Wise v. Southern Pac. Co.

• Decision Date: 20 January 1970
• Docket Number: S.F. 22686
• Citation: 463 P.2d 426,83 Cal.Rptr. 202,1 Cal.3d 600
• Court: California Supreme Court
• Parties: , 463 P.2d 426, 73 L.R.R.M. (BNA) 2360 Wayne E. WISE, Plaintiff and Respondent, v. SOUTHERN PACIFIC COMPANY, Defendant and Appellant.

Page 202

83 Cal.Rptr. 202

1 Cal.3d 600, 463 P.2d 426, 73 L.R.R.M. (BNA) 2360

Wayne E. WISE, Plaintiff and Respondent, v. SOUTHERN PACIFIC COMPANY, Defendant and Appellant.

S.F. 22686.

Supreme Court of California In Bank.

Jan. 20, 1970.

William R. Denton and W. A. Gregory, San Francisco, for defendant and appellant.

Perkins, Carr & Anderson, Sacramento, Leo Fried, San Francisco, and Thomas C. Perkins, Sacramento, for plaintiff and respondent.

Bodle, Fogel, Julber & Reinhardt, George E. Bodle, Daniel Fogel, Stephen Reinhardt, Loren R. Rothschild and James H. Webster, Los Angeles, as amici curiae on behalf of plaintiff and respondent.

BURKE, Justice.

In this action for wrongful discharge from employment plaintiff recovered judgment, and defendant railroad company appeals. As will appear, we have concluded that defendant failed to establish its asserted ground for discharging plaintiff, that no other error has been shown, and that the judgment should be affirmed.

Plaintiff entered defendant's employ in 1936. In February 1960, following a hearing required under the collective bargaining agreement between defendant and the union to which plaintiff belongs, plaintiff was discharged for violation of rule 803 of defendant's General Rules and Regulations. ¹ This action for damages followed.

On an earlier appeal (Wise v. Southern Pacific Company (1963) 223 Cal.App.2d 50, 58--59, 35 Cal.Rptr. 652) ² it was held that the state courts have jurisdiction and that as required by California law plaintiff employee had exhausted his administrative remedies required under his employment contract before he brought this action. We adhere to those rulings as the law of the case. (People v. Durbin (1966) 64 Cal.2d 474, 477, 50 Cal.Rptr. 657, 413 P.2d 433.) ³

The collective bargaining agreement constituting plaintiff's comployment contract provides in rule 39 thereof that plaintiff was not to be dismissed by defendant except for a just cause and after written notice to plaintiff of 'the precise charge' against him and a fair hearing before a proper officer of defendant company. ⁴

In January 1960 defendant served plaintiff with notice that he was charged with the solicitation of various of defendant's employees during the years 1957 and 1958 for the purpose of inducing such employees to bring personal injury lawsuits against defendant; the notice also advised plaintiff to present himself for formal hearing on the charges. ⁵ Following a hearing before an officer of defendant company, and review of the hearing transcript by two other such officers, defendant dismissed plaintiff from service in February 1960. ⁶

Plaintiff contends, and the trial court found and concluded, that defendant breached plaintiff's employment contract in that the hearing accorded plaintiff was not a fair hearing and proof of a just cause for dismissal had not been produced in support of defendant's charges against plaintiff. ⁷

As grounds for reversal defendant urges that the hearing was fair, and that the solicitation by plaintiff of personal injury litigation against his employer (the charge set forth in the notice to plaintiff, Ante, fn. 5) and the rendering of assistance to his employer's adversaries in litigation (an additional charge now made by defendant) constitute disloyalty as a matter of law and provide legally sufficient grounds for dismissing plaintiff.

At the outset it should be emphasized that defendant is a private corporation and not a governmental agency, and that plaintiff's employment contract did not provide for a hearing before an impartial referee or board possessing the power to subpoena evidence and to swear witnesses. Thus comparisons between the hearing accorded plaintiff here, and the hearing to which statutes often entitle public employees, are not apposite. Rather, as defendant itself notes, there were no rules or prescribed forms to be followed by the lay hearing officer of defendant company, and the hearing accorded plaintiff was 'not a trial. It is an opportunity to bring out all sides of a situation. It is an investigation rather than a prosecution.'

However, the employment contract Did specify in rule 39 (Ante, fn. 4) that plaintiff was to be dismissed only for just cause and after fair hearing upon notice of the precise charge against him. Thus as in any other action in which plaintiff charges breach of contract by a defendant who undertook to unilaterally terminate the contractual relationship, as did defendant here, defendant if it is to prevail must establish in court that the termination was authorized under the terms of the contract. In the present case this means that to justify the dismissal of plaintiff as an employee, defendant must show that All of the contractual conditions were met; i.e., (1) plaintiff was given notice of the precise charge against him, (2) plaintiff was guilty as so charged, (3) the acts charged constituted a just cause for dismissal, and (4) the hearing on the charge was fair. Accordingly, in order to warrant disturbance by an appellate court of the trial court's determination that proof of a just cause for dismissal had not been produced in support of defendant's charge against plaintiff and that the hearing was not a fair hearing, defendant must demonstrate that the only reasonable view of the evidence is that all of the contractual conditions existed entitling it to discharge plaintiff. This defendant has failed to do.

Regardless of whether or not the hearing as conducted by defendant's officials was shown to be a fair hearing, a point which we do not reach, the record indicates that defendant failed to produce before the court any evidence whatever which would compel a finding that plaintiff was guilty of the solicitation charged against him. At trial plaintiff offered the transcript of the hearing into evidence for the sole purpose of showing unfairness of the hearing, and not as evidence of the truth of the matters asserted therein, as to which matters plaintiff objected to the transcript as hearsay. The court admitted the transcript into evidence for the limited purpose proposed by plaintiff. Although certain of the testimony and written statements of employees of defendant which appear in the transcript could conceivably support the solicitation charge against plaintiff, the testimony and statements were not given under oath and at trial defendant agreed that the transcript was offered 'to show * * * what took place at the hearing. * * * (N)obody is going to ask this Court to determine whether (the witnesses) spoke truthfully or anybody else there. * * * In other words, our officers have made decisions based on the transcript.' Defendant itself offered no evidence before the court which would support the solicitation charge.

Additionally, at trial, and in plaintiff's deposition introduced by defendant at trial, plaintiff testified with respect to each instance of alleged solicitation cited by defendant, explained the circumstances, and consistently denied that the acts charged took place. The trial court was, of course, entitled to believe plaintiff. Plaintiff's testimony was to the effect that injured members of his union had sought his advice, as their union representative, with respect to injuries sustained on the job, and that on occasion he had recommended certain specific attorneys whom he considered especially competent in the field. Such activity in assistance of his fellow employees not only did not constitute solicitation of such employees as charged by defendant, but was an activity protected under the rationale of Brotherhood of Railroad Trainmen v. Virginia ex rel. Virginia State Bar (1964) 377 U.S. 1, 5--6, 84 S.Ct. 1113, 12 L.Ed.2d 89, 11 A.L.R.3d 1196). ⁸

Defendant refers to admissions by plaintiff in his court testimony that on various occasions he rendered assistance to attorneys in connection with personal injury cases they were handling against defendant. However, certain of such instances occurred after plaintiff was discharged in January 1957 and before he was ordered reinstated in January 1958 (see fn. 3, Ante) and other instances took place following the discharge which gave rise to the present action. But even if those instances of rendering assistance to counsel which occurred while plaintiff was in the active employ of defendant would support defendant's contention that as a matter of law plaintiff was thereby guilty of disloyalty toward defendant as his employer, defendant failed to notify plaintiff before the hearing and dismissal here at issue that the rendering of such assistance was one of the charges against him, as defendant was required to do under rule 39 of the employment contract. ⁹ In sum, defendant has shown no ground for interference with the ruling of the trial court that defendant breached plaintiff's employment contract.

Defendant also contends that the trial court applied an erroneous measure of damages in favor of plaintiff. Plaintiff was awarded $7,581.51 as 'lost wages,' plus $8,157.14 as lost benefits of a medical plan and $1,998.91 for loss of an insurance policy, to both of which benefits he was entitled under the terms of his employment contract with defendant. The judgment thus totaled $17,737.56.

Defendant first urges that under the provision of rule 39 of the contract (Ante, fn. 4) stating that if an employee has been unjustly dismissed, he 'shall be reinstated with his seniority rights unimpaired, and compensated for the wage loss, if any, resulting from' the dismissal, plaintiff is entitled to recover only lost wages in this action, and not lost 'fringe benefits' as well. ¹⁰ However, even if it be assumed without deciding that the contract could properly limit plaintiff's damages to the extent and in the respect for which defendant contends, it is our view that in an action for wrongful discharge, and pursuant to the present day concept of employer-employee relations, the term 'wages' should be...