SHERRIFF v. REVELL INCORPORATED (1985)

This is an action alleging wrongful termination of employment.   The questions presented by this appeal are whether the trial court erred, first by sustaining demurrers without leave to plaintiff's causes of action for negligent and intentional infliction of emotional distress, and for fraudulent inducement by an employer in violation of Labor Code sections 970–972;  and later, by granting defendants' motion for summary judgment on the remaining causes of action for fraud and wrongful termination of employment.   We conclude that the trial court correctly found that plaintiff had raised no triable issue of fact on the remaining causes of action.   We further conclude that plaintiff failed to state a separate and independent cause of action for negligent or intentional infliction of emotional distress distinct from his cause of action for wrongful termination of employment.   We also conclude that the trial court erred in sustaining defendants' demurrer to the purported cause of action under Labor Code section 970, but that in light of the court's proper grant of summary judgment, such error was harmless.   Accordingly, the judgment is affirmed.

STATEMENT OF FACTS

Plaintiff Russell Sherriff (Sherriff) was first employed by defendant Revell Incorporated (Revell) in Massachusetts in October 1976 in a sales capacity.   He rapidly advanced within the company.   In July 1977 he had been promoted to regional sales manager for New England and the middle Atlantic states.   In September 1978, less than two years after his first affiliation with the company, he was approached by the individual defendants, Stanley Blaustein (Blaustein) and David Wain (Wain), concerning the position of national sales manager of Revell.   Blaustein was then being promoted from national sales manager to director of U.S. marketing, and Wain was the new vice-president of world marketing.   After overcoming his initial reservations, Sherriff ultimately accepted this position.   He moved his family to California in order to perform his new role.   It is his termination from this position, approximately four and one-half months later, of which he complains in this action.

The disputed facts viewed most favorably to plaintiff are as follows:  Plaintiff neither applied for nor initiated his consideration for the post of national sales manager.   He was approached by defendants.   He was reluctant to leave his established home in Massachusetts where he had lived for 37 years, and reluctant to uproot his wife and school-age children.   His ties to Massachusetts included homeownership and ownership of income producing property.

Because of his reservations about leaving his established home and of his inexperience in a national role, he asked for a six-month-trial period in the job.   This request was denied and he was told that he had to make up his mind within three days.   He was also told that he would have to sell his income property in Massachusetts because the company would require a “total commitment” from him in his new position, and that he in return would receive a “total commitment” from the company.

Plaintiff also contends that during these discussions certain material misstatements and/or omissions were made to him.   These are, in essence:  (1) Defendants would make a “total commitment” to him;  (2) defendants would provide him training and emotional support;  (3) the company was not about to be sold or merged;  (4) the sales administration division was running smoothly;  (5) his new job duties did not include handling of national accounts;  (6) he was not told of the “deplorable condition” of the shipping department, nor of the inefficiency of the sales administration department.

He also expressed concern that the salary increase offered to him was insufficient to justify the move.   He was assured by defendant Wain that the opportunities and growth potential being offered would, within a short time, more than compensate him for detriments of the move.

Plaintiff contends that he was not advised of dissatisfaction with his performance as national sales manager prior to his termination.   On the contrary, when he inquired of defendant Blaustein he was told “You'll always be doing okay until I tell you differently.”   Without warning, he was terminated on February 26, 1979.   After his termination no one was hired to replace him, defendant Blaustein reassumed the responsibilities of national sales manager.

PROCEDURAL SUMMARY

Like many actions, this one has expanded and contracted as it wended its way through the law and motion departments.   At its peak it contained the following causes of action:  Wrongful termination—breach of oral contract of employment, fraud, negligent infliction of emotional distress, intentional infliction of emotional distress, violation of Labor Code sections 970–972, and “ultra vires.” ¹

Demurrers were sustained without leave to the causes of action for negligent and intentional infliction of emotional stress and for violation of the Labor Code.   The cause of action labeled “ultra vires” was voluntarily dismissed.   Substantial discovery on both sides occurred.   Three years after the commencement of the action, each defendant moved for summary judgment.   Summary judgments were granted as to each defendant on each of the remaining causes of action.

THE SUMMARY JUDGMENTS

We first turn to the central issue on this appeal, whether the summary judgment was properly granted.   Prior to the motion of summary judgment, the trial court had sustained without leave defendants' demurrers to the causes of action for emotional distress and Labor Code violations.   Defendants then moved for summary judgment on the remaining causes of action, breach of oral contract of employment as against Revell and fraud as against all defendants.

 The summary judgment motion was to be decided on the basis of the record presented to the trial court.  (Oldenkott v. American Electric, Inc. (1971) 14 Cal.App.3d 198, 207, 92 Cal.Rptr. 127;  Snider v. Snider (1962) 200 Cal.App.2d 741, 747–748, 19 Cal.Rptr. 709.)   It is, of course, well settled that a summary judgment may not be granted if the record disclosed any triable issue of fact.  (Code Civ.Proc., § 437c;  Parker v. Twentieth Century-Fox Film Corp. (1970) 3 Cal.3d 176, 181, 89 Cal.Rptr. 737, 474 P.2d 689.)   Thus, summary judgments must be granted sparingly and reviewed with care.  (Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 417, 42 Cal.Rptr. 449, 398 P.2d 785.)

The foregoing general propositions, however, do not mean that summary judgments should never be granted.   On the contrary, summary judgments, when appropriate serve the salutary function of saving very substantial financial and emotional costs for the litigants and attorneys in a case that should not go to trial.   Even more important, they eliminate from the courts' backlog cases that should not consume scarce judicial resources.  (See Versa Technologies, Inc. v. Superior Court (1978) 78 Cal.App.3d 237, 240, 142 Cal.Rptr. 570.)

Once the parties have had ample opportunity to conduct discovery and develop the facts, they should either be able to raise a triable issue of fact, or the proceeding should be terminated by the summary judgment so that the case does not continue to be a drain on the time, energies and financial resources of the litigants, attorneys, and the courts.

Plaintiff has briefed this appeal as if the principal issue were whether a person who has moved his family across the country in reliance upon inducement of his employer is entitled to be protected from arbitrary “at will” termination.   The trial court agreed with plaintiff and overruled defendants' demurrers based on the contention that Revell had the right to terminate plaintiff at will.   The issue on this appeal is whether plaintiff has raised a triable issue of fact whether defendant had cause for the termination.

In this case, Revell and the individual defendants produced competent evidence that plaintiff's performance was unsatisfactory.   Defendants pointed to the buyer from their largest single account, K-Mart, and the buyer from another major national account, Toys R Us, who found plaintiff's performance to be ineffective in one case and offensive in another.   Defendants also produced evidence that plaintiff lacked control and was ineffective at Revell's annual national sales meeting.   In answer to plaintiff's interrogatories, they produced a substantial catalog of detailed complaints.

In response, plaintiff has presented virtually nothing.   The record does not disclose any declarations or depositions disputing the dissatisfaction of major customers or attendees at the national sales meeting.   Plaintiff's response in the trial court was:  (1) To cite portions of plaintiff's deposition wherein he stated under oath and in detail the chronology alleged in his complaint;  (2) plaintiff argued in his brief that the credibility of the dissatisfied supervisors had not been tested before a trier of fact;  and (3) to assert that “good cause” remained a triable issue of fact.

 The mere fact that a declarant had not been tested before a trier of fact is insufficient basis to deny a summary judgment.   If this were the rule, summary judgments could never be granted because credibility could never be tested short of trial.  (Code Civ.Proc., § 437c;  see Shepherd v. Jones (1982) 136 Cal.App.3d 1049, 1062, 186 Cal.Rptr. 708.)

 This rule is not to be confused with the rule that says the court need not accept evidence from a declarant that is solely within his knowledge.   For example, when a declarant says he acted only with the purest of intentions, a court is not required to grant summary judgment merely because no one else could know what were the intentions of the declarant.  (Code Civ.Proc., § 437c;  see Overland Plumbing, Inc. v. Transamerica Ins. Co. (1981) 119 Cal.App.3d 476, 483, 174 Cal.Rptr. 1.)   Nor is it to be confused with the rule that reserves issues such as negligence as jury issues almost without exception.  (See, e.g., Maxwell v. Colburn (1980) 105 Cal.App.3d 180, 186, 163 Cal.Rptr. 912;  Sesma v. Cueto (1982) 129 Cal.App.3d 108, 181 Cal.Rptr. 12.)   Neither of these situations is presented here however.   The declarants not only expressed their personal dissatisfaction with plaintiff's performance, they cited chapter and verse of complaints by other persons, customers or employees.

Plaintiff's position reduces itself to the contention that the summary judgment should have been denied because (1) he was not told of inefficiency in his work performance, (2) no replacement for him was hired, but rather his job was reassumed by defendant Blaustein, and (3) “good cause” is a triable issue of fact.   These factors, plaintiff contends, show that defendants' arguments are after-the-fact rationalizations and not the true reason for his firing.

 The function of the trial court in a wrongful termination action is not to review by trial the business judgment of private employers.   Wrongful termination is a doctrine to protect employees whose termination would violate public policy, or who by virtue of longevity of service, or otherwise by virtue of express or implied agreement, are entitled to protection from termination without cause.

 Defendants may have been unwise in failing to adequately inform plaintiff of complaints by buyers for major national accounts, or in not working with him to cure deficiencies.   They may have made an error in judgment in terminating him after such short period of performance.   None of these issues, however, is sufficient to imply a wrongful termination.   The doctrine has not been extended to afford a legal right to notice, or opportunity to be heard before termination from private employment.

The question then is, have the defendants shown that plaintiff was terminated “for cause.”   Precisely, what is encompassed by the right not to be terminated without cause is not susceptible of a short, precise definition.   Certain reasons have been determined as a matter of law to be improper, and impermissible causes for termination.   Union activities (Cleary v. American Airlines, Inc. (1980) 111 Cal.App.3d 443, 454–455, 168 Cal.Rptr. 722), refusal to carry out an order that is illegal or contrary to public policy (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 178, 164 Cal.Rptr. 839, 610 P.2d 1330), are clear examples.

 In the absence of such clear factors, no single rule has been formulated nor is likely to be formulated that will define the right in a broad sense.   Plainly, an employee who has given long years of satisfactory service to an employer and who has reached an age where finding new employment may be difficult should be entitled to greater protection than one who is new on the job, or who, if talented, can find a satisfactory new position relatively quickly.   Similarly, it seems self-evident that the nature of the employment and the nature of the complaints are relevant.   The work product of some employees may be susceptible of comparatively precise objective numerical measurement.   The work product of a management or executive employee may necessarily be primarily subjective.   The nature of the supposed cause for termination must also be relevant.   An employee's lack of wit or charm surely is more tolerable in the accounting or shipping department than in the sales or personnel department.   Another guide post is that courts are not to become reviewers' without responsibility of business judgments.   Substantial deference must be given to private decisions as to whether particular people are or are not well suited to particular responsibilities, especially in connection with sensitive executive or managerial positions.  (See Pugh v. See's Candies, Inc. (1981) 116 Cal.App.3d 311, 330, 171 Cal.Rptr. 917;  also, Note, Protecting At Will Employees Against Wrongful Discharge:  The Duty to Terminate Only in Good Faith (1980) 93 Harv.L.Rev. 1816, 1840.)

But the existence of this multiplicity of factors does not imply that every case must go to the jury.   In this case we have the short term of total employment, less than three years;  and a short term of employment in the particular position from which he was discharged, less than six months.   His position, national sales manager, is in the nature of upper management or executive.   This position is, by its nature, highly subjective of evaluation, and one in which subjective factors such as being pleasing to particular customers or employees are appropriate criteria.

Neither the weight of these factors, nor defendants' evidence would be sufficient to support a summary judgment if plaintiff had raised a triable issue either as to the lack of truth of the asserted cause, or as to the existence of some other improper cause.

 No improper cause or ulterior motive is suggested by the facts called to the court's attention.   The record does not show any history of union activities or personal animosity or other cause.   The only suggestion of improper motivation raised by plaintiff is that defendant Blaustein wanted to reassume the duties of national sales manager.   Assuming arguendo that plaintiff could so show, plaintiff has still shown no impropriety.   A management decision that two people can perform executive functions previously performed by three is not an improper cause for termination.   Consolidation or elimination of positions, especially management positions, is plainly legitimate management prerogative.

 In summary, after extensive discovery, plaintiff has not presented to the court evidence to dispute defendants' contentions of a termination for cause nor to demonstrate an impermissible motivation.   On this record, the summary judgment on the wrongful termination cause of action was proper.

THE FRAUD CAUSES OF ACTION

 In the context of defendants' summary judgment on the wrongful termination cause of action, plaintiff's fraud causes of action must similarly fail.   Plaintiff alleged in his complaint several false representations.   Plaintiff has failed to produce any evidence that such representations were made by the individual defendants with knowledge of their falsity or reckless disregard for the truth.   More importantly, since defendants produced uncontradicted evidence of cause for plaintiff's termination, there is no triable issue of fact unless plaintiff produces evidence that he suffered damage resulting from his reliance upon an alleged false representation.

 Plaintiff has failed to present any evidence that plaintiff has been so damaged by such reliance.   Plaintiff produced no evidence, for example, that his termination was in any way related to conditions in the shipping department or sales administration department.

 As to the representations concerning possible sale of the company, once again, no evidence has been presented as to causation of damage.   No evidence has been called to the court's attention concerning any communications with or on behalf of Revell's new owners in any way relating to plaintiff's termination, nor in any other way suggesting the termination was caused by Revell's take over.

 In summary, we are left simply with evidence of the termination for cause and no evidence suggesting that plaintiff's reliance upon any false representation led to his ultimate damage.   Accordingly, the summary judgment as to plaintiff's fraud cause of action was proper.

THE DEMURRERS TO THE CAUSES OF ACTION FOR EMOTIONAL DISTRESS

Plaintiff purported to state in his amended complaint causes of action for negligent and intentional infliction of emotional distress.   The only additional allegations of fact in these causes of action, beyond those alleged in his wrongful termination cause, were “plaintiff's self-image concerning his job performance was an integral part of his emotional stability”;  defendants knew of “plaintiff's particular susceptibility to emotional distress in the area of providing a socially and economically stable environment for himself and his family”;  and defendants “used their position of power to seriously undermine plaintiff's self-image as professionally competent and as a good provider․”  He also alleged that his termination did in fact cause him great emotional upset;  that he suffered physical manifestations of emotional upset such as sleeplessness and upset stomach.

 Plaintiff contends that adequate causes of action for negligent and intentional infliction of emotional distress have been pleaded by his allegations following the general rules of tort pleading.   That is, plaintiff plead the existence of duty from defendants to plaintiff;  the breach of that duty;  the foreseeability that damage in the nature of emotional distress would result from such breach;  the occurrence of both physical and emotional damage;  and proximate causation of such damage from such breach.   The plaintiff plead alternative theories about whether the breach was intentional or negligent.   The physical manifestations alleged were “a severe stomach disorder and emotional and mental ailments of a physically disabling nature․”

The trial court held that such allegations failed to state a separate and independent cause of action.   We agree.

 The question presented by this case, however, is not whether damages for emotional distress are recoverable if he prevails on his proper causes of action for wrongful termination of employment.   Such damages are recoverable if the employer's conduct is extreme or outrageous.  (Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 578–580, 108 Cal.Rptr. 480, 510 P.2d 1032;  Rulon-Miller v. International Business Machines Corp. (1984) 162 Cal.App.3d 241, 254, 208 Cal.Rptr. 524.)   Rather, the question is whether plaintiff has alleged an independent tort of negligent or intentional infliction of emotional distress based on the same conduct.

 Plaintiff relies upon the theory that damages for emotional distress may be recovered in an action for negligent or intentional infliction of physical damage.   We agree with the trial court, however, that plaintiff's general allegations of common physical manifestations of emotional distress are insufficient to transform this action into one for constructive battery.   Plaintiff does not come within the scope of any decision of which we are aware, allowing recovery for emotional distress in the absence of foreseeable physical injury.  (Cf. Dillon v. Legg (1968) 68 Cal.2d 728, 739–740, 69 Cal.Rptr. 72, 441 P.2d 912;  Molien v. Kaiser Foundation Hospitals (1980) 27 Cal.3d 916, 921–923, 167 Cal.Rptr. 831, 616 P.2d 813.)

We need not consider whether plaintiff should have been given leave to try to allege a foreseeable physical injury resulting from his termination, in light of our conclusion that summary judgment was properly granted.

DEMURRER TO THE LABOR CODE CAUSE OF ACTION

Defendants' demurrers were also sustained without leave to plaintiff's cause of action based on Labor Code sections 970–972.   These sections provide, in essence, a civil action, with double damages, for any person who has been induced to move from one location to any other place within this state by means of certain specified false representation “for the purpose of working in any branch of labor.”  The nature of the misrepresentations specified in section 970 concern either (a) the kind, character or existence of such work;  (b) the length of time such work will last, or the compensation therefor;  (c) the sanitary or housing conditions relating to or surrounding the work;  or (d) the existence or nonexistence of a labor dispute.

Plaintiff alleges that he was induced to move to a location within California, based upon a knowingly false representation as to the length of time the work would last and as to the compensation therefor.

Defendants contend that the statutory provisions are applicable only to migrant farm workers, or to “laborers” in the ordinary sense of the term, as distinguished from professional, management or executive personnel.

The plaintiff contends that the phrase “for the purpose of working in any branch of labor” was the Legislature's means of encompassing every person who moved for the purpose of employment.

It's evident from a reading of section 970, that this statute, which was originally enacted in 1903, and modified to its present form in 1937, was passed in contemplation of problems more prevalent in the great depression than more recent times.   The statutory reference to importing workers from one location to another without telling them they were intended to be strike breakers or that they would be provided housing of dubious sanitation, clearly suggest that the Legislature contemplated problems quite different from Sherriff's when it enacted this statute.   Such observations, however, do not resolve the question whether the statute is limited to such situations.

Defendant cites a 1935 decision, Universal Pictures Corp. v. Superior Ct. (1935) 9 Cal.App.2d 490, 50 P.2d 500, as well as more recent general authorities for the proposition that the word “labor” can appropriately be interpreted to exclude other categories of employment, such as managerial, or executive.  (48 Am.Jur.2d (1979) Labor and Labor Relations, § 1, p. 79.)   If the Legislature were to pass a statute today which uses the word “labor,” it might be appropriate to infer that the Legislature intended to incorporate a definition from that body of law known as “labor law” that has arisen since the mid-1930's.   However, the inference of the 1937 Legislature intended such a distinction is a more doubtful proposition.

These sections have rarely been interpreted by published appellate opinions.   The closest is Munoz v. Kaiser Steel Corp. (1984) 156 Cal.App.3d 965, at 980, 203 Cal.Rptr. 345, in which the court stated “we suspect defendant is correct is asserting that [the statutes] enactment had its genesis in problems relating to the solicitation of agricultural employees or other seasonal or mass hiring situations.   Nonetheless, nothing in the statute restricts application of the statutory language to any particular class or kind or employment, and, absent some compelling indicia of legislative intent to so restrict the statutory ambit, we find no justification for restricting application of the statutory provisions to farm labor or other mass hiring situations.”   The court held the statute to be applicable to an individual employee whose function was to be a labor foreman for a salary of $1800 a month.

 When construing a statute, a reviewing court must be guided by the words of the statute and the intent of the Legislature.  (H.S. Mann Corp. v. Moody (1956) 144 Cal.App.2d 310, 320, 301 P.2d 28.)   Although we find no clear signs of legislative intent concerning managerial employees, we conclude that the Legislature would not have intended to deny the benefits of this statute to managerial or executive employees who had been misled by an employer about the existence of a labor dispute, and who were induced to move to a new location in reliance upon such misrepresentations.   This conclusion is in accord with Munoz, supra.   We construe the phrase “for the purpose of working in any branch of labor” to be synonymous with “for any purpose of employment.”

 Accordingly, we conclude that the trial court erred in sustaining the demurrer to the cause of action based on the Labor Code.   In light of our conclusion, however, that the court correctly granted summary judgment on plaintiff's fraud causes of action, as discussed above, this error is to be harmless.

 The misrepresentations alleged in connection with the Labor Code sections are also alleged in the fraud cause of action.   In addition, since the scope of actual misrepresentations under the Labor Code is considerably more narrow than those allowed under general fraud law, it follows that if plaintiff cannot raise a triable issue as to fraud in general, that his cause of action for intentional misrepresentation within the meaning of Labor Code sections 970–972 must also fail.

The judgment is affirmed.

FOOTNOTES

FOOTNOTE.  

1.   Despite several successful demurrers, it remains unclear whether each cause of action is purportedly stated as against all defendants.  (See Los Angeles Superior Court Rules, Manual of Policy and Procedures for Law and Motion, rule 1. C.)

CHERNOW, Associate Justice.* FN* Assigned by the Chairperson of the Judicial Council.

HASTINGS, Acting P.J., and EAGLESON, J., concur.