Green v. Ralee Engineering Co.

BAXTER, J.

I respectfully dissent.

For the past number of years, this court strove to contribute to a stable employment environment in California by holding that the public policy exception to the statutory right of employers to terminate employment at will (Lab. Code, § 2922 1 ) was a narrow one, dependent upon those fundamental public policies delineated in constitutional and statutory provisions. Today, the majority abruptly change course and dramatically expand the contours of the so-called “Tameny” claim (see Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167 [ 164 Cal.Rptr. 839 , 610 P.2d 1330 , 9 A.L.R.4th 314 ]) to include public policies supposedly expressed in statutorily authorized administrative regulations. While this, in itself, raises significant concerns of notice and burden to employers given the vast number of such regulations, what is particularly alarming about today’s decision is that a fired employee may assert the public policy exception based upon administrative regulations that do not even apply to the employer but instead regulate the conduct of entities doing business with the employer. Not surprisingly, the majority are unable to articulate any meaningful criteria for determining when a particular regulatory policy is both fundamental and sufficiently directed to a particular employer’s conduct to support a wrongful discharge claim. The result is a standardless rule that unfairly burdens employers and allows judges to enforce their own predilections for public policy whenever they can find some regulatory expression on the subject.

In Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083 [ 4 Cal.Rptr.2d 874 , 824 P.2d 680 ] (Gantt), this court held in no uncertain terms that the public policy exception to the right of an employer to terminate an employee at will must be found in either a constitutional or statutory provision. (Gantt, supra, 1 Cal.4th at p. 1095 .) Our decision to impose that limitation was driven by the concern, shared by a number of jurisdictions, that the concept of public policy is “notoriously resistant to precise definition.” {Ibid.) We determined that the vagueness of public policy as a concept was problematic for at least two reasons. First, individual judges could mistake their own predilections for public policy deserving recognition at law if courts were allowed to declare public policy absent some prior legislative expression on the subject. *92 (Ibid.) Second, employers had a legitimate interest in having the tort of wrongful discharge clearly defined and suitably controlled. (See 1 Cal.4th at pp. 1092, 1095.)

After due consideration of the conflicting decisional law and the competing interests at stake, this court rejected a broad approach and instead concluded that “[a] public policy exception carefully tethered to fundamental policies that are delineated in constitutional or statutory provisions strikes the proper balance among the interests of employers, employees and the public. The employer is bound, at a minimum, to know the fundamental public policies of the state and nation as expressed in their constitutions and statutes; so limited, the public policy exception presents no impediment to employers that operate within the bounds of law. Employees are protected against employer actions that contravene fundamental state policy. And society’s interests are served through a more stable job market, in which its most important policies are safeguarded.” (Gantt, supra, 1 Cal.4th at p. 1095 , italics added.)

Until today, we have followed Gantt consistently and have never questioned its conclusion that only a termination in violation of a fundamental public policy expressed in a statute or a constitutional provision would support a wrongful discharge action. (See Stevenson v. Superior Court (1997) 16 Cal.4th 880, 889 [ 66 Cal.Rptr.2d 888 , 941 P.2d 1157 ] (Stevenson); Jennings v. Marralle (1994) 8 Cal.4th 121, 130 [ 32 Cal.Rptr.2d 275 , 876 P.2d 1074 ] (Jennings); Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1257 [ 32 Cal.Rptr.2d 223 , 876 P.2d 1022 ] (Turner); Hunter v. UpRight, Inc. (1993) 6 Cal.4th 1174, 1186 [ 26 Cal.Rptr.2d 8 , 864 P.2d 88 ].) Just last year, we emphasized yet again that “tethering public policy to specific constitutional or statutory provisions serves not only to avoid judicial interference with the legislative domain, but also to ensure that employers have adequate notice of the conduct that will subject them to tort liability to the employees they discharge . . . .” (Stevenson, supra, 16 Cal.4th at p. 889 .) 2

So much for precedent. Today’s decision dispenses with Gantt’s carefully considered limits and years of established case law. Henceforth, a Tameny *93 claim may be predicated upon expressions of public policy contained in a wide array of statutorily authorized regulations, whether or not related to public safety concerns, 3 that do not even purport to regulate the conduct of the particular employer. But by choosing to “untether” the exception from fundamental public policies as directly expressed in constitutional and statutory provisions, the majority succeed in committing the precise sins that Gantt sought to avoid. Not only do they create a rule that fails to respect the legitimate interests of employers but they also interfere with legislative policy in doing so.

Under today’s rule, employers are deprived of adequate notice as to what conduct negates their right to terminate an at-will employee and exposes them to tort liability. As regulated employers are keenly aware, it is no small feat to keep abreast of all administrative regulations that govern their actions. Now, however, both regulated and nonregulated employers alike are expected to keep themselves fully informed of regulatory schemes applying to others. That is precisely the situation here. ( 14 C.F.R. § 21.143 (1998) [Federal Aviation Administration’s (FAA) certification procedures requiring prime manufacturers to submit data describing quality control inspection procedures].)

This court has already acknowledged the obvious lack of warning to employers with respect to regulatory statutes that do not apply to them: “It would be unreasonable to expect employers” to “realize that they must comply with the law from which they are exempted under pain of possible tort liability.” ( Jennings, supra, 8 Cal.4th at pp. 135-136.) Given the multitude of administrative regulations that are “routinely adopt[ed]” under express statutory authority (see maj. opn., ante, at p. 82), it is even more unreasonable and more inequitable to expect employers to know that the at-will nature of their employment relationships may be destroyed by rules that do not even regulate their conduct.

To justify their holding, the majority reason that “no reasonable parts manufacturer could read the applicable federal regulations and believe it was free to supply defective parts to airline companies.” (Maj. opn., ante, at p. 84, italics added.) The majority also conclude that “[b]y informing defendant that he believed it was shipping defective parts for use in passenger aircraft, plaintiff gave defendant adequate notice that his concern involved potentially significant public policy matters because the FAA requires manufacturers to establish quality control procedures for the component parts they *94 produce.'’’ (Maj. opn., ante, at p. 85, italics added.) Yet the majority never explain why a parts supplier such as defendant should have thought to focus upon a regulation pertaining to FAA certification and oversight of prime manufacturers. Indeed, the majority apparently are unable to identify any FAA regulation applicable to parts suppliers. 4

As the foregoing suggests, the majority fail to articulate any objective criteria or standards to determine when a regulatory provision sufficiently expresses a fundamental public policy with respect to a particular employer. At most, the facts and analysis in this case indicate that employees may negate the at-will nature of their employment simply by complaining to their superiors about breaches of contracts with regulated third party entities. 5 Such a result, however, is directly contrary to our previous holding that “[t]he tort of wrongful discharge is not a vehicle for enforcement of an employer’s internal policies or the provisions of its agreements with others.” (Turner, supra, 7 Cal.4th at p. 1257 .)

The ramifications of today’s decision are ominous. Employers, to avoid exposure to Tameny claims, must familiarize themselves with all statutorily authorized regulations of the nation and state applying to all of the entities with which they contract, as well as all such regulations applying to their own particular industries. The resulting burden to employers is tremendous and cannot be denied. Indeed, the majority make no attempt to do so.

Just as troubling is the majority’s intrusion upon the legislative domain in diminishing the statutory right of employers to terminate employees at will in the absence of any legislatively expressed fundamental public policy to *95 the contrary. I do not agree with the majority that section 1102.5 6 justifies their extension of the public policy exception to administrative regulations where, as here, the employee fails to report his suspicions to a governmental or law enforcement agency. (See maj. opn., ante, at p. 77.) In enacting section 1102.5, the Legislature made a policy judgment that employees deserve protection from employer retaliation when they go so far as to contact a public agency that will enforce the public’s interest on the matter. Unlike the majority, I see no basis for second-guessing that legislative judgment in a way that will otherwise allow regulatory violations to remain hidden from the view of public officials.

Setting aside any policy debate over the necessity of public disclosure, I observe that, even assuming for purposes of argument that the “quasi-legislative” expression of public policy in an administrative regulation deserves consideration equal to a statutory expression of policy for purposes of negating at-will employment, and even assuming that the FAA regulation at issue manifests a public policy that is fundamental, the majority overreach in finding that the regulatory policy extends to the defendant employer here.

As the majority acknowledge, “Congress has specifically directed the FAA to ‘assign[], maintain[], and enhanc[e] safety and security as the highest priorities in air commerce’ and to regulate air commerce ‘in a way that best promotes its . . . safety.’ ( 49 U.S.C. § 40101 (d)(1), (2).)” (Maj. opn., ante, at p. 90, italics added.) Following that directive, the FAA promulgated a regulation that requires prime manufacturers such as Boeing and Northrup to submit data describing quality control inspection procedures for airline parts and assemblies. ( 14 C.F.R. § 21.143 (1998).) The FAA has made clear, however, that the duty to ensure aircraft conformity with FAA safety regulations lies with the prime manufacturer, not suppliers such as defendant here. (Ibid.; see United States v. Varig Airlines (1984) 467 U.S. 797, 816-817 [ 104 S.Ct. 2755, 2765-2766 , 81 L.Ed.2d 660 ].)

Since the FAA determined that the public interest in ensuring quality control is best served by its oversight of prime manufacturers, it is presumptuous, to say the least, for this court to find in the subject regulation a fundamental public policy that extends to employers whose conduct the FAA has not chosen to regulate. (Cf. Jennings, supra, 8 Cal.4th at pp. 135-136.) On matters of fundamental public policy, it is not the function of judges to *96 substitute their own predilections in place of measured legislative (or quasi-legislative) judgment. I find it both ironic and disturbing that the majority caution lower courts against judicial policymaking while they themselves contribute to it.

The majority rely on several out-of-state cases to support their decision to allow wrongful discharge claims involving airline safety. But in those cases, there was no dispute that the particular employers and/or employees were subject to regulation by the FAA or that direct violations of FAA safety regulations were involved. (E.g., Anderson v. Evergreen Intern. Airlines, Inc. (1994) 131 Or.App. 726 [ 886 P.2d 1068, 1069, 1072-1073 ] [on review, court had to accept as true the plaintiff’s allegations that the defendant airline company’s operations were subject to regulation by the FAA and that the defendant ordered the plaintiff to act in violation of FAA regulations]; Norris v. Hawaiian Airlines, Inc. (1992) 74 Hawaii 235 [ 842 P.2d 634 ] [plaintiff was an FAA-licensed aircraft mechanic whose license did not permit him to authorize return of aircraft to service in violation of FAA regulations]; Air Lines Pilots Association, International v. Quesada (2d Cir. 1960) 276 F.2d 892 [suit by FAA-licensed airline pilots to enjoin FAA regulation forbidding commercial air carriers from utilizing pilots over age 60] 7 ) This court, then, appears to be the only one willing to allow employer liability in a situation where there is no showing of FAA oversight over the employer or employee and hence no evidence of a possible regulatory violation. (Cf. Adolphsen v. Hallmark Cards, Inc. (Mo.Ct.App. 1995) 907 S.W.2d 333 [plaintiff must specify the precise legal provision violated by the employer and the legal provision must involve a clear mandate of public policy].)

In closing, let me be clear. Like the majority, I strongly support motherhood, the American flag and commercial air safety. I also strongly agree with Congress’s recognition that air safety is of vital public importance. But that is not enough to justify the result here. As the majority implicitly conclude, the congressionally expressed policy to promote air safety, standing alone, is too generalized a mandate to make any enforcement of the policy practicable through employment-related litigation. Having reached that conclusion, the majority should put an end to the instant litigation in strict accordance with Gantt’s limits on the permissible sources of public policies for Tameny claims. Although the majority claim to see a “clearly mandated public policy” in a regulation that has no applicability to defendant, what I see is a clear case of judicial policymaking.

*97 By turning their backs on established precedent, the majority have opened the door to virtually limitless litigation in California over what was once a narrowly contoured exception to the legislatively declared general rule of at-will employment. One cannot deny there are thousands and thousands of administrative regulations that have been promulgated pursuant to state and federal statutes. That reality, coupled with the majority’s utter failure to provide any meaningful standards for determining when a regulatory provision sufficiently expresses a fundamental public policy with respect to a particular employer, makes it inevitable that the once-limited exception will become the general rule and effectively nullify the concept of at-will employment.

Since the majority’s lack of discipline undoes years of decisional law, I join Justice Brown in her call for this court to take a fresh look at the public policy exception and its underlying rationale.

Brown, J., concurred.

All further statutory references are to this code unless otherwise specified.

General Dynamics Corp. v. Superior Court (1994) 7 Cal.4th 1164 [ 32 Cal.Rptr.2d 1 , 876 P.2d 487 ] (General Dynamics) did not address the applicability of Gantt’s rule limiting public policy sources to constitutional and legislative provisions. To the extent the majority rely on General Dynamics to suggest that Gantt’s analysis did not exclude statutorily based administrative regulations as possible public policy sources, they are wrong. (See Gantt, supra, 1 Cal.4th at p. 1104 (conc. and dis. opn. of Kennard, J.).) Moreover, any confusion caused by General Dynamics was quickly dispelled by our subsequent statements in Stevenson, Jennings and Turner.

Although the instant case involves what the majority describe as “regulations promulgated to address important public safety concerns” (maj. opn., ante, at p. 74), their overruling of Gantt is absolute with respect to statutorily authorized regulations (maj. opn., ante, at p. 80, fn. 6). Accordingly, any “fundamental” regulatory policy affecting the public interest may now qualify as a basis for the public policy exception.

Although the majority vaguely claim that “[p]laintiff performed the FAA-required inspections on the parts intended for use in Boeing aircraft” (maj. opn., ante, at p. 82, italics added) and that the “internal quality control procedures at issue in this case are part of a statutory and regulatory scheme established by Congress and the FAA” (id. at p. 85, italics added), the record is devoid of any evidence supporting such claims. Plaintiff did not submit any evidence to counter defendant’s evidence that it was “not subject to any statutory or regulatory authority with respect to its inspection practices and documents,” and the most plaintiff has claimed is that Boeing ended its business relationship with defendant as a result of plaintiff’s post-termination complaints. (See post, fn. 5.) Noticeably missing is any legal authority or evidence showing that the FAA considers parts suppliers such as defendant to be subject to its oversight.

In addition to the facts recited by the majority, other evidence in the record shows that after plaintiff was fired he informed Boeing about defendant’s alleged shipping of “discrepant” parts. But the only reported consequence of plaintiff’s disclosure is that Boeing removed defendant from its list of approved suppliers. Plaintiff does not claim, and the record does not show, that the FAA ever investigated defendant’s practices or that it attempted to ban or discourage prime manufacturers from contracting with defendant. In short, the only demonstrated outcome of plaintiff’s complaints was that a private business relationship between two commercial entities was terminated.

This section, known as the “whistleblower” statute, provides in relevant part: “No employer shall retaliate against an employee for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or violation or noncompliance with a state or federal regulation.” (§ 1102.5, subd. (b).)

Air Lines Pilots Association, International v. Quesada, supra, 276 F.2d 892 , is inapposite for the additional reason that the appellate court simply addressed the validity of the particular FAA regulation and did not discuss whether the alleged facts could properly support a state wrongful termination suit.