Plaintiff James M. Turner asserts he was forced by his employer, defendant Anheuser Busch, Inc. (ABI), to quit his job after he complained of ABI's alleged illegal activity. Although ABI prevailed on summary judgment in the trial court, Turner persuaded the Court of Appeal to reinstate his claim. We now consider the elements of a cause of action for constructive wrongful discharge in violation of fundamental public policy. Applying those elements, we discern no material issue of fact and no legal foundation for Turner's case. We therefore reverse the judgment of the Court of Appeal and direct summary judgment in favor of ABI.
I. FACTS AND PROCEDURAL HISTORY
Turner worked at ABI's Los Angeles brewery as an industrial relations manager for approximately six years, until his voluntary resignation in 1981. In January 1984, Turner returned to work for ABI at its wholesale operations division in Riverside.
Turner's initial position at the Riverside division was "branch off-premises coordinator" in the sales department. As such, he was responsible for coordinating sales activities with retailers who sold ABI products off-sale, i.e., for consumption away from the retailers' premises. Turner's immediate supervisor was William Schmitt. Schmitt's supervisor was George Liakos.
In May 1985, Turner was reassigned to the position of "assistant supervisor route sales." He retained the same salary and level of responsibility. In his new position, Turner no longer reported to Schmitt. In January 1986, Schmitt was transferred to St. Louis, Missouri.
With one exception, Turner received overall "good" ratings on written performance evaluations between June 1984 and November 1987. (He received a "needs improvement" rating in December 1984.) On his December
On January 3, 1989, Turner tendered a letter of resignation to ABI, effective February 1, 1989. After his departure, Turner filed suit against ABI and certain individuals, alleging causes of action for age discrimination, constructive wrongful discharge in violation of public policy, breach of contract, and both intentional and negligent infliction of emotional distress.
The individual defendants were dismissed in various pretrial proceedings. Turner's emotional distress claims were dismissed on ABI's motion for judgment on the pleadings; he voluntarily dismissed his claim for age discrimination. ABI then obtained summary judgment on the breach of contract and public policy claims.
The Court of Appeal affirmed the summary judgment as to the contract claim, but reversed on the public policy claim. It held that the "cumulative effect" of the "long list of alleged actions [by ABI] and [workplace] conditions" established a triable case of constructive wrongful discharge in violation of public policy. We granted ABI's petition for review.
A. The Governing Law
Employment relationships are generally terminated by resignation or discharge. (Lab. Code, § 2922.) An employee voluntarily severs the relationship by resignation; the employer does so by actual discharge. (Ibid.)
Actual discharge carries significant legal consequences for employers, including possible liability for wrongful discharge. In an attempt to avoid liability, an employer may refrain from actually firing an employee, preferring instead to engage in conduct causing him or her to quit. The doctrine of constructive discharge addresses such employer-attempted "end runs" around wrongful discharge and other claims requiring employer-initiated terminations of employment.
(1) Constructive Discharge
We have not previously addressed what an employee must prove to establish a constructive discharge. The Courts of Appeal have devised and applied the following test for constructive discharge: "[A]n employee who is forced to resign due to actions and conditions so intolerable or aggravated at the time of his resignation that a reasonable person in the employee's position would have resigned, and whose employer had actual or constructive knowledge of the intolerable actions and conditions and of their impact upon the employee and could have remedied the situation, but did not, is constructively discharged." (Zilmer, supra, 215 Cal. App.3d at p. 38; see also Brady v. Elixir Industries (1987) 196 Cal.App.3d 1299, 1306 [242 Cal.Rptr. 324] [hereafter Brady].)
Three areas of inquiry are suggested by the proffered test: (1) what kinds of actions or conditions are sufficient to convert what is ostensibly a voluntary quit into a discharge; (2) whether the impact of those actions and conditions is measured by a subjective (impact on this particular employee) test or an objective (impact on a hypothetical reasonable employee) test; and (3) what level of employer knowledge or intent regarding those actions or conditions should be required to achieve a discharge. We will consider these questions in light of the case law concerning constructive discharge.
The doctrine of constructive discharge was first recognized in federal cases brought under the National Labor Relations Act (NLRA). Under section 8(a)(3) of the NLRA, it is "an unfair labor practice for an employer ... by discrimination ... to encourage or discourage membership in any labor organization...." (29 U.S.C. § 158(a)(3).) Approving decisions of the National Labor Relations Board and lower courts, the United States Supreme Court has held that "an employer violates [§ 8(a)(3)] not only when, for the purpose of discouraging union activity, it directly dismisses an employee, but also when it purposefully creates working conditions so intolerable that the employee has no option but to resign — a so-called `constructive discharge.'" (Sure-Tan, Inc. v. NLRB (1984) 467 U.S. 883, 894 [81 L.Ed.2d 732, 744, 104 S.Ct. 2803], italics added.)
The federal courts have also applied constructive discharge in employment discrimination cases under title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e) and the Age Discrimination in Employment Act of 1967 (29
In contrast, the Ninth Circuit's formulation of constructive discharge makes no reference to employer knowledge or intent, but provides instead that "[a] constructive discharge occurs when, looking at the totality of circumstances, `a reasonable person in [the employee's] position would have felt that he was forced to quit because of intolerable and discriminatory working conditions.'" (Watson v. Nationwide Ins. Co. (9th Cir.1987) 823 F.2d 360, 361, quoting Satterwhite v. Smith (9th Cir.1984) 744 F.2d 1380, 1381.)
a. Intolerable Conditions
In order to amount to a constructive discharge, adverse working conditions must be unusually "aggravated" or amount to a "continuous pattern" before the situation will be deemed intolerable.
"There appears to be no disagreement [in the cases] that one of the essential elements of any constructive discharge claim is that the adverse working conditions must be so intolerable that any reasonable employee would resign rather than endure such conditions." (Slack, supra, 423 S.E.2d at p. 556.)
Various terms such as "intolerable" or "aggravated" have been used to describe the subnormal character of the working conditions required to establish constructive discharge. (Slack, supra, 423 S.E.2d at p. 556; see also Zilmer, supra, 215 Cal. App.3d at p. 38; Brady, supra, 196 Cal. App.3d at p. 1306.) The essence of the test is whether, under all the circumstances, the working conditions are so unusually adverse that a reasonable employee in plaintiff's position "`"would have felt compelled to resign."'" (Slack, supra, 423 S.E.2d at p. 556, quoting Calhoun v. Acme Cleveland Corp. (1st Cir.1986) 798 F.2d 559, 561.)
b. An Objective Standard
c. Employer Knowledge and Intent
In Brady, the Court of Appeal concluded that a majority of other courts had declined to impose a requirement of express employer intent in constructive discharge cases and adopted instead an element mandating only the employer's "actual or constructive knowledge of the intolerable actions and of their impact on the employee" in a situation the employer "could have remedied." (Brady, supra, 196 Cal. App.3d at p. 1306, italics added.) The Brady court did not define the term "constructive knowledge," but observed that its goal in developing a test for constructive discharge was "to insure that a peaceful on-the-job resolution has been attempted or was futile." (Ibid.)
From our review of the cases, we conclude that Brady's test is inadequate to the extent it allows a claim for wrongful discharge on a finding that the employer had mere constructive knowledge of the intolerable conditions leading to an employee's resignation, because such a test does not further the Brady court's goal of insuring corrective measures will be attempted before a lawsuit is required. Although the majority of courts have declined to join the Fourth Circuit in requiring an employer's express intent to force an employee to leave, they have generally demanded that the "intolerable conditions" causing a constructive discharge be expressly "created by or
For example, in Goss v. Exxon Office Systems Co. (3d Cir.1984) 747 F.2d 885, 888, the court stated: "[N]o finding of an [express] intent on the part of the employer to bring about a discharge is required for the application of the constructive discharge doctrine. The court need merely find that the employer knowingly permitted conditions of discrimination in employment so intolerable that a reasonable person subject to them would resign." (Italics added.)
And in Beye, the court emphasized that although an "express intent" was not necessary in constructive discharge cases: "It suffices if the employer's actions were deliberate, or, in cases of harassment by supervisors or fellow employees, if the employer was aware of the situation and permitted it to continue." (Beye, supra, 477 A.2d at p. 1202, italics added.)
Finally, following a comprehensive review of the state and federal cases, the West Virginia Supreme Court adopted the "majority view" that "in order to prove a constructive discharge, a plaintiff must establish that working conditions created by or known to the employer were so intolerable that a reasonable person would be compelled to quit. It is not necessary, however, that a plaintiff prove that the employer's actions were taken with [an express] intent to cause the plaintiff to quit." (Slack, supra, 423 S.E.2d at p. 558, italics added.)
An employer's intent to cause a resignation will rarely be revealed by direct evidence. Self-interest will most often prevent an employer from announcing a constructive discharge strategy from the rooftops. An express intent requirement might unduly focus the trier of fact's attention on the presence or absence of direct evidence. But we see no reason why a standard requiring the employer's actual (rather than mere constructive) knowledge of the intolerable conditions would do so. Such a standard serves to emphasize a central aspect of constructive discharge law — the resignation must be employer-caused and against the employee's will. Consistent with this principle, the employer must either deliberately create the intolerable working conditions that trigger the resignation or, at a minimum, must know about
The dissent of Justice Kennard rejects our modification of the Brady test, claiming that our actual knowledge test "leaves the employer free to turn a blind eye to blatant and pervasive workplace abuses and to discourage or refuse to entertain employee complaints about intolerable workplace conditions and then claim a lack of actual knowledge of the intolerable conditions as a complete defense to a wrongful discharge action." (Dis. opn., post, at p. 1260.) This is a highly exaggerated and unlikely situation that even the dissent admits is not supported by any examples of cases from the majority of jurisdictions that have adopted the identical actual knowledge test for constructive discharge claims. The dissent simply confuses constructive knowledge, which the Brady court left undefined, with constructive discharge which, as most courts hold, requires proof that the employer created or knowingly permitted the intolerable conditions to persist. (See, e.g., Goss v. Exxon Office Systems Co., supra, 747 F.2d at p. 888.)
By providing that a wrongful discharge claim may prevail only if an employee can show the employer, or those representing the employer, either created or knowingly permitted working conditions to remain intolerable, it should be easier for plaintiffs to prove their case in the situation hypothesized by the dissent — i.e., where an employer is either unavailable or refuses to acknowledge that the intolerable conditions exist. (Dis. opn. post, at p. 1260.) By requiring employees to notify someone in a position of authority of their plight, we permit employers unaware of any wrongdoing to correct a potentially destructive situation, and we prevent employers from shielding themselves from constructive discharge lawsuits simply by deliberately ignoring a situation that has become intolerable to a reasonable employee. Indeed, our test furthers the Brady court's stated goal that a constructive discharge test should encourage an employer to take corrective action if notified of the intolerable working conditions. (Brady, supra, 196 Cal. App.3d at p. 1306.) As a matter of policy, therefore, our holding requiring the employer (or its agent) either to have created or knowingly permitted the intolerable conditions to exist, encourages early resolution of the employee complaint and, contrary to the dissent, discourages employer inaction.
Finally, the dissent's unnecessary concern over a purely hypothetical situation is aggravated by its reliance on federal circuit court cases that either support our actual knowledge test for constructive discharge cases or focus exclusively on title VII (or its equivalent under title IX) sexual harassment causes of action. (Compare Paroline v. Unisys Corp. (4th Cir.
The considerations discussed above lead us to modify the elements of constructive discharge in the Brady line of cases. In order to establish a constructive discharge, an employee must plead and prove, by the usual preponderance of the evidence standard, that the employer either intentionally created or knowingly permitted working conditions that were so intolerable or aggravated at the time of the employee's resignation that a reasonable employer would realize that a reasonable person in the employee's position would be compelled to resign.
For purposes of this standard, the requisite knowledge or intent must exist on the part of either the employer or those persons who effectively represent the employer, i.e., its officers, directors, managing agents, or supervisory employees.
To the extent it is inconsistent with these elements in that it requires mere constructive knowledge of the intolerable conditions leading to the employee's resignation, the Brady line of cases is disapproved. (See, e.g., Brady, supra, 196 Cal. App.3d at p. 1306; Zilmer, supra, 215 Cal. App.3d at p. 38; Soules, supra, 2 Cal. App.4th at pp. 399-400; Rochlis, supra, 19 Cal. App.4th at p. 212.)
(2) Wrongful Discharge in Violation of Public Policy
An employee may prove, for example, that a constructive discharge is a breach of an express or implied contract of employment. In the absence of an
Thus, a constructive discharge may, in particular circumstances, amount to breach of an employer's express or implied agreement not to terminate except in accordance with specified procedures or without good cause. (Soules, supra, 2 Cal. App.4th at pp. 399-400.)
Apart from the terms of an express or implied employment contract, an employer has no right to terminate employment for a reason that contravenes fundamental public policy as expressed in a constitutional or statutory provision. (Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1094-1095 [4 Cal.Rptr.2d 874, 824 P.2d 680] [hereafter Gantt].) An actual or constructive discharge in violation of fundamental public policy gives rise to a tort action in favor of the terminated employee. (Foley, supra, 47 Cal.3d at pp. 665-671; Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 178 [164 Cal.Rptr. 839, 610 P.2d 1330, 9 A.L.R.4th 314] [hereafter Tameny].)
(3) Summary Judgment
This case arises from a Court of Appeal decision reversing a summary judgment in ABI's favor.
In reviewing a ruling on a motion for summary judgment, an appellate court (1) "identif[ies] the issues framed by the pleadings," (2) "determine[s] whether the moving party's showing has established facts which negate the opponent's claim and justify a judgment in movant's favor," and (3) "[w]hen a summary judgment motion prima facie justifies a judgment, ... determine[s] whether the opposition demonstrates the existence of a triable,
B. Turner's Claim for Constructive Wrongful Discharge in Violation of Fundamental Public Policy
Turner claims ABI subjected him to a "campaign of harassment" because he complained of alleged ABI violations of federal and state laws, internal company policies, and provisions of ABI's collective bargaining agreement. Through declarations submitted in opposition to ABI's summary judgment motion, he catalogs various complaints he made to ABI management shortly after beginning his employment and argues they triggered less-than-satisfactory performance evaluations several years later, thereby causing him to quit.
In light of the governing law discussed in the previous section, Turner's claim suffers from two fatal flaws. First, Turner's declarations fail to show he was subjected to working conditions rendering his job so intolerable that a reasonable person in his position would have felt compelled to resign. Thus, he did not show that his resignation amounted to a constructive discharge. Second, even assuming a colorable claim of constructive discharge was shown, Turner did not establish the required nexus between his alleged "whistle-blowing" activities in reporting allegedly illegal conduct, and negative reviews of his performance coming four years later. For either of these independent reasons, Turner failed to create a triable issue of fact, and ABI was entitled to summary judgment in its favor.
(1) No Constructive Discharge
Observing that Turner resigned more than four years after his "whistle-blowing" reports of alleged misconduct by ABI employees, ABI contends Turner's claim fails as a matter of law under the "statute of limitations" rule announced in Panopulos v. Westinghouse Electric Corp. (1989) 216 Cal.App.3d 660 [264 Cal.Rptr. 810] (hereafter Panopulos). Turner urges us to reject the rule in Panopulos in favor of the more fact-specific and flexible principles applied in Valdez, supra, 231 Cal.App.3d 1043.
In Panopulos, plaintiff resigned in 1983 and thereafter filed suit for constructive discharge in violation of an implied contract. Plaintiff maintained he had been transferred in 1978 and made to work under intolerable
The mere existence of illegal conduct in a workplace does not, without more, render employment conditions intolerable to a reasonable employee. Turner was not requested, let alone required, to participate in any of the illegal conduct he complains of. Nor does he contest ABI's statements that his supervisors duly acknowledged and investigated at least some of his complaints. Although Turner may have been a witness to allegedly illegal conduct condoned by his employer, the nature of the conduct (violations of state law regulating the economic and contractual relationships between
Moreover, the so-called illegal acts in 1984 and Turner's 1985 reassignment were remote in time and context from the 1989 resignation. Although not dispositive, the passage of this much time after purportedly unbearable conditions arose strongly suggests that neither Turner, nor a reasonable employee, would have regarded the working conditions at ABI as intolerable.
Finally, Turner's 1988 performance rating, an event he contends triggered his resignation, is not a basis for a claim of constructive discharge. As we have observed in part II.A.(1), ante, a single negative performance rating does not amount to a constructive discharge. "In order to properly manage its business, every employer must on occasion review, criticize, demote, transfer, and discipline employees." (Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 160 [233 Cal.Rptr. 308, 729 P.2d 743], quoted in Soules, supra, 2 Cal. App.4th at p. 401.) Thus, the dissent errs in claiming that Turner's pleadings show a campaign to drive him "out of the company by means of adverse performance evaluations based on charges deliberately fabricated." (Dis. opn., post, at p. 1270.)
Even if Turner's miscellaneous charges of employer misconduct are considered together, no continuous pattern of harassment or aggravating conditions emerges. (See Soules, supra, 2 Cal. App.4th at p. 402.) Turner concedes that he received good performance reviews and increases in his compensation from 1985-1987, more than three years after his complaints of illegal activity. He also admits that he resigned when he did because he believed ABI was "setting him up" for termination and that his "chances would be better" in future litigation if he preempted his discharge. Turner's attempt to weave unrelated and disjointed events together into an insidious pattern unravels quickly in these circumstances. Turner's resignation was voluntary and strategic, not, as the dissent claims, coerced or compelled by ABI's acts. In short, Turner was not constructively discharged.
(2) No Wrongful Discharge in Violation of Fundamental Public Policy
Tort claims for wrongful discharge typically arise when an employer retaliates against an employee for "(1) refusing to violate a statute ... [,] (2) performing a statutory obligation... [,] (3) exercising a statutory right or privilege ... [, or] (4) reporting an alleged violation of a statute of public importance. (Gantt, supra, 1 Cal.4th at pp. 1091-1092, fn. omitted.)
Turner also maintains that Liakos "harassed" employees who failed to implement ABI policies concerning refrigeration of beer, arbitrarily and capriciously performed annual evaluations of salaried employees, used threats of probation and harassment to subject all salaried employees to his "whimsical" practices, fabricated merit reviews to justify decisions to discharge employees, and falsified records at ABI's Riverside operation to further its success in interbranch sales competitions.
Turner does refer in some of his claims to statutory provisions. He charges that ABI management employees Liakos and Schmitt violated unspecified provisions of "the [federal] Alcohol, Tobacco and Firearms laws." He points to Schmitt's alleged gifts to alcohol retailers "in contravention of ABC laws." According to Turner, Schmitt also instructed sales personnel to remove or tear down competitor's products and advertising, to make consignment sales of alcoholic beverages in violation of "ABC Act § 25503."
Turner's vague charge of "Alcohol, Tobacco and Firearms laws" violations, largely unaccompanied by citations to specific statutory or constitutional provisions, puts ABI and the court in the position of having to guess at the nature of the public policies involved, if any. This kind of showing is plainly insufficient to create an issue of material fact justifying a trial on the merits of Turner's claims.
Turner does refer to a single provision of California Alcohol Beverage Control Act (Bus. & Prof. Code, § 23000 et seq. [hereafter Act]) to support his claim. Section 25503 of the Act prohibits consignment sales of alcoholic beverages, i.e., arrangements under which title to beverages is retained by the seller or possession may be returned to the seller. (§ 25503, subd. (a).) In addition, section 23104.2 forbids a seller of beer from reacquiring its product "from a retailer except when the beer delivered was not the brand or size container ordered by the retailer, or the amount delivered was other than the amount ordered ... or if a package had been broken or otherwise damaged prior to or at the time of actual delivery...."
Violations of these sections might be construed as implicating fundamental public policy. The Legislature's declaration of purpose in section 23001
Assuming that Turner has identified ABI violations of state statutes implicating fundamental public policies, he has nonetheless fallen short of creating a triable issue on a cause of action for wrongful discharge in violation of fundamental public policy. Initially, Turner does not show that he was ever asked to participate in any illegal activity or that he was subjected to harassment for performing a statutory obligation or exercising a statutory right or privilege. (Gantt, supra, 1 Cal.4th at pp. 1090-1091.) Therefore, he cannot assert a wrongful discharge claim in the classic Tameny sense. (See Tameny, supra, 27 Cal.3d 167 [employee discharged for refusing to participate in illegal price-fixing scheme].) Thus, Turner's claim is limited to an assertion of "whistle-blower harassment," i.e., a contention that he was harassed and ultimately forced to quit because he reported to ABI "an alleged violation of a statute of public importance." (Gantt, supra, 1 Cal.4th at p. 1091.)
But Turner's claim of whistle-blower harassment fails because he cannot demonstrate the required nexus between his reporting of alleged statutory violations and his allegedly adverse treatment by ABI. Turner's reporting activity occurred some four to five years before the negative performance evaluations that Turner maintains caused him to quit. Indeed, contrary to the dissent, there is no indication in the record that management regarded Turner as a disloyal employee and troublemaker for his reporting of illegal activity. In response to Turner's complaints, ABI managers did not dismiss his concerns or admonish him to cease communication, but investigated and made their own determinations that illegal activity was not taking place. The ABI managers receiving Turner's reports were not on the scene when other ABI managers later found his performance less than satisfactory. Turner's performance evaluations and status within ABI were generally satisfactory
The only reasonable inference from the record before us is that Turner's evaluation reflected a bona fide assessment of his job performance, not a retaliatory blow for reporting alleged illegalities remote in time, place, and context from the evaluation setting.
For the reasons stated above, Turner's claim for constructive wrongful discharge in violation of fundamental public policy fails as a matter of law. The trial court was correct in granting summary judgment in ABI's favor. We therefore reverse the judgment of the Court of Appeal and direct a summary judgment in favor of ABI. ABI shall recover its costs.
Arabian, J., Baxter, J., and George, J., concurred.
I join in part I. of Justice Kennard's dissenting opinion. I agree, for reasons concisely stated therein, that an employer with constructive rather than actual knowledge of an employee's intolerable working conditions should not be able to escape liability for a constructive wrongful discharge.
I am also in accord with part II.C. of Justice Kennard's dissent. The facts and allegations of this case depict an employer who may have acted from a combination of motives, some legitimate, others not. It should be for the trier of fact to untangle this complex causal web to decide whether Turner's complaint about the company's illegal marketing practices in 1984 substantially contributed to his constructive discharge in 1988.
Nonetheless, I concur in the judgment of the majority because I agree that, as a matter of law, Turner did not suffer in his employment "actions and conditions ... so intolerable or aggravated at the time of the employee's resignation that a reasonable person in the employee's position would have resigned." (Brady v. Elixir Industries (1987) 196 Cal.App.3d 1299, 1306 [242 Cal.Rptr. 324].) I agree in principle with Justice Kennard that unjustified poor performance evaluations may, in the proper context, constitute an intolerable condition that would cause a reasonable employee to resign. The majority opinion does not declare otherwise. But, although an employee who believes he must look forward to a series of undeservedly negative performance evaluations that will blot his employment record and block his chances for advancement may be able to maintain a cause of action for
Moreover, the view that the conditions of Turner's workplace were not truly "intolerable" is reinforced by his statement that the resignation was dictated by strategic considerations in pursuit of future litigation. (Maj. opn., ante, at p. 1254.) This damaging admission confirms the picture that emerges from the record before us — and before the trial court — that Turner's allegations of intolerable conditions cannot be substantiated.
On this limited basis, I concur in the judgment of the majority.
First, I do not agree with the majority's modification of the established elements for a claim of constructive discharge in violation of public policy. The majority asserts that to succeed on such a claim, the employee must prove that the employer possessed actual and not merely constructive knowledge of the plaintiff's allegedly intolerable working conditions. By excluding constructive knowledge, the majority leaves the employer free to turn a blind eye to blatant and pervasive workplace abuses and to discourage or refuse to entertain employee complaints about intolerable workplace conditions and then claim lack of actual knowledge of the intolerable conditions as a complete defense to a wrongful discharge action. Analogous federal and state law, and considerations of sound public policy, support the constructive knowledge component of the established test for wrongful constructive discharge.
Second, I do not agree with the majority's conclusion that the employer in this case is entitled to summary judgment. Fairly read, the record of the trial court proceedings provides no basis for summary judgment.
I. CONSTRUCTIVE KNOWLEDGE
In Brady v. Elixir Industries (1987) 196 Cal.App.3d 1299, 1306 [242 Cal.Rptr. 324], the Court of Appeal identified the elements of a cause of action for wrongful constructive discharge in violation of public policy: "(1) the actions and conditions that caused the employee to resign were violative of public policy; [¶] (2) these actions and conditions 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 [¶] (3) facts and circumstances showing that the employer had actual or constructive knowledge of the intolerable conditions and of their impact on the employee and could have remedied the situation." (Italics added.)
Nevertheless, the majority disapproves this definition to the extent that it would allow proof of the employer's constructive rather than actual knowledge of the intolerable conditions that forced the employee to resign. I disagree.
At the outset, I note that the majority's entire discussion of this point is unnecessary because plaintiff is not proceeding on a theory that his employer had constructive rather than actual knowledge of his allegedly intolerable working conditions. As the majority acknowledges, in this context the term "employer" includes "supervisory employees." (Maj. opn., ante, p. 1255.) Thus, proof that plaintiff's immediate supervisors knew of his allegedly intolerable working conditions is sufficient. Here, plaintiff has alleged not only actual knowledge by his immediate supervisors, but also that they intentionally created the intolerable conditions in retaliation for his opposition to their actions and policies and for the purpose of forcing plaintiff's resignation.
The issue of constructive knowledge could arise only in a case in which the employee's plight is unknown not only to the employing company's management, but also to the affected employee's immediate supervisor, a situation that is not alleged in this case.
Nevertheless, because the majority has chosen to address the issue, and because its determination of the issue will no doubt be accepted as the law of California, I will respond.
Apart from the Court of Appeal's decision in Brady v. Elixir Industries, supra, 196 Cal.App.3d 1299, and the unanimous acceptance of that decision by this state's appellate courts, is there other substantial persuasive authority for the inclusion of an employer's constructive knowledge within the elements of constructive wrongful discharge? There is.
As the majority explains, federal courts have considered the elements of constructive wrongful discharge in the context of actions brought under title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.), and a clear majority of the federal appellate courts has rejected a requirement that the
To implement title VII, the Equal Employment Opportunity Commission (EEOC) has issued a variety of regulations, including guidelines on discrimination because of sex (29 C.F.R. § 1604.1 et seq. (1993)) and discrimination because of national origin (id., 1606.1).
This test for employer responsibility for the abusive acts of coworkers has been widely adopted by the federal courts, which have applied the test not only to acts of sexual harassment, but also to harassment on the basis of race, ethnic origin, and other prohibited grounds. Indeed, every federal appellate court that has considered the question has held that, absent prompt and appropriate corrective action, an employer is liable for a hostile workplace environment of which the employer has constructive knowledge. (Lipsett v. University of Puerto Rico (1st Cir.1988) 864 F.2d 881, 901 [applying title VII standard in a title IX case]; Kotcher v. Rosa and Sullivan Appliance Center, Inc. (2d Cir.1992) 957 F.2d 59, 63; Andrews v. City of Philadelphia (3d Cir.1990) 895 F.2d 1469, 1486; Paroline v. Unisys Corp. (4th Cir.1989) 879 F.2d 100, 107; Nash v. Electrospace System, Inc. (5th Cir.1993) 9 F.3d 401, 403; Kauffman v. Allied Signal, Inc., Autolite Div. (6th Cir.1992) 970 F.2d 178, 183; Juarez v. Ameritech Mobile Communications, Inc. (7th Cir.1992) 957 F.2d 317, 320; Hall v. Gus Const. Co., Inc. (8th Cir.1988) 842 F.2d 1010, 1015; Ellison v. Brady (9th Cir.1991) 924 F.2d 872, 881; Hirschfeld v. New Mexico Corrections Dept. (10th Cir.1990) 916 F.2d 572,
California law follows federal law on this point. Like title VII, the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.) prohibits workplace harassment on sexual, racial, and other grounds. When prohibited harassment by a coworker results in a hostile workplace environment, California law, like title VII, imposes liability on an employer who has constructive knowledge of the harassment, unless the employer has taken appropriate remedial action. In the words of the statute, "[h]arassment of an employee or applicant by an employee other than an agent or supervisor shall be unlawful if the entity, or its agents or supervisors, knows or should have known of this conduct and fails to take immediate and appropriate corrective action." (Gov. Code, 12940, subd. (h)(1), italics added.)
Under what circumstances might an employer (or its agents, including immediate supervisors) be said to have constructive knowledge of an employee's intolerable working conditions attributable to the actions of coworkers or subordinates? First, constructive knowledge exists when the intolerable conditions, or the improper practices that result in the intolerable conditions, are so obvious and pervasive that any reasonably attentive employer would notice them. (See E.E.O.C. v. Hacienda Hotel (9th Cir.1989) 881 F.2d 1504, 1516; Hunter v. Allis-Chalmers Corp., Engine Div. (7th Cir.1986) 797 F.2d 1417, 1422; Taylor v. Jones (8th Cir.1981) 653 F.2d 1193, 1199; Note, Sexual Harassment Claims of Abusive Work Environment Under Title VII, supra, 97 Harv.L.Rev. 1449, 1462, fn. 69; Lindemann & Kadue, Sexual Harassment in Employment Law, supra, pp. 242-244.) Second, constructive knowledge exists when the employer declines to read or listen to employee complaints, otherwise discourages employee complaints, or gives the employee no reasonably available means to complain. (See Kotcher v. Rosa and Sullivan Appliance Center, Inc., supra, 957 F.2d 59, 63;
The constructive knowledge component of the established test for wrongful constructive discharge is supported by logic, sound public policy, and analogous but persuasive authority under title VII. I would retain it.
II. SUMMARY JUDGMENT
Disagreeing with the Court of Appeal, the majority concludes that defendant was entitled to summary judgment because of "two fatal flaws" in plaintiff's claim for constructive discharge in violation of public policy. (Maj. opn., ante, p. 1253.) The asserted flaws are, first, insufficient proof that plaintiff's working conditions were intolerable at the time he resigned and, second, insufficient nexus between plaintiff's complaints about illegal activities and his adverse performance evaluations. To explain why the majority's conclusion is erroneous, I will review the pertinent facts and then discuss each of the claimed "fatal flaws."
Plaintiff's complaint includes a claim for constructive discharge in violation of public policy. In support of that claim, the complaint makes these allegations:
In January 1984, Anheuser-Busch, Inc. (ABI) hired plaintiff to work at its plant in Riverside. On or about January 31, 1989, plaintiff was forced to resign after his supervisors "lodged a campaign of harassment to create intolerable conditions and to constructively terminate plaintiff" because of plaintiff's opposition to various practices that plaintiff regarded as illegal or otherwise improper. These improper practices included: (1) violations of "Alcohol, Tobacco and Firearms laws"; (2) violations of collective bargaining agreement provisions concerning conflicts of interest, wages, benefits, and job security; (3) violations of company policies prohibiting family members and relatives working in the same department, and requiring temperature control of draught beer to prevent spoilage; and (4) manipulation of sales records to artificially improve the Riverside plant's performance compared to other ABI facilities.
To justify punitive action against plaintiff, plaintiff's supervisors solicited and encouraged coworkers to fabricate accusations against plaintiff and to document these false accusations, which could then be used in annual merit reviews. Plaintiffs' supervisors also harassed plaintiff by changing his work shift schedule to affect his service on a federal jury panel.
ABI employed plaintiff at its wholesale operations division (WOD) in Riverside from January 1984 until plaintiff's resignation on January 3, 1989. The Riverside WOD serves as a distribution center for the sale of ABI's beer and related products throughout Southern California. Plaintiff had previously worked for ABI as the industrial relations manager at its Los Angeles brewery in Van Nuys from 1975 to 1981.
George Liakos was the general manager at the Riverside WOD. He hired plaintiff in the position of branch off-premises coordinator with responsibility for the Riverside WOD's beer sales to retailers, such as liquor stores and supermarkets, that sell alcoholic beverages for consumption away from the retailers' premises. Plaintiff began work in January 1984. His immediate supervisor was William Schmitt, the sales manager, who reported directly to Liakos.
On his first performance appraisal, in June 1984, plaintiff received an overall rating of "good," which the appraisal form defines as "consistently dependable and competent performance of the job." The report was divided into 14 rating categories. Plaintiff received a "good" rating in 11 categories, a "very good" rating in 2 categories, and a "needs improvement" rating in 1 category. Schmitt performed the appraisal, and Liakos approved it.
On his next appraisal, in December 1984, plaintiff received an overall rating of "needs improvement," which the appraisal form defines as "performance which does not meet minimum level of acceptability, and is not good enough to warrant recognition or greater responsibility." He retained a "good rating" in five categories, and a "very good" rating in one category, but he received a "needs improvement" rating in eight categories. On this evaluation as well, Schmitt made the appraisal, and Liakos approved it.
The parties agree that the June 1984 evaluation was based solely on an objective evaluation of plaintiff's performance during the appraisal period, but they disagree about the reason for the "needs improvement" rating in the
During his deposition, plaintiff testified about the following incidents:
(1) Plaintiff received information that Schmitt had directed one employee (Elledge) to have some Anheuser-Busch jackets made and to provide them as gifts to an ABI customer (a liquor retailer). Believing this conduct to be in violation of state or federal law,
(2) Plaintiff received information that Schmitt had directed another employee (Newman) to give a different ABI customer tickets to professional baseball games. Plaintiff relayed this information to Bill Richards, the operations manager, who at the time was his supervisor.
(3) Schmitt encouraged ABI sales employees to remove competitors' advertising displays from retail liquor stores. At the morning meeting of the sales department, Schmitt would initial the purloined displays and award the responsible employee points toward "salesman of the month." During the course of the meeting, Schmitt would, in plaintiff's words, "take these things, some of these things that were particularly good and he would hold them up as documentation, identify the person who brought them in and give him an `atta boy.'" Based on briefings by ABI attorneys, plaintiff believed
(4) Plaintiff also complained to Schmitt about fabrication of company documents reflecting the number of times ABI representatives had called on customers. Schmitt's sarcastic reply, as related by plaintiff, was, "We'll call in a priest."
In July 1985, Liakos transferred plaintiff from the sales department to the delivery department, with no change in salary. The reason for the transfer is disputed. In his declaration, Liakos states that he transferred plaintiff because of plaintiff's performance problems in the sales department and because he believed plaintiff's background would be better utilized in the delivery area. By contrast, plaintiff's deposition reveals his conviction that he had performed competently in the sales department and that the transfer, like the adverse performance evaluation, was in retaliation for his complaints about the previously mentioned practices by Schmitt.
In his new position, plaintiff supervised the day-to-day activities of delivery department employees. His immediate supervisor was Steve Garcia, the delivery manager, and his second level supervisor was Bill Richards, the operations manager. Garcia reported to Richards, who in turn reported to Liakos. In performance evaluations in December 1985, December 1986, and November 1987 plaintiff received an overall rating of "good." Richards made the appraisals; Liakos approved them. It is undisputed that these evaluations were based solely on an objective evaluation of plaintiff's performance during the appraisal periods.
In his December 1988 performance appraisal, plaintiff received an overall rating of "needs improvement." The decline from the November 1987 appraisal was dramatic. In the earlier evaluation, plaintiff was rated "good" in eight categories, "very good" in six categories, and "excellent" in one category. He did not receive a single "needs improvement" rating in any of the 15 rating categories. In the December 1988 appraisal, by contrast, plaintiff was rated "needs improvement" in eight categories, and "good" in the remaining seven categories.
Plaintiff, by contrast, maintains that his performance never deteriorated below the level of "good" and that the "needs improvement" performance evaluation was part of a concerted effort of harassment in retaliation for plaintiff's continuing opposition to his superiors' improper practices. He states in his declaration that his supervisors did not question him about the alleged instances of poor performance at the time they occurred, and that Richards raised them for the first time on December 28, 1988. Plaintiff states that he denied the allegations when first confronted with them. As he explained in his deposition, he then believed he was being "set up" for termination; he testified that his supervisors had used similar tactics in the past with other employees, whom he named.
During his tenure with the delivery department, plaintiff complained to Riverside WOD management about actions he believed were in violation of ABI's union contracts. Specifically, he complained that ABI was violating its union contract by subcontracting the task of washing delivery trucks to a company owned by Garcia, the delivery manager, when this task should have been performed by ABI employees who were union members. Plaintiff complained to Garcia, Richards, and Liakos about this contract violation.
Plaintiff also informed Liakos about a provision of the union contract defining eligibility for what plaintiff described as "health and welfare benefits." Plaintiff told Liakos that ABI could be "in jeopardy" for withholding
Plaintiff also complained that the Riverside facility was not following ABI policies requiring temperature control of draught beer, with the result that the beer was in danger of spoilage.
On January 3, 1989, approximately one week after the discussion with Richards about his performance evaluation, plaintiff tendered his letter of resignation, effective January 31.
B. Intolerable Conditions
The essential elements of a claim for constructive discharge in violation of public policy are, as I have previously observed, the following: (1) working conditions so intolerable or aggravated that a reasonable person in the employee's position would have felt compelled to resign; (2) circumstances sufficient to establish the employer's responsibility for the intolerable conditions, and (3) circumstances showing that the discharge violated public policy. (Brady v. Elixir Industries, supra, 196 Cal.App.3d 1299, 1306.) The majority concludes that the state of the evidence relating to the first element — intolerable working conditions — warrants summary judgment for defendant ABI. I disagree. Although I would not characterize the evidence of intolerable conditions as "overwhelming," I am convinced it was sufficient to establish a triable issue of fact.
By itself, a single adverse performance review does not constitute intolerable working conditions, even when the low evaluation is unjustified. But the record here, viewed in the light most favorable to the party opposing summary judgment (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107 [252 Cal.Rptr. 122, 762 P.2d 46]), shows considerably more.
According to plaintiff, the adverse December 1988 performance review was not an isolated incident, but was part of a concerted campaign of harassment designed to force him to leave the company. He has provided some evidence to justify this assertion; defendant's contrary evidence does no more than establish the existence of a triable issue of fact.
Plaintiff suffered two adverse performance reviews, both of which followed plaintiff's complaints about actions of his supervisors that he considered illegal or otherwise improper. After the first adverse evaluation, he was
It is striking that after some four years in the delivery department, during which plaintiff received uniformly favorable evaluations, he suddenly received a negative evaluation. Plaintiff has explained this anomaly by stating that his performance did not change and that the charges against him were fabricated in retaliation for his opposition to practices in the delivery department. Defendant, by contrast, has offered no explanation for the sudden deterioration in plaintiff's performance that it claimed had occurred.
Plaintiff testified, without contradiction, that his supervisors had not discussed any of the instances of poor performance cited in the December 1988 evaluation at the time they allegedly occurred. This was contrary to normal and sound personnel practices, and it lends credence to plaintiff's belief that he was being "set up" for discharge.
Finally, plaintiff testified, again without contradiction, that Liakos had used the same or similar tactics with other employees who had opposed or reported improper activities at ABI's Riverside facility. This testimony further supports the conclusion that plaintiff was being "set up" for termination or discharge.
The question, then, is not whether one, or even two, adverse performance reviews justify an employee's decision to resign. Rather, the issue is whether a reasonable employee would find working conditions intolerable, and feel compelled to resign, when the employee's supervisors had launched a campaign to drive the employee out of the company by means of adverse performance evaluations, based on charges deliberately fabricated. Knowing that the poor evaluations would continue and would eventually lead to discharge, and knowing also that discharge would reduce the prospects of employment elsewhere, an employee of normal sensibilities might very well find the described situation intolerable. Because plaintiff presented substantial evidence to support this description of his predicament at the Riverside
As to the third element of the claim for constructive discharge in violation of public policy — circumstances showing that the discharge violated public policy — the majority asserts that if there was a constructive discharge in December 1988, uncontradicted evidence establishes that it was unrelated to the illegal activities that allegedly occurred in the sales department in 1984.
Plaintiff's complaints about illegal activities in the sales department promptly resulted in an adverse performance evaluation (in December 1984) and a transfer to the delivery department. Whether plaintiff was thereafter a "marked man" within the company is properly a jury question. Assuming that he was, I do not find it implausible that his supervisors allowed an interval of time to pass before stepping up a campaign of harassment designed to force plaintiff to resign or be fired. Indeed, this is exactly how one might expect a legally sophisticated employer to treat an employee it regards as disloyal.
Moreover, the record shows that the period between plaintiff's transfer to the delivery department and his December 1988 adverse performance evaluation was not uneventful. Plaintiff continued to oppose activities he regarded as improper. Although these activities did not violate fundamental public policy (see fn. 7, ante), they gave his superiors, and particularly Liakos, continuing grounds to regard plaintiff as a disloyal employee and a troublemaker. Thus, there is sound evidentiary support for plaintiff's belief that his final adverse evaluation was not based on an objective appraisal of his performance, but rather was made to force him out of the company in retaliation for his "disloyal" opposition to established practices at the Riverside WOD. If this is true, then the only issue as to "nexus" is whether the
The majority offers unpersuasive reasons for denying plaintiff a trial on the merits of his wrongful discharge claim. In my view, the claim is not suitable for summary judgment and should proceed to trial.
An employer who reasonably should know of intolerable workplace conditions, and who does nothing to correct them, should not escape liability when the intolerable conditions force an employee to quit. As I have explained, in reaching out unnecessarily to strike down the constructive knowledge component of the established test for constructive discharge, the majority diverts our state's employment jurisprudence from the judicial mainstream of American employment law.
In this case, moreover, the majority errs in directing summary judgment for the employer. Defendant employer failed to establish that plaintiff employee will be unable to prove any element of his constructive wrongful discharge claim at trial.
For these reasons, I dissent.
Woods (A.M.), J.,
Plaintiff also testified that Bosman, Hocking, Dunez (or Dunaj), and Peterson were four Riverside WOD employees whose merit reviews had been fabricated to encourage them to "terminate rather than be fired."