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

Gordon TAMENY, Plaintiff and Appellant, v. ATLANTIC RICHFIELD CO., a corporation, J. C. McDermott, and Does 1 through 10, Defendants and Respondents.

Civ. 53660.

Decided: January 22, 1979

Richard P. Carroll and James R. Carroll, Anaheim, for plaintiff and appellant. Miller, Glassman & Browning, Inc., by Stephen D. Miller, Jane D. Saltsman, Beverly Hills, for defendants and respondents.

Appellant was employed by Atlantic Richfield Co. (ARCO) and its predecessor in interest during the period 1960-1975 and was discharged allegedly because of his refusal to cooperate with his employer in illegally attempting to persuade certain of ARCO's retail gasoline dealers to increase sales by reducing gasoline prices. On March 23, 1977, he brought suit against ARCO and J. C. McDermott, his superior, setting forth in his complaint three causes of action sounding in tort (for wrongful discharge, breach of covenant of good faith and fair dealing, and for interference with contractual relations), one for breach of his employment contract and a last based on violation of the Cartwright Act.[FN1] McDermott demurred generally and the trial court dismissed the action against him. ARCO did likewise and the trial court sustained its demurrer without leave to amend on the tort causes, overruled it on the contract claim and sustained it with leave to amend the Cartwright allegations. Wishing a definitive resolution, appellant himself dismissed the contract claim and suffered dismissal of the remainder of the action without any attempt to amend the fifth count. The appeal is from the order of dismissal.

The issues are:

(a) whether discharge of an employee for a reason which in any sense contravenes public policy creates in the employee a tort cause of action against his employer;

(b) whether, assuming the existence of an implied covenant of good faith and fair dealing in an employment contract, the breach thereof gives rise to a tort cause of action;

(c) whether an action for intentional interference with contractual relations is good against a party to the contract or its employee; and

(d) whether there is standing to sue in an employee discharged for refusal to be a party to price-fixing activities proscribed by the Cartwright Act.

We discuss the issues in the order stated and affirm the judgment.

At an earlier time it was axiomatic that an employee at will was engaged in his occupation wholly at the pleasure of his employer and was subject to discharge at any time for any reason, irrespective of motive. The presence of morals in the marketplace of human labor was at best dubious and not a subject of any great interest in laissez faire economics. We think the axiom is still the law and has continuing vitality. Historically there never was any recognition of tortious conduct in connection with the dismissal of a servant and he was obliged therefore to pursue a contract remedy or none at all. As noted above appellant has voluntarily dismissed any contractual claim he might urge. His dismissal is predicated upon his belief that certain statutes and cases announce a different public policy which embraces his claims. We do not agree.

Appellant cites cases holding it is now actionable in tort if one is dismissed by his employer because of absence from work to fulfill an obligation as an election officer (Kouff v. Bethlehem-Alameda Shipyard (1949) 90 Cal.App.2d 322, 202 P.2d 1059; Elec.Code, s 695[FN2] ) or because of engagement in labor activities encouraged and authorized by Labor Code section 923[FN3] (Montalvo v. Zamora (1970) 7 Cal.App.3d 69, 86 Cal.Rptr. 401; Wetherton v. Growers Farm Labor Assn. (1969) 275 Cal.App.2d 168, 79 Cal.Rptr. 543; Glenn v. Clearman's Golden Cock Inn (1961) 192 Cal.App.2d 793, 13 Cal.Rptr. 769; see also Healdsburg Police Officers Assn. v. City of Healdsburg (1976) 57 Cal.App.3d 444, 129 Cal.Rptr. 216.) Similarly, an action in tort has been held to arise in instances not having to do with employment where rights accorded a class of persons would be intentionally emasculated by another's otherwise lawful conduct. (Aweeka v. Bonds (1971) 20 Cal.App.3d 278, 97 Cal.Rptr. 650; see also S. P. Growers Assn. v. Rodriguez (1976) 17 Cal.3d 719, 131 Cal.Rptr. 761, 552 P.2d 721; Schweiger v. Superior Court (1970) 3 Cal.3d 507, 90 Cal.Rptr. 729, 476 P.2d 97.)

Predicated on the law in the above cited cases, appellant concludes and argues that because he would not cooperate with his employer in what he conceived to be a policy to fix prices contrary to statute, he was tortiously wronged, or, in his words, that “discharge of an employee in violation of a statute embodying a public policy is tortious.” Our analysis of the cases hereinabove cited does not support his conclusion. Whereas in those instances an action in tort was permitted because it was necessary to effectuate the public policy sought to be protected, there is at bench no relation between appellant's allegation of ARCO's claimed Cartwright violations and appellant's discharge, except in the fact he refused to and did not similarly engage in the alleged unlawful conduct. There is no direct connection between providing appellant redress in tort for wrongful discharge and obtaining compliance by respondents with antitrust proscriptions. The exceptions referred to in the cited authorities are departures from the otherwise clear language of Labor Code section 2922[FN4] which in our view should be extended only upon a more substantial basis than the fact that statutory exceptions do exist, i. e., any further departure must rest upon its own adequate rationale. We find none such offered.

Nor is this conclusion altered by consideration of the decision in Petermann v. International Brotherhood of Teamsters (1959) 174 Cal.App.2d 184, 344 P.2d 25. There, plaintiff was employed for so long as his work should be satisfactory. He was subpoenaed to testify before a state legislative committee and was instructed by his employer to make certain false statements. He testified truthfully and was the next day discharged from his job. In an action seeking declaratory relief defendant was granted judgment on the pleadings. On appeal this court held that while under an employment agreement terminable at will discharge is usually permissible for any reason whatsoever, that right was subject to limitation by statute or by considerations of public policy. The decision, however, went no further than to permit suit upon the Breached contract and reached not at all any question of tort liability. Consistently, we are of the opinion termination of employment, regardless of motive, except under circumstances falling fairly within the exceptions previously discussed constitutes no more than breach of contract and does not give rise to a tort action. (See Odell v. Humble Oil & Refining Co. (10th Cir. 1953) 201 F.2d 123; see also Mallard v. Boring (1960) 182 Cal.App.2d 390, 6 Cal.Rptr. 171.)

A similar conclusion is required with respect to the second issue raised herein, i. e., bad faith violation of an adhesion contract. While the Result appellant contends for has been reached in a long line of cases having to do with duties judicially imposed upon insurance companies, the Rationale of those decisions must be confined to the setting which distinguishes them. Thus, again, it is not enough simply to point out tort liability may arise in given instances where an action sounding only in contract might be expected. What is required is an analysis of the reasons for the departure from precedent. Those reasons adequately appear from examination of cases like Fletcher v. Western National Life Ins. Co. (1970) 10 Cal.App.3d 376, 89 Cal.Rptr. 78, and Barrera v. State Farm Mut. Automobile Ins. Co. (1969) 71 Cal.2d 659, 79 Cal.Rptr. 106, 456 P.2d 674. They rest upon the premise that:

“ ‘(T)he business of insurance is Quasi public in character’ * * *

“ ‘The purpose and nature of (life) insurance (contracts), and the duties which the insurer assumes under such contracts, and the manner in which such contracts are negotiated, impress such contracts and the relationship of the parties, * * * with characteristics unlike those incident to contracts * * * in ordinary commercial transactions.’ ” (Barrera v. State Farm Mut. Automobile Ins. Co., supra, at p. 668, fn. 5, 79 Cal.Rptr. at p. 112, 456 P.2d at p. 680.)

So, while it is true that every contract contains an implied covenant of good faith and fair dealing, it does not follow, and we do not accept the proposition, that every breach of such an imposed undertaking creates liability in tort as well as in contract.

Concerning appellant's third contention, viz. that having to do with intentional interference with contractual relations, it is enough to say Dryden v. Tri-Valley Growers (1977) 65 Cal.App.3d 990, 135 Cal.Rptr. 720; and Wise v. Southern Pacific Co. (1963) 223 Cal.App.2d 50, 35 Cal.Rptr. 652, foreclose its efficacy, the first by making clear the action does not lie against a party to the contract and the second in its holding that agents and employees of a corporation cannot conspire with their corporate employer, so that appellant's third alleged cause of action is good neither against ARCO nor McDermott.

Finally, appellant misplaces reliance on authorities claimed to support his standing to sue on an antitrust theory. Twentieth Century Fox Film Corp. v. Goldwyn (9th Cir. 1964) 328 F.2d 190, does not stand for the proposition the antitrust laws do not impose limitations on the extent of aggrieved parties, but rather makes clear it is not enough that an act has been committed which harms a given person, unless it can also be shown that that person is within an area of the economy endangered by a breakdown of competitive conditions in a particular industry. The fact that appellant suffered some indirect harm by virtue of ARCO's alleged illegal practices is not sufficient. He must go further in establishing he was a person intended to be protected by the conduct objected to, that he was within the reach of the statutory coverage afforded and that he was the victim of the precise harm sought to be avoided by the statute's enactment. As we have alluded to earlier, there is no adequate correlation for purposes of standing to sue under the Cartwright Act between the attempt to illegally fix the price of gasoline and the discharge of an employee who refuses to cooperate in that activity. Nor do Dailey v. Quality School Plan, Inc. (5th Cir. 1967) 380 F.2d 484; Nichols v. Spencer International Press, Inc. (7th Cir. 1967) 371 F.2d 332; Roseland v. Phister Mfg., Co. (7th Cir. 1942) 125 F.2d 417; Broyer v. B. F. Goodrich Co. (E.D.Pa.1976) 415 F.Supp. 193; Bowen v. Wohl Shoe Co. (S.D.Tex.1975) 389 F.Supp. 572, or Wilson v. Ringsby Truck Lines, Inc. (D.Colo.1970) 320 F.Supp. 699 provide otherwise. In each of those cases the complaining parties were persons who were in one fashion or another clearly within the “target area” of the economy endangered by a threatened rupture of competitive conditions and were directly injured by the respective defendants' actions.

The order of dismissal is affirmed.


1.  Business & Professions Code section 16700 et seq.

2.  The section as revised and reenacted appears in Elections Code section 1655 and provides in part:“No person shall be suspended or discharged from any service or employment because of absence while serving as an election officer on election day.”

3.  Labor Code section 923 provides:“In the interpretation and application of this chapter, the public policy of this State is declared as follows:“Negotiation of terms and conditions of labor should result from voluntary agreement between employer and employees. Governmental authority has permitted and encouraged employers to organize in the corporate and other forms of capital control. In dealing with such employers, the individual unorganized worker is helpless to exercise actual liberty of contract and to protect his freedom of labor, and thereby to obtain acceptable terms and conditions of employment. Therefore it is necessary that the individual workman have full freedom of association, self-organization, and designation of representatives of his own choosing, to negotiate the terms and conditions of his employment, and that he shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

4.  This section provides:“An an employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month.”

ROTH, Presiding Justice.

FLEMING and BEACH, JJ., concur.