MEYER v. BYRON JACKSON INC (1981)

Plaintiff and appellant, Jacob A. Meyer, appeals from a judgment on the pleadings in this action against his employers' BJ-Hughes, Inc. (sued herein as “Byron Jackson, Inc.”), BJ-Hughes Service Equipment Co. (sued herein as “Byron Jackson Service Equipment Co.”) and Charles E. Williams (hereinafter “respondents”) for compensatory and punitive damages for discriminatory discharge. Respondents' motion for judgment on the pleadings was sustained by the trial court on the basis that the jurisdiction of the Workers' Compensation Appeals Board (hereinafter “Appeals Board”) was exclusive. On appeal the question before us concerns the sufficiency of the complaint as a matter of law (Sullivan v. County of Los Angeles (1974) 12 Cal.3d 710, 714, 117 Cal.Rptr. 241, 527 P.2d 865); at issue in this instance is whether Labor Code section 132a precludes a civil suit for damages by an employee discharged under that section.

The facts underlying the instant action, as alleged in the complaint, are as follows: Appellant was employed by respondents as a mechanic-welder under an oral contract of employment from July 1, 1964, through July 26, 1974. On the latter date, appellant was discharged from his employment solely because in October 1972 he had filed an application with the Appeals Board in connection with industrial injuries he had suffered earlier that year, and because in July 1974 he had received an award from the Appeals Board in connection with those injuries. Appellant further alleged (in his opposition to respondents' motion for judgment on the pleadings) that he lost, as a result of the termination of his employment, wages, retirement benefits and medical insurance coverage; appellant also alleged that he suffered severe emotional distress as the result of his discharge. As noted, it is respondents' contention that appellant may pursue his remedy exclusively under section 132a of the Labor Code before the Appeals Board. For the reasons delineated below, we disagree.

I.

It has been held that violations of public policy statutes, including those dealing with certain aspects of employer-employee relations, are justiciable in civil actions, criminal sanctions within the statute notwithstanding. (Montalvo v. Zamora (1970) 7 Cal.App.3d 69, 76, 86 Cal.Rptr. 401.) In Montalvo, the statutory prohibition regarding an employer's discharge of, or discrimination against, any employee because of the employee's participation in proceedings relative to the enforcement of the “Minimum Wage Law for Women and Minors” (Lab. Code, § 1196) was held to have established the basis of a civil action for discriminatory discharge. (Ibid.)¹ It seems clear therefore that Labor Code section 132a, as originally enacted, established a public policy prohibiting the discharge of any employee because of the employee's participation in proceedings before the Appeals Board sufficient to permit a cause of action for civil relief.² It is nowhere alleged, nor do we believe, that at any time prior to 1972 (at which time section 132a was amended) a worker could be compensated under the workers' compensation statutes for the economic damage and emotional distress resulting from a discharge within the purview of section 132a.

Respondents nevertheless contend that one of the basic tenets of the Workers' Compensation Act is the exclusivity of the remedy for the employee. The cornerstone of that contention is section 3601 of the Labor Code, which states in pertinent part: “Where the conditions of compensation exist, the right to recover … compensation … is … the exclusive remedy for injury or death of an employee against the employer or against any other employee of the employer acting within the scope of his employment․” Although there are three exceptions to the above, they do not apply to the instant case as they have to do with acts of physical aggression, intoxication or recklessness by a fellow employee.

The language in section 3601 does not encompass the situation contemplated by section 132a. The question thus presented is whether section 132a, as amended in 1972, precluded a civil action by virtue of providing an exclusive remedy for discrimination and discharge within that section.

II.

Labor Code section 132a, as amended in 1972, read as follows:

“It is the declared policy of this state that there should not be discrimination against workers who are injured in the course and scope of their employment.

Any employer who discharges, or threatens to discharge, or in any manner discriminates against any employee because the latter has filed or made known his intention to file an application with the appeals board, or because the employee has received a rating, award or settlement, or, because the employee has received a rating, award or settlement, or, because the employee testified or made known his intentions to testify in any matter relating to the appeals board, is guilty of a misdemeanor and subject to the provisions of Section 4553.

Any insurance carrier who advises, directs, or threatens an insured under penalty of cancellation or a raise in premium or for any other reason, to discharge an employee because the latter has filed or made known his intention to file an application with the appeals board, or because the employee has received a rating, award, or settlement, is guilty of a misdemeanor and subject to the provisions of Section 4553. Proceedings under this section for increased compensation as provided in Section 4553 are to be instituted by filing an appropriate petition with the appeals board, but such proceedings may not be commenced more than one year from the discriminatory act or date of termination of the employee. The appeals board is vested with full power, authority, and jurisdiction to try and determine finally all the matters specified in this section subject only to judicial review.”

Respondents contend that the 1972 version of section 132a, in rendering violators of the section subject to the provisions of section 4553, thereby provided compensation to employees discharged under section 132a.³ They rely on the creation of this remedy to bring section 132a within the scope of section 3601, and thus preclude any civil action for discriminatory discharge under section 132a.

We restate that the economic and emotional harm reasonably flowing from such a discharge is not contemplated by section 3601. Therefore, if section 132a is to establish an exclusive remedy, it must do so either by its terms or by the nature of the remedy provided by the section.

It is apparent that the explicit exclusivity established by section 3601, subdivision (a), of the Labor Code is not echoed in section 132a. The latter section renders an employer “… guilty of a misdemeanor and subject to the provisions of Section 4553,” and provides that “[p]roceedings under this section for increased compensation as provided in Section 4553 are to be instituted by filing an appropriate petition with the appeals board ․ The appeals board is vested with full power, authority, and jurisdiction to try and determine finally all the matters specified in this section ․” A civil action is not explicitly precluded by the language of the section. Rather, jurisdiction is vested in the Appeals Board to try and determine the application of Labor Code section 4553 to the employer's conduct should the employee elect to proceed before the board under section 132a.

This reading of section 132a is compelled by the fact that the economic/emotional harm caused by a discriminatory discharge is not compensated by recovery under sections 132a and 4553. That this is so is pointed up by the illogic of predicating the measure of an employee's recovery for discriminatory discharge upon the value assigned an unrelated prior injury. Under respondents' interpretation of these sections, a short-term employee whose discharge was based on his recovery for an underlying injury would be compensated for the discharge measured by up to half his prior recovery. Conversely, a long term employee who sustained no prior injury but was discharged for testifying “in any manner relating to the Appeals Board” (thereby losing accumulated retirement benefits and medical insurance coverage) would receive no compensation for the discharge, despite the fact that the damages flowing from his discharge were significantly greater than those of the short term employee. Clearly such inequity was not contemplated by the Legislature. Absent recourse to the courts, any uninjured employee participating in proceedings before the Appeals Board could be discharged without remedy. Such an interpretation neither deters discriminatory discharge nor compensates the victim of such discrimination.

Another indication that the damages flowing from a discharge under section 132a are not compensated under section 4553 is supplied by State Dept. of Corrections v. Workmen's Compensation App. Bd. (1971) 5 Cal.3d 885, 97 Cal.Rptr. 786, 489 P.2d 818, where the court noted that the fixed schedule of compensation was not considered to be complete compensation for injury; under State Dept. of Corrections an increase in compensation under section 4553 clearly represents more adequate compensation for the initial injury. (Id. at p. 889, 97 Cal.Rptr. 786, 489 P.2d 818.)⁴ For this reason damages recoverable for discriminatory discharge are not provided under Workers' Compensation statutes; such culpable behavior on the part of an employer renders him liable under section 132a's criminal sanction, and justifies the assessment of more adequate compensation for the underlying industrial injury.

Finally, the crucial distinction drawn between compensation for an initial injury and recovery for subsequent actionable conduct of the employer has been recognized in varied contexts. (Johns-Manville Products Corp. v. Superior Court (1980) 27 Cal.3d 465, 469, 165 Cal.Rptr. 858, 612 P.d 948 [cause of action may exist for aggravation of a work-related disease due to employer's fraudulent concealment of the condition and its cause], Ramey v. General Petroleum Corp. (1959) 173 Cal.App.2d 386, 402, 343 P.2d 787 [fraudulent concealment of employee's cause of action was distinct from the industrial injury].) In the case at bar the actionable conduct (discriminatory discharge) is thoroughly independent of any initial industrial injury. In view of the fact that section 132a as amended in 1972 did not provide an employee discharged under that section with a remedy for the economic and emotional harm resulting from the discharge, appellant is not precluded from initiating a civil action to redress his wrong.⁵

The judgment is reversed.

FOOTNOTES

1.  It is well established that a cause of action for wrongful discharge may sound in tort as well as in contract. (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 176-177, 164 Cal.Rptr. 839, 610 P.2d 1330; Cleary v. American Airlines, Inc. (1980) 111 Cal.App.3d 443, 456, 168 Cal.Rptr. 722.)

2.  Labor Code section 132a was originally enacted in 1941. It then provided:“Any employer who discharges, or threatens to discharge, or in any other manner discriminates against any employee because the latter has filed or made known his intention to file an application or complaint with the commission, or because the employee has testified or made known an intention to testify in any investigation or proceeding held by the commission, is guilty of a misdemeanor.“No prosecution under this section shall be commenced until the commission shall have notified the accused of the demand for the prosecution, afforded him an opportunity to be heard before it or a referee thereof, and following said hearing shall have recommended that such prosecution be commenced.”A 1965 amendment merely substituted “Appeals Board” for “Commission.”

3.  Labor Code section 4553 provides:“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).”

4.  Burton v. Workers' Comp. Appeals Bd. (1980) 112 Cal.App.3d 85, 169 Cal.Rptr. 72, does not require a different result. In addressing the proper calculation of a Labor Code section 5814 ten percent penalty for unreasonable delay in the payment of an award of increased benefits under sections 132a and 4553, Labor Code, the Burton court was not called upon to determine whether recovery under section 4553 compensates an employee for a discriminatory discharge; nor is such a conclusion required in determining that the section 132a civil/administrative remedy is a separate “class of benefit” for purposes of assessing a section 5814 penalty.

5.  We do not address here the proper interpretation of section 132a as amended in 1978, as that question is not presented on this appeal.

STEPHENS, Associate Justice.

KAUS, P. J., and ASHBY, J., concur. Hearing denied; KAUS, J., did not participate.