported that they would not be eating there as often because there were too many black employes. Ledbetter implied to plaintiff, who is black, that plaintiff should fire Ms. White to make room for a white employe. On December 18, 1979, plaintiff fired White.

When White applied for unemployment compensation she reported that she had been discharged to make room for a white employe. On January 9, 1980, Ledbetter called a meeting with plaintiff because he knew that White could not be lawfully discharged for that reason. At that meeting, Ledbetter filled out a Unit Service Report ¹ describing the circumstances of White's discharge:

"OBJECTIVE OF THIS CALL

"1) To discuss the termination of * * * White

"COMMENTS

"My notes show that [plaintiff] talked to me about a personnel problem with [White]. My notes show that [plaintiff] told me that [White] asked him to sleep with her and that when he would not that she started causing dissension within the crew.

"[Plaintiff] now tells me that she asked him to come over to her house and that he declined.

"[Plaintiff] also has said that the problem was solved by the beginning of the month (Dec) although my records show that we had talked about it on 12-15 after a crew meeting.

"[Plaintiff] asked me on or about 12-15 to take two weeks vacation. When I inquired about how well the store would run he said it would be OK. I then asked if [White] would cause any problems while he was gone and that if she would that it would be best if she was terminated.

"Also on 12-14-79 I discussed with [plaintiff] statements I had heard from two local patrons of the store that although the store was clean and the food was good they weren't eating here as frequently as they would if the crew were not all black.

"I suggested the addition of one or two white people but in no way did I suggest that he terminate anyone because of their color.

"[Plaintiff] said today that he thought I had told him to fire [White] because she was black and I made very clear that this was not my intention at all and that the customer comments I heard had nothing whatsoever to do with terminating [White].

"At this point in our conversation [plaintiff] got up from the table & refused to talk with me at all. When I insisted he threatened to leave. I told him if he did I would consider it a resignation. He stayed. * * * "

The report concluded that White must be reinstated. Plaintiff refused to sign the report because he felt it contained untrue statements. Specifically, plaintiff objected to the statement that White had asked plaintiff to sleep with her and when he refused she caused dissension at work. Ledbetter warned plaintiff that refusing to sign the report could jeopardize his employment.

On January 15, 1980, Ledbetter and his supervisor, Messal, met with plaintiff. Messal insisted that plaintiff sign the report and rehire White. Plaintiff refused, saying that White did not want to be rehired because she had obtained a better job. Messal terminated plaintiff as manager but offered him the position of assistant manager in a Eugene outlet. Plaintiff refused the offer and was discharged. ²

The question in this case is whether plaintiff has proved a claim for the common-law tort of wrongful discharge on the basis that he was required to sign a false and potentially defamatory statement to retain his employment. ³ We hold that he has.

The general rule regarding employment at will is that an employer may discharge an employe or an employe may quit at any time for any reason. Simpson v. Western Graphics, 293 Or. 96, 99, 643 P.2d 1276 (1982); Maddox v. Clack. County Sch. Dist. No. 25, 293 Or. 27, 31, 643 P.2d 1253 (1982). This general rule has met a growing number of challenges with a variety of results. ⁴ Some jurisdictions authorize a recovery for breach of contract based upon an implied contractual duty of the employer not to terminate the employe for motives regarded as violative of public policy. See, Cleary v. American Airlines, Inc., 111 Cal.App.3d 443, 168 Cal.Rptr. 722 (1980); Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505 (1980); Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549 (1974). But see Martin v. Tapley, 360 So.2d 708 (Ala.1978); Larsen v. Motor Supply Co., 117 Ariz. 507, 573 P.2d 907 (1977). Other jurisdictions provide employes a remedy in tort for wrongful or retaliatory discharge on the theory that dismissal of employes for reasons violative of a particular public policy should be actionable. See, Tameny v. Atlantic Richfield Co., 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330 (1980); Kelsay v. Motorola, Inc., 74 Ill.2d 172, 23 Ill.Dec. 559, 384 N.E.2d 353 (1978); Patterson v. Philco Corp., 252 Cal.App.2d 63, 60 Cal.Rptr. 110 (1967). But see Goodroe v. Georgia Power Co., 148 Ga.App. 193, 251 S.E.2d 51 (1978); Hinrichs v. Tranquilaire Hospital, 352 So.2d 1130 (Ala.1977).

In Nees v. Hocks, 272 Or. 210, 536 P.2d 512 (1975), we recognized an exception to the general rule that an employer can discharge an employe at will and allowed plaintiff a remedy in tort for wrongful discharge. In Nees, an employe was discharged for serving on jury duty. Stating that the jury system and jury duty are highly regarded societal obligations, as reflected in the Oregon constitutional and statutory provisions giving the right to jury trials, we concluded that an employer could not fire plaintiff for fulfilling her societal obligation and plaintiff could sue for wrongful discharge.

In Campbell v. Ford Industries, Inc., 274 Or. 243, 546 P.2d 141 (1976), plaintiff, a stockholder and employe, was fired in retaliation for exercising his statutory right to inspect corporate records. This court noted that the statute's primary purpose was to protect private and proprietary interests rather than public interests. 274 Or. at 250, 546 P.2d 141. Plaintiff was discharged for exercising a private statutory right not of great importance to society. We affirmed the trial court's holding that plaintiff failed to allege sufficient facts to constitute a wrongful discharge cause of action.

In Walsh v. Consolidated Freightways, 278 Or. 347, 563 P.2d 1205 (1977), this court held that although the discharge of an employe for complaining about unsafe working conditions frustrated an important social interest in safe working conditions, the employe had an adequate administrative remedy, a complaint to the Department of Labor, and would not be accorded an additional tort remedy.

In Brown v. Transcon Lines, 284 Or. 597, 588 P.2d 1087 (1978), the plaintiff filed a workers' compensation claim and was discharged for so doing. ORS 659.410 makes discriminating against an employe who files a workers' compensation claim an unlawful employment practice. We held that the statute was legislative recognition of an important public policy and the employer's discharge frustrated that substantial public interest.

The preceding cases fall into three general categories:

Nees is an example of the first category of cases, where plaintiff was discharged for fulfilling a societal obligation. To discharge an employe for being called to jury duty thwarts not a private interest of the employe but an important public function. The oft-cited case of Petermann v. International Brotherhood of Teamsters, 174 Cal.App.2d 184, 344 P.2d 25 (1959), also comes within this category. In Petermann, plaintiff was fired for refusing to follow his employer's instructions to testify falsely under oath. To do so would have been perjury, a severe breach of a public duty. In both Nees and Petermann plaintiffs were held to have been wrongfully discharged.

The second category is demonstrated by Campbell and Brown. In both cases, plaintiffs pursued private statutory rights and were fired for their pursuit. In Brown, plaintiff was entitled to a wrongful discharge remedy and in Campbell, plaintiff was not. What is the difference? The statutory right pursued in Brown related directly to the plaintiff's role as an employee. He was fired for filing a worker's compensation claim. In Campbell, the statutory right pursued by plaintiff related to plaintiff, not in his role as an employee, but in his role as a stockholder. Furthermore, in...