Stevenson v. Superior Court

• Decision Date: 27 August 1997
• Docket Number: No. S052588,S052588
• Court: California Supreme Court
• Parties: , 941 P.2d 1157, 74 Fair Empl.Prac.Cas. (BNA) 1623, 72 Empl. Prac. Dec. P 45,272, 13 IER Cases 321, 97 Cal. Daily Op. Serv. 6918, 97 Daily Journal D.A.R. 11,181 Joan STEVENSON, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; HUNTINGTON MEMORIAL HOSPITAL, Real Party in Interest.

Page 888

66 Cal.Rptr.2d 888

16 Cal.4th 880, 941 P.2d 1157,

74 Fair Empl.Prac.Cas. (BNA) 1623,

72 Empl. Prac. Dec. P 45,272, 13 IER Cases 321,

97 Cal. Daily Op. Serv. 6918,

97 Daily Journal D.A.R. 11,181

Joan STEVENSON, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent;

HUNTINGTON MEMORIAL HOSPITAL, Real Party in Interest.

No. S052588.

Supreme Court of California.

Aug. 27, 1997.

Antonio M. Lawson, Oakland, Traber, Voorhees & Olguin, Bert Voorhees, Fernando M. Olguin and Theresa M. Traber, Pasadena, for Petitioner.

Joseph Posner, Encino, Cathy Ventrell-Monsees, Laurie A. McCann, Washington, DC, and William C. Quackenbush, San Mateo, as Amici Curiae on behalf of Petitioner.

No appearance for Respondent.

Fonda, Garrard, Hilberman & Davis, Peter M. Fonda, Laurie DeYoung, Los Angeles, O'Flaherty & Belgum, Brian P. Barrow, Todd E. Croutch and Robert M. Dato, Long Beach, for Real Party in Interest.

Gibson, Dunn & Crutcher, David A. Cathcart, Los Angeles, Mark Snyderman, Crosby, Heafey, Roach & May, James C. Martin, Anna Segobia Masters and Ellen R. Brostrom, Los Angeles, as Amici Curiae on behalf of Real Party in Interest.

KENNARD, Justice.

California statutory law prohibits employers from discriminating against older workers (statutorily defined as workers over the age of 40) because of their age. Specifically, the Fair Employment and Housing Act (FEHA) ( Gov.Code, § 12900 et seq.) makes it "an unlawful employment practice for an employer to refuse to hire or employ, or to discharge, dismiss, reduce, suspend, or demote, any individual over the age of 40 on the ground of age, except in cases where the law compels or provides for such action." (Id., § 12941, subd. (a).) ¹ The FEHA defines an "employer" as a person "regularly employing five or more persons." (Id., § 12926, subd. (d).)

In Jennings v. Marralle (1994) 8 Cal.4th 121, 32 Cal.Rptr.2d 275, 876 P.2d 1074 (Jennings ), we held that an older worker who has been discharged because of age by an employer having fewer than five workers (and thus not subject to the age discrimination prohibition of the FEHA) may not bring a tort claim for wrongful discharge in violation of public policy. But we specifically left for future determination the question whether an older worker may assert such a common law claim against an employer with five or more workers. (Id. at p. 130, 32 Cal.Rptr.2d 275, 876 P.2d 1074.) The issue we left open in Jennings we will decide here.

We conclude that, as applied to employers regularly employing five or more workers, the policy prohibiting employment discrimination against older workers satisfies each of the criteria this court has established as necessary to support a common law action for tortious wrongful discharge: The policy has been articulated in a statute (the FEHA), benefits society at large, is "substantial" and "fundamental," and was well established at the time of the discharge here. We further conclude that, because the FEHA expressly does not preempt any common law tort claims, the FEHA's age discrimination remedies are not exclusive and do not bar a tort claim for wrongful discharge in violation of the public policy against age discrimination.

I. FACTS AND PROCEDURAL HISTORY

Because this matter comes to us on demurrer, we take the facts from plaintiff's complaint, the allegations of which are deemed true for the limited purpose of determining whether the plaintiff has stated a viable cause of action. (Livitsanos v. Superior Court (1992) 2 Cal.4th 744, 747, 7 Cal.Rptr.2d 808, 828 P.2d 1195.)

When she was discharged at the age of 60, plaintiff Joan Stevenson (Stevenson) had worked as an employee of real party in interest Huntington Memorial Hospital (the Hospital) for over 30 years, performing her job competently and receiving commendations and pay increases. During 1992, shortly before her discharge, Stevenson had been on a medical leave of absence approved by the Hospital. According to the Hospital's Personnel Policies and procedures manual, upon return from an approved medical leave of absence for occupational or nonoccupational injury or illness an employee is guaranteed reinstatement to the same job classification and shift. The manual further states that if it is "not possible for business reasons to guarantee reinstatement to the same job classification and shift, an employee will be reinstated to any available job ... which, in the judgment of the hospital, the employee is qualified to perform" and "will be given the opportunity to be reassigned to that same job classification and shift when next available."

On November 6, 1992, the Hospital informed Stevenson that her right to reinstatement would be guaranteed until December 31, 1992. On an unspecified day during November 1992, Stevenson notified the Hospital that she was ready to return to work. At that time, the Hospital told Stevenson that she would not be allowed to return to her original job classification and shift, and it denied her reinstatement "to another job classification and shift with opportunity for later reassignment to her original job classification and shift."

The Hospital terminated Stevenson's employment "some time after December 31, 1992." It did so "because of [Stevenson's] age and to deny her the opportunity to obtain benefits to which she was entitled and eligible as a 30-year employee."

On December 30, 1993, Stevenson filed a wrongful termination action against the Hospital. Her first amended complaint, which is the pleading at issue here, contains allegations grouped into four alleged causes of action: (1) breach of employment contract; (2) wrongful discharge in violation of a public policy against terminating an employee for taking an approved medical leave; (3) wrongful discharge in violation of a public policy against age discrimination; and (4) breach of the implied covenant of good faith and fair dealing.

The Hospital demurred to Stevenson's first amended complaint in its entirety. Regarding the first and fourth causes of action (the contract claims), the Hospital asserted that Stevenson had not sufficiently alleged the existence of a written, oral, or implied contract. As to the second and third causes of action (the tort claims), the Hospital maintained that fundamental public policy was not violated by either age discrimination in employment or termination of employment for taking medical leave. These tort claims according to the Hospital, were also barred because Stevenson had not exhausted her statutory remedies under the FEHA.

The trial court overruled the Hospital's demurrer with respect to the contract claims. As to the tort claims for wrongful discharge in violation of fundamental public policy, the trial court sustained the demurrer without leave to amend. Stevenson petitioned the Court of Appeal for a writ of mandate to set aside this latter part of the trial court's order.

The Court of Appeal issued an alternative writ but ultimately denied Stevenson's petition. The court devoted a large portion of its opinion to the central question of whether Stevenson's wrongful discharge claim was supported by a fundamental public policy against age discrimination in employment. Although recognizing that we had expressly left this issue open in Jennings, supra, 8 Cal.4th 121, 32 Cal.Rptr.2d 275, 876 P.2d 1074, the Court of Appeal nonetheless viewed the logic of Jennings as leading ineluctably to the conclusion that age discrimination in employment does not violate any fundamental public policy of this state, no matter how many employees an employer regularly employs. The Court of Appeal ended its opinion by "respectfully urg[ing] the Supreme Court to explore further this troubling area of the law at its next opportunity." We granted Stevenson's petition for review. ²

II. DISCUSSION

A. Origins of the Tortious Discharge Claim

In California, an employment relationship may generally be terminated by either party "at will." ³ This means that, unless they agree otherwise, either party may terminate the employer-employee relationship without cause. (Lab.Code, § 2922.) On occasion, employers have abused the at will relationship by discharging employees for reasons contrary to public policy as expressed in statutory or constitutional mandates. In response, courts have created an exception to, or qualification of, the at will employment principle. The exception is this: An employer may not discharge an at will employee for a reason that violates fundamental public policy. This exception is enforced through tort law by permitting the discharged employee to assert against the employer a cause of action for wrongful discharge in violation of fundamental public policy.

The first California appellate court decision to recognize a tortious discharge claim was Petermann v. International Brotherhood of Teamsters (1959) 174 Cal.App.2d 184, 344 P.2d 25 (Petermann ). In Petermann, the plaintiff sued his employer after he was discharged for refusing to perjure himself during an investigative hearing before the Legislature. The trial court granted the employer's motion for summary judgment based on the parties' at will employment relationship. (Id. at p. 187, 344 P.2d 25.) The Court of Appeal reversed, stating: "It would be obnoxious to the interests of the state and contrary to public policy and sound morality to allow an employer to discharge an employee ... on the ground that the employee declined to commit perjury." (Id. at pp. 188-189, 344 P.2d 25.) The Petermann court noted that Penal Code section 118, prohibiting perjury, derives from the general principle that "[t]he presence of false testimony in any proceeding tends to interfere with the proper administration of public affairs and the administration of justice." (Petermann, supra, at p. 188, 344 P.2d 25.)

This court first addressed the tortious discharge claim in Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d...