Tameny v. Atlantic Richfield Co. case brief

Tameny v. Atlantic Richfield Co.; (Sup Ct of CA, 1980); CB 339; Notes 41

Public policy exception to at-will employment

• Facts: Tamney alleges that Arco discharged him after 15 years of work because he refused to participate in an illegal scheme to fix retail gasoline prices. Plaintiff sought recovery from Arco on a number of theories, contending that Arco’s conduct in discharging him for refusing to commit a criminal act was tortuous and subjected the employer to liability for compensatory punitive damages under normal tort principles. Arco demurred to the complaint, contending that the plaintiff’s allegations, even if true, did not state a cause of action in tort. Arco conceded that California authorities establish that an employee who has been fired for refusing to perform an illegal act may recover from his employer for wrongful discharge. Arco contended, however, that the employee’s remedy in such cases sounds only in contract and not in tort.
• Holding: An employer’s authority over its employee does not include the right to demand that the employee commit a criminal act to further its interests, and an employer may not coerce compliance with such unlawful directions by discharging an employee who refuses to follow such an order. An employer engaging in such behavior violates a basic duty imposed by law upon all employers, and this employee who has suffered damages as a result of such a discharge may maintain a tort action for wrongful discharge against the employer. You can’t discharge someone for engaging in activities in furtherance of public policy-also can’t fire someone for refusing to do something that in contrary to public policy.