Sheppard v. Freeman
| Decision Date | 19 October 1998 |
| Docket Number | No. D025818,D025818 |
| Citation | 79 Cal.Rptr.2d 13,67 Cal.App.4th 339 |
| Court | California Court of Appeals Court of Appeals |
| Parties | , 14 IER Cases 801, 98 Cal. Daily Op. Serv. 7882, 98 Daily Journal D.A.R. 10,911 Christopher G. SHEPPARD, Plaintiff and Appellant, v. Lou FREEMAN et al., Defendants and Respondents. |
Haas & Hout and R. Ted Haas, San Diego, for Plaintiff and Appellant.
Preston Gates & Ellis, Jane H. Barrett, Mark B. Tuvin and Kathleen O. Peterson, Los Angeles, for Defendants and Respondents.
Paul Grossman, John J. Gallagher, Neal D. Mollen, Margaret H. Spurlin, Washington, DC, Robert J. DeLucia, Luce, Forward, Hamilton & Scripps, George S. Howard, Jr. and John D. Edson, San Diego, as Amici
Curiae on behalf of Defendants and Respondents.
After Christopher G. Sheppard was fired from his job with Southwest Airlines (Southwest), he sued both Southwest and coworkers Lou Freeman, Roni Hardiman, Alan Godfrey, Jon Tree, and Rod Jones, individually, for their alleged conduct relating to his termination. The trial court entered judgment in favor of the coworkers, after sustaining demurrers without leave to amend in favor of some and granting summary judgment in favor of others. Sheppard appeals, contending he may sue his coworkers for interference with contract and prospective economic advantage, libel, and infliction of emotional distress, based on their having falsely reported to Southwest that he was incompetent.
We hold that except where a statutory exception applies, an employee or former employee cannot sue other employees based on their conduct relating to personnel actions. We note that the right to sue for libel is governed by statute, and that the Legislature has prescribed the circumstances under which this cause of action and the defenses and privileges pertaining thereto, may lie. (See Civ.Code, §§ 43, 45, 47-48.) Thus, we reverse the judgment as it pertains to Sheppard's claim for libel. We affirm the judgment as to all other causes of action. 1
After four and one-half years as a first officer pilot for Southwest, Sheppard was terminated in June 1994 after he failed Southwest's mandatory captain upgrade, as provided by the collective bargaining agreement between Southwest and the Southwest Airlines Pilot's Association. 2
Sheppard filed a grievance under the collective bargaining agreement over his termination. He claimed that evaluations of his performance had been falsified in an elaborate conspiracy among his coworkers, which caused him to fail to be upgraded to captain and ultimately caused his termination. Specifically, Sheppard contended that another pilot, Freeman, had had an extra-marital affair with Hardiman, a flight attendant with whom Sheppard had had a bitter argument. After the argument, Hardiman harbored ill will toward Sheppard and used her influence over Freeman to secure his assistance in attempting to have Sheppard fired. Freeman then enlisted Tree, Jones and Godfrey (who was one of his subordinates) in the conspiracy, and they purportedly recruited other "check airmen" to fail Sheppard during his performance evaluations, which resulted in his termination. However, after a two-day hearing, an arbitration tribunal rejected Sheppard's claims and upheld his termination.
Sheppard then filed a verified complaint arising from his termination against Southwest and his coworkers. Southwest removed the case to federal court, where the action against it for wrongful termination was dismissed as preempted by the Railway Labor Act. (45 U.S.C. § 151 et seq.) However, the court held that the act did not preempt Sheppard's tort claims against individual defendants, and remanded those claims to the superior court. 3
In the superior court, Jones and Tree filed demurrers and motions to strike, while Freeman, Hardiman and Godfrey filed answers and sought summary judgment. The trial
court sustained the demurrers without leave to amend, granted the summary judgment motions, and denied Sheppard's motion for leave to amend his complaint to allege that his coworkers were not acting within the course and scope of their employment with Southwest. Judgment was entered accordingly, and this appeal ensued.
Disposition of this appeal turns on our resolution of an issue of first impression: Whether an employee or former employee can sue other coemployees individually based on their conduct relating to personnel actions, e.g. termination, demotion, discipline, transfers, compensation setting, work assignments, and/or performance appraisals. We conclude that except where mandated by statute, such actions are barred, whether or not the employees are determined to have been acting within their scope of employment and regardless of their personal motives. 4
The trial court sustained the demurrers brought by Tree and Jones without leave to amend, in part because it deemed that claims against coworkers for conduct related to Sheppard's termination were barred by Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 663, 254 Cal.Rptr. 211, 765 P.2d 373, Hunter v. Up-Right, Inc. (1993) 6 Cal.4th 1174, 1178, 26 Cal.Rptr.2d 8, 864 P.2d 88, and Soules v. Cadam, Inc. (1991) 2 Cal.App.4th 390, 396, footnote 1, 404, 3 Cal.Rptr.2d 6, disapproved on other grounds in Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1251, 32 Cal.Rptr.2d 223, 876 P.2d 1022. The court also granted Hardiman's, Freeman's and Godfrey's motions for summary judgment, based on Sheppard's failure to create a triable issue that they were acting outside the course and scope of their employment, or were not protected by the managerial privilege (see Marin v. Jacuzzi (1964) 224 Cal.App.2d 549, 554, 36 Cal.Rptr. 880).
We note that the issue at hand does not fall within the specific purview of Foley. Foley limited tort claims arising out of the termination of an employment relationship, holding that an employee has an actionable claim only where the employer's conduct violates public policy. (See, e.g., Foley v. Interactive Data Corp., supra, 47 Cal.3d at pp. 669-670, 254 Cal.Rptr. 211, 765 P.2d 373; Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1090, 4 Cal.Rptr.2d 874, 824 P.2d 680.) Indeed, to support a tort action for wrongful discharge, "the policy in question must involve a matter that affects society at large rather than a purely personal or proprietary interest of the plaintiff or employer," and must be "fundamental" and "substantial," as well as "well established" at the time of the discharge. (Stevenson v. Superior Court (1997) 16 Cal.4th 880, 889, 66 Cal.Rptr.2d 888, 941 P.2d 1157, quoting Foley v. Interactive Data Corp., supra, 47 Cal.3d at pp. 669-670, 254 Cal.Rptr. 211, 765 P.2d 373.) However, these concerns pertain to employer liability to an employee, not to liability of coemployees. (See Jacobs v. Universal Development Corp. (1997) 53 Cal.App.4th 692, 704, 62 Cal.Rptr.2d 446 [].)
Thus, we have found little analysis of coworker liability under the principles of Foley and its progeny. 5 However, we recognize the deleterious effects on business if disciplined employees may avoid Foley 's bar by simply alleging malice and suing coemployees The doctrine of respondeat superior also illustrates the inappropriateness of imposing liability on coworkers who participate in personnel actions, rather than on the employer. We start with the premise that personnel actions are a sine qua non of any business operation: "In order to properly manage its business, every employer must on occasion review, criticize, demote, transfer and discipline employees ... [yet e]mployees may consider any such adverse action to be improper and outrageous." (Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 160, 233 Cal.Rptr. 308, 729 P.2d 743.) With this in mind, it is axiomatic that respondeat superior allocates risks based on policy, rather than on fault, and arises from "a deeply rooted sentiment" that it would be "unjust for an enterprise to disclaim responsibility for injuries occurring in the course of its characteristic activities." (Mary M. v. City of Los Angeles (1991) 54 Cal.3d 202, 208, 285 Cal.Rptr. 99, 814 P.2d 1341.) Indeed, the California Supreme Court has repeatedly emphasized the central justification for respondeat superior liability: "losses fairly attributable to an enterprise--those which foreseeably result from the conduct of the enterprise--should be allocated to the enterprise as a cost of doing business." (Lisa M. v. Henry Mayo Newhall Memorial Hospital (1995) 12 Cal.4th 291, 299, 48 Cal.Rptr.2d 510, 907 P.2d 358, quoting Farmers Ins. Group v. County of Santa Clara (1995) 11 Cal.4th 992, 1004, 47 Cal.Rptr.2d 478, 906 P.2d 440.)
for damages on alternative [67 Cal.App.4th 345] tort theories, when the identical personnel action cannot give rise to tort damages against the employer. Indeed, Jensen v. Hewlett-Packard Co. (1993) 14 Cal.App.4th 958, 965, 18 Cal.Rptr.2d 83, observes that, under Foley, the proper remedy against an employer for alleged falsified performance reviews is an action in contract. Hunter v. Up-Right, Inc., supra, 6 Cal.4th at page 1185, 26 Cal.Rptr.2d 8, 864 P.2d 88, expressly embraces the proposition that false statements cannot serve as a predicate for tort damages otherwise unavailable under Foley. Here, all Sheppard's claims arise from the termination, which he alleges was caused by a conspiracy of false reporting by coemployees. There is no suggestion in the record of any violation of public policy under Foley. To the contrary, the employee evaluation and reporting system which led to Sheppard's termination from Southwest would appear to advance both corporate and public interests in safety. (49 U.S.C. § 44701(d).) Allowing coworkers to...To continue reading
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