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Featured Wrongful Termination Case

Green v. Ralee Eng’g Co., 19 Cal. 4th 66, 960 P.2d 1046 (1998)

A terminated employee of a manufacturer of aircraft components sued his former employer for wrongful termination, alleging retaliation for his complaints about the employer’s inspection practices.  The terminated employee argued that his complaints served a broad public policy favoring aviation safety, entitling him to sue for wrongful dismissal despite the fact that he was an at-will employee. The trial court granted summary judgment and threw out the case.  The Court of Appeal reversed the trial court. The California Supreme Court held that: (1) wrongful termination cases involving a Tameny cause of action under public policy exception to right of employer to discharge at-will employee are limited to those claims finding support in an important public policy based on a statutory or constitutional provision, but fundamental public policy may be enunciated in administrative regulations that serve the statutory objective; (2) federal safety regulations promulgated to address important public safety concerns may serve as requisite source of fundamental public policy; (3) regulations implementing the Federal Aviation Act by promoting the proper manufacture and inspection of component airline parts are such a source; (4) employee met his burden to provide the specific statutes and regulations on which he based his claim; (5) employee gave employer adequate notice that his concern involved potentially significant public policy matters; and (6) regardless of whether employer legally violated the regulations, employee’s suspicion that it had done so was “reasonably based.”

The Supreme Court’s opinion was very important in many respects because it discussed in great detail claims for wrongful termination in violation of public policy, and summarized the leading cases on point: “In Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 669 (Foley), we underscored the term “public” in Tameny ‘s public policy exception by observing that the employee’s actions must further a policy affecting the public interest, which must be fundamental or substantial when the company discharges the employee. Foley, supra, 47 Cal.3d at p. 670, fn. 11. In rejecting a tort claim based on an employee’s discharge after he reported to management his supervisor’s history of embezzlement, we held that alleged violations of internal practices that affect only the employer’s or employee’s interest, and not the general public’s interest, will not give rise to tort damages. Foley, supra, 47 Cal.3d at pp. 669–671. In other words, courts must focus not on compensation to employees, but rather on the “general social policies being advanced.” Foley, supra, 47 Cal.3d at p. 668.  Even then, not all statutes (or constitutional provisions) will support a Tameny claim. “[M]any statutes simply regulate conduct between private individuals, or impose requirements whose fulfillment does not implicate fundamental public policy concerns.” Foley, supra, 47 Cal.3d at p. 669. In discussing whether an employee’s Tameny claim could state a discharge that actually implicated public policy, we held that “[t]he absence of a distinctly ‘public’ interest in this case is apparent when we consider that if an employer and employee were expressly to agree that the employee has no obligation to, and should not, inform the employer of any adverse information the employee learns about a fellow employee’s background, nothing in the state’s public policy would render such an agreement void. By contrast, in the previous cases asserting a discharge in violation of public policy, the public interest at stake was invariably one which could not properly be circumvented by agreement of the parties. For example, in Tameny, supra, 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330, a contract provision purporting to obligate the employee to comply with an order of the employer directing the employee to violate the antitrust laws would clearly have been void as against public policy…. Because here the employer and employee could have agreed that the employee had no duty to disclose such information, it cannot be said that an employer, in discharging an employee on this basis, violates a fundamental duty imposed on all employers for the protection of the public interest.” Foley, supra, 47 Cal.3d at pp. 670–671, fn. 12.

In Gantt, we discussed further the requirements for a wrongful discharge claim alleging a public policy violation. Gantt considered whether an employee stated a cause of action for wrongful discharge against public policy after his employer terminated him in retaliation for supporting a coworker’s sexual harassment claim. Gantt, supra, 1 Cal.4th at pp. 1087–1089. The court recognized that public policy cases fall into one of four categories: the employee (1) refused to violate a statute; (2) performed a statutory obligation; (3) exercised a constitutional or statutory right or privilege; or (4) reported a statutory violation for the public’s benefit. Id. at pp. 1090–1091. After observing that all four categories involved statutory provisions, Gantt allowed the plaintiff’s claim, but specifically limited Tameny ‘s application to those cases in which a plaintiff’s public policy source is “tethered to” either a specific constitutional or statutory provision. Gantt, supra, 1 Cal.4th at p. 1095. Gantt also observed that, in order to provide an exception to section 2922 ‘s at-will mandate, the policy must be “public” in that it “affects society at large” rather than the individual, must have been articulated at the time of discharge, and must be “ ‘fundamental’ ” and “ ‘substantial.’.. Gantt ‘s limitation on public policy sources (that they must be supported by either constitutional or statutory provisions) grew from our belief that “ ‘public policy’ as a concept is notoriously resistant to precise definition, and that courts should venture into this area, if at all, with great care and due deference to the judgment of the legislative branch” in order to avoid judicial policymaking. Gantt, supra, 1 Cal.4th at p. 1095.  Green v. Ralee Eng’g Co., 19 Cal. 4th 66, 75–76, 960 P.2d 1046, 1051–52 (1998).

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