TURNER v. ANHEUSER BUSCH INC (1992)

James Turner sued his former employer for damages for wrongful termination.   The employer moved for summary judgment, which was granted.   Following the entry of the judgment, the employer moved for an award of attorney's fees, which motion was also granted.   Turner appeals from both the judgment and the fee award.   We reverse both the judgment and the post-judgment order.

DISCUSSION

A. THE SUMMARY JUDGMENT1. Standard of Review and Method of Analysis **

2. Turner's Claims

As originally filed, Turner's complaint asserted five purported causes of action:  the first, for age discrimination pursuant to the California Fair Employment and Housing Act (Gov.Code, § 12900, et seq.);   the second, for tortious constructive discharge;  the third, for breach of an employment contract;  and the fourth and fifth, for intentional and negligent infliction of emotional distress, respectively.   The two emotional distress causes of action were dismissed following the employer's successful demurrer and motion for judgment on the pleadings.   In addition, Turner dismissed the first cause of action after the employer moved for summary judgment but before the hearing on the motion.   Thus, at the time the summary judgment motion came on for decision, only the second and third causes of action remained.

There are “three theories under which a wrongful termination action may be brought:  an action in tort for a discharge in contravention of public policy;  a contract action for a discharge in breach of an express or implied-in-fact employment agreement;  and an action for breach of the implied-in-law covenant of good faith and fair dealing.”  (Summers v. City of Cathedral City (1990) 225 Cal.App.3d 1047, 1059, 275 Cal.Rptr. 594, citing Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 254 Cal.Rptr. 211, 765 P.2d 373.)   Turner's second cause of action is an example of the first type, i.e., an action in tort.   His third cause of action is of the second type, in that it alleges the existence and breach of an implied-in-fact employment agreement.

3. Constructive Discharge

Before discussing the specific elements of these two causes of action, we turn first to a factual element common to them both.   Turner admits that he was not affirmatively fired from his job, but rather alleges that he was forced to resign due to intolerable conditions imposed by the employer.

 To establish a constructive discharge, an employee must show that (1) the actions and conditions which caused the employee to resign “were so intolerable or aggravated at the time of the employee's resignation that a reasonable person in the employee's position would have resigned;”  and (2) “the employer had actual or constructive knowledge of the intolerable actions and conditions and of their impact on the employee and could have remedied the situation.”  (Brady v. Elixir Industries (1987) 196 Cal.App.3d 1299, 1306, 242 Cal.Rptr. 324 [tort claim];  accord, Zilmer v. Carnation Co. (1989) 215 Cal.App.3d 29, 38, 263 Cal.Rptr. 422 [claim for breach of implied-in-fact contract].)

Turner's complaint describes a long list of alleged actions and conditions, the cumulative effect of which a finder of fact might find intolerable to a reasonable person.   Turner alleged that these actions and conditions were deliberately designed to coerce Turner to resign.   Thus, the complaint adequately alleges the existence of a constructive discharge.  (See, e.g., Zilmer v. Carnation Co., supra, 215 Cal.App.3d at pp. 38–39, 263 Cal.Rptr. 422.)

a. The Rule of Panopulos

 The employer's motion did not challenge the existence of those actions and conditions, but rather argued that the alleged actions were so remote in time that as a matter of law they could not have motivated a reasonable person to resign.   The employer makes the same argument on appeal.   In doing so, it relies, as it did in the trial court, on the decision in Panopulos v. Westinghouse Electric Corp. (1989) 216 Cal.App.3d 660, 264 Cal.Rptr. 810.   That reliance is misplaced.

In Panopulos, the plaintiff had remained in the employ of the defendant for five years after the commencement of the allegedly intolerable conditions, and then retired.  (Id., pp. 664–665, 264 Cal.Rptr. 810.)   He sued the employer, alleging the breach of an implied contract not to discharge without good cause.  (Id., p. 668, 264 Cal.Rptr. 810.)   That action was apparently timely filed, as the court indicated that “the statute of limitations as such [was] not at issue․”  (Id., p. 670, 264 Cal.Rptr. 810.)   Nevertheless, it affirmed a summary judgment in favor of the employer, on the ground that “sound policy requires that there be a limit beyond which claims such as that of plaintiff here may not be asserted.”  (Id., p. 669, 264 Cal.Rptr. 810.)   Those policy considerations, which were not clearly identified, led that court “to conclude that the applicable limitations period must constitute an outer limit beyond which an employee may not, as a matter of law, remain employed after the onset of allegedly intolerable conditions and thereafter maintain a claim for wrongful constructive discharge.”  (Id., p. 670, 264 Cal.Rptr. 810.)

The Panopulos court cited no authority for the rule it announced, and no subsequent reported decision has followed it on that point.   To the contrary, the only court to address the issue declined to follow the Panopulos rule, finding “no basis in precedent or logic for holding an employee who remains on the job beyond some arbitrarily set time limit is barred as a matter of law from claiming work conditions were intolerable.”  (Valdez v. City of Los Angeles (1991) 231 Cal.App.3d 1043, 1058, 282 Cal.Rptr. 726.)

The Valdez court pointed out several defects in the Panopulos rule.  “The question for the trier of fact in wrongful discharge cases is what a reasonable person in the employee's position would have done.”  (Valdez, supra, 231 Cal.App.3d at p. 1058, 282 Cal.Rptr. 726.)   Federal authorities “treat the length of time an employee remains on the job under allegedly intolerable conditions as one circumstance within the ‘totality of circumstances' to be considered by the trier of fact” in answering that question.  (Ibid.)  The federal rule correctly recognizes that while the “length of time the plaintiff remained on the job is relevant in determining the severity of the impact of the working conditions,” that single fact is not dispositive because there may be other circumstances affecting the decision of when to resign.  (Ibid.)  “Applying Panopulos 's arbitrary outer limit in every case precludes the trier of fact from considering whether an employee had a reasonable basis for remaining on the job despite the employer's allegedly intolerable actions.  Panopulos is also inconsistent with the notion that the policy against employment discrimination is best served when employees, if possible, attack discrimination within the context of their existing employment relationships.”  (Valdez, 231 Cal.App.3d p. 1059, 282 Cal.Rptr. 726.)

 The Valdez approach, under which the length of time between the onset of the adverse conditions and the actual resignation is not the sole factor in determining the reasonableness of the employee's response to his or her working conditions, is the better rule.   We join Valdez in declining to follow Panopulos.   Accordingly, Turner's resignation is not unreasonable as a matter of law just because he may have stayed on the job for longer than the applicable limitations period after the adverse conditions commenced.¹

b. Alternative Arguments ***

4. Discharge in Contravention of Public Policy ***

5. Breach of Implied in Fact Contract ***6. Reference to Evidence Proffered in Support of Motion ***B. THE ATTORNEY'S FEE AWARD ***DISPOSITION

There being triable issues of material fact in the second cause of action, the judgment in favor of the employer, and the order awarding attorney's fees to the employer, must be reversed.   The trial court is directed to vacate that portion of its order granting the employer's motion for summary judgment on the second cause of action.

FOOTNOTES

FOOTNOTE.   See footnote *, ante.

1.   The contract claim is governed by the two-year limitations period of Code of Civil Procedure section 339, subdivision (1).   We do not decide whether the statute of limitation governing a tortious wrongful discharge action is one year (Code Civ.Proc., § 340, subd. (3)) or four years (Code Civ.Proc., § 343).

FOOTNOTE.   See footnote *, ante.

McKINSTER, Associate Justice.

DABNEY, Acting P.J., and McDANIEL, J.†, concur.