Patterson v. Philco Corp.

• Decision Date: 27 June 1967
• Citation: 60 Cal.Rptr. 110,252 Cal.App.2d 63
• Court: California Court of Appeals Court of Appeals
• Parties: George PATTERSON, Plaintiff and Appellant, v. PHILCO CORPORATION, Defendant and Respondent. Civ. 23595.

Page 110

60 Cal.Rptr. 110

252 Cal.App.2d 63

George PATTERSON, Plaintiff and Appellant, v. PHILCO CORPORATION, Defendant and Respondent.

Civ. 23595.

Court of Appeal, First District, Division 3, California.

June 27, 1967.

Morgan, Beauzay, Wylie, Ferrari & Leahy, San Jose, for appellant.

Popelka, Graham, Hanifin, Van Loucks & Allard, by Fred J. Graham, San Jose, for respondent.

HAROLD C. BROWN, Associate Justice.

Appellant Patterson filed a complaint against respondent Philco Corporation, his employer and D. Joyce, a fellow employee for damages for his wrongful discharge. This is an appeal from the judgment of dismissal entered after the demurrer of respondent (Philco Corporation) to appellant's first amended complaint was sustained with leave to amend. A demurrer by defendant Joyce, the fellow employee, was overruled and that action is now pending.

Appellant's complaint named as defendants D. Joyce, a fellow employee, and respondent and certain other defendants by fictitious names. Appellant alleges that D. Joyce and other individual defendants sued in their fictitious capacity 'did maliciously and for the purpose of procuring jobs for their personal friends and for the purpose of advancing their personal status in that certain corporate organization * * * (respondent) * * *, falsely and fraudulently rate the performance of * * * (appellant) and recommend his discharge by * * * (respondent).' Appellant further alleges that as a proximate result of the oppressive conduct of the individual defendants, appellant was discharged without cause.

Appellant bases his right to recover on the allegation of the complaint 'That on and after the Plaintiff's discharge * * * Plaintiff called the attention of the * * * false rating to the attention of supervisory officials of Philco Corporation, * * * but said officials did * * * ratify the conduct of the said individual defendants * * *.'

Appellant also alleges that because of the wrongful discharge he has been prevented from obtaining gainful employment and has suffered mentally and physically to his damage in the sum of $50,000.

Appellant's complaint does not allege a contract either oral or written for a specified term and concedes that his employment was terminable at the will of respondent. Section 2922 of the Labor Code provides as follows: 'An employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month.'

It is recognized that 'Intentional and unjustifiable interference with contractual relations is actionable in California as in most other jurisdictions. (Citation.) * * * the fact that a contract is 'at the will of the parties respectively does not make it one at the will of others,' * * *' (Speegle v. Board of Fire Underwriters, 29 Cal.2d 34, 39, 172 P.2d 867, 870.) Since appellant alleged that defendant Joyce was acting in a personal capacity, the demurrer was properly overruled as to the fellow employee Joyce. This appeal pertains only to the judgment following the trial court's sustaining the demurrer of respondent Philco Corporation.

The mere fact that a contract is terminable at will does not give the employer the absolute right to terminate it in all cases. The employer may be subject to damages for terminating the contract at will when such termination would be a violation of (a) public policy (Petermann v. International Brotherhood of Teamsters, 174 Cal.App.2d 184, 188, 344 P.2d 25) (b) a statute (Elec.Code, § 695; Kouff v. Bethlehem-Alameda Shipyard, 90 Cal.App.2d 322, 202 P.2d 1059; Lockheed Aircraft Corp. v. Superior Court, 28 Cal.2d 481, 171 P.2d 21, 166 A.L.R. 701), or (c) when the employee was engaged contractually to serve so long as he performed to the satisfaction of the employer (Coats v. General Motors Corp., 3 Cal.App.2d 340, 348, 39 P.2d 838).

In other cases the employee under the terms of a contract at will, may quit at any time and his employer can discharge him at any time with or without cause. The court in Marin v. Jacuzzi, 224 Cal.App.2d 549, 553--554, 36 Cal.Rptr. 880, 883, stated: 'It is not the function of the courts in the absence of contractual, statutory or public policy considerations to compel a person to accept or retain another in his employ, nor to compel any person against his will to remain in the employ of another. Our courts have consistently held that in such a confidential relationship, the privilege is absolute, and the presence of ill will or improper motive will not destroy it (Mallard v. Boring, supra, 182 Cal.App.2d 390, 6 Cal.Rptr. 171; Imperial Ice Co. v. Rossier, supra, 18 Cal.2d at p. 38, 112 P.2d at 634, distinguishing Boyson v. Thorn, 98 Cal. 578, 33 P. 492, 21 L.R.A. 233 on this ground). To hold otherwise would prevent an employer from firing an employee except for good cause shown in every situation. We are not here dealing with a hiring to the 'satisfaction of the employer,' where 'good faith' is a proper test (Coats v. General Motors Corp., 3 Cal.App.2d 340, 348, 39 P.2d 838).'

The complaint alleges that respondent discharged appellant after being informed of Joyce's wrongful action. Appellant concedes in his brief that the contract of employment was terminable at will.

Under section 2922 of the Labor Code, supra, respondent could discharge appellant with or without a reason. In Mallard v. Boring, 182 Cal.App.2d 390, 6 Cal.Rptr. 171, the plaintiff alleged in her complaint that she was employed on a month-to-month basis and was wrongfully discharged by the defendant manager because she was ordered by her employer not to fill in a form indicating that she was eligible for jury duty and she disobeyed that order. The court said: 'As to the second cause of action, it is conceded that plaintiff's employment was terminable at will. Under such a contract of employment, plaintiff could quit at any time and her employer could discharge her at any time with or without cause. Roberts v. Western Pac. R.R. Co., 142 Cal.App.2d 317, 298 P.2d 120; Lab.Code, sec. 2922. It makes no difference if the employer had a bad motive in so doing. 'Precisely as may the employe cease labor at his whim or pleasure, and, whatever be his reason good, bad, or indifferent, leave no one a legal right to complain; so, upon the other hand, may the employer discharge, and, whatever be his reason, good, bad, or indifferent, no one has suffered a legal wrong.' Union Labor Hospital Ass'n v. Vance Redwood Lumber Co., 158 Cal. 551, 554, 112 P. 886, 888, 33 L.R.A., N.S., 1034.' (Mallard v. Boring, supra, 390, 394, 6 Cal.Rptr. 171, 174.) The trial court scathingly criticized the employer's employment philosophy in discharging appellant but reluctantly recognized the employer was acting within his legal rights. ¹

A number of jurisdictions support the rule that a party to the contract (terminable at will or otherwise) cannot be held for the tort of inducing its breach but can only be responsible for compensatory damages flowing from the breach. (See cases collected in 26 A.L.R.2d, § 49, p. 1284.) Thus in Allison v. American Airlines, Inc., et al., D.C., 112 F.Supp. 37, 38, 39, the court said: 'Generally, where an employer...