Unpublished Disposition, 845 F.2d 1029 (9th Cir. 1988)

MEMORANDUM

Robert Glanville was employed by McDonnell Douglas as a senior field service engineer for product support. He provided on-site technical services to the branches of the armed forces that used McDonnell's aircraft.

McDonnell assigned Glanville to duty aboard the aircraft carrier USS Constellation. After two weeks aboard ship he received permission to leave because his performance was impaired by motion sickness. He informed McDonnell that he could not complete the carrier assignment.

McDonnell offered him an alternate assignment in Bagotville, Quebec, Canada. He rejected it. He said that it was unreasonable to leave the country because his wife was ill and required a special diet and continuous medication. McDonnell discharged Glanville after he refused to accept the carrier-based or Canadian assignments, or a transfer to another component or department.

Glanville's complaint against McDonnell, filed in California state court, alleged ten causes of action.¹  McDonnell removed for diversity, and moved for judgment on the pleadings.

It contended that each cause of action was a handicap discrimination claim, governed by California's Fair Employment and Housing Act (FEHA), Cal. Gov't Code Sec. 12900 et seq. (West 1980 & Supp.1988), which requires exhaustion of administrative remedies as the prerequisite to a civil action. It contended also that Glanville's fifth through eighth causes of action failed to state a claim for which relief could be granted.

The district court granted the motion to dismiss with prejudice, although it rejected expressly McDonnell's characterization of the complaint. It framed the issue as "whether the failure to take the land-based assignment constituted a valid cause for termination." The court analyzed the question under the doctrine of constructive discharge, and concluded "that even if plaintiff established all of the allegations of his complaint, it would not be legally sufficient to entitle him to the relief sought."

Glanville argues that the court erred, even if it correctly construed his complaint as an action for constructive discharge, because the complaint raises an issue of fact. He argues also that its conclusion would not impair his other claims alleging breach of implied covenants of good faith and fair dealing, and intentional and negligent infliction of emotional distress.

McDonnell contends that the court was correct and that, in the alternative, its ruling should be upheld because Glanville's claims are preempted by FEHA.² 

DISCUSSION

Dismissal of a complaint pursuant to Fed. R. Civ. P. 12(c) is reviewed de novo. Gearhart v. Thorne, 768 F.2d 1072, 1073 (9th Cir. 1985).

"Judgment on the pleadings may be granted only if, on the facts as to [sic] admitted, the moving party is clearly entitled to judgment." 2A Moore's Federal Practice p 12.15, at 12-106 (1987).

Although framed as a motion for judgment on the pleadings, the district court treated properly McDonnell's motion as one to dismiss for failure to state a claim upon which relief can be granted. See Aldabe v. Aldabe, 616 F.2d 1089, 1093 (9th Cir. 1980); Fed.R.Civ.Proc. 12(b) (6), (h) (2).

The burden of demonstrating that no claim has been stated is upon the movant. In determining the motion, the court must presume all factual allegations of the complaint to be true and all reasonable inferences are made in favor of the non-moving party.

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Generally, the allegations of the complaint are to be liberally construed.

After thus construing the complaint, the court should deny a motion to dismiss for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief."

Id. p 12.07 [.2-5], at 12-63 to 12-65 (citations omitted). We now consider Glanville's complaint under the 12(b) (6) standard.

FIRST CAUSE OF ACTION--BREACH OF IMPLIED PROMISE NOT TO

TERMINATE EXCEPT FOR CAUSE.

California recognizes a cause of action for wrongful discharge when an employer breaches an implied promise not to terminate without cause. See Pugh v. See's Candies, Inc., 116 Cal. App. 3d 311, 171 Cal. Rptr. 917 (1981). Glanville alleged that he was terminated in retaliation for his refusal to accept the carrier assignment and "to be used as an example to those who followed that such assignments could not be refused, regardless of the circumstances." Complaint at 7. He argues implicitly that he was terminated without cause. Yet he attached to the complaint a copy of McDonnell's offer of employment which provided:

You will be required to travel as directed to customer facilities to provide our customers with on-site technical assistance to improve the reliability and operation of McDonnell products.

Complaint at App.A.³ 

Our analysis focuses on the existence of cause to terminate. California courts have indicated:

In articulating "good cause," the court must balance the employer's interest in operating his business efficiently and profitably with the interest of the employee in maintaining his employment and the interest of the public in maintaining a proper balance between the two.

Crosier v. United Parcel Service Inc., 150 Cal. App. 3d 1132, 198 Cal. Rptr. 361, 366 (1983). Just cause or good cause connotes essentially " 'a fair and honest cause or reason, regulated by good faith on the part of the party exercising the power.' Care must be taken, however, not to interfere with the legitimate exercise of managerial discretion." Pugh, 171 Cal. Rptr. at 928.

Glanville's interest is obvious; McDonnell's may be more obscure.

Once an employee specifically accepts employment requiring definite assignments, the employer has a substantial interest in assuring that the employee performs them. This interest relates directly to efficiency and profitability. The employer is in the better position to determine the most effective means for maximizing efficiency and profitability, and its decisions in this realm must be accorded some deference.

Employers have limited resources allocable for personnel. Efficiency and profitability guide their allocation. An employer's ability to deploy its resources effectively would be thwarted if it could not terminate or reassign employees who refuse to perform assignments to which they agreed and for which they were hired.

Allowing employees to dictate their work assignments contrary to the better business judgment of the employer would intrude upon management's control of the business. Such a result would undermine the employer's goals of maximizing efficiency and profitability.

Glanville's interest does not outweigh McDonnell's. He may have what he considers to be legitimate reasons for refusing the assignments aboard ship or in Canada. But his complaint admits the on-site requirement of his position and his refusal to accept either assignment. In light of these admissions McDonnell had cause to terminate him.

Glanville also alleges that his termination was "to be used as an example to those who followed that such assignments could not be refused." Having concluded that McDonnell acted properly in terminating one refusing assignments, we find Glanville's use as an example no different from that of anyone terminated for wrongful behavior.

Glanville has not stated a claim because as a matter of law McDonnell had cause to terminate.

SECOND CAUSE OF ACTION--BREACH OF AN IMPLIED PROMISE, BASED

UPON INDEPENDENT CONSIDERATION, NOT TO TERMINATE

EXCEPT FOR CAUSE

Independent consideration may be the basis for enforcing a promise not to terminate except for cause. See Rabago-Alvarez v. Dart Indus., 55 Cal. App. 3d 91, 127 Cal. Rptr. 222, 225 (1976). But see Hillsman v. Sutter Community Hospitals of Sacramento, 153 Cal. App. 3d 743, 200 Cal. Rptr. 605, 610-11 (1984) (termination for cause must be found in express or implied contract or considerations of public policy).

In light of the previous discussion, Glanville has not stated a claim because McDonnell had cause to terminate.

THIRD CAUSE OF ACTION--BREACH OF IMPLIED COVENANT OF GOOD

FAITH AND FAIR DEALING

Breach of an implied covenant of good faith and fair dealing may preclude discharge without good cause. Gianaculas v. Trans World Airlines, Inc., 761 F.2d 1391, 1394 (9th Cir. 1985); Khanna v. Microdata Corp., 170 Cal. App. 3d 250, 215 Cal. Rptr. 860, 865-66 (1985).

In analyzing this cause of action, it is necessary to distinguish between the simple breach of an employment contract by discharge of the employee without good cause and a breach of the implied covenant of good faith and fair dealing affording tort remedies. If the employer merely disputes his liability under the contract by asserting in good faith and with probable cause that good cause existed for discharge, the implied covenant is not violated and the employer is not liable in tort. If, however, the existence of good cause for discharge is asserted by the employer without probable cause and in bad faith, that is, without a good faith belief that good cause for discharge in fact exists, the employer has tortiously attempted to deprive the employee of the benefits of the agreement and an action for a breach of the implied covenant of good faith and fair dealing will lie.

Koehrer v. Superior Court, 181 Cal. App. 3d 1155, 226 Cal. Rptr. 820, 829 (1986) (emphasis added); see also Huber v. Standard Ins. Co., No. 86-5620, slip op. at 3221-22 (9th Cir. Mar. 11, 1988). Whether the implied covenant has been breached is a factual question, not an issue of law. See Khanna, 215 Cal. Rptr. at 868.

We must examine Glanville's complaint to determine if his allegations, accepted as true, are sufficient to state a cause of action. He alleged:

"As a result of the employment relationship ... [McDonnell] covenanted and promised to act in good faith toward and deal fairly with plaintiff and concerning all matters related to said employment so as not to deprive plaintiff of or injure his right to receive the benefit of said relationship."

McDonnell's termination of Glanville "was wrongful, in bad faith, unfair, and breached the implied-in-law covenant of good faith and fair dealing."

Complaint at 15. This claim fails for two reasons.

Glanville has misinterpreted the scope of the covenant. The analysis does not focus on the cause for termination, but on whether the employer had a good faith belief for the discharge. The complaint does not allege facts sufficient to establish that Glanville was discharged in bad faith.

This cause of action must be dismissed because the existence of good cause to terminate renders the discharge, by definition, not in bad faith. Fowler v. Varian Assoc., Inc., 196 Cal. App. 3d 34, 241 Cal. Rptr. 539, 543 (1987).

FOURTH CAUSE OF ACTION--BREACH OF PUBLIC POLICY

Employees (including at-will employees) may recover for wrongful discharge if the "discharge clearly violated an express statutory objective or undermined a firmly established principle of public policy." Hentzel v. Singer Co., 138 Cal. App. 3d 290, 188 Cal. Rptr. 159, 162 (1982); Tameny v. Atlantic Richfield Co., 27 Cal. 3d 167, 610 P.2d 1330, 164 Cal. Rptr. 839, 840 (1980).

Allegations of retaliatory discharge for protesting work conditions as hazardous to the employee's health and safety will support a wrongful discharge action. See Hentzel, 188 Cal. Rptr. at 161-68. Hentzel involved a protest of hazardous working conditions caused by co-workers smoking in the workplace. The complaint alleged that Hentzel was discharged for his " 'attempt to obtain a reasonably smoke-free environment,' " and that "the presence of cigarette smoke in closed environments creates a significant health hazard to those who are present in the environment." 188 Cal. Rptr. at 161. The court concluded that Hentzel's complaint stated a cause of action for unlawful retaliatory discharge.

The foundation for Hentzel's claim was a statutory scheme to assure employee's safety in the workplace.⁴  The rationale for recognizing his action was to further the policies behind that scheme:

Achievement of the statutory objective--a safe and healthy working environment for all employees--requires that employees be free to call their employer's attention to such conditions, so that the employer can be made aware of their existence, and given opportunity to correct them if correction is needed.

188 Cal. Rptr. at 164. Despite some seeming similarities with Hentzel, we conclude that the complaint here does not state a cognizable claim.

Paragraph 21 of the complaint contains the operative allegations.⁵  It alleges generally that Glanville was terminated for his conduct "in protesting and refusing to accept an assignment hazardous to his health and safety." Fatal to this claim is the failure to allege conditions aboard the USS Constellation that could be considered hazardous. The complaint is completely silent as to working conditions.

The gravamen of the complaint is that the carrier assignment was hazardous only because of his susceptibility to motion sickness. At best, his allegations amount to a claim for wrongful discharge due to protests about an assignment that was unpleasant or unhealthy because of the employee's personal medical condition. His claim is distinguishable from that in Hentzel which involved a protest over working conditions which were allegedly hazardous to all exposed employees, and which could be corrected by the employer.

The rationale that supported the action in Hentzel does not support Glanville's claim. Concerns over a healthy and safe working environment are not implicated here.

FIFTH CAUSE OF ACTION--INTENTIONAL INFLICTION OF EMOTIONAL

DISTRESS

Allegations of " 'extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress' " are essential to a cause of action for intentional infliction of emotional distress. See Prevost v. First Western Bank, 193 Cal. App. 3d 1492, 239 Cal. Rptr. 161, 168 (1987) (citations omitted).

Outrageous conduct is that which is " 'so extreme as to exceed all bounds of that usually tolerated in a civilized community.' " Fowler, 241 Cal. Rptr. at 545 (citations omitted). We have identified recently factors that California courts use to define outrageous conduct:

Behavior may be considered outrageous if a defendant (1) abuses a relation or position which gives him power to damage the plaintiff's interests; (2) knows the plaintiff is susceptible to injuries through mental distress; or (3) acts intentionally or unreasonably with the recognition that the acts are likely to result in illness through mental distress.

Huber v. Standard Ins. Co., No. 86-5620, slip op. at 3226 (9th Cir. Mar. 11, 1988) (quoting Wallis v. Superior Court, 160 Cal. App. 3d 1109, 207 Cal. Rptr. 123 (1984)). Before allegations of outrageous conduct may be presented to a fact-finder, the court must first determine " 'whether the defendant's conduct may reasonably be recognized as so extreme and outrageous as to permit recovery.' " Fowler, 241 Cal. Rptr. at 545 (citations omitted).

The gist of Glanville's allegations are:

1) McDonnell knew of Glanville's life-long problem with severe motion sickness, and knew that he narrowly escaped serious injury in an accident aboard the Constellation.

2) It knew also that his wife was seriously ill, requiring a special diet and continuous medical supervision and treatment.

3) In light of this knowledge, McDonnell offered as the sole alternative to shipboard assignment, an assignment out of the country in a remote area. The out of country assignment is known throughout the division as a disciplinary assignment.

4) An agent of McDonnell refused to forward the Navy's request that Glanville's employment be extended beyond the proposed termination date.

Complaint at 22-23.

McDonnell may have been insensitive to the difficult choices faced by Glanville, but we cannot say the allegations amount to outrageous conduct.⁶ 

SIXTH CAUSE OF ACTION--NEGLIGENT INFLICTION OF EMOTIONAL

DISTRESS

Negligent infliction of emotional distress is predicated upon the existence of a duty of care and breach of that duty. See Taylor v. California State Auto Ass'n, 194 Cal. App. 3d 1214, 240 Cal. Rptr. 107, 113 (1987); Williams v. Transport Indem. Co., 157 Cal. App. 3d 953, 203 Cal. Rptr. 868, 875 (1984). It requires objectively verifiable actions on the part of the defendant which would foreseeably elicit "serious emotional responses in the plaintiff and hence serve as a measure of the validity of plaintiff's claims for emotional distress." See Molien v. Kaiser Foundation Hospitals, 27 Cal. 3d 916, 167 Cal. Rptr. 831, 839 (Cal.1980) (In Bank).

Glanville does not allege facts from which to infer a duty owed by McDonnell, or allege that emotional distress was reasonably foreseeable. Absent these, this cause of action must be dismissed.

SEVENTH CAUSE OF ACTION--BREACH OF FIDUCIARY DUTY

To state a claim, Glanville's complaint must allege facts sufficient to support the existence of a fiduciary duty.

California courts have refrained from placing strict limits on the definition of a fiduciary relationship. Committee on Children's Television v. General Foods Corp., 35 Cal. 3d 197, 197 Cal. Rptr. 783, 798-99, 673 P.2d 660 (1983). Yet the California Supreme Court has said:

It would appear, however, that before a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law.

Id. Fiduciary duties extend to certain recognized legal relationships, such as: guardian and ward, trustee and beneficiary, principal and agent, and attorney and client. See Barbara A. v. John G., 145 Cal. App. 3d 369, 193 Cal. Rptr. 422, 431 (1983).

Glanville alleges "a fiduciary duty arising from plaintiff having placed trust and confidence in the fidelity and integrity of defendant CORPORATION in entrusting Plaintiff with the authority to act as a Senior Field Service Engineer." Complaint at 25.

There are no allegations that McDonnell undertook to act on behalf of Glanville. Nor has California imposed a fiduciary duty upon employers except with respect to employee pension plans. See Odorizzi v. Bloomfield School Dist., 246 Cal. App. 2d 123, 54 Cal. Rptr. 533, 539 (1966); see, e.g., Melander v. Hughes Aircraft Co., 235 Cal. Rptr. 593, 194 Cal. App. 3d 542 (1987). The complaint does not allege facts sufficient to support a fiduciary relationship.

EIGHTH CAUSE OF ACTION--FRAUD AND DECEIT; NEGLIGENT

MISREPRESENTATION OF FACT

An action for negligent misrepresentation rests on a "misrepresentation of past or existing material fact." See Fox v. Pollack, 181 Cal. App. 3d 954, 226 Cal. Rptr. 532, 537 (1986).

The complaint alleges: "On or about September 28, 1965, Defendant CORPORATION falsely represented to Plaintiff that after one year, Plaintiff's employment would become permanent (See Exhibit "A") and continuously implied that Plaintiff would be terminated only for just cause." Complaint at 28.

McDonnell had cause to terminate. There was no misrepresentation. This cause of action must be dismissed.

CONCLUSION

Glanville has not alleged facts which if proved would entitle him to relief. The order dismissing his complaint is AFFIRMED.