Grinzi v. San Diego Hospice Corp., No. D042431.

• Court: California Court of Appeals
• Writing for the Court: Huffman
• Citation: 120 Cal.App.4th 72,14 Cal.Rptr.3d 893
• Parties: Joan GRINZI, Plaintiff and Appellant, v. SAN DIEGO HOSPICE CORPORATION, Defendant and Respondent.
• Decision Date: 30 June 2004
• Docket Number: No. D042431.

14 Cal.Rptr.3d 893 120 Cal.App.4th 72 Joan GRINZI, Plaintiff and Appellant,
v.
SAN DIEGO HOSPICE CORPORATION, Defendant and Respondent. No. D042431. Court of Appeal, Fourth District, Division Three. June 30, 2004. Rehearing Denied July 16, 2004.

[14 Cal.Rptr.3d 895]

[120 Cal.App.4th 77]

John Y. Tremblatt, San Diego, for Appellant.

Gordon & Rees and Margaret C. Bell, San Diego, for Respondent.

HUFFMAN, J.

Joan Grinzi (Grinzi) appeals a dismissal of her first amended complaint after the court sustained, without leave to amend, the demurrer of San Diego Hospice Corporation (Hospice). Grinzi contends she was wrongfully terminated from employment in violation of established public policy supported by the First Amendment of the

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United States Constitution and Labor Code¹ sections 96, subdivision (k), and 98.6.

We find the First Amendment free speech provision fails to establish public policy against terminations by private employers for speech-related activities because this provision applies only to government actions and expresses no public policy regarding terminations by private employers. Further, we hold section 96, subdivision (k), provides only procedure under which the Labor Commissioner shall exercise jurisdiction rather than independent public policy creating a private right of action. (Barbee v. Household Automotive Finance Corp. (2003) 113 Cal.App.4th 525, 533, 6 Cal.Rptr.3d 406 (Barbee).) Finally, we find the Legislature did not intend section 98.6 to establish public policy against terminations for conduct not protected under the Labor Code. Therefore, we affirm the judgment of dismissal.

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FACTUAL AND PROCEDURAL BACKGROUND

Grinzi worked as a case manager for Hospice, a private corporation, for about 13 years. During her employment, she received a promotion, commendations and raises. Hospice never warned or disciplined her, and she performed all her duties and obligations. In early 2002, Grinzi alleges Hospice fired her explaining her termination was because of her membership in Women's Garden Circle, an investment group Hospice believed to be an illegal pyramid scheme. A few days later, Hospice told her she was terminated for wrongful use of Hospice's email system. Grinzi alleges this second explanation was a pretext. She asserts the true reason for her termination was her lawful conduct, outside working hours, consisting of membership in Women's Garden Circle.

Grinzi sued Hospice for wrongful termination in violation of public policy, breach of implied contract and intentional infliction of emotional distress. Hospice filed a cross-complaint and a general demurrer. The court sustained Hospice's demurrer with leave to amend. Grinzi answered the cross-complaint and filed a first amended complaint alleging a single cause of action, wrongful termination in violation of public policy. The court sustained Hospice's demurrer to Grinzi's first amended complaint, without leave to amend, and dismissed the action. The parties have stipulated to stay proceedings on Hospice's cross-complaint until resolution of this appeal.

DISCUSSION I STANDARD OF REVIEW

A demurrer tests the legal sufficiency of the complaint. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.) Therefore, we review the complaint de novo to determine whether it contains sufficient facts to state a cause of action. (Hill v. Miller (1966) 64 Cal.2d 757, 759, 51 Cal.Rptr. 689, 415 P.2d 33.) "We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law." (Serrano v. Priest (1971) 5 Cal.3d 584, 591, 96 Cal.Rptr. 601, 487 P.2d 1241.) The trial court exercises its discretion in declining to grant leave to amend. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318, 216 Cal.Rptr. 718, 703 P.2d 58.) If it is reasonably possible the pleading can be cured by amendment, the trial court abuses its discretion by not granting leave to

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amend. (Ibid.) The plaintiff has the burden of proving the possibility of cure by amendment. (Ibid.)

120 Cal.App.4th 79

II CONTENTIONS OF WRONGFUL TERMINATION IN VIOLATION OF PUBLIC POLICY

Section 2922² provides a presumption of employment at will, terminable at any time by either party upon notice. Absent a contract overcoming this presumption, "the employee can be fired with or without good cause." (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 665, 254 Cal.Rptr. 211, 765 P.2d 373.) The employer's right to discharge at-will employees is, however, limited by public policy. (Ibid.) Although an at-will employee may be discharged "for no reason, or for an arbitrary or irrational reason, there can be no right to terminate for an unlawful reason or a purpose that contravenes fundamental public policy." (Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1094, 4 Cal.Rptr.2d 874, 824 P.2d 680, overruled in part on other grounds by Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 80, fn. 6, 78 Cal.Rptr.2d 16, 960 P.2d 1046 (Green).) When an employee is discharged in violation of "fundamental principles of public policy," the employee "may maintain a tort action and recover damages traditionally available in such actions." (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 170, 164 Cal.Rptr. 839, 610 P.2d 1330.) The court has recognized four sources of public policy to support such claims: "the employee (1) refused to violate a statute; (2) performed a statutory obligation; (3) exercised a constitutional or statutory right or privilege; or (4) reported a statutory violation for the public's benefit." (Green, supra, 19 Cal.4th at p. 76, 78 Cal.Rptr.2d 16, 960 P.2d 1046.)

Courts must make policy determinations "`with great care and due deference to the judgment of the legislative branch' . . . to avoid judicial policymaking. [Citation.]" (Green, supra, 19 Cal.4th at p. 76, 78 Cal.Rptr.2d 16, 960 P.2d 1046.) Consequently, to support a claim for tortious discharge, the violated policy (1) "must be supported by either constitutional or statutory provisions;" (2) "be `public' in the sense that it `inures to the benefit of the public' rather than serving merely the interests of the individual;" (3) "have been articulated at the time of the discharge;" and (4) "be `fundamental' and `substantial.'" (Stevenson v. Superior Court (1997) 16 Cal.4th 880, 889-890, 66 Cal.Rptr.2d 888, 941 P.2d 1157 (Stevenson).)

Limiting tortious discharge claims to those supported by constitutional or statutory provisions "best serves the Legislature's goal to give law-abiding employers broad discretion in making managerial decisions." (Green, supra,

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19 Cal.4th at pp. 79-80, 78 Cal.Rptr.2d 16, 960 P.2d 1046.) It also ensures "employers have adequate notice of the conduct that will subject them to tort liability to the employees they discharge." (Stevenson, supra, 16 Cal.4th 880, 889, 66 Cal.Rptr.2d 888, 941 P.2d 1157.) A statute's exclusion of certain employers from its requirements precludes a finding that a fundamental policy supported by that statute would extend to the excluded employers. (Jennings v. Marralle (1994) 8 Cal.4th 121, 135, 32 Cal.Rptr.2d 275, 876 P.2d 1074 (Jennings) [no extension of public policy against age discrimination

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to small employers excluded under FEHA].) To make such a finding would unreasonably require employers to realize they must comply with a law from which they are exempted or suffer the possibility of tort liability. (Id. at pp. 135-136, 32 Cal.Rptr.2d 275, 876 P.2d 1074.)

Here, Grinzi contends she was fired for exercising her First Amendment free speech rights while engaging in lawful conduct during nonworking hours off the employer's premises. She asserts the First Amendment of the United States Constitution³ supports public policy against terminations of employment for the exercise of free speech. Further, Grinzi argues sections 96, subdivision (k) and 98.6 support a public policy against terminations for lawful conduct occurring during nonworking hours away from the employer's premises.

III

FIRST AMENDMENT DOES NOT SUPPORT PUBLIC POLICY AGAINST PRIVATE EMPLOYER TERMINATIONS

To support public policy sufficient for a tortious discharge claim, the First Amendment⁴ free speech provision must delineate the fundamental policies at issue. (Sequoia Ins. Co. v. Superior Court (1993) 13 Cal.App.4th 1472, 1480, 16 Cal.Rptr.2d 888.) The provision does not have to specifically

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prohibit the employer's precise act, but it "must sufficiently describe the type of prohibited conduct to enable an employer to know the fundamental public policies that are expressed in that law." (Ibid.; Turner v. Anheuser-Busch, Inc., supra, 7 Cal.4th 1238, 1256, fn. 9, 32 Cal.Rptr.2d 223, 876 P.2d 1022.) Here, the First Amendment free speech provision expresses a guarantee only against action taken by the government. (Hudgens v. N.L.R.B. (1976) 424 U.S. 507, 513, 96 S.Ct. 1029, 47 L.Ed.2d 196.) As such, no protection or redress is provided by the First Amendment itself against "a private corporation or person who seeks to abridge the free expression of others." (Ibid.) For example, a newspaper publisher can fire an at-will employee "based on dissatisfaction with the content of or views expressed by the reporter's writing." (Eisenberg v. Alameda Newspapers, Inc. (1999) 74 Cal.App.4th 1359, 1391, 88 Cal.Rptr.2d 802.) Consequently, the First Amendment does not sufficiently describe the type of conduct alleged here, a private employer terminating an employee for the exercise of free speech, to enable the employer to know the fundamental public policies expressed by the First Amendment prohibited such a termination. (Sequoia Ins. Co., supra, 13 Cal.App.4th at p. 1480, 16 Cal.Rptr.

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2d 888; see also Sullivan v. Delta Air Lines, Inc. (1997) 58 Cal.App.4th 938, 947, 68 Cal.Rptr.2d 584 [holding policy underlying...