Gray v. Superior Court

• Decision Date: 01 May 1986
• Docket Number: No. D004138,D004138
• Citation: 181 Cal.App.3d 813,226 Cal.Rptr. 570
• Court: California Court of Appeals Court of Appeals
• Parties: Michael E. GRAY, Petitioner, v. SUPERIOR COURT, etc., County of San Diego, Respondent; CIPHER DATA PRODUCTS, INC., et al., Real Parties in Interest.

Page 570

226 Cal.Rptr. 570

181 Cal.App.3d 813

Michael E. GRAY, Petitioner, v. SUPERIOR COURT, etc., County of San Diego, Respondent CIPHER DATA PRODUCTS, INC., et al., Real Parties in Interest.

No. D004138.

Court of Appeal, Fourth District, Division 1, California.

May 1, 1986.

Richard W. Davis, San Diego, for petitioner.

No appearance for respondent.

Littler, Mendelson, Fastiff & Tichy and Alan S. Levins, San Francisco, and Belinda D. Stith, Los Angeles, for real parties in interest.

BUTLER, Associate Justice.

Michael E. Gray sued his former employer, Cipher Data Products, Inc. and supervisory employees for damages for wrongful termination of employment. The court sustained demurrers without leave to amend to his second, third, fourth and sixth causes of action. He seeks a writ of mandate to set aside the court's rulings. We shall hold the court erred as to the third, fourth and sixth causes of action, grant the writ as to those and otherwise deny relief.

We state the facts as pleaded in fashion most favorable to Gray.

Gray is a computer programmer. Cipher Data needed a programmer to set up a customer's service order/inventory management function. Cipher told Gray, upon his hiring, his job tenure "would be secure so long as his ... work was satisfactory" in regard to his responsibility for the installation of the system. Gray was hired at a rate less than that typical for such a job. He was attracted by the challenge and the responsibility implied by reporting to a vice president.

Cipher gave Gary an employee booklet. It describes two types of termination of employment--voluntary and involuntary. Reasons for involuntary termination are inadequate performance, cause, reduction in force and failure to return to work after leave of absence. The booklet includes a Code of Conduct. Failure to uphold one's responsibilities is just cause for "verbal warning, written warning or immediate dismissal." Warnings are administered on a progressive scale calling for talks between the employee and the supervisor. Violation of provisions of the Code "may lead to progressive counseling or dismissal." Among these violations are "d. Refusal or willful failure to perform job duties, or intentional obstruction of others in the performance of their duties." Listed under that heading are two items:

"Disregarding orders of Supervisor pertaining to work.

"Insubordination."

A separate heading is "1. Performing personal work on Company time."

The booklet encourages employees to "speak up," telling them to discuss any problems with their supervisor or manager.

During his employment, Gray treated fellow employees with respect and courtesy and the customer service group accepted his reports, recommendations and his design, development and installation of the inventory management system. Marlene Revelen was Gray's immediate supervisor. Gray did not "speak up" to her and she did not meet and counsel with him about any problems.

During his employment, Gray never received any oral or written warning as to any misconduct. Some 14 months after his employment, ¹ and on September 17, 1984, Revelen submitted a performance report on Gray, marking him unsatisfactory as to achievement of goals, problem solving and decision making, working with people and development of subordinates and planning and organizing work. He was acceptable as to knowledge of job and fully acceptable as to affirmative action. The report stated Gray did not meet major job requirements.

The report included attachments expanding upon the reasons for Gray's unsatisfactory ratings. Attachment 3 notes his documentation and software analysis work was fully effective and thus his overall rating was acceptable. Attachment 7 says Revelen will continue "to clearly communicate expectations and standards of performance," Gray must make immediate progress in improvement of his performance to meet standards "which have been set forth" by Revelen and his failure to achieve significant progress "may lead to disciplinary action including termination of employment." The report includes a space for employee comments and the employee's signature.

September 18, 1984, the day following submission of the report, Jack Farnan, a personnel representative, told Gray to proceed with a formal response to the performance report, and to be available for a meeting the following day. Revelen did not object. September 19, at 4:00 p.m., Revelen told Gray he could not write his response on company time. Gray ceased writing his response and told Revelen he was finishing the comments as he was meeting with Farnan later. Revelen left Gray's cubicle without making any comment as to insubordination. Douglas Martini, Revelen's superior, then summoned Gray to his office and Revelen in Gray's presence told Martini she was terminating Gray for insubordination.

Vern Wiersma was Cipher's director of human resources and Farnan's supervisor. Contrary to Cipher practices, calling for Farnan to conduct an "exit" interview, Wiersma did so. He did not challenge Gray's dismissal and did not give Gray an opportunity to be heard and "inferred" his termination was justified because Gray did not seem to be popular with his superiors.

Wrongful Termination

The second cause of action alleges Gray's termination of employment was wrongful for several reasons. (1) His conduct in preparing the response on company time was not insubordinate, (2) Cipher failed to follow the progressive procedure for dealing with misconduct as to severity and frequency and other dismissal procedures, (3) Revelen's conduct constituted sexual discrimination under Government Code section 12940, subdivision (a) because she postponed Gray's annual performance review, failed to cooperate with him, submitted a false performance report (the first cause of action pleads the report is defamatory) and unreasonably refused to permit Gray to complete his response to the report, (4) the discharge was retaliatory in violation of Government Code sections 12940, subdivision (f) and 12920, and (5) he was discharged for responding to a known false performance report in violation of Civil Code sections 45 and 45a.

Gray does not plead a written employment contract. He was an at-will employee (Lab.Code, § 2922). The absolute power conferred by Labor Code section 2922 to discharge an at-will employee has been limited by a series of California cases:

"Three distinct theories have been developed: (1) a tort cause of action for wrongful discharge in violation of public policy (Tameny v. Atlantic Richfield Co., supra, 27 Cal.3d 167 [164 Cal.Rptr. 839, 610 P.2d 1330] ); (2) a cause of action for employer's breach of the implied covenant of good faith and fair dealing, which sounds both in tort and contract (Cleary v. American Airlines, Inc., supra, 111 Cal.App.3d 443 ); and (3) a cause of action for employer's breach of an implied-in-fact covenant to terminate only for good cause (Pugh v. See's Candies, Inc. (1981) 116 Cal.App.3d 311 )." (Shapiro v. Wells Fargo Realty Advisors (1984) 152 Cal.App.3d 467, 475-476, 199 Cal.Rptr. 613.)

Gray's first two grounds for claiming wrongful discharge are that his conduct was not insubordinate and Cipher did not follow prescribed procedures. These are not sufficient grounds for a claim of wrongful termination. That tort is based on an employee discharge violating public policy. (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330; Shapiro v. Wells Fargo Realty Advisors, supra.) The discharge to be actionable on this theory must reflect a violation of a strong public policy; generally, violation of a statute must be involved, as when the discharge is because the employee would not violate the law, or when the discharge is retaliatory in violation of statutory restrictions. (See discussion in Shapiro, supra, 152 Cal.App.3d at pp. 476-477, 199 Cal.Rptr. 613; see also Tameny, supra, 27 Cal.3d at pp. 177-179, 164 Cal.Rptr. 839, 610 P.2d 1330.) The employer's violation of its own internal procedures and definitions of cause for discharge do not violate any strong public policy or statute.

The third alleged basis for wrongful discharge is sexual discrimination (Gov.Code, § 12940, subd. (a)) and the fourth is retaliatory discharge in violation of Government Code section 12940, subdivision (b). Gray's pleading has no specific factual allegations suggesting sexual discrimination. He simply lists Revelen's actions in failing to cooperate, postponing his annual review, submitting a false report and refusing to allow him to complete his response, and affixes to them a sexual discrimination label.

The allegations of retaliatory discharge in violation of Government Code sections 12920 and 12940, subdivision (f) are totally without factual support. Gray simply asserts the termination was in violation of these sections without any alleged factual basis.

The remaining alleged statutory bases for wrongful discharge are claimed violations of Civil Code section 45 and 45a arising out of his response to the false performance report on company time and his discharge for that reason. These sections define libel and libel on its face. The first cause of action sounds in libel. Apparently, Gray considers his response to the claimed libel is privileged and his discharge violates a right to be free from libel. The argument is without merit.

We conclude Gray has failed to state a cause of action for wrongful termination in violation of a public policy stated in a statute. The demurrer was properly sustained.

Breach of the Implied Covenant of Good Faith And Fair Dealing

Cleary v. American Airlines, Inc. (1980) 111 Cal.App.3d 443, 453, 168 Cal.Rptr. 722, declared there is an implied covenant of good faith and fair dealing in the employment relationship in that neither employer nor employee may do anything to injure the rights of the other. Cleary, a pleading case, held the length of an employee's service...