Amparo GIORGI, Plaintiff and Appellant, v. VERDUGO HILLS HOSPITAL, Defendant and Respondent.
Appellant timely appeals from the summary judgment entered in respondent's favor on May 28, 1987. We affirm.
The facts are not in dispute in any material manner. Therefore, we dispense with the necessity to set forth at length the facts of the case and give only this synopsis of the facts. These facts appear in the record on appeal and are based upon allegations in the appellant's fourth amended complaint and the uncontradicted evidence presented by respondent in support of its motion for summary judgment.
In June 1980, defendant and respondent Verdugo Hills Hospital (hereafter “Hospital”) hired plaintiff and appellant Amparo Giorgi (hereafter “Giorgi”) as the night housekeeping supervisor. Her duties included overseeing cleaning assignments and working procedures. She was also expected to keep the department in harmony. In addition to her salary, she received medical insurance and other benefits. In November 1981, Giorgi's daughter was found to have brain cancer and underwent surgery. Giorgi requested and was granted a leave of absence to care for her.
Before her leave of absence, Giorgi's attitude at work had been satisfactory. However, upon her return on January 2, 1982, it completely changed. Giorgi was demanding towards her executive supervisor, Chrisula Tseliki, (hereafter “Tseliki”) and argued with Tseliki about some of the personnel changes instituted in Giorgi's absence. In Tseliki's words, “I had a finger at my face most of the time.” Although Tseliki is fluent in English, it is not her first language. Giorgi also argued continuously with the employees under her supervision, who complained to Tseliki that Giorgi talked down to, yelled at and threatened them. Tseliki attempted to discuss the problems with Giorgi, but was met with more arguments.
On January 12, 1982, Hospital gave Giorgi a formal written Disciplinary Notice, stating that her conduct was unsatisfactory because of her insubordinate, argumentative and authoritarian attitude towards her executive supervisor and her poor employee relations. Although the arguments with Tseliki abated somewhat following this formal notice, the situation did not significantly improve. Giorgi's subordinates continued to complain about her treatment of them. She compounded the problem by failing to attend an employee meeting to discuss the complaints. In addition, she abandoned her duties without notice although no emergency required her to do so. When Tseliki questioned Giorgi about leaving work during her shift, Giorgi reacted with fury. An angry confrontation ensued, which prompted Tseliki to give Giorgi a verbal warning with an admonition not to abuse the system by leaving work when no emergency was occurring. Finally, faced with a department in turmoil and concluding there was no hope for improvement, the Hospital terminated Giorgi on June 30, 1982, for “ineffective management and insubordination and incompatibility with” the Environmental Services Director, Tseliki.
Hospital had a written discipline policy which provided for two written warnings before termination in “typical” cases, but noted that since all cases of employee discipline were different, some called for more or fewer steps. Hospital also had two grievance procedures for employees who believed they had been unjustly discharged. The employee could informally discuss the situation with a supervisor. If dissatisfied with the result, the employee could formally request permission to go to higher-level supervisors and finally to the president of the Hospital. Giorgi met with the president of the Hospital, Roald Davey, a few days after her termination. Davey saw no basis for rescinding the Hospital's action.
On March 23, 1983, Giorgi filed suit against Hospital, alleging several causes of action arising out of her termination. As a result of a series of successful demurrers, the complaint was amended four times.
The fourth amended complaint alleged multiple causes of action. Eventually Giorgi dismissed four causes of action leaving three as follows:
a. intentional infliction of emotional distress;
b. breach of implied contract of permanent employment, and
c. breach of the implied covenant of good faith and fair dealing.
Essentially, Giorgi alleged that she was a permanent employee, that Hospital had failed to follow proper procedures in firing her and that she had suffered financial and emotional distress as a result of the termination of her employment and her insurance.
In December 1986, Hospital moved to summarily adjudicate whether Giorgi could sue her employer for intentional infliction of emotional distress, contending that (1) such injuries are compensable, if at all, under the workers' compensation scheme, according to Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 233 Cal.Rptr. 308, 729 P.2d 743, and (2) that Giorgi's state law claims against her employer, alleging that she was fired to cut off medical benefits, are preempted by federal law under ERISA.1 Giorgi conceded that ERISA preempted any claim of emotional distress due to a denial of health benefits. The court granted summary adjudication.
In April 1987, Hospital moved for summary adjudication of the remaining two causes of action. Hospital presented evidence that Giorgi was an at-will employee or, alternatively, was terminated for good cause (insubordination, incompatibility, ineffective management) and that Hospital had not violated its termination policies. Giorgi argued that she was a permanent employee who could not be terminated absent good cause. She did not dispute that she was terminated for insubordination, but argued that Hospital did not follow a three-step termination procedure in firing her. Summary judgment in Hospital's favor was entered on May 28, 1987. This appeal followed.
STANDARD OF REVIEW
A motion for summary judgment “shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ.Proc., § 437c, subd. (c).) The purpose of summary judgment is to penetrate evasive language and adept pleading and to ascertain, by means of affidavits, the presence or absence of triable issues of fact. (Chern v. Bank of America (1976) 15 Cal.3d 866, 873, 127 Cal.Rptr. 110, 544 P.2d 1310.) Accordingly, the function of the trial court in ruling on a motion for summary judgment is merely to determine whether such issues of fact exist, and not to decide the merits of the issues themselves. (Walsh v. Walsh (1941) 18 Cal.2d 439, 441, 116 P.2d 62.)
Summary judgment is a drastic measure that deprives the losing party of a trial on the merits. (Mann v. Cracchiolo (1985) 38 Cal.3d 18, 35, 210 Cal.Rptr. 762, 694 P.2d 1134.) It should therefore be used with caution, so that it does not become a substitute for trial. (Rowland v. Christian (1968) 69 Cal.2d 108, 111, 70 Cal.Rptr. 97, 443 P.2d 561.) The affidavits of the moving party should be strictly construed, and those of the opponent liberally construed. (Stationers Corp. v. Dun & Bradstreet, Inc., (1965) 62 Cal.2d 412, 417, 42 Cal.Rptr. 449, 398 P.2d 785.) Any doubts as to the propriety of granting the motion should be resolved in favor of the party opposing the motion. (Slobojan v. Western Travelers Life Ins. Co. (1969) 70 Cal.2d 432, 437, 74 Cal.Rptr. 895, 450 P.2d 271.)
A defendant is entitled to summary judgment if the record establishes as a matter of law that none of the plaintiff's asserted causes of action can prevail. (Stationers Corp. v. Dun & Bradstreet, Inc., supra, 62 Cal.2d 412, 417, 42 Cal.Rptr. 449, 398 P.2d 785.) To succeed, the defendant must conclusively negate a necessary element of or establish a complete defense to each cause of action of the plaintiff's case (Estate of Fisher (1988) 198 Cal.App.3d 418, 423, 244 Cal.Rptr. 5) and demonstrate that under no hypothesis is there a material issue of fact that requires the process of a trial. (Stationers Corp. v. Dun & Bradstreet, Inc., supra, 62 Cal.2d at p. 417, 42 Cal.Rptr. 449, 398 P.2d 785.) We shall examine the grant of summary judgment in this case with the foregoing standard in mind.
I. Intentional Infliction of Emotional DistressA. Giorgi's Claims That She Suffered Mental Anguish And Distress And Became Ill, Nervous And Upset As A Result Of Her Employment Termination Are Within The Exclusive Jurisdiction Of The Workers' Compensation Act Thereby Preempting Any State Common Law Causes Of Action For Personal Injuries.
Article XIV, section four of the California Constitution, vests the legislature with the plenary power to create and enforce the workers' compensation system. The legislature has accordingly devised a statutory system which is to be “liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment.” (Lab.Code, § 3202.) 2 Not all injuries sustained in the course of employment are significant enough to warrant compensation under the workers' compensation system. To trigger the compensation mechanisms of the system, an injury must cause disability or the need for medical treatment. (§ 3208.1.)
Section 3600 of the Act, which states the conditions of compensation that must concur before an employer is liable for an employee's injury, includes the requirement that “at the time of the injury, the employee is performing service growing out of and incidental to his employment and is acting within the course of his employment.” (Former § 3600, subd. (b).) Where these conditions concur, “the right to recover such compensation ․ is ․ the exclusive remedy ․ of an employee against the employer․” (Former § 3601, subd. (a).)
The “exclusive remedy” rule is a reflection of the underlying premise of the workers' compensation system. That system, the Supreme Court has observed, “balances the advantage to the employer of immunity from liability at law against the detriment of relatively swift and certain compensation payments. Conversely, while the employee receives expeditious compensation, he surrenders his right to a potentially larger recovery in a common law action for the negligence or willful misconduct of his employer.” (Johns–Manville Products Corp. v. Superior Court (1980) 27 Cal.3d 465, 474, 165 Cal.Rptr. 858, 612 P.2d 948.) As a general proposition, this balance is jeopardized by “continual efforts to make end-runs around the exclusivity provisions of the workers' compensation system.” (United States Borax & Chemical Corp. v. Superior Court (1985) 167 Cal.App.3d 406, 411, 213 Cal.Rptr. 155.)
The trend of recent decisions has been to narrow the range of exceptions to exclusivity, an approach also reflected in the legislature's 1982 amendments to the Act and in particular section 3602, subdivision (b),3 which restrictively states the judicial exceptions to exclusivity, implying no others exist. See Continental Casualty Co. v. Superior Court (1987) 190 Cal.App.3d 156, 235 Cal.Rptr. 260, as follows:
“We conclude the trend of recent decisions, such as Cole v. Fair Oaks Fire Protection Dist., supra, and Johns–Manville, supra, is to narrow the range of exceptions to exclusivity, an approach also reflected in the legislative intent behind Labor Code section 3602, subdivision (a) (abridging dual capacity doctrine) and section 3602, subdivision (b) (restrictively stating judicial exceptions to exclusivity, implying no others exist). Curtailing the exceptions to exclusivity benefits both employers and employees within the system, by keeping down the costs of compensation insurance and preserving the low cost, efficiency and certainty of recovery which characterizes workers' compensation.” (Id., at p. 162, 235 Cal.Rptr. 260.)
The most recent word from the Supreme Court on the exclusive remedy rule is Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d 148, 233 Cal.Rptr. 308, 729 P.2d 743, decided in early 1987. Cole, a firefighter, alleged he was subjected to a campaign of harassment on the job and suffered a massive stroke which left him mentally and physically disabled. He brought a tort action against his employer for intentional infliction of emotional distress. The Supreme Court held that his action was barred by the exclusive remedy provision of the Act. Focusing not on the employee's injury but on the employer's conduct, the court held that “when the employee's claim is based on conduct normally occurring in the workplace, it is within the exclusive jurisdiction of the Workers' Compensation Appeals Board.” (Id., at p. 151, 233 Cal.Rptr. 308, 729 P.2d 743.)
In her brief, Giorgi attempts to distinguish Cole by arguing that the decision does not apply to terminations and also that Cole had received workers' compensation benefits. However, we perceive that the facts, holding and policy animating the Cole decision are controlling in this case. We are quick to point out the lack of suggestion on our part that the workers' compensation system precludes the pursuit of whatever contractual remedies are available to Giorgi. We only hold that it bars traditional tort remedies, such as emotional distress damages and punitive damages.
1. Injuries Resulting From An Employee's Dismissal Satisfy The Relevant Conditions Of Workers' Compensation Coverage.
a. The termination of an employment relationship by the employer is an act that necessarily “arises out of” the employment.
Cole held that in a case where an employee's injury is alleged to have been caused by the employer's misconduct, the requirement that the injury arise out of the employment is satisfied if “the misconduct attributed to the employer is actions which are a normal part of the employment relationship.” (Emphasis added.) (Id., at p. 160, 233 Cal.Rptr. 308, 729 P.2d 743.) Giorgi asserts that terminations, and especially those alleged to be in bad faith, are not a normal part of employment.
We find Giorgi's position to be untenable. Termination necessarily arises out of the employment relationship since it is the event that ends that relationship. Cole itself established that termination is an inherent risk of employment. A short time before Cole's debilitating stroke, his employer “filed an application with the state to force Cole to retire involuntarily.” (Id., at p. 153, 233 Cal.Rptr. 308, 729 P.2d 743.) The court clearly described the effort to terminate Cole's employment—involving even more egregious circumstances than alleged here—as “an inherent part of the employment setting.” (Id., at p. 161, 233 Cal.Rptr. 308, 729 P.2d 743.)
Giorgi's reasoning that wrongful termination is not a normal part of employment results from confusing what is normal, with what would be ideal. Ideally, employment relationships would always end amicably by the mutual consent of the employer and the employee, but it is normal for them to end otherwise. There can be no doubt that involuntary termination by the employer is among the circumstances under which employment relationships normally terminate. It simply is not sound to suggest than an employee who accepts a particular job does not also accept the risk of losing it without the employee's consent.
As the court specifically observed in Cole, “[i]n order to properly manage its business, every employer must on occasion review, criticize, demote, transfer and discipline employees.” (Id., at p. 160, 233 Cal.Rptr. 308, 729 P.2d 743.) Certainly, the dismissal of employees—no less than other personnel decisions, such as hiring, demotions, or discipline—must be regarded as integral to the management of a business and, hence, as a normal part of employment. (Cf. Garcia v. Rockwell Internat. Corp. (1986) 187 Cal.App.3d 1556, 1562, 232 Cal.Rptr. 490 [“The same wrongful conduct is involved whether the retaliation inflicted is a six-month suspension without pay or a discharge.”].)
A termination is no less a normal risk of employment because it is alleged to be wrongful. Employers are no more likely to be saints than anyone else. They may unfairly criticize, demote, transfer, discipline or fire an employee. If the conduct is fair, there is no ground for complaint. If it is unfair, it is still a normal part of the employment relationship. (Witness the extreme circumstances of Cole.) As aptly observed in Cole, “employees may consider any such adverse action to be improper and outrageous․ [¶] If characterization of conduct normally occurring in the workplace as unfair or outrageous were sufficient to avoid the exclusive remedy provisions of the Labor Code, the exception would permit the employee to allege a cause of action in every case where he suffered mental disability merely by alleging an ulterior purpose of causing injury. Such an exception would be contrary to the compensation bargain and unfair to the employer.” (Cole v. Fair Oaks Fire Protection Dist, supra, 43 Cal.3d 148, 160, 233 Cal.Rptr. 308, 729 P.2d 743.)
Injury to an employee resulting from a termination—whether characterized as in bad faith or not—is an inherent risk of employment. “[I]t would be unusual for an employee not to suffer emotional distress as a result of an unfavorable decision by his employer. (Cf. Magnuson v. Burlington Northern, Inc. (9th Cir.1978) 576 F.2d 1367, 1369 [“[e]very employee who believes he has a legitimate grievance will doubtless have some emotional anguish occasioned by his belief that he has been wronged”].)” (Id., at p. 160, 233 Cal.Rptr. 308, 729 P.2d 743.) Hence, injuries flowing from this conduct necessarily arise out of the employment.
b. The employer's termination of an employment relationship also necessarily occurs “in the course of” the employment for purposes of workers' compensation.
For an injury to occur “in the course of employment,” the employee must be working within the scope of the job assignment, at a place where the employee may reasonably be for that purpose and at a time within the period of his or her employment. (2 Hanna, California Law of Employee Injuries and Workmen's Compensation, (2d ed. 1988) § 9.01[b], p. 9–3.) These conditions of coverage are easily satisfied where the injury results from the employer's termination of the employment relationship.
No discharged employee could plausibly maintain that a discharge was an act that occurred outside the scope of the employee's assignment. Moreover, for an employee to suggest that the employee was not actually in the course of his or her employment at the instant the employer terminated its contractual relationship with the employee is contra not only to the legislature's clear intention that workers' compensation provisions be liberally construed in favor of injured employees (§ 3202), but also the sound judicial decisions that have construed the term “course of employment” to encompass more than just the time period during which the parties' contractual relationship technically exists. (Spratley v. Winchell Donut House, Inc. (1987) 188 Cal.App.3d 1408, 1412, 234 Cal.Rptr. 121 [Where employer misrepresented safety of workplace before employee's acceptance of employment, court rejected employee's contention that action against employer for fraud should lie because the tort was committed “before the employment relationship began;” held, action barred by exclusive remedy rule because the injury arose out of and in the course of the employment relationship.]; Gates v. Trans Video Corp. (1979) 93 Cal.App.3d 196, 202, 155 Cal.Rptr. 486 [“[A] person who has been discharged and sustains an injury while in the process of leaving the job site is still considered an employee for the purpose of compensation coverage.”]; Mitchell v. Hizer (1977) 73 Cal.App.3d 499, 506–507, 140 Cal.Rptr. 790 [Held, discharged employees injured while retrieving tools from workplace were still in the course of employment.].)
As the Supreme Court observed in Laeng v. Workmen's Comp. Appeals Bd. (1972) 6 Cal.3d 771, 777, 100 Cal.Rptr. 377, 494 P.2d 1, “an ‘employment’ relationship sufficient to bring the act into play cannot be determined simply from technical contractual or common law conceptions of employment but must instead be resolved by reference to the history and fundamental purposes underlying the Workmen's Compensation Act.”
Peterson v. Moran (1952) 111 Cal.App.2d 766, 245 P.2d 540 is particularly illustrative of this point. There, an employee briefly remained at the workplace following his discharge for the specific purpose of discussing with his foreman his employer's reason for terminating him, and was injured. In the tort action which the employee filed against his former employer, the employer argued that the employee's injuries were redressable only under the workers' compensation system because, at the time he was injured, the employee was still in the course of employment. The Court of Appeal agreed, concluding that since it was reasonable for the employee to inquire of the foreman why he had been discharged, the plaintiff, though no longer technically under contract with the employer, was nonetheless an “employee” under the broadly protective purposes of the Workers' Compensation Act. (Id., at pp. 768–770, 245 P.2d 540.)
Going one step further, where a discharged employee claims to have been injured not by acts of the employer that are closely associated with the employee's termination—as in Peterson—but by the termination itself, it becomes a necessary inference that the employee was injured by an act that occurred during the period of employment. It is logically inconsistent for one who claims to have lost a job for an improper reason to maintain that at the time of discharge the employee was not employed. Turning the proposition around, surely no reasonable litigant would dispute the claim of an employee attempting to invoke the workers' compensation remedies that, at the instant of discharge, the employee was still employed for purposes of workers' compensation; the very same result must obtain where the discharged employee is attempting to renounce the workers' compensation remedies. (Freire v. Matson Navigation Co. (1941) 19 Cal.2d 8, 10, 118 P.2d 809; Scott v. Pacific Coast Borax Co. (1956) 140 Cal.App.2d 173, 184, 294 P.2d 1039.) In sum, when an employee claims injuries as a result of the termination of employment, those injuries occur “in the course” of the employment.
2. Workers' Compensation Provides The Exclusive Forum For Work Related Injuries, Whether Or Not The Employee Actually Seeks And Receives Workers' Compensation Benefits.
Giorgi argues that Cole is distinguishable because the employee there had claimed damages for emotional distress in a workers' compensation action. Giorgi states that “[a]llowing Cole to recover damages at common law as well, would have resulted in a double recover.” In contrast to Cole, Giorgi argues that she did not pursue a workers' compensation remedy and alleged no medical treatment or disability, physical or emotional, only distress and detriment to her general health.
The argument fails on two grounds. First, it would make workers' compensation the exclusive remedy only at the election of the employee, and that is not how the system is intended to work. In rejecting a similar argument, one court observed:
“We are cognizant of the fact that plaintiff, believing himself without fault, regards it to his decided advantage to maintain an action for damages against his employer rather than to receive an award of workmen's compensation. But in deciding whether an injury is compensable, we must disregard completely the question of fault and be mindful that the rules we lay down in this particular case must be salutary and consonant with the spirit and purpose of the compensation act, since they will govern other cases where the act will provide the worker disabled by industrial injury with his sole remedy.” (Scott v. Pacific Coast Borax Co., supra, 140 Cal.App.2d 173, 184 [294 P.2d 1039]; accord, Freire v. Matson Navigation Co., supra, 19 Cal.2d 8, 10 [118 P.2d 809] [The rule demanding liberal construction of workers' compensation provisions so as to extend their benefits widely is not altered because a plaintiff believes that he can establish negligence on the part of his employer and brings a civil suit for damages.]; Peterson v. Moran, supra, 111 Cal.App.2d 766, 768 [245 P.2d 540] [In applying the rule requiring liberal construction, “[t]he wishes or desires of either the employee or employer are a false quantity and are not to be regarded.”].)
Second, in barring Cole's tort action, the Supreme Court gave no indication that the avoidance of a double recovery played a part in its rationale. Nor could it have under the applicable legal principles. In the limited circumstances where the Supreme Court has permitted an employee to sue an employer in tort, to prevent a double recovery, the judgment is offset by any workers' compensation benefits the employee has received. (Johns–Manville Products Corp. v. Superior Court, supra, 27 Cal.3d 465, 478–479, 165 Cal.Rptr. 858, 612 P.2d 948; Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616, 636, 102 Cal.Rptr. 815, 498 P.2d 1063.)
It is true that work-related injuries which do not result in medical treatment or disability are not compensable under workers' compensation. (§ 3208.1; Jones v. Los Angeles Community College Dist. (1988) 198 Cal.App.3d 794, 805, 244 Cal.Rptr. 37.) 4 However, an important corollary to the exclusive remedy rule is that an injury which does not qualify for workers' compensation does not, by virtue of that fact, become redressable in a tort action.
Certain injuries occurring in the course of employment have been deemed by the legislature to be too insignificant to trigger the compensation mechanism under the Labor Code. This represents one of the crucial trade-offs to the right conferred on an employee to obtain swift compensation under the workers' compensation framework without having to satisfy extensive proof requirements. (Williams v. State Compensation Ins. Fund (1975) 50 Cal.App.3d 116, 123, 123 Cal.Rptr. 812 [The fact that the type of injury suffered by plaintiff while working was not a compensable injury under workers' compensation “does not open the door to tort recovery.”]; Seide v. Bethlehem Steel Corp. (1985) 169 Cal.App.3d 985, 991, 215 Cal.Rptr. 629 [“Nothing in the workers' compensation law requires a compensable injury before Labor Code section 3601 applies. ‘The existence of a noncompensable injury does not, by itself, abrogate the exclusive remedy provisions of the Workers' Compensation Act.’ ”].) To make available a tort remedy for an injury not serious enough to give rise to any right in workers' compensation is to upset the legislative balancing of benefits and burdens underlying the workers' compensation system. (Spratley v. Winchell Donut House, Inc., supra, 188 Cal.App.3d 1408, 1414, 234 Cal.Rptr. 121 [“A failure of workers' compensation law to include an element of damages recoverable at common law is a legislative, not a judicial, problem.”].)
If a work-related injury is not sufficiently severe to qualify the employee for workers' compensation, it is not compensable at all.5 Moreover, it turns the system on its head to permit those with nondisabling injuries to sue in tort while those more severely injured are confined to a workers' compensation award. Thus, the fact that Cole had sought and received workers' compensation benefits and Giorgi did not is not a principled basis on which to distinguish the decision. Even if Cole had not invoked the workers' compensation system or had been denied its benefits, he could not have brought a tort suit against his employer. (Cf. Potter v. Arizona So. Coach Lines, Inc. (1988) 202 Cal.App.3d 126, 132–136, 248 Cal.Rptr. 284) [workers' compensation exclusive remedy for various claims, including intentional infliction of emotional distress, despite fact that plaintiff's workers' compensation claim was denied.].)
3. Cole Establishes Unequivocally That There Is No General Exception To The Exclusive Remedy Rule For Injuries Alleged To Be Intentionally Caused.
Giorgi appears to contend that various decisions recognize an implied general exception to the exclusivity of workers' compensation when the employee's injury is intentionally caused, citing Johns–Manville Products Corp. v. Superior Court, supra, 27 Cal.3d 465, 165 Cal.Rptr. 858, 612 P.2d 948, Unruh v. Truck Insurance Exchange, supra, 7 Cal.3d 616, 102 Cal.Rptr. 815, 498 P.2d 1063 and Young v. Libbey–Owens Ford Co. (1985) 168 Cal.App.3d 1037, 214 Cal.Rptr. 400. Not only do these decisions fail to support such a broad proposition, but any notion that intentionally caused injuries fall outside the purview of the workers' compensation scheme was definitely put to rest in Cole.
Even before Cole, the Supreme Court categorically rejected the suggestion that “any misconduct of an employer which may be characterized as intentional warrants an action at law for damages,” observing that any such holding would significantly disturb the underlying premise on which the workers' compensation system is based—the balance between the employee's relatively swift and certain compensation as a substitute for a less certain but potentially more profitable damage recovery. (Johns–Manville Products Corp. v. Superior Court, supra, 27 Cal.3d 465, 474, 165 Cal.Rptr. 858, 612 P.2d 948.) In Johns–Manville, the court held that exceptions to the workers' compensation preemption apply only where the employer “acts deliberately for the purpose of injuring the employee” or aggravates an existing injury. (Id. at p. 476, 165 Cal.Rptr. 858, 612 P.2d 948.) As the Supreme Court reemphasized in Cole, “[t]o permit liability where the employer did not specifically intend to cause distress but his misconduct reflected a reckless disregard of the probability of injury would be contrary to Johns–Manville.” (Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d 148, 159, 233 Cal.Rptr. 308, 729 P.2d 743.)
If any doubt remained, Cole made absolutely clear that an employee cannot avoid the exclusive remedy rule merely by alleging his injury was the result of intentional misconduct by the employer. The court reasoned that “[p]ermitting such an action would throw open the doors to numerous claims already compensable under the compensation law.” (Id., at p. 160, 233 Cal.Rptr. 308, 729 P.2d 743.) Since “[a]n employer's supervisory conduct is inherently ‘intentional,’ ” exceptions to the exclusive remedy rule are limited to “conduct of an employer having a ‘questionable’ relationship to the employment, an injury which did not occur while the employee was performing service incidental to the employment and which would not be viewed as a risk of the employment, or conduct where the employer or insurer stepped out of their proper roles.” (Id., at pp. 160–161, 233 Cal.Rptr. 308, 729 P.2d 743.) No such factors were present in Cole, and none are present here.
Plaintiff's reliance on Young is misplaced in light of Cole. Citing Renteria v. County of Orange (1978) 82 Cal.App.3d 833, 841, 147 Cal.Rptr. 447, Young held that an employee was not precluded from suing his employer for intentional infliction of emotional distress, since “such tort constitutes ‘an entire class of civil wrongs outside the contemplation of the workers' compensation system.’ ” (Young v. Libbey–Owens, supra, 168 Cal.App.3d 1037, 1042, 214 Cal.Rptr. 400.) Renteria held that when the plaintiff's injuries are essentially non-physical, the exclusive remedy rule does not bar a cause of action for intentional infliction of emotional distress (Renteria v. County of Orange, supra, 82 Cal.App.3d 833, 842, 147 Cal.Rptr. 447 limited by Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d 148, 155–157, 233 Cal.Rptr. 308, 729 P.2d 743), reasoning (incorrectly) that mental suffering is noncompensable under workers' compensation. (Id., 82 Cal.App.3d at p. 839, 147 Cal.Rptr. 447.) In response to the employers' argument that Young's injuries were primarily physical, and thus covered by workers' compensation, the court observed that his claim for emotional distress seemed “substantial” and not merely “ ‘tacked on.’ ” (Young v. Libbey Owens Ford Co., supra, 168 Cal.App.3d at pp. 1042–1043, n. 4, 214 Cal.Rptr. 400.)
Cole makes it clear that infliction of emotional distress is decidedly not outside the ambit of workers' compensation. And after Cole, there really is nothing left of the physical/emotional injury dichotomy promulgated in Renteria and followed in Young and other decisions. We decline to follow such decisions in light of Cole. The Cole court held that Cole's action was barred by the exclusive remedy provision of the Act, but not because the “essence” of his injury was physical (he could not “move, care for himself, or communicate other than by blinking”). (Cole v. Fair Oaks Fire Protection Dist, supra, 43 Cal.3d 148, 153, 156–157, 233 Cal.Rptr. 308, 729 P.2d 743.) Rather, the court decried that “anomaly” permitting the least severe and most dubious cases of emotional distress to proceed outside the workers' compensation system while relegating the “ordinarily more reprehensible” cases—where emotional distress was accompanied by physical injury or disability—to that system. (Id., at p. 156, 233 Cal.Rptr. 308, 729 P.2d 743.) The Cole court placed the focus where it belongs—not on the employee's injury but on the employer's conduct, and held that when the employee's claim is based on conduct normally occurring in the workplace—intentional or not—it is within the exclusive jurisdiction of the workers' compensation system. (Id., at p. 151, 233 Cal.Rptr. 308, 729 P.2d 743.)
B. Giorgi's Claims For Other Tort Damages And Punitive Damages Are Also Barred By The Exclusive Remedy Rule, No Matter What The Labels Of The Causes Of Action Seeking Them.
Under the reasoning of Cole, it is not only Giorgi's claim for damages for the intentional infliction of emotional distress which is barred by the exclusive remedy rule, but also her claims for punitive damages and tort damages for breach of the covenant of good faith and fair dealing. Cole simply cannot be read as sanctioning an exception to the exclusive remedy rule which would allow employees who sustain emotional injuries in the course of employment to obtain punitive damages and other tort damages through a tort action. Quite to the contrary, where, as in Cole and the instant case, an employee's work-related injuries are compensable only under the Workers' Compensation Act, Cole requires that the employee look exclusively to the workers' compensation system for any non-contractual damages he may claim. (Id., at p. 151, 233 Cal.Rptr. 308, 729 P.2d 743.)
In setting that framework in place, the legislature was obviously well aware that on occasion injurious misconduct of an employer could be so serious as to warrant additional compensation to the employee as a deterrent to further misconduct. This is when Labor Code section 4553 6 applies to permit an employee injured by his employer's serious and willful misconduct to obtain an additional award of one-half the amount of his compensation. Giorgi should not be permitted to circumvent the remedy afforded by section 4553 and to recover damages that could not have been awarded the plaintiff in Cole, who suffered extremely disabling injuries from misconduct of a much more egregious nature than that alleged here. This result would frustrate the manifest intentions of the legislature and would revive the anomaly created by Renteria and laid to rest by Cole.
While Cole discussed only emotional distress damages, Hospital maintains that the language and logic of that case, and of the workers' compensation system, compel the conclusion that other tort remedies for damages arising out of the employment relationship—specifically including punitive damages—are equally unavailable to Giorgi except under narrow circumstances not involved in this case. (See, e.g., Johns–Manville Products Corp. v. Superior Court, supra, 27 Cal.3d 465, 165 Cal.Rptr. 858, 612 P.2d 948 and Unruh v. Truck Insurance Exchange, supra, 7 Cal.3d 616, 102 Cal.Rptr. 815, 498 P.2d 1063.) It matters not what labels Giorgi has affixed to those causes of action. In fact, the court in Cole was unequivocal on this point: an action for emotional injuries arising out of and in the course of employment “is barred by the exclusiveness clause no matter what its name or technical form if the usual conditions of coverage are satisfied.” (Id., 43 Cal.3d at p. 160, 233 Cal.Rptr. 308, 729 P.2d 743.)
Appellate decisions following Cole confirm this reasoning. For instance, in Potter v. Arizona So. Coach Lines, Inc., supra, 202 Cal.App.3d 126, 248 Cal.Rptr. 284, an employee who had been discharged following a work-related injury sued his employer for failing to notify him of his statutory right to convert his group health insurance to individual coverage. His complaint contained multiple causes of action, including negligent and intentional infliction of emotional distress, breach of the covenant of good faith and fair dealing, and breach of contract. The Court of Appeal found all barred by the exclusive remedy rule, holding, “the court will look behind the label to ascertain if the usual conditions of coverage ․ are satisfied.” (Id., at p. 133, 248 Cal.Rptr. 284.) And in Spratley v. Winchell Donut House, Inc., supra, 188 Cal.App.3d 1408, 234 Cal.Rptr. 121, an employee who was assaulted by an intruder sued her employer for fraud and for breach of the covenant of good faith and fair dealing. She sought damages for emotional distress and punitive damages. The court held the suit was barred by the exclusive remedy rule. (Id., at pp. 1416–1417, 234 Cal.Rptr. 121.) Finally, in Continental Casualty Co. v. Superior Court, supra, 190 Cal.App.3d 156, 235 Cal.Rptr. 260, causes of action for breach of the implied covenant of good faith and fair dealing and spoliation of evidence were held barred by the exclusive remedy of workers' compensation where the conduct of the employer's insurer in processing a claim was “a fairly normal, routine incident for the compensation carrier in any industrial injury situation.” (Id., at pp. 161, 162, n. 1, 235 Cal.Rptr. 260.)
Thus, not only does the exclusive remedy rule preclude Giorgi's cause of action for intentional infliction of emotional distress, it also bars the other tort damages she seeks, including punitive damages.
C. To the Effect That Giorgi's Cause of Action For Intentional Infliction of Emotional Distress is Based Upon a Denial of Health Benefits, ERISA Preempts and Bars the Cause of Action.
The gist of Giorgi's claim for intentional infliction of emotional distress was this: knowing that Giorgi's daughter was ill and plaintiff was financially dependent on her job and its benefits, defendant “in reckless disregard” of these facts, “intentionally, maliciously and without good cause” terminated plaintiff. The trial court found the entire cause of action preempted by the Workers' Compensation Act and ERISA to the extent it related to medical plan benefits. Giorgi conceded that ERISA preempted any claim of emotional distress due to a denial of health benefits.
ERISA, the Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1001 et seq.) is a comprehensive regulatory scheme intended to promote the interests of employees in fringe benefit plans offered by employers. (Shaw v. Delta Air Lines, Inc. (1983) 463 U.S. 85, 90, 103 S.Ct. 2890, 2896, 77 L.Ed.2d 490.) Plaintiff did not dispute that the Hospital's health and medical benefit plan is covered by ERISA. ERISA contains a “virtually unique pre-emption provision (Franchise Tax Bd. v. Laborers Vacation Trust (1983) 463 U.S. 1, 24, fn. 26, 103 S.Ct. 2841, 2854, fn. 26, 77 L.Ed.2d 420) which broadly states that ERISA's provisions “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan․” (29 U.S.C., § 1144(a).) ERISA makes it unlawful to discharge an employee for exercising rights under an employee benefit plan. (29 U.S.C. § 1140.)
Case law leaves no doubt that state courts may not entertain claims—no matter how denominated—for damages suffered because benefits were allegedly denied or delayed under plans covered by ERISA. (Metropolitan Life Ins. Co. v. Taylor (1987) 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55, [Employee's common law contract and tortious wrongful termination claims were preempted by ERISA and subject to exclusive federal jurisdiction.]; Pilot Life Ins. Co. v. Dedeaux (1987) 481 U.S. 41, 54, 107 S.Ct. 1549, 1556, 95 L.Ed.2d 39 [“The policy choices reflected in the inclusion of certain remedies and the exclusion of others under the federal scheme would be completely undermined if ERISA–plan participants and beneficiaries were free to obtain remedies under state law that Congress rejected in ERISA.”]; Johnson v. Trans World Airlines, Inc. (1983) 149 Cal.App.3d 518, 530, 196 Cal.Rptr. 896 [Claims of wrongful termination, bad faith, fraud and deceit held preempted by ERISA.]; Provience v. Valley Clerks Trust Fund (1984) 163 Cal.App.3d 249, 261–262, 209 Cal.Rptr. 276 [Preempted claims for fraud, bad faith denial of benefits and intentional infliction of emotional distress “sound uniformly in tort for damages. Consequently, the state courts of California have no jurisdiction to adjudicate his preempted claims.”]; Drummond v. McDonald Corp. (1985) 167 Cal.App.3d 428, 429, 213 Cal.Rptr. 164 [Summary judgment on basis of ERISA preemption affirmed in favor of an employer on an employee's claims of breach of the covenant of good faith and fair dealing, fraud, and intentional infliction of emotional distress.]; Lembo v. Texaco, Inc. (1987) 194 Cal.App.3d 531, 536–537, 239 Cal.Rptr. 596 [Two former employees sued employer for fraud, misrepresentation and infliction of emotional distress, claiming employer forced them to retire to deprive them of retirement benefits. A jury awarded them compensatory and punitive damages. The Court of Appeal reversed, holding all claims were preempted by ERISA: The “ ‘preemption of state law claims by ERISA depends on the conduct to which such law is applied, not on the form or label of the law.’ ”]; Barnick v. Longs Drug Stores, Inc. (1988) 203 Cal.App.3d 377, 383, 250 Cal.Rptr. 10 [Employee claiming his employer fired him to deprive him of pension benefits sued for (1) wrongful termination, (2) breach of employment contract, (3) breach of benefits plan contract, (4) conversion, and (5) breach of the covenant of good faith and fair dealing. Held: The third, fourth and fifth causes of action are preempted by ERISA, as well as the first and second to the extent they refer to the plan.].)
D. Cause of Action for Intentional Infliction of Emotional Distress is Barred As a Matter of Law For the Additional Reason That Giorgi Failed to Show Any Wrongful Act Independent of Her Termination.
We hold that the court's ruling that Giorgi has no cause of action for the intentional infliction of emotional distress as a matter of law is correct on the additional ground that Giorgi points to no wrongful conduct independent of the termination.
Stripped of its ERISA–preempted allegations of improper denial of plan benefits, Giorgi's intentional infliction claim is essentially that the Hospital fired her at a time when her daughter was gravely ill, knowing she would suffer economically and emotionally from the termination. On summary judgment, defendant presented evidence that Giorgi was discharged for insubordination, which Giorgi not only did not deny, but conceded. Giorgi offered no proof of facts other than the discharge itself, which alone is insufficient to support a cause of action for intentional infliction of emotional distress.
As the Supreme Court recognized in Cole, employers' actions in dealing with employees are inherently intentional, and employees usually suffer emotional distress as a result of unfavorable employment decisions. (Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d 148, 160, 233 Cal.Rptr. 308, 729 P.2d 743.) On this point, the court cited Magnuson v. Burlington Northern, Inc., supra, 576 F.2d 1367. In Magnuson, a train dispatcher alleged he had been wrongfully discharged and sued his employer for intentional infliction of emotional distress. In concluding the dispute was a “minor” one requiring arbitration under the Railway Labor Act, the Ninth Circuit observed:
“All of the damages which he claims to have suffered flowed from his wrongful dismissal from his employment. The alleged evil motivation of the defendants would have caused him no legal injury if he had either not been discharged or if his discharge was not wrongful․ His emotional distress was an incident of the wrongful discharge, rather than a result of an alleged conspiracy. Every employee who believes he has a legitimate grievance will doubtless have some emotional anguish occasioned by his belief that he has been wronged. Artful pleading cannot conceal the reality that the gravamen of the complaint is wrongful discharge.” (Id., at p. 1369.)
Similar is Buscemi v. McDonnell Douglas Corp. (9th Cir.1984) 736 F.2d 1348, where the employee alleged he was fired on a pretext and that his emotional distress resulted from the callous and insensitive manner of the termination. The court found this allegation no more than a claim that he was fired without good cause and suffered emotional distress as a result. “These allegations do not support a tort claim under [California] law for intentional infliction of emotional distress.” (Id., at p. 1352; Takahashi v. Bd. of Trustees of Livingston (9th Cir.1986) 783 F.2d 848, 851 [“Absent termination of her employment contract, Takahashi suffered no harm. Takahashi's allegations of mental distress caused as a result of her dismissal do not present a separate injury.”].)
Also instructive is Crain v. Burroughs Corp. (C.D.Cal.1983) 560 F.Supp. 849. There the district court granted summary judgment against an employee who sued her employer for wrongful termination and intentional infliction of emotional distress. The court concluded that she had no cause of action for either, noting:
“[S]he fails to plead extreme and outrageous conduct, an essential element of the tort of intentional infliction of emotional distress. [Citations.]․ In an at-will employment relationship, the privilege of the employer to discharge the employee with or without cause ‘is absolute, and the presence of ill will or improper motive does not destroy [such privilege].’ [Citations.]” (Id., at p. 853.)
Like the employees in these cases, Giorgi alleges, at most, that she suffered emotional distress as a result of being terminated. This allegation cannot support a claim for intentional infliction of emotional distress.
II. Breach of Contract
A. Giorgi's Termination Did Not Constitute A Breach of Contract: Giorgi Was an At–Will Employee Who, In Any Event, Indisputably Was Discharged For Good Cause.
Employment contracts in California are traditionally at will. Labor Code section 2922 provides, “An employment, having no specified term, may be terminated at the will of either party on notice to the other.” As reaffirmed in Newfield v. Insurance Co. of the West (1984) 156 Cal.App.3d 440, 203 Cal.Rptr. 9, “[t]here is no public policy that people are or should be entitled to permanent employment or that an employer is not entitled to discharge an employee. The law as set forth by [section 2922] reflects a contrary policy.” (Newfield v. Insurance Co. of the West, supra, 156 Cal.App.3d 440, 444, 203 Cal.Rptr. 9 disapproved on another point in Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 672–675, 254 Cal.Rptr. 211, 765 P.2d 373.) In recent years this principle has been qualified in certain respects, but unless an employee can carry the burden of proving one of the recognized exceptions to the statutory rule, she cannot rebut her at-will status.
1. Giorgi's Employment Was At Will, With No Implied Promise That She Could Be Terminated For Cause Only.
Giorgi maintains that she was not an at-will employee, but one whose contract included an implied promise of continued employment with termination for good cause only. Giorgi points to testimony that she was hired as a “permanent employee” and to evidence of favorable evaluations and salary increases before returning from leave in January 1982, although she does not mention the criticisms and discipline she received after that date.
The evidence showed that even Giorgi understood the term “permanent employment” to mean only that her position was not a temporary one, such as a three-month job. Moreover, “[a] contract for permanent employment is interpreted as a contract for an indefinite period and in the absence of statutory provisions or public policy considerations [citations] is terminable at the will of either party [citation] for any reason whatsoever.” (Marin v. Jacuzzi (1964) 224 Cal.App.2d 549, 553, 36 Cal.Rptr. 880.)
To support her argument that she was not an at-will employee, Giorgi invokes Pugh v. See's Candies, Inc. (1981) 116 Cal.App.3d 311, 171 Cal.Rptr. 917. But Pugh is distinguishable on several grounds. Pugh, who had worked his way up the ladder at See's for 32 years, was suddenly fired without notice or prior discipline. He was given no explanation, only to “ ‘look deep within [him]self.’ ” (Id., at p. 317, 171 Cal.Rptr. 917.) From all these factors the Court of Appeal determined that Pugh's contract included an implied promise that he could be terminated only for good cause.
Giorgi's employment with Hospital stands in stark contrast. She had worked for the Hospital for only two years before termination. She had received written and verbal criticisms, beginning six months before her discharge. She was given very specific reasons, in writing, for her discipline and termination. And, while Giorgi maintains that Hospital had a policy that was regularly followed with regard to terminating employees, she did not allege or present evidence that defendant had a policy or practice of not terminating employees except for good cause.
As the trial court correctly found, Giorgi was an at-will employee whose employment could be terminated with or without cause. This point, however, is greatly attenuated in view of the significant evidence of good cause for dismissal presented by defendant and unrebutted by Giorgi.
2. Giorgi's Insubordination Toward Her Supervisor And Difficulties In Managing The Employees She Supervised Constituted Good Cause For Dismissal.
In support of its summary judgment motion, Hospital presented evidence of its reasons for dismissing Giorgi as frequent arguments with her supervisor and subordinates (who complained that Giorgi talked down to, yelled at and threatened them), insubordination toward her supervisor, poor employee relations and leaving work without notice. If Hospital needed cause to dismiss Giorgi, it was present in this case. (Cf. Pugh v. See's Candies, Inc. (1988) 203 Cal.App.3d 743, 754–755, 250 Cal.Rptr. 195 [hereafter Pugh II] [reasons for discharge included incompatibility, failure to train assistants as directed, failure to cooperate with other staff and outright insubordination].)
However, the question presented on summary judgment was not whether Giorgi actually was insubordinate and a poor manager, but whether there were any triable issues of fact as to whether Hospital reasonably believed it had good cause to discharge her. (Cf. Rulon–Miller v. International Business Machines. Corp. (1984) 162 Cal.App.3d 241, 253, 208 Cal.Rptr. 524 disapproved on another point in Foley v. Interactive Data Corp., supra, 47 Cal.3d 654, 688, 700, fn. 42, 254 Cal.Rptr. 211, 765 P.2d 373 [approving jury instruction that “ ‘an employer who acts in good faith on an honest but mistaken belief that discharge of an employee is required by legitimate business interests has not committed a wrongful discharge․’ ”)
An employer is given considerable autonomy in determining when the interests of its business require that an employee be dismissed, and “the reasonableness of the employer's dissatisfaction should seldom be a question for the jury.” (Coats v. General Motors Corp. (1934) 3 Cal.App.2d 340, 347, 39 P.2d 838.) As the Pugh court noted, in determining whether there is “just cause” or “good cause” for termination, “[c]are must be taken ․ not to interfere with the legitimate exercise of managerial discretion.” (Pugh v. See's Candies, Inc., supra, 116 Cal.App.3d 311, 330, 171 Cal.Rptr. 917; accord, Clutterham v. Coachmen Industries, Inc. (1985) 169 Cal.App.3d 1223, 1227, 215 Cal.Rptr. 795 [same, where employer's uncontradicted evidence showed a legitimate business reason for termination]; Crosier v. United Parcel Service, Inc. (1983) 150 Cal.App.3d 1132, 1140, 198 Cal.Rptr. 361 disapproved on another point in Foley v. Interactive Data Corp., supra, 47 Cal.3d 654, 688, 700, fn. 2, 254 Cal.Rptr. 211, 765 P.2d 373 [Employer “must be permitted ample latitude in disciplining its personnel.”].)
This principle is especially important when an employee, such as Giorgi, is in a supervisorial position over others. In such a case the employer generally has greater latitude in exercising its discretion to discharge than when dealing with an employee whose tasks are more routine. (Pugh v. See's Candies, Inc., supra, 116 Cal.App.3d 311, 330, 171 Cal.Rptr. 917; Pugh II, supra, 203 Cal.App.3d 743, 769, 250 Cal.Rptr. 195 [Intangible attributes such as personality, ability to function as part of management team, and ability to motivate subordinates are important factors.].) Decisions from the Ninth Circuit and other jurisdictions are in accord. (See, e.g., Douglas v. Anderson (9th Cir.1981) 656 F.2d 528, 534 [Business decision to terminate manager need not meet unqualified approval of judge or jury, so long as not based on unlawful motive.]; Ackerman v. Diamond Shamrock Corp. (6th Cir.1982) 670 F.2d 66, 70 [Civil rights law “ ‘not intended as a vehicle for judicial review of business decisions.’ ”]; Dale v. Chicago Tribune Co. (7th Cir.1986) 797 F.2d 458, 464 [Court “does not sit as a super-personnel department that reexamines an entity's business decisions.”].)
Giorgi offered no proof whatsoever that Hospital did not have good cause to dismiss her or a reasonable good faith belief that it had good cause. Indeed, she did not dispute that she was discharged for insubordination, although she suggested the charges were pretextual. On appeal, while contending that she could not be terminated without good cause, she fails even to attempt to make the corollary argument—that there was no good cause. When an employee contends that her employer's stated reasons for termination are pretextual and that she was fired for a hidden motive, she bears the burden of establishing pretext. (Cleary v. American Airlines, Inc. (1980) 111 Cal.App.3d 443, 453, n. 5, 168 Cal.Rptr. 722 disapproved on another point in Foley v. Interactive Data Corp., supra, 47 Cal.3d 654, 700, fn. 42, 254 Cal.Rptr. 211, 765 P.2d 373; Pugh v. See's Candies, Inc., supra, 116 Cal.App.3d 311, 330, 171 Cal.Rptr. 917.)
When, as here, the issue arises on the employer's motion for summary judgment, if the employee does not present sufficient evidence of pretext to raise a triable issue of fact, the motion must be granted. (Crosier v. United Parcel Service, supra, 150 Cal.App.3d 1132, 1139, 198 Cal.Rptr. 361 disapproved on another point in Foley v. Interactive Data Corp., supra, 47 Cal.3d 654, 688, 700, fn. 42, 254 Cal.Rptr. 211, 765 P.2d 373 [Employee's “suspicions of improper motives are primarily based on conjecture and speculation. Without the support of stronger evidence, he does not show that the reasons for his discharge were pretextual and so, does not sustain his burden under Pugh.”]; Clutterham v. Coachmen Industries, Inc., supra, 169 Cal.App.3d 1223, 1227, 215 Cal.Rptr. 795 [Employer's motion for summary judgment properly granted when employee failed to show asserted reason for termination was pretextual.]; cf. Burton v. Security Pacific Nat. Bank (1988) 197 Cal.App.3d 972, 978, 243 Cal.Rptr. 277 [“Appellant has not brought forth one fact to support his theory that respondent contrived a reason for his discharge․ Summary judgment was proper․”]; Fowler v. Varian Associates, Inc. (1987) 196 Cal.App.3d 34, 40–41, 241 Cal.Rptr. 539 [Summary judgment for employer affirmed; record contained no evidence that employer lacked good cause or reasonable belief in existence of cause for termination.].)
Even critics of the at-will doctrine recognize that employers need protection from suits brought by “disgruntled employees who were discharged for perfectly valid reasons” and that summary judgment helps serve that function. (See, Note, Protecting At Will Employees Against Wrongful Discharge: The Duty To Terminate Only In Good Faith (1980) 93 Harv.L.Rev. 1816, 1842.) As this frequently-cited article explains,
“the employee should be required to meet a reasonable threshold if she is to avoid summary judgment. The evidence presented should indicate a colorable claim that the defendant's decision to terminate was not made in good faith, or that the employee's job performance was substantially satisfactory over a reasonable period. The employee ․ should bear the burden of persuasion to establish that the employer's decision was unreasonable. The ․ employer's answer must outline the basic reason for the employee's discharge. Through the evidence derived from the discovery process, the court should be able to determine whether the [employee's] claim has sufficient merit to go to trial.” (Fns. omitted.) (Id., at pp. 1842–1843.)
The burden rested on Giorgi to demonstrate that she was not terminated for insubordination, incompatibility and inability to supervise subordinates. She did not meet it, and summary judgment on her contract cause of action was properly granted.
III. Breach of the Covenant of Good Faith and Fair Dealing
A. Giorgi's Termination Did Not Constitute A Tortious Breach of the Covenant of Good Faith and Fair Dealing.
Giorgi's claim that the trial court erred in finding as a matter of law that the Hospital had not acted in bad faith in discharging her appears to rest on Cleary v. American Airlines, Inc., supra, 111 Cal.App.3d 443, 168 Cal.Rptr. 722 disapproved by Foley v. Interactive Data Corp., supra, 47 Cal.3d 654, 700, fn. 42, 254 Cal.Rptr. 211, 765 P.2d 373.7 Plaintiff contends that, like Cleary, she was terminated in violation of her employer's policies and procedures. Giorgi maintains that the actions of Hospital will support a recovery in tort for breach of the implied covenant of good faith and fair dealing. The point is without merit. As previously held, any tort recovery, regardless of theory, is preempted by the Worker's Compensation Act, ERISA and Giorgi's failure to raise a triable issue of material face which would support such a recovery.
B. Giorgi's Termination Did Raise A Triable Issue Of Material Fact As To Whether Hospital Breached The Covenant of Good Faith And Fair Dealing in Failing to Follow Its Own Procedures, Thereby Affording Contractual Relief to Giorgi.
a. Summary of Hospital's Written Policies And Unwritten Custom Pertaining To Employee Discipline and Termination.
The Hospital had a written memorandum setting forth a three-step procedure of employee discipline for “typical” cases. The memorandum states that “[a]ll cases of employee discipline are different, and while some cases may require more than three steps, others cases, such as a physical attack on another, may call for immediate discharge.”
Step one states that when an employee's conduct is determined to be unacceptable, he should be told three things: (1) why, in detail, his conduct is unacceptable, (2) that he is receiving a first official disciplinary warning, which will be placed in his personnel file, and (3) “that further unacceptable conduct ․ will cause the employee to be further disciplined, including, but not necessarily limited to, suspension without pay or termination.” (Emphasis added.) Step two is essentially similar, with the additional reminder of previous discipline. In step three, the employee is reminded of previous disciplinary warnings and is told why his conduct is unacceptable and that he is being discharged.
Thus, the Hospital's disciplinary procedure expressly provides not only for immediate discharge with no warning in certain cases but also for termination after one written warning in some other cases. According to the testimony of department head Tseliki and Hospital president Davey, each case is evaluated separately, and the number of warnings given varies according to the problem involved. The three-step procedure would probably be followed for minor infractions, but not for more serious ones, such as abandonment of one's post. The need to terminate an insubordinate and argumentative employee might justify not following all three steps.
b. In Giving Giorgi One Written Disciplinary Notice And One Verbal Warning, A Triable Issue Of Material Fact Exists As To Whether Hospital Followed Its Own Procedures and Customs.
The undisputed evidence showed that the written disciplinary notice given Giorgi on January 12, 1982, fulfilled the first step of the Discipline Procedure memorandum and that Giorgi received at least one verbal warning from Tseliki before being discharged in June 1982. Although Giorgi makes no specific claim that step three was violated (notification of the reasons for termination), the essence of her claim appears to be that she was entitled to and did not receive a second written warning and by implication did not receive the benefits of step three prior to termination. We find merit in Giorgi's contention that a triable issue of material fact has been raised, and she is entitled to a trial on the merits under the state of this record for the alleged breach of covenant of good faith and fair dealing for Hospital's failure to follow its own procedures and customs, but only on an ex contractu theory vice an ex delicto theory.
IV. Punitive Damages
A. The Trial Court Correctly Found There was No Basis for a Recovery of Punitive Damages.
Giorgi seeks punitive damages for intentional infliction of emotional distress and breach of the implied covenant of good faith and fair dealing. The trial court found, after reviewing all the evidence presented in the summary judgment proceeding, that there was no basis for the recovery of punitive damages as a matter of law.
As we have shown, Giorgi failed to establish that Hospital committed any torts, and for that reason alone cannot recover punitive damages. However, for the sake of completeness, we wish to emphasize that Giorgi's claim for punitive damages cannot succeed for the additional reason that she failed to plead—let alone establish by way of opposition to the summary judgment motion—facts to support her conclusory allegation of fraud, malice and oppression within the meaning of Civil Code section 3294. (Marin v. Jacuzzi, supra, 224 Cal.App.2d 549, 552, 36 Cal.Rptr. 880 [“The use of the words wrongfully, wilfully and maliciously adds nothing to the pleadings except to convey a sense of outrage on the part of the appellant.”].)
As repeatedly noted, Hospital presented unrebutted evidence of the reasons it discharged Giorgi and the procedures it employed. Giorgi's speculations as to a hidden motive on defendant's part were supported by no evidence whatsoever. (Cullincini v. Deming (1975) 53 Cal.App.3d 908, 913–914, 126 Cal.Rptr. 427 [Opponent of motion for summary judgment cannot rely on pleadings, but must make independent showing of sufficient proof of the allegations to raise a question of fact.].)
When an employer fires or demotes an employee for not doing her job, even if other elements are present which might suggest tortious conduct (such as failing to follow its own grievance or termination policies), punitive damages can never be appropriate, and plaintiff cites no authority to the contrary. Monge v. Superior Court (1986) 176 Cal.App.3d 503, 222 Cal.Rptr. 64, upon which Giorgi places great reliance, does not support her position. Monge was a pleading case in which the court found that allegations that the employer had caused a lewd question to appear on the plaintiff's computer screen, refused to investigate the incident and retaliated against the plaintiff by changing her working conditions and demoting her were sufficient to withstand a demurrer. “This concisely pleads defendants' actions as having an unequivocally evil and mischievous motive.” (Emphasis added.) (Id., at p. 511, 222 Cal.Rptr. 64.) In contrast, not only did the pleadings in this case fail to allege any such evil or mischievous motive, but the facts adduced on summary judgment established a wholly legitimate motive for Giorgi's termination.
This is not a case of sexual harassment as in Monge, but a case where an employee was fired for not doing her job. Giorgi made no showing of any conduct on Hospital's part that would warrant the imposition of punitive damages. The court rightly found such damages barred as a matter of law.
The judgment is affirmed except as to appellant's cause of action for breach of implied covenant of good faith and fair dealing on an ex contractu theory for failure of Hospital to follow its procedures and customs in dealing with employee discipline and termination. It was an abuse of discretion for the court to summarily adjudicate this issue in favor of respondent. Appellant to recover costs on appeal.
I concur in all aspects of the majority's excellent opinion except that portion of the majority opinion which holds the Workers' Compensation Act bars Ms. Giorgi's cause of action for intentional infliction of emotional distress and, consequently, her claim for punitive damages based on that intentional tort. (Maj. opn. at pp. 433–438.) From that conclusion I must respectfully dissent.
The majority opinion holds that when an employer intentionally inflicts emotional distress on an employee the employee must receive compensation under the workers' compensation law or receive no compensation at all. The majority opinion is wrong for three reasons: (1) Ms. Giorgi did not suffer an employment disability compensable under workers' compensation, therefore, her cause of action for intentional infliction of emotional distress is not barred by the exclusivity provision of Labor Code section 3600, (Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 160, 233 Cal.Rptr. 308, 729 P.2d 743); (2) workers' compensation is not the all-or-nothing remedy for an employee who suffers intentional infliction of emotional distress by an employer, (Renteria v. County of Orange (1978) 82 Cal.App.3d 833, 840, 147 Cal.Rptr. 447); (3) the majority's intimation Ms. Giorgi's injury was too insignificant to deserve any redress is not supported by the record.
1. A Cause of Action for Intentional Infliction of Emotional Distress Is Only Barred If the Emotional Distress Caused Disability Compensable by Workers' Compensation.
As the majority concedes, work-related injuries which do not result in medical treatment or disability are not compensable under workers' compensation. (Maj. opn. at p. 434.) (Jones v. Los Angeles Community College Dist. (1988) 198 Cal.App.3d 794, 805, 244 Cal.Rptr. 37.) “Disability” in this context means “[i]n order to entitle the injured employee to disability indemnity payments ․ the injury must result in an impairment of his earning capacity.” (2 Hanna, Cal. Law of Employee Injuries and Workmens' Compensation (2d ed. 1953) § 1301.01, p. 13–2; and see West v. Industrial Acc. Com. (1947) 79 Cal.App.2d 711, 718, 180 P.2d 972.)
In Cole, the plaintiff alleged his employer engaged in such extreme on-the-job harassment he suffered a severe and totally disabling cerebral vascular accident; he could not move, care for himself, or communicate other than by blinking. (43 Cal.3d at p. 153, 233 Cal.Rptr. 308, 729 P.2d 743.) There was never any question that Cole suffered a “disability” compensable under workers' compensation. Indeed, the Supreme Court's opinion is premised on this fact. The opinion begins by stating the issue to be: “whether an employee may maintain a civil action in the courts for intentional infliction of emotional distress against his employer and fellow employee when the conduct complained of has caused total, permanent, mental and physical disability compensable under workers' compensation law.” (Id. at p. 151, 233 Cal.Rptr. 308, 729 P.2d 743, italics added.)
The court resolved the issue as follows:
“We have concluded that, when the misconduct attributed to the employer is actions which are a normal part of the employment relationship, such as demotions, promotions, criticism of work practices, and frictions in negotiations as to grievances, an employee suffering emotional distress causing disability may not avoid the exclusive remedy provisions of the Labor Code by characterizing the employer's decisions as manifestly unfair, outrageous, harassment [sic ], or intended to cause emotional disturbance resulting in disability.” (Id. at p. 160, 233 Cal.Rptr. 308, 729 P.2d 743, italics added.)
“Permitting such an action,” the court observed, “would throw open the doors to numerous claims already compensable under the compensation law.” (Ibid.)
The court, in Cole, made clear its opinion was limited to cases where the plaintiff had suffered a compensable injury under the workers' compensation law. The court acknowledged a civil action would be allowed in a case where intentional infliction of emotional distress does not result in a disability. (43 Cal.3d at p. 156, 233 Cal.Rptr. 308, 729 P.2d 743.)
2. Workers' Compensation Is Not the All–Or–Nothing Remedy for an Employee Who Suffers Intentional Infliction of Emotional Distress by an Employer.
In cases involving intentional infliction of emotional distress, the absence of a remedy under workers' compensation does not preclude a remedy under traditional civil litigation. (Renteria v. County of Orange, supra, 82 Cal.App.3d at p. 841, 147 Cal.Rptr. 447; Green v. City of Oceanside (1987) 194 Cal.App.3d 212, 224, 239 Cal.Rptr. 470.)
The majority opinion asserts that workers' compensation is the all-or-nothing remedy for an employee suffering intentional infliction of emotional distress by her employer. (Maj. opn. at p. 435.) Although this leaves Ms. Giorgi without redress for her employer's intentional tort, the majority opinion rationalizes this result as the unavoidable consequence of the trade-off employees make “to obtain swift compensation under the workers' compensation framework” when workers' compensation does apply. (Ibid.)
Although the “trade-off” rationale has been used to explain why, in isolated circumstances, an injured employee may find his negligently caused injury is not compensable through workers' compensation or civil litigation (Williams v. State Compensation Ins. Fund (1975) 50 Cal.App.3d 116, 122–123, 123 Cal.Rptr. 812), it has not been used to shield an employer from liability for its misconduct specifically intended to injure the employee. To the contrary, the “trade-off” argument advanced in the majority opinion was specifically considered and rejected by the court in Renteria v. County of Orange, supra, 82 Cal.App.3d at page 841, 147 Cal.Rptr. 447.
In Renteria, plaintiff sued his employer for intentional and negligent infliction of emotional distress alleging he had been treated in a rude and degrading manner, placed under surveillance and subjected to lengthy interrogations. Plaintiff alleged these acts were done with the object and intent to cause him humiliation, mental anguish and emotional and physical distress. Plaintiff did not allege that the mental distress he suffered “caused any accompanying physical or mental illness, or that it resulted in any employment disability.” (82 Cal.App.3d at p. 840, 147 Cal.Rptr. 447.) The trial court sustained a demurrer to the complaint on the ground workers' compensation provided the exclusive remedy for the wrongs alleged in the complaint.
The court of appeal reversed. The court first determined that Renteria's injury was not compensable under workers' compensation because workers' compensation does not cover purely emotional injuries. (82 Cal.App.3d at pp. 839–840, 147 Cal.Rptr. 447.) 1 The court then turned to the question whether the exclusion of Renteria's injury under the workers' compensation law indicated a legislative intent to deny civil damages as well. The court recognized that in some circumstances it is necessary to deny a civil remedy in order to keep in balance the “reciprocal concessions” the workers' compensation system demands of both employees and employers, citing Williams v. State Compensation Ins. Fund, supra. (Id. at p. 840, 147 Cal.Rptr. 447.) However, the court found Williams distinguishable in two respects.
“We have here not an isolated instance of a physical injury [impotence] which is noncompensable, but an entire class of civil wrongs outside the contemplation the workers' compensation system․ Moreover, this class of civil wrongs involves intentional injury.” (Id. at p. 841, 147 Cal.Rptr. 447.)
The court explained why the “trade-off” rationale does not bar tort recovery for intentional infliction of emotional distress.
“While it is possible to believe that the Legislature intended that employees lose their right to compensation for certain forms of negligently or accidentally inflicted physical injuries in exchange for a system of workers' compensation featuring liability without fault, compulsory insurance, and prompt medical care, it is much more difficult to believe that the Legislature intended the employee to surrender all right to any form of compensation for mental suffering caused by extreme and outrageous misconduct by an employer. It would indeed be ironic if the Workers' Compensation Act, created to benefit employees, were to be interpreted to shield the employer from all liability for such conduct. We decline to interpret it in this fashion.” (82 Cal.App.3d at p. 841, 147 Cal.Rptr. 447, fn. omitted.)
Our Supreme Court cited Renteria with approval in Cole v. Fair Oaks Fire Protection Dist., supra, noting “[T]he language of Renteria ․ recognize[s] that the basis of liability in part is that the employee had no substantial remedy under the workers' compensation law and that an employer should not be permitted to engage in intentional tortious conduct with neither compensation nor damages to deter him.” (43 Cal.3d at p. 156, 233 Cal.Rptr. 308, 729 P.2d 743.)
None of the cases cited in the majority opinion support its all-or-nothing approach to claims of intentional infliction of emotional distress. None of the cases involve intentional infliction of emotional distress. Williams v. State Compensation Ins. Fund, supra, involved an employer's negligent conduct that left its employee impotent. Seide v. Bethlehem Steel Corp. (1985) 169 Cal.App.3d 985, 215 Cal.Rptr. 629 was a wrongful death action by the nondependent parent of an employee killed through a co-employee's negligence. Spratley v. Winchell Donut House, Inc. (1987) 188 Cal.App.3d 1408, 234 Cal.Rptr. 121 was a suit by an employee injured on the job who claimed the employer fraudulently induced her to accept employment by representing it would make the work place safe.
Furthermore, upholding the exclusivity of the workers' compensation remedy in these cases did not create a liability gap for intentional torts as it would in the case at bar. In Spratley v. Winchell Donut House, Inc., supra, the only case involving an intentional tort, the plaintiff unquestionably suffered injuries compensable under the workers' compensation law. (188 Cal.App.3d at pp. 1410, 1412, 234 Cal.Rptr. 121.) As the Supreme Court noted in Cole, the reasoning of Renteria and the cases following it “is largely based on the absence of any other deterrent to intentional tortious conduct․” (43 Cal.3d at p. 157, 233 Cal.Rptr. 308, 729 P.2d 743.) Where that deterrent exists, in the form of workers' compensation, it is unnecessary to look elsewhere for a remedy. (Ibid.) However, where a deterrent in the form of workers' compensation does not exist, its absence should not “be interpreted to shield the employer from all liability for [intentional infliction of emotional distress].” (Renteria, supra, 82 Cal.App.3d at p. 841, 147 Cal.Rptr. 447.) 2
3. The Record Does not Support the Majority Opinion's Assertion Ms. Giorgi's Emotional Injury Is Too Insignificant to Deserve Redress.
The majority opinion states, “If a work-related injury is not sufficiently severe to qualify the employee for workers' compensation, it is not compensable at all.” (Maj. opn. at p. 435.) No authority is cited for this sweeping generalization. Furthermore, there is no evidence in the record before us as to the severity of Ms. Giorgi's injuries from emotional distress. The burden was on Verdugo Hospital, as the party moving for summary judgment, to establish the lack of severity of her injury as an undisputed fact. It failed to do so.
The inference cannot be fairly drawn that, because an injury does not result in an employment disability, it is not severe. (See Williams v. State Compensation Ins. Fund, supra, 50 Cal.App.3d at pp. 121–122, 123 Cal.Rptr. 812; Renteria v. County of Orange, supra, 82 Cal.App.3d at p. 840, 147 Cal.Rptr. 447; Green v. City of Oceanside, supra, 194 Cal.App.3d at pp. 224–225, 239 Cal.Rptr. 470.) The most that can be inferred is that the injury did not result in an impairment of the plaintiff's earning capacity. (Williams, supra, 50 Cal.App.3d at p. 122, 123 Cal.Rptr. 812; Hanna, Cal. Law of Employee Injuries and Workmen's Compensation, supra, § 1301, p. 13–2.)
For the reasons set forth above, I would allow Ms. Giorgi to pursue her claim for intentional infliction of emotional distress and for punitive damages based on Verdugo's conduct in discharging her.
1. Employee Retirement Income Security Act (29 U.S.C. § 1001 et seq.).
2. All statutory references are to the Labor Code unless otherwise indicated. The Workers' Compensation Act (hereafter “Act”) was amended in 1982. Reference to the Act are in its pre-amendment form since Giorgi's alleged injuries occurred before the effective date of the amendments, on January 1, 1983.
3. Labor Code section 3602, subdivision (b) provides as follows: “An employee, or his or her dependents in the event of his or her death, may bring an action at law for damages against the employer, as if this division did not apply, in the following instances: [¶] (1) Where the employee's injury or death is proximately caused by a willful physical assault by the employer. [¶] (2) Where the employee's injury is aggravated by the employer's fraudulent concealment of the existence of the injury and its connection with the employment, in which case the employer's liability shall be limited to those damages proximately caused by the aggravation. The burden of proof respecting apportionment of damages between the injury and any subsequent aggravation thereof is upon the employer. [¶] (3) Where the employee's injury or death is proximately caused by a defective product manufactured by the employer and sold, leased, or otherwise transferred for valuable consideration to an independent third person, and that product is thereafter provided for the employee's use by a third person.”
4. There appears to be a great deal of unnecessary confusion over the issue whether purely emotional injuries are compensable. (See, e.g., Jones v. Los Angeles Community College Dist., supra, 198 Cal.App.3d 794, 805, 244 Cal.Rptr. 37 [“ ‘If the injuries were emotional, it was recognized that workers' compensation provided no remedy. In order to provide some type of compensation to the injured employee, the courts created an exception to the exclusivity doctrine,’ ” quoting Hart v. National Mortgage & Land Co. (1987) 189 Cal.App.3d 1420, 1427–1428, 235 Cal.Rptr. 68, which in turn cites Renteria v. County of Orange (1978) 82 Cal.App.3d 833, 147 Cal.Rptr. 447 limited by Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d 148, 155–157, 233 Cal.Rptr. 308, 729 P.2d 743.].)However, there is no doubt that purely emotional injuries and disabilities are fully compensable under workers' compensation; there is no requirement that the injury or disability be physical. (Traub v. Board of Retirement (1983) 34 Cal.3d 793, 797, 195 Cal.Rptr. 681, 670 P.2d 335 [depressive neurosis caused by job stress]; Albertson's Inc. v. Workers' Comp. Appeals Bd. (1982) 47 Cal.Comp. Cases 460 [emotional distress resulting from work harassment compensable]; Aetna Casualty & Surety Co. v. Workers' Compensation Appeals Bd. (1978) 43 Cal.Comp. Cases 247 [same].)
5. The fact that insignificant work-related injuries do not warrant payment of benefits does not mean that the legislature simply overlooked them in devising a workers' compensation scheme. Labor Code section 4650 shows that trivial and transitory injuries were within the contemplation of the legislature and that the legislature had an excellent reason for not providing workers' compensation for those injuries. Subject to a few exceptions, section 4650, precludes the payment of disability benefits to an injured employee whose disability does not last longer than three days. These three days are known as the “waiting period.” (2 Hanna, California Law of Employee Injuries and Workmen's Compensation, supra, § 13.03, p. 13–12.) According to Hanna, “[t]he purpose of this waiting period is to motivate the employee to return to work when the injury is not serious, to reduce the opportunity for false claims, to decrease costs of claims administration, and to divert a greater proportion of funds from inconsequential to more serious injuries.” (Ibid.)
6. Former Labor Code section 4553 provided: “The amount of compensation otherwise recoverable shall be increased one-half where the employee is injured by reason of the serious and willful misconduct of any of the following:“(a) The employer, or his managing representative.“(b) If the employer is a partnership, on the part of one of the partners or a managing representative or general superintendent thereof.“(c) If the employer is a corporation, on the part of an executive, managing officer, or general superintendent thereof.“But such increase of award shall in no event exceed ten thousand dollars ($10,000); together with costs and expenses incident to procurement of such award, not to exceed two hundred fifty dollars ($250).”
7. We need not address the issue of whether or not Foley is retroactive since we hold as a matter of law that Hospital did not tortiously breach the implied covenant of good faith and fair dealing. That issue is presently before the Supreme Court in Newman v. Emerson Corp. L.A. 32284 (review granted Dec. 11, 1986). We note, however, that Division 4 of the Second Appellate District has refused to apply Foley retrospectively in Welch v. Metro–Goldwyn–Mayer Film Co. (1988) 207 Cal.App.3d 164, 254 Cal.Rptr. 645 review granted (1989) 256 Cal.Rptr. 750, 769 P.2d 932 and in Rodie v. Max Factor & Co. (1989) 207 Cal.App.3d 1509, 256 Cal.Rptr. 1.
1. The majority opinion suggests Renteria may have been incorrect on this score. (Maj. opn. at p. 434, fn. 4.) The point is irrelevant to Ms. Giorgi's case. Ms. Giorgi's injury is noncompensable because it did not result in an employment disability. (See Discussion, supra, at pp. 445–446 and maj. opn. at p. 434.)
2. In Potter v. Arizona So. Coach Lines, Inc., (1988) 202 Cal.App.3d 126, 134, 248 Cal.Rptr. 284 the court rejected a cause of action for intentional infliction of emotional distress on the ground, among others, the conduct which caused the emotional distress was a “normal part of the employment relationship.” The court did not address the question whether plaintiff's distress resulted in an employment disability.
FRED WOODS, Associate Justice.
LILLIE, P.J., concurs.