Plaintiff appeals the trial court’s orders in favor of defendants Oregon Beauty Supply Company (OBSC) and Lawrence Stebbeds on her claims of intentional interference with economic relations and outrageous conduct. Defendant Scott Stebbeds cross-appeals the trial court’s denial of his motion for a judgment nоtwithstanding the verdict or a new trial on plaintiffs interference claim.
Viewing the evidence in the light most favorable to plaintiff, it shows that she was an employe of OBSC. She worked directly for Lawrence Stebbeds, OBSC’s principal owner and manager. Lawrence’s son Scott supervised OBSC’s warehouse. Plaintiff began dating Scott. Later, when shе wanted to date other men, he became jealous. On one occasion, he became intoxicated and refused to allow her to leave a tavern. When she asked for help, a fight ensued. After that, she refused to date Scott. Thereafter, he began treating her in a hostile manner at work. 1 Several times daily, he stood outside her office and “glared” at her. He told coworkers that she was a drug addict and that she had given him a venereal disease. He cursed her, called her a whore, searched her personal belongings and threw things at her. He intentionally slammed a door into her. He refused to cooperate with her when she needed information from him about shipping and receiving to do her job. There also was evidence that Scott would “fling” paperwork and sample merchandise into her office. He told other employes that she would not be working at OBSC much longer.
Plaintiff complained to Lawrence. He agreed to talk to his son about the problem. When the harassment continued, plaintiff complained to another supervisor. That supervisor was already aware of the problem. She also agreed to talk to Scott. After doing so, the supervisor was “in tears.” The next week, she quit her job. Plaintiff met with Lawrence *666 again. He informed her that Scott was going to continue working at OBSC and that, if she did not like it, she could quit. Still, he discouraged her from quitting and, again, said that he would talk to his son. Nevertheless, the harassment continued. About six months after the harassment began, plaintiff asked Lawrence for time off to look for another job. She also asked him to keep Scott away from her. Lawrence told her that it would be best if she quit. She did so and then brought this action against OBSC, Scott and Lawrence for interference with her employment relationship and outrageous conduct.
The trial court granted OBSC a directed verdict on both of plaintiffs claims. ORCP 60. The court also granted Lawrence a directed verdict on plaintiffs outrageous conduct claim. The jury was instructed that, if it found in favor of plaintiff on her interference claim, it should not consider her outrageous conduct claim against Scott. Plaintiff did not object to that instruction.
The jury found against Lawrence and Scott on the interference claim and awarded $65,000 general damages. Additionally, it awarded $75,000 рunitive damages against Lawrence and $25,000 punitive damages against Scott. Thereafter, the trial court granted Lawrence’s motion for a judgment notwithstanding the verdict and denied Scott’s similar motion.
Because the issues on appeal involve vicarious liability for conduct involved in the cross-appeal, we address somе of the cross-appeal issues first. On cross-appeal, Scott contends, in what amounts to a jury argument, that the trial court erred in denying his motion for a judgment notwithstanding the verdict or a new trial on plaintiffs interference claim. He argues that plaintiff voluntarily quit her at will employment and that, thus, he did not interfere with her employment relаtionship with OBSC. Plaintiff argues that the jury was entitled to find that she did not voluntarily quit and that Scott materially interfered with her employment relationship with OBSC.
Oregon law recognizes a cause of action for intentional interference with economic relations.
Straube v. Larson,
“One who intentionally and improperly interferes with another’s prospective contractual relation (except a contract to marry) is subject to liability to the other for the pecuniary harm resulting from the loss of benefits of the relation, whether the interference consists of
“(a) inducing or otherwise causing a third person not to enter into or continue the prospective relation or
“(b) preventing the other from acquiring or continuing the prospective relation.”
The first question is whether an at will employment relationship can form the basis for a claim of intentional interference with an employment relationship. Comment g to section 766, the general section on interference with contractual relations, states that a contract terminable at will may form the basis for an interference claim. Although a party to an at will contract may have a right to terminate the contract, “[ujntil he has so terminated it, a contract is valid and subsisting, and the defendant may not properly interfere with it.” We conclude that an at will employment rеlationship may form the basis for an interference claim.
The next question is whether a cause of action for intentional interference with an employment relationship can exist if an employe quits. Restatement (Second) Torts § 766B supra, provides for recovery when the defendant induces or otherwise causes a third person to discontinue an emрloyment relationship or prevents that person from continuing an employment relationship. Scott argues that OBSC did not discontinue its relationship with plaintiff but that she voluntarily quit. 2 Plaintiff argues that to characterize her quitting as voluntary totally ignores the fact found by the jury that Scott’s conduct prevented her from working, thereby forcing her to quit.
In this context, to state a claim for interference with *668 аn employment relationship plaintiff first must show that OBSC terminated its employment relationship with her. Normally, an employe’s resignation is not regarded as a discharge. However, some jurisdictions recognize an exception when the employe is forced to resign.
“The law is not entirely blind, however. It is able, in most instances, to discard form for substance, to reject sham for reality. It therefore recognizes the concept of ‘constructive discharge’; in a proper case, it will overlook the fact that a termination was formally effected by a resignation if the record shows that the resignation was indeed an involuntary one, coerced by the employer.” Beye v. Bureau of National Affairs, 59 Md App 642, 649,477 A2d 1197 , rev den 301 Md 639 (1984).
The concept of constructive discharge arose in federal labor and discrimination cases. The theory developed in recognition of the fact that employers who did not want to risk discharging an employe when there was potential liability could simply force an employe to quit by making working conditions intolerable.
“If an employer directly discharges an at-will employee in such a manner as to make the discharge [wrongful] it would defy both reason and fairness to immunize him from liability simply because he has been clever enough to effect the abusive separation by forcing a resignation. That would, in effect, reward him fоr the extra measure of malefaction — of not only acting in contravention of some clearly mandated public policy but of making things so intolerable that the employee is forced to initiate his own unlawful termination.” Beye v. Bureau of National Affairs, supra, 59 Md App at 653.
Although this is not a wrongful discharge case, we find that analysis of the constructive discharge issue persuasivе. We conclude that the concept of constructive discharge is recognized in Oregon.
Jurisdictions that recognize the concept of constructive discharge have established different elements that the plaintiff must prove. Some hold that the employe must show that the employer’s actions were deliberate and taken with the intention of forcing a resignation.
See Johnson v. Bunny Bread Co.,
646 F2d 1250 (8th Cir 1981);
Muller v. United States Steel Corp.,
509 F2d 923 (10th Cir),
cert den
“An employer’s activities may be deemed to amount to a constructive discharge only if ‘the employer made conditions so intolerable that the employee reasonably felt compelled to resign.’ * * * The effect on the employee of the conditions imposed, not the employer’s intentions, governs the outcome.” Kelleher v. Flawn, 761 F2d 1079, 1086 (5th Cir 1985). (Emphasis in original.)
See also Shawgo v. Spradlin,
701 F2d 470 (5th Cir),
cert den sub nom Whisenhunt v. Spradlin,
In this case, the jury was entitled to find from the evidence that plaintiff was subjected to extraordinarily difficult and onerous working conditions. The harassment by Scott, his interference with her job performance and the refusal of her supervisors to do anything to remedy the situation presented her with working conditions so intolеrable that any reasonable person in her position would have felt compelled to quit. Plaintiff, in order to recover, was not required to bear the considerable emotional distress from intolerable circumstances until she was discharged.
To state a claim for interference, a plaintiff next must show that the defendant interfered for an improper purpose or used an improper means which resulted in injury to the plaintiff.
Straube v. Larson, supra,
Proceeding to the appeal, plaintiff first contends that the trial court erred in granting Lawrence a judgment notwithstanding the verdict on the interference claim. She argues that he is liable as a joint tortfeasor, both for acting in concert with Scott and for acquiescing in Scott’s conduct. Lawrence contends that he did everything that he could to resolve the problem. There was evidence presented аt trial that Lawrence was well aware of Scott’s conduct but that he did nothing to stop it. He told plaintiff that Scott would continue working at OBSC and that, if she did not like it, she could quit. The jury could find that Lawrence acted in concert with Scott in harassing plaintiff and that that harassment amounted to interference with her employment relationshiр with OBSC.
Lawrence argues, however, that, even if he did act in concert with Scott, he cannot be held liable, because he and OBSC are one in the same and OBSC cannot be held liable for interference with its own contract. We disagree. We address the issue of OBSC’s liability below. The evidence presented at trial showed only that Lawrence is the “vice principal” of OBSC. There was no evidence that he was the sole owner. 3 Thus, Lawrence is a mere agent of OBSC; he can be held personally liable for interference with plaintiffs relationship with OBSC. For that reason, the trial court erred in granting Lawrence a judgment notwithstanding the verdict on plaintiffs interfеrence claim.
Plaintiff next contends that the trial court erred in granting OBSC an involuntary dismissal on her interference claim. She argues that the company can be held vicariously liable for the interference of its employes. We disagree. There is liability only when a third party interferes in a contractual relationship. Although plaintiff seeks to hold the company vicariously liable rather than directly liable, we hold that a *671 company cannot be liable for interference with an employment relationship to which it is a party.
Plaintiff last contends that the trial court erred in granting Lawrence and OBSC an involuntary dismissal on her outrageous conduct claim. Shе argues that Lawrence’s conduct was outrageous because, as “vice principal” and her manager at OBSC and Scott’s direct supervisor, he was responsible for Scott’s outrageous conduct and he failed to stop it. She also argues that, by failing to stop Scott’s outrageous conduct, Lawrence acquiеsced in it and therefore, is liable for it. Finally, she argues that OBSC is vicariously liable for Scott’s and Lawrence’s conduct. The jury has not determined whether Scott’s conduct was outrageous, because it was instructed not to decide that issue. On this evidence, a reasonable jury could find that it was.
In an action based on vicarious liability, thе guilty employe need not be a party to the case. The finder of fact can find the conduct of the employe outrageous and hold the supervisor and employer liable without the employe being a party to the action.
See Vendrell v. School Dist No. 26C,
On the cross-appeal, Scott also contends that the trial court erred in denying his motion to strike plaintiffs claim for punitive damages and for judgment notwithstanding the verdict on that issue. He argues that the punitive damage award is an unconstitutional infringement of his right of free expression, Oregon Constitution, Article 1, section 8, because plaintiffs allegations deal with speech and therefore, punitive damages cannot be awarded.
See Hall v. The May Dept. Stores,
*672
Assuming that there is a limitation on the recoverability of punitive damages for torts consisting of expression,
but see Christofferson v. Church of Scientology,
Punitive damages can be awarded when a defendant’s conduct is sufficiently arbitrary or unconscionable.
See Chamberlain v. Jim Fisher Motors, Inc.,
Affirmed as to Oregon Beauty Supply Company on the interference claim; reversed and remanded with instructions to reinstate the verdict as to Lawrence Stebbeds on the interference claim; and reversed and remanded as to Lawrence Stebbeds and Oregоn Beauty Supply Company on the outrageous conduct claim; affirmed on cross-appeal.
Notes
In its summary of the facts, defendant Scott Stebbeds’ brief on cross-appeal states in relevant part:
“After plaintiff rejected [Scott’s] efforts to sustain a closer * * * relationship, [he] developed a dislike for plaintiff and demonstrated hostility toward her. [He] became ‘uncooperative’ and ‘belligerent’ and began a campaign of actions and conduct * * * which he directed at plaintiff at their place of employment. This campaign continued until plaintiff quit her employment.”
Cf. Springfield. Int. Restaurant v. Sharley,
Rao v. Rao, 718 F2d 219 (7th Cir 1983) relied on by Lawrence, is distinguishable. In that case the evidence unequivocally showed that the defendant was the sole owner of the professional corporation.