Fermino v. Fedco, Inc.

• Decision Date: 12 May 1994
• Docket Number: No. S033096,S033096
• Citation: 872 P2d 559,7 Cal.4th 701,30 Cal.Rptr.2d 18
• Court: California Supreme Court
• Parties: , 872 P.2d 559, 62 USLW 2753, 9 IER Cases 1132 Julie Loretta Glass FERMINO, Plaintiff and Appellant, v. FEDCO, INC., et al., Defendants and Respondents.

Page 18

30 Cal.Rptr.2d 18

7 Cal.4th 701, 872 P.2d 559, 62 USLW 2753, 9 IER Cases 1132

Julie Loretta Glass FERMINO, Plaintiff and Appellant, v. FEDCO, INC., et al., Defendants and Respondents.

No. S033096.

Supreme Court of California In Bank.

May 12, 1994.

Robert M. Ball, Beverly Hills, for plaintiff and appellant.

Joseph Posner, Encino, John Howard, Ventura, Quackenbush & Quackenbush and William C. Quackenbush, Palo Alto, as amici curiae on behalf of plaintiff and appellant.

McClintock, Weston, Benshoof, Rochefort, Rubalcava & MacCuish, Steven W. Weston, Andrew M. Gilford and Eugene A. Burrus, Los Angeles, for defendants and respondents.

O'Melveny & Myers, Stephen P. Pepe and Janet I. Swerdlow, Los Angeles, as amici curiae on behalf of defendants and respondents.

MOSK, Justice.

In this case we consider whether an employee subject to false imprisonment at the hands of her employer may sue that employer in a civil action, or whether such a suit is barred by the exclusivity provisions of the Workers' Compensation Act (Lab.Code, §§ 3600, 3602). We conclude that her suit would not be barred, because an employer that falsely imprisons its employee has stepped outside its proper role, and an injury resulting therefrom is beyond the scope of what we have termed the "compensation bargain."

I. Statement of Facts

Because this case comes to us after the sustaining of a demurrer, all well-pleaded allegations of the complaint will be taken as true. (Livitsanos v. Superior Court (1992) 2 Cal.4th 744, 747, 7 Cal.Rptr.2d 808, 828 P.2d 1195.)

The facts, as stated in plaintiff's second amended complaint, are as follows. Plaintiff Fermino was employed as a salesclerk in defendant's department store, working in the jewelry department. The store's personnel manager summoned her to a windowless room, and proceeded to interrogate her concerning her alleged theft of the proceeds of a $4.95 sale to a customer. The personnel manager was joined by the store's loss prevention manager and by two security agents. One of the security agents stated that a customer and an employee, who were waiting in the next room, had witnessed the theft. He then demanded that Fermino confess. He told her that the interrogation could be handled in two ways: the "Fedco way" or the "system way." The "Fedco way" was to award points each time she denied her guilt. When 14 points were reached, she would be handled the "system" way, i.e., handed over to the police. After each of plaintiff's repeated and vehement denials, the security agent said "one point." The loss prevention manager "hurled profanities" and demanded that Fermino confess.

Fermino's repeated requests to leave the room and to call her mother were denied. She was physically compelled to remain in the room for more than one hour. At one point Fermino rose out of her chair and walked toward the door of the interrogation room in an attempt to leave; however, as soon as she made a move toward the door, one of the security guards slid in front of the door, threw up a hand and gestured her to stop.

Finally, Fermino became hysterical, and broke down in tears. At this point her interrogators departed from the room. Upon returning, they admitted no employee or customer was waiting to testify against her. They further stated they believed her, and that she could leave.

As the result of this incident, Fermino sustained unspecified physical injury and "shock and injury to her nervous system and person," as well as "mental anguish and emotional distress." Fermino sued for false imprisonment, as well as intentional and negligent infliction of emotional distress. She claimed that the false imprisonment resulted from a method of interrogation that was approved company policy.

Defendant Fedco demurred on the grounds that Fermino's claim was barred by the Workers' Compensation Act (hereafter the Act), and in particular the exclusivity provisions of Labor Code sections 3600 and 3602, (hereafter the exclusivity rule). The trial court sustained the demurrer. A divided Court of Appeal upheld the trial court, relying on the statute, and on our decisions in Shoemaker v. Myers (1990) 52 Cal.3d 1, 276 Cal.Rptr. 303, 801 P.2d 1054 (hereafter Shoemaker ) and Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 233 Cal.Rptr. 308, 729 P.2d 743 (hereafter Cole ). Only the false imprisonment claim has been raised in Fermino's petition for review with this court.

II. Discussion

Labor Code section 3600, subdivision (a), ¹ provides that, subject to certain particular exceptions and conditions, workers' compensation liability, "in lieu of any other liability whatsoever" will exist "against an employer for any injury sustained by his or her employees arising out of and in the course of the employment." As we have recognized, the basis for the exclusivity rule in workers' compensation law is the "presumed 'compensation bargain,' pursuant to which the employer assumes liability for industrial personal injury or death without regard to fault in exchange for limitations on the amount of that liability. The employee is afforded relatively swift and certain payment of benefits to cure or relieve the effects of industrial injury without having to prove fault but, in exchange, gives up the wider range of damages potentially available in tort." (Shoemaker supra, 52 Cal.3d at p. 16, 276 Cal.Rptr. 303, 801 P.2d 1054.)

We recognized in Shoemaker and elsewhere, however, that certain types of injurious employer misconduct remain outside this bargain. There are some instances in which, although the injury arose in the course of employment, the employer engaging in that conduct " 'stepped out of [its] proper role[ ]' " or engaged in conduct of " ' "questionable" relationship to the employment.' " (Shoemaker, supra, 52 Cal.3d at p. 16, 276 Cal.Rptr. 303, 801 P.2d 1054, quoting Cole, supra, 43 Cal.3d at p. 161, 233 Cal.Rptr. 308, 729 P.2d 743.)

Fermino took the position below that her false imprisonment was in fact an instance of an employer acting outside of its proper role. ² The Court of Appeal disagreed. It regarded Fedco's action as merely a form of employee interrogation, as normal as "demotions, promotions, criticism of work practices, and frictions in negotiations as to grievances...." (Cole, supra, 43 Cal.3d at p. 160, 233 Cal.Rptr. 308, 729 P.2d 743.) The court concluded that in this case, as in Cole, the mere fact that the practice was characterized as intentionally tortious and calculated to cause the employee harm was not sufficient to place the conduct outside the scope of the workers' compensation system.

We agree that a proper understanding of Cole, and the related line of cases preceding and succeeding it regarding the relationship between intentional torts and workers' compensation, is important for deciding the case before us. We find however, that the Court of Appeal has misapplied the doctrine that has emerged from these cases. A brief review of that doctrine is appropriate.

A. The Place of Intentional Torts in the Workers' Compensation System.

In a majority of jurisdictions, all or virtually all intentionally tortious acts committed by an employer against an employee in the course of employment are excluded from the workers' compensation system. (See 2A Larson, Workmen's Compensation Law (1993) § 68.11, pp. 13-1-13-7 and fns. 1-2 [hereafter Larson].) These jurisdictions typically have statutes that provide or are construed as providing that only "accidental" workplace injuries are to be covered by workers' compensation (ibid.; see, e.g., Miss.Code Ann. § 71-3-3(b) (1994); N.J.Stat.Ann. § 34:15-1 (1993); Utah Code Ann. § 35-1-45 (1993)) or have statutes that explicitly exclude intentional torts Mich.Comp.Laws § 418.131 (1994); Wash.Code Ann. § 51.24.020 (1994). Courts also rely on general public policy considerations to exclude intentional torts from the compensation systems. As the Utah Supreme Court declared, "[i]t would serve no social purpose to allow an employee to intentionally injure another employee engaged in the same employment, then use an otherwise socially beneficial, remedial, statute as a shield for such wrongdoing." (Bryan v. Utah International (Utah 1975) 533 P.2d 892, 894; see also Newby v. Gerry (1984) 38 Wash.App. 812, 690 P.2d 603, 607, and cases cited therein.) Employees in these jurisdictions are therefore free to pursue civil actions against employers that engage in intentionally tortious conduct.

In California, the place of intentional torts in the workers' compensation system has been somewhat more complicated, for at least two reasons. First, the workers' compensation exclusivity statute (§ 3600), which declares that "any injury ... arising out of and in the course of ... employment" is covered by the Act, is unqualified by any reference to accident or intentional tort. Second, section 4553 provides that employees shall have their workers' compensation awards "increased [by] one-half" if the employee's injury results from the employer's "serious and willful misconduct." The Legislature, it would seem, has thereby evinced its intent to include at least some portion of what are classified as "intentional torts" within the workers' compensation system.

It is equally true, however, that the Legislature has not expressed clearly its intent to categorically exclude from the courts all intentional torts committed by employers against employees. Section 3600, which declares the exclusivity of the workers' compensation remedy, provides that workers' compensation liability will exist "in lieu of any other liability whatsoever ... without regard to negligence...." (§ 3600, subd. (a), italics added.) In Mathews v. Workmen's Comp. Appeals Bd. (1972) 6 Cal.3d 719, 728, 100 Cal.Rptr. 301, 493 P.2d 1165, we concluded, after extensive review of the applicable constitutional and legislative history of the Act, that the 1918 constitutional amendment (now Cal.Const., art. XIV, §...