West Hollywood Employment Attorneys

An employee who was fired from his position as a pilot following a job review brought tort suit against employer and coworkers. The wrongful discharge claim against the employer was dismissed after removal to federal court, and the tort claims against coworkers were remanded. The Superior Court, San Diego County, No. 686819, Judith McConnell, J., sustained some coworkers’ demurrers to complaint without leave to amend and entered summary judgment in favor of other coworkers. The mployee appealed. The Court of Appeal, McIntyre, J., held that: (1) employee could not hold coworkers individually liable for their conduct related to personnel action against him, absent statutory exception, and (2) as right to sue for libel was governed by statute, claim for libel was not barred.  The Court’s opinion included the following language regarding coworker liability: We note that the issue at hand does not fall within the specific purview of Foley. Foley limited tort claims arising out of the termination of an employment relationship, holding that an employee has an actionable claim only where the employer’s conduct violates public policy. (See, e.g., Foley v. Interactive Data Corp., supra, 47 Cal.3d at pp. 669–670, 254 Cal.Rptr. 211, 765 P.2d 373; Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1090, 4 Cal.Rptr.2d 874, 824 P.2d 680.) Indeed, to support a tort action for wrongful discharge, “the policy in question must involve a matter that affects society at large rather than a purely personal or proprietary interest of the plaintiff or employer,” and must be “fundamental” and “substantial,” as well as “well established” at the time of the discharge. (Stevenson v. Superior Court (1997) 16 Cal.4th 880, 889, 66 Cal.Rptr.2d 888, 941 P.2d 1157, quoting Foley v. Interactive Data Corp., supra, 47 Cal.3d at pp. 669–670, 254 Cal.Rptr. 211, 765 P.2d 373.) However, these concerns pertain to employer liability to an employee, not to liability of coemployees. (See Jacobs v. Universal Development Corp. (1997) 53 Cal.App.4th 692, 704, 62 Cal.Rptr.2d 446 [only an employer can be liable for tortious discharge].)  Thus, we have found little analysis of coworker liability under the principles of Foley and its progeny. However, we recognize the deleterious effects on business if disciplined employees may avoid Foley ‘s bar by simply alleging malice and suing coemployees **16 for damages on alternative *345 tort theories, when the identical personnel action cannot give rise to tort damages against the employer. Indeed, Jensen v. Hewlett–Packard Co. (1993) 14 Cal.App.4th 958, 965, 18 Cal.Rptr.2d 83, observes that, under Foley, the proper remedy against an employer for alleged falsified performance reviews is an action in contract. Hunter v. Up–Right, Inc., supra, 6 Cal.4th at page 1185, 26 Cal.Rptr.2d 8, 864 P.2d 88, expressly embraces the proposition that false statements cannot serve as a predicate for tort damages otherwise unavailable under Foley. Here, all Sheppard’s claims arise from the termination, which he alleges was caused by a conspiracy of false reporting by coemployees. There is no suggestion in the record of any violation of public policy under Foley. To the contrary, the employee evaluation and reporting system which led to Sheppard’s termination from Southwest would appear to advance both corporate and public interests in safety. (49 U.S.C. § 44701(d).) Allowing coworkers to suffer liability would be anomalous under such circumstances. The doctrine of respondeat superior also illustrates the inappropriateness of imposing liability on coworkers who participate in personnel actions, rather than on the employer. We start with the premise that personnel actions are a sine qua non of any business operation: “In order to properly manage its business, every employer must on occasion review, criticize, demote, transfer and discipline employees … [yet e]mployees may consider any such adverse action to be improper and outrageous.” (Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 160, 233 Cal.Rptr. 308, 729 P.2d 743.) With this in mind, it is axiomatic that respondeat superior allocates risks based on policy, rather than on fault, and arises from “a deeply rooted sentiment” that it would be “unjust for an enterprise to disclaim responsibility for injuries occurring in the course of its characteristic activities.” (Mary M. v. City of Los Angeles (1991) 54 Cal.3d 202, 208, 285 Cal.Rptr. 99, 814 P.2d 1341.) Indeed, the California Supreme Court has repeatedly emphasized the central justification for respondeat superior liability: “losses fairly attributable to an enterprise—those which foreseeably result from the conduct of the enterprise—should be allocated to the enterprise as a cost of doing business.” (Lisa M. v. Henry Mayo Newhall Memorial Hospital (1995) 12 Cal.4th 291, 299, 48 Cal.Rptr.2d 510, 907 P.2d 358, quoting Farmers Ins. Group v. County of Santa Clara (1995) 11 Cal.4th 992, 1004, 47 Cal.Rptr.2d 478, 906 P.2d 440.) Based on a similar rationale, the Supreme Court recently held that individual supervisory employees cannot be personally liable under the Fair Employment and Housing Act (FEHA) (Gov.Code, § 12900 et seq.) or for discharge in violation of public policy for discrimination relating to personnel management decisions. *346 (Reno v. Baird (1998) 18 Cal.4th 640, 76 Cal.Rptr.2d 499, 957 P.2d 1333.) There, the court stated: “We do not decide merely whether individuals should be held liable for their wrongdoing, but whether all supervisors should be subjected to the ever-present threat of a lawsuit each time they make a personnel decision. Litigation is expensive for the innocent as well as the wrongdoer.” (18 Cal.4th at p. 663, 76 Cal.Rptr.2d 499, 957 P.2d 1333.) It concluded that in limiting the threat of lawsuit to the employer, a balance was being struck “between the goals of eliminating discrimination in the workplace and minimizing the debilitating burden of litigation on individuals.” (Ibid.) Such a balance must also be achieved in the employment arena outside the context of FEHA, and for all employees, whether or not they are supervisors. Personnel actions are made for the benefit of the enterprise—the employer, and it is the employer, not the individual employees, that must bear the risks and responsibilities attendant to these actions. Naturally, personnel actions are made with the input of employees, both as part of their official duties and otherwise. **17 Without such input, the employer would be making decisions and taking action in a vacuum, and indeed, effective management and operation of an enterprise to a significant extent depends upon the free exchange of information, concerns, and ideas of all employees. This can hardly occur when the individual employees face the prospect of being sued for this conduct. Some of the information exchanged will be incorrect, even maliciously so. Thus, it will behoove the employer to be thorough in its investigation and analysis relating to personnel actions, not only to avoid civil liability (see Cotran v. Rollins Hudig Hall Internat., Inc. (1998) 17 Cal.4th 93, 107, 69 Cal.Rptr.2d 900, 948 P.2d 412 [employer must conduct good faith investigation regarding basis for discharging employee] ) and costly grievance procedures, but to retain and reward good employees and to root out those who are dishonest or who act with ulterior motives which undermine the effective operation of the company.