Ely v. Wal-Mart, Inc.

• Citation: 875 F. Supp. 1422
• Decision Date: 09 February 1995
• Docket Number: No. ED CV 94-0284 RT (BQRx).,ED CV 94-0284 RT (BQRx).
• Court: U.S. District Court — Central District of California
• Parties: Kathleen ELY, Plaintiff, v. WAL*MART, INC., an Arkansas Corporation; and Does 1 through 50, inclusive, Defendants.

875 F. Supp. 1422

Kathleen ELY, Plaintiff, v. WAL*MART, INC., an Arkansas Corporation; and Does 1 through 50, inclusive, Defendants.

No. ED CV 94-0284 RT (BQRx).

United States District Court, C.D. California, Eastern Division.

February 9, 1995.

Marc D. Roberts and David Mule, Marc D. Roberts and Associates, Palm Desert, CA, for plaintiff.

John L. Barber, Gray, York, Duffy & Rattet, Encino, CA, for defendants.

ORDER DENYING DEFENDANT WAL*MART, INC.'s MOTION TO DISMISS PLAINTIFF ELY'S FIRST AND SEVENTH CLAIMS FOR RELIEF

TIMLIN, District Judge.

Defendant Wal*Mart, Inc.'s (Wal*Mart's) motion to dismiss plaintiff Kathleen Ely's (plaintiff's) first and seventh claims for relief in her original complaint¹ (motion) was heard on or about 10 a.m. on January 23, 1995 before the Honorable Judge Robert J. Timlin.

Marc D. Roberts and David Mule, Marc D. Roberts and Associates, appeared for plaintiff. John L. Barber, Gray, York, Duffy & Rattet appeared for Wal*Mart.

The court having taken the matter under submission, and after consideration of oral argument and all papers presented to the court, the court will deny Wal*Mart's motion to dismiss for the reasons set forth in the following opinion.

I. Procedural History

On October 31, 1994, plaintiff filed, in Riverside County Superior Court, a complaint against her former employer, Wal*Mart. The complaint contained seven claims:

(1) wrongful discharge in contravention of public policy (public policies as stated in the California Family Care and Medical Leave Act, Government Code section 12945.2 et seq.),²

(2) breach of contract,

(3) breach of the implied covenant of good faith and fair dealing,

(4) intentional interference with prospective business advantage,

(5) defamation,

(6) violation of California Labor Code section 1050, and

(7) intentional infliction of emotional distress.

Wal*Mart removed the action to this court based on diversity of citizenship, and then filed the instant motion, asserting that plaintiff failed "to state a cognizable legal theory as well as ... sufficient facts under a cognizable legal theory" (1) as to her first claim, for wrongful discharge in contravention of public policy as stated in the Moore-BrownRoberti Family Rights Act, Government Code section 12945.2 et seq. (Family Rights Act), and (2) as to her seventh claim for relief, for intentional infliction of emotional distress.

II. Factual Background

According to the allegations of the complaint, Wal*Mart is an employer with more than five employees. On August 13, 1992, plaintiff was hired as a department manager at Wal*Mart's La Quinta store. In November 1992, she became department manager of the women's department at that store, and as such earned $7.65 per hour.

On or about April 19, 1994, she had a ruptured hernia and required emergency surgery. The next morning, plaintiff's spouse contacted plaintiff's assistant store manager, Gene Scales, and told him that plaintiff had undergone emergency surgery and was unable to report to work. Later that day, plaintiff's spouse called and spoke to assistant store manager, Ken Rice, and told him that plaintiff would be hospitalized for five to six days, and would then need five to six weeks of recuperation at home.

Two days later, plaintiff herself called her manager, Krista Feaster, and local personnel officer, Billie Jay, and told them she would give them a back-to-work date as soon as she would be released by her doctor.

On or about June 20, 1994, plaintiff was released to return to work. Upon her return, the store manager, Michael Halbert, advised her that she would not be reinstated in her former position. Instead, she could return as a cashier, a position not comparable to her former position as department manager, and which position paid only $6.50 per hour. Halbert told her that if she did not take this position, she would be terminated. Plaintiff refused the position and, according to the allegations of her complaint, "was thereby constructively terminated."

In August 1994, plaintiff interviewed with Woman's World Shops in Palm Desert, and that company agreed to hire her as a full-time employee at a rate of $7.50 per hour. Plaintiff accepted the offer and arranged the dates upon which she would report to work. Thereafter, Woman's World Shops rescinded its offer. Plaintiff's complaint alleges, on information and belief, that this occurred because Woman's World Shops contacted Wal*Mart and spoke to Feaster to verify plaintiffs prior employment, and Feaster then told Woman's World Shops that plaintiff was in litigation with Wal*Mart, knowing that such statement was false, and with the intent to stigmatize plaintiff as a troublemaker so as to prevent her from being employed by Woman's World Shops, which conduct plaintiff alleges would be a violation of California Labor Code section 1050.

Plaintiff further alleges that there was a written contract of employment between herself and Wal*Mart as evidenced by the Wal*Mart Employee Handbook. This handbook included written personnel policies which provided for:

(a) medical leaves of absence, allowing employees to be absent from work for the purpose of receiving medical treatment, and to be reinstated upon recovery, and

(b) emergency leaves of absence for the purpose of allowing an employee to handle a crisis or emergency such as a serious illness, and then to be reinstated upon recovery.

An excerpt from the handbook as to these policies is attached as Exhibit A to the complaint.³ Plaintiff alleges that she fully complied with all the conditions of this contract as required by the procedures and policies in the handbook; Wal*Mart, however, breached its responsibilities under the contract.

Wal*Mart contends in its motion that plaintiff's first claim, for wrongful discharge in contravention of public policy, as stated in the Family Rights Act, must be dismissed, because California law requires that claims for wrongful discharge in contravention of public policy must be predicated upon a statute or constitutional provision which has been recognized as embodying "fundamental" and well-established public policy. According to Wal*Mart, plaintiff is attempting to advance her claim under the auspices of the Family Rights Act portion of California's Fair Employment and Housing Act, (FEHA), which it describes as "a statute which cannot be relied upon for a tortious wrongful discharge."

Wal*Mart also urges that because plaintiff cannot state a claim for wrongful discharge in violation of public policy and she does not allege any outrageous conduct by Wal*Mart outside the employment relationship, she also cannot state a claim for intentional infliction of emotional distress, and thus her seventh claim must be dismissed, too. Wal*Mart also asserts that plaintiff's claim for intentional infliction of emotional distress is subsumed by the exclusive remedies of the worker's compensation system.

Plaintiff in opposition contends that Wal*Mart has misread the case law, and that violations of FEHA's provisions relating to the Family Rights Act may form the basis for a claim for wrongful discharge in violation of public policy.

Plaintiff further argues that case law demonstrates that worker's compensation laws do not preempt a claim for intentional infliction of emotional distress based on violations of FEHA.

III. Discussion

A. Plaintiff Has Stated a Sufficient Claim for Wrongful Termination in Violation of the Public Policy Contained in The Family Rights Act

In California, an at-will employee may bring a tort action for wrongful discharge in violation of public policy so long as the basis for the public policy at issue is rooted in a statutory or constitutional provision. Gantt v. Sentry Insurance, 1 Cal.4th 1083, 1090, 1095, 4 Cal.Rptr.2d 874, 824 P.2d 680 (1992).

The reason for requiring that the public policy be delineated by a statute or constitutional provision is that "A public policy exception carefully tethered to fundamental policies that are delineated in constitutional or statutory provisions strikes the proper balance among the interests of employers, employees and the public. The employer is bound, at a minimum, to know the fundamental public policies of the state and nation as expressed in their constitutions and statutes; so limited, the public policy exception presents no impediment to employers that operate within the bounds of law. Employees are protected against employer actions that contravene fundamental state policy. And society's interests are served through a more stable job market, in which its most important policies are safeguarded." (1 Cal.4th at p. 1095, 4 Cal.Rptr.2d 874, 824 P.2d 680.)

Although the court in Gantt did not specifically define what it meant by a "fundamental" policy, the above-noted quote clearly implies that a public policy is fundamental if it is expressed in a statute or constitution, rather than in case law and administrative rules and regulations. (See 1 Cal.4th at pp. 1089-1095, 4 Cal.Rptr.2d 874, 824 P.2d 680; sep. opn. by Kennard, J., conc. & diss. at pp. 1102-1104.) The term "fundamental," when used to describe the kind of public policy which must form the basis for a claim of wrongful discharge in contravention of public policy, also means that the public policy is one which benefits the public in general, not just the discharged employee. Rojo v. Kliger, 52 Cal.3d 65, 89, 276 Cal.Rptr. 130, 801 P.2d 373 (1990): the underlying public policy "must be `fundamental' and `public' in nature, i.e., `one which inures to the benefit of the public at large rather than to a particular employer or employee.' Citation."

Here, plaintiff's tort claim for wrongful discharge in violation of public policy is premised on the Family Rights Act, which provides, in relevant part:

"(a) Except as provided in subdivision (b), it shall be an unlawful employment practice for any employer, as defined in paragraph (2) of subdivision (c), to refuse to grant a...