Rabago-Alvarez v. Dart Industries, Inc.

• Decision Date: 06 February 1976
• Docket Number: RABAGO--ALVARE,P
• Citation: 127 Cal.Rptr. 222,55 Cal.App.3d 91
• Court: California Court of Appeals Court of Appeals
• Parties: , 115 L.R.R.M. (BNA) 4704 Yvonnelaintiff, Respondent and Appellant, v. DART INDUSTRIES, INC., Defendant, Appellant and Respondent. Civ. 36373.

Page 222

127 Cal.Rptr. 222

55 Cal.App.3d 91, 115 L.R.R.M. (BNA) 4704

Yvonne RABAGO--ALVAREZ, Plaintiff, Respondent and Appellant, v. DART INDUSTRIES, INC., Defendant, Appellant and Respondent.

Civ. 36373.

Court of Appeal, First District, Division 2, California.

Feb. 6, 1976.

Kenneth D. Buckwalter, Zenk & Buckwalter, Palo Alto, for Dart industries, inc.

Fullerton, Lang, Richert & Patch, Jeffrey L. Wall, Fresno, for Rabago-Alvarez.

ROUSE, Associate Justice.

Plaintiff Yvonne Rabago-Alvarez brought suit against defendant Dart Industries, Inc. to recover damages for wrongful termination of her employment.

The evidence produced at the trial shows that in 1971, just prior to the commencement of her employment with defendant, plaintiff was employed in the direct selling of copper gift ware. Plaintiff had engaged in this occupation for 16 years and had at all times worked for the same man, Charles, collis. During those 16 years, plaintiff had developed a great degree of skill in using a 'party plan' sales technique whereby homemakers were encouraged to invite their friends to parties where a salesperson would demonstrate a particular product. Plaintiff earned a gross income of $12,000 per year from this employment.

In 1971, Vanda Beauty Counsellor (hereafter 'Vanda'), a division of defendant Dart Industries, Inc., assigned a distributor named Pamela Cardell to investigate 'party plan' selling and to determine whether it would be a good method of selling Vanda's cosmetics. In November 1971, Mrs. Cardell attended a party where plaintiff was selling copper gift ware. Mrs. Cardell found plaintiff's performance outstanding, and she was convinced that plaintiff's knowledge and talent at 'party plan' sales were the best she had ever seen. Mrs. Cardell so advised her husband, Emery Cardell, who was employed by Vanda as a regional manager. Mrs. Cardell was then thinking of resigning from her employment with Vanda, and she felt that plaintiff would make an excellent replacement for her.

Immediately after her first meeting with plaintiff, Mrs. Cardell asked her if she would be interested in coming to work for Vanda. Plaintiff replied that she was not at all interested, that she had worked for Mr. Collis for many years and that she had no desire to leave his employment.

Mrs. Cardell subsequently introduced plaintiff to her husband, and both the Cardells urged plaintiff to come to work for Vanda. Initially, Mr. Cardell offered plaintiff a salary of $7,500 a year, but she told him that she was not interested since she was already earning $12,000 per year.

On January 6, 1972, plaintiff attended a luncheon meeting with the Cardells, and Mr. Cardell then offered to start her at a yearly salary of $9,000. Mr. Cardell offered her the job of area sales manager, and he told her that he was in charge of raises and that her salary would probably increase to $12,000 within three years. He also told her that in the meantime, if her performance was good, she would receive annual bonuses of $2,000 of $3,000. Plaintiff told the Cardells that she had worked for the same employer for 16 years and that she was not in the least interested in a position which might prove to be only temporary. She expressed her fear that Vanda might hire her for the purpose of learning her 'party plan' sales techniques and then dismiss her after she had taught these techniques to the Vanda personnel. Mr. Cardell assured plaintiff that he was offering her a permanent position as long as her work efforts were satisfactory.

Plaintiff then asked to meet with other Vanda management personnel with higher authority than Mr. Cardell. Mr. Cardell arranged such a meeting and introduced plaintiff to Fred Gress, the personnel director for Vanda, and two other Vanda executives. Plaintiff told Mr. Gress of her long tenure with her present employer, and she stated that her primary concern was that the position at Vanda be permanent. Mr. Gress assured plaintiff that, if her performance was as represented by Mr. Cardell, she would be with Vanda as long as the company remained in existence. He further stated that even if Vanda were to go out of business, there were other direct selling companies owned by Dart where plaintiff could work. Mr. Cardell assured plaintiff that she would never be terminated arbitrarily, but only if there was good cause for termination, in that she had failed to perform her work functions and assignments.

Plaintiff finally agreed to accept employment with Vanda, and she became an area sales manager in January 1972. In March 1972, Mr. Cardell was dismissed from his employment with Vanda and was replaced by James Rebal. Mr. Rebal testified that he found plaintiff to be an extremely hard working person who always had the best interests of her distributors at heart. Nevertheless, in February 1973, Mr. Rebal terminated plaintiff's employment with Vanda, purportedly for her lack of administrative management.

Plaintiff and another witness, Carolee Cave, testified to an incident which took place in the summer of 1972, when Mr. Rebal had taken plaintiff and Mr. and Mrs. Cave to view some topless and bottomless entertainment. Plaintiff and Mrs. Cave insisted upon leaving, and Mr. Rebal was angry. He told plaintiff that she was prudish and unbusinesslike and that she should be willing to accompany the male distributors wherever they wished to go. Plaintiff expressed her disagreement with Mr. Rebal's views. According to plaintiff, her relationship with Mr. Rebal was definitely altered as a result of this incident, and from that point on, he continually criticized her and 'picked on' her for matters which had nothing to do with the proper performance of her duties.

The trial court concluded that Dart had breached its agreement with plaintiff by wrongfully terminating her employment and that plaintiff had not breached her employment agreement with defendant company.

Judgment was entered awarding plaintiff damages in the amount of $16,653.63. Plaintiff and defendant both filed notices of appeal therefrom.

On its appeal from the judgment, defendant Dart Industries, Inc. contends that the trial court erred in determining that plaintiff's employment contract could be terminated only for good cause. Defendant attacks both the court's finding that plaintiff's employment agreement was supported by consideration independent of the personal services to be performed by her and the finding that it was expressly and impliedly agreed that she could be terminated only for good cause. Defendant contends the plaintiff's employment agreement was such that she could be terminated at will or, at least, for good cause if her employer was in good faith dissatisfied with her performance. Defendant asserts that the evidence established as a matter of law that plaintiff's supervisor, Mr. Rebal, terminated her employment because of his good faith dissatisfaction with her performance. We find no merit in defendant's contentions.

It is settled that contracts of employment in California are terminable only for good cause if either of two conditions exist: (1) the contract was supported by consideration independent of the services to be performed by the employee for his prospective employer; or (2) the parties agreed, expressly or impliedly, that the employee could be terminated only for good cause.

In Millsap v. National Funding Corp. (1943), 57 Cal.App.2d 772, 776, 135 P.2d 407, 409, the court held that the giving up of other employment could furnish sufficient consideration for a promise of permanent employment. The court stated, 'Where the prospective employee clearly states to his prospective employer . . . that he will not give up his present employment unless the prospective employer will agree to give him permanent employment and the prospective employer expressly agrees to those terms, it seems clear that the prospective employee (to paraphrase the language of section 1605 Civil Code) in giving up his present employment suffers a prejudice as an inducement to the promisor for his promise of permanent employment.'

In Drzewiecki v. H & R Block, Inc. (1972), 24 Cal.App.3d 695, 704, 101...