Lead Opinion
Opinion
After Christopher G. Sheppard was fired from his job with Southwest Airlines (Southwest), he sued both Southwest and coworkers Lou Freeman, Roni Hardiman, Alan Godfrey, Jon Tree, and Rod Jones, individually, for their alleged conduct relating to his termination. The trial court entered judgment in favor of the coworkers, after sustaining demurrers without leave to amend in favor of some and granting summary judgment in favor of others. Sheppard appeals, contending he may sue his coworkers for interference with contract and prospective economic advantage, libel, and infliction of emotional distress, based on their having falsely reported to Southwest that he was incompetent.
We hold that except where a statutory exception applies, an employee or former employee cannot sue other employees based on their conduct relating to personnel actions. We note that the right to sue for libel is governed by statute, and that the Legislature has prescribed the circumstances under which this cause of action and the defenses and privileges pertaining thereto, may lie. (See Civ. Code, §§ 43, 45, 47-48.) Thus, we reverse the judgment as it pertains to Sheppard’s claim for libel. We affirm the judgment as to all other causes of action.
Factual and Procedural Background
After four and one-half years as a first officer pilot for Southwest, Sheppard was terminated in June 1994 after he failed Southwest’s mandatory captain upgrade, as provided by the collective bargaining agreement between Southwest and the Southwest Airlines Pilot’s Association.
Sheppard filed a grievance under the collective bargaining agreement over his termination. He claimed that evaluations of his performance had been falsified in an elaborate conspiracy among his coworkers, which caused him to fail to be upgraded to captain and ultimately caused his termination. Specifically, Sheppard contended that another pilot, Freeman, had had an extramarital affair with Hardiman, a flight attendant with whom Sheppard had had a bitter argument. After the argument, Hardiman harbored ill will toward Sheppard and used her influence over Freeman to secure his assistance in attempting to have Sheppard fired. Freeman then enlisted Tree, Jones and Godfrey (who was one of his subordinates) in the conspiracy, and they purportedly recruited other “check airmen” to fail Sheppard during his performance evaluations, which resulted in his termination. However, after a two-day hearing, an arbitration tribunal rejected Sheppard’s claims and upheld his termination.
Sheppard then filed a verified complaint arising from his termination against Southwest and his coworkers. Southwest removed the case to federal court, where the action against it for wrongful termination was dismissed as preempted by the Railway Labor Act. (45 U.S.C. § 151 et seq.) However, the court held that the act did not preempt Sheppard’s tort claims against individual defendants, and remanded those claims to the superior court.
In the superior court, Jones and Tree filed demurrers and motions to strike, while Freeman, Hardiman and Godfrey filed answers and sought summary judgment. The trial
Discussion
Disposition of this appeal turns on our resolution of an issue of first impression: whether an employee or former employee can sue other coemployees individually based on their conduct relating to personnel actions, e.g., termination, demotion, discipline, transfers, compensation setting, work assignments, and/or performance appraisals. We conclude that except where mandated by statute, such actions are barred, whether or not the employees are determined to have been acting within their scope of employment and regardless of their personal motives.
The Holding of the Trial Court
The trial court sustained the demurrers brought by Tree and Jones without leave to amend, in part because it deemed that claims against coworkers for conduct related to Sheppard’s termination were barred by Foley v. Interactive Data Corp. (1988)
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; Gantt v. Sentry Insurance (1992)
Thus, we have found little analysis of coworker liability under the principles of Foley and its progeny.
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)
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. (Reno v. Baird (1998)
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.
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)
This does not guarantee that some cases will not “fall through the cracks.” Some employees will be discharged or demoted based on incorrect or false information from other employees that is not discovered by the employer through a good faith investigation, or revealed through grievance procedures.
The interest in allowing all employees the freedom to act and speak in relation to personnel actions without the threat of debilitating litigation outweighs the risk that a few employees will act maliciously and go undetected by their employers. Accordingly, we hold that an employee or former employee cannot sue individual employees based on their conduct, including acts or words, relating to personnel actions.
“Scope of Employment”
Here, Sheppard alleged in boilerplate language in his verified complaint that all the defendants were agents and employees of each other and acting within the scope of their employment. Later, he sought to amend his complaint to allege that the defendants were acting outside their scope of employment. The court denied this .motion, and granted summary judgment, ruling that Sheppard had failed to create a triable issue as to whether Hardiman, Freeman and Godfrey were acting outside the scope of their employment. Sheppard contends this ruling was error and that the court also erred in denying his motion to amend.
These contentions are moot, however, because our holding does not depend on whether an employee is determined to have been acting within his scope of employment while engaged in conduct relating to a personnel action. Although the “scope of employment” limitation may have facial appeal, this test undermines the purpose and balance struck in insulating employees from personal liability in order to allow, and indeed, encourage, employees to act and speak in relation to personnel actions. Otherwise, whether
Moreover, all employees, regardless of their job descriptions, responsibilities or “scope” should be permitted to speak or act freely in relation to personnel actions. If any employee learns of wrongdoing, misconduct, or incompetence by another employee, he or she should be able to inform the employer or otherwise act without having to worry if doing so falls within his or her “scope of employment” and whether he or she will be sued.
The difficulty with the scope of employment limitation is illustrated by the circumstances of this case. Godfrey, Freeman and Hardiman do not stand on equal footing in terms of “scope of employment.” Godfrey was a check airman who administered one of Sheppard’s flight tests. Thus, it would appear that he was acting within the scope of his employment in evaluating Sheppard. Freeman was the chief pilot for Southwest’s Chicago base, but was not among Sheppard’s superiors or flying partners. Thus, it is unclear whether, or under what circumstances, Freeman could be found to be acting within the scope of his employment. Hardiman, a flight attendant, had no responsibility for evaluating Sheppard; thus, it would seem that she was not acting within the scope of her employment. However, flight attendants should not be discouraged from acting upon, reporting or otherwise exchanging information regarding a pilot simply because doing so is not within their job description and thus, they risk being sued. The same is true of employees in other industries. The freedom to act and speak in relation to personnel actions should not turn on whether doing so is determined, years later, to be within an employee’s “scope of employment.”
Libel
Sections 43 through 48.5 of the Civil Code provide a scheme governing recovery for and defenses to defamation, and Sheppard’s allegations pertaining to his claim for libel are patterned after the libel and defamation statutes set forth therein. (See Civ. Code, §§ 45, 46.) However, as additional grounds for sustaining the demurrers in favor of Tree and Jones, the court ruled that Sheppard failed to allege that these two defendants published libelous statements as required under Civil Code section 45. Similarly, as additional grounds for granting summary judgment in favor of Hardiman, Freeman and Godfrey, the court ruled that Sheppard had failed to show that anyone except Godfrey had published libelous statements, and had failed to show that any publication was not privileged. (See Civ. Code, §§ 45, 47.)
Sheppard points out that he alleged that all defendants acted in concert and engaged in a conspiracy to defame him, and further argues that there is an issue of fact as to whether the publications were made with malice and thus were not privileged under Civil Code section 47. We note that liability for libel may be imposed on a conspiracy theory. (See Wilcox v. Superior Court (1994)
Conclusion
Employees must be allowed to act and speak freely in relation to personnel actions without fear and risk of being sued for doing so. It is the employer that ultimately benefits from, and thus, must bear the risks attendant to, the free exchange of information. Accordingly, we hold that employees, regardless of their scope of employment or personal motives, cannot be individually
Disposition
The judgment is reversed and remanded as it pertains to the cause of action for libel; it is affirmed in all other respects. The parties are to bear their own costs on appeal.
Nares, J., concurred.
Notes
Sheppard’s causes of action other than libel are not based on any statute, but rather, were created by the common law. Thus, for the reasons set forth herein, it is proper and appropriate for the court to limit them in the employment context.
The Railway Labor Act mandates resolution of all disputes concerning the terms of collective bargaining agreements through internal grievance and appeal processes, culminating in binding arbitration before tribunals called boards of adjustment. (45 U.S.C. § 153 First, Second; Consol. Rail Corp. v. Railway Labor Executives (1989)
It appears that federal legislation enacted in 1996 would also prevent Sheppard or any other person who applies for a job as a pilot from bringing state tort claims against former coemployees who have entered any information on his job records, including pilot evaluations. (49 U.S.C. § 44936(g).) Here, Sheppard has not brought his tort claims as a job applicant who alleges harm based on the sharing of his records. (See 49 U.S.C. § 44936(f) & (g).) Rather, his claims derive solely from his termination from Southwest and are outside the purview of 49 United States Code section 44936(g).
We do not intend by this opinion to limit coemployee liability for torts involving physical injury.
We also have found only limited analyses of the issue of coworker liability in other states. Of those which have considered the question, several took approaches which reflected the need to contain burgeoning liability theories in this arena. The Minnesota Supreme Court in dicta rejected suits against coworkers, on grounds the coworkers’ conduct was not a cause of the dismissal as a matter of law. (Nordling v. Northern States Power Co. (Minn. 1991)
The court distinguished harassment under FEHA from discrimination in business or personnel management decisions. (18 Cal.4th at pp. 645-646.) We note that a cause of action for sexual harassment is governed by statute (see Gov. Code, § 12940) and we do not purport to limit it. Indeed, contrary to the dissent’s suggestion, this opinion does not create “a sweeping new immunity”; what it does, is properly limit the “piling on” of boundless nonstatutory tort claims.
Of course nothing prevents an employer from taking action against an employee if it subsequently discovers that he or she has lied or otherwise furnished misinformation or acted dishonestly.
Concurrence Opinion
I concur in part and dissent in part.
I
I concur in the majority opinion’s result with respect to its effective affirmance of the superior court’s denial of appellant Christopher G. Sheppard’s motion for leave to amend his complaint to allege that defendants were acting outside the course and scope of their employment. Since Sheppard’s proposed amendment sought to contradict the express allegations of his original complaint on an important substantive matter and was untimely as presented shortly before trial, the court acted within its discretion in denying Sheppard’s request to amend.
II
I dissent from the portion of the majority opinion reversing the summary judgment favoring defendants Lou Freeman, Roni Hardiman and Alan Godfrey on Sheppard’s cause of action for libel. In granting summary judgment as to libel, the superior court properly concluded Sheppard failed to present evidence raising any triable factual issue that defendants’ conduct was not immunized by the managerial privilege. The court also properly concluded Sheppard failed to present evidence raising a triable factual issue that any defendant except Godfrey published anything or that any publication was not privileged. The court’s references to those privileges effectively amounted to a determination that Sheppard failed to present any evidence sufficient to support a finding that Freeman, Hardiman or Godfrey acted with malice.
This evidentiary record supported the superior court’s determination. In his declaration opposing the summary judgment motions, Sheppard stated he was a pilot/first officer for Southwest Airlines; Southwest had a policy requiring termination of the employment of any pilot not successfully completing the program for upgrade from first officer to captain; the final phase of the captain upgrade program was a flight test called the “Initial Operating Experience” (IOE); defendant Godfrey was a captain and “check airman” who administered Sheppard’s final IOE; and the reason given for Sheppard’s employment termination was his failing the IOE. In essence, Sheppard’s complaint and declaration acknowledged that Godfrey in the course and scope of his employment engaged in the “ ‘commonly necessary personnel management action’ ” of evaluating Sheppard’s job performance. (Cf. Reno v. Baird (1998)
Ill
I concur in the majority opinion’s result with respect to affirming the summary judgment favoring defendants Freeman, Hardiman and Godfrey on Sheppard’s causes of action for interference with contract, interference with prospective economic advantage, and intentional emotional distress. Such claims as alleged were based upon Sheppard’s libel cause of action. Given the evidentiary record compelling summary judgment favoring those defendants as to libel, summary judgment was also proper on Sheppard’s derivative ancillary claims.
IV
I concur in the section of the majority opinion reversing the portion of the judgment dismissing Sheppard’s cause of action for libel against defendants Tree and Jones. As the majority observe, Sheppard’s complaint adequately pleaded facts sufficient to state such cause of action and thus survive demurrer. (Wilcox v. Superior Court (1994)
It is here that the majority depart into an attempt to decide this case not on its specific record but instead by creating a sweeping new immunity relieving all defendant coemployees from liability for virtually all damages caused to a plaintiff employee or former employee—whether lost economic benefits, emotional distress, property damage or otherwise—by the defendant coemployees’ malicious intentional acts “relating to personnel actions” regardless whether committed within or outside the course and scope of employment (Maj. opn., ante, at pp. 342, 343, 347, 349.) The majority then carve out exceptions for the statutorily established torts of defamation and harassment plus “torts involving physical injury.” (Maj. opn, ante, at pp. 342, 343, 345, fn. 6, 348-349.) However, the rule adopted by the majority is unnecessary, contrary to settled law and sound policy, and ultimately unworkable. Indeed, in the common situation presented here where a plaintiff’s lawsuit consists of libel and derivative claims, the majority’s rule is rendered hollow by its exceptions and accomplishes little. The manifest practical and analytical problems engendered by the majority’s approach demonstrate that creation of such broad extended immunity is a task more properly left to the Legislature.
A
The rule adopted by the majority is unnecessary since, as explained, this case can be decided entirely on the record under settled law. The majority’s rule is also unnecessary
The majority recognize the existence of the legislative scheme bearing on the legislatively declared personal right of protection from defamation (Civ. Code, § 43 et seq.). That legislative scheme both establishes the elements of actionable defamation and provides privileges from liability. Although the majority express concern that “all employees who dare to act or speak” in relation to personnel actions “will be subjected to the risks of costly, burdensome litigation, the outcome of which may not be determined for years” (maj. opn., ante, at p. 347), the Legislature has already immunized from liability those coemployees who act or speak without malice in relation to personnel actions. The possibility that nonmalicious coemployees may become embroiled in lengthy litigation before ultimately prevailing does not warrant granting blanket immunity to tortfeasors who maliciously cause plaintiff-victims to lose their economic livelihood. The law provides other remedies for meritless lawsuits short of blanket immunity to malicious tortfeasors. Further, the Legislature can enact additional such remedies.
B
In immunizing defendant coemployees from liability for intentionally inflicting emotional distress on a plaintiff employee based upon acts relating to personnel actions regardless whether the defendant coemployees were acting within or outside the scope of their employment, the majority appear to ignore the underpinnings of well-established case law involving employee suits against employers and supervisorial coemployees. In Shoemaker v. Myers (1990)
Sheppard’s cause of action for intentional infliction of emotional distress against coemployees Tree and Jones was based primarily upon alleged malicious intentional acts including defamation. Certainly the alleged maliciously defamatory publication by Tree and Jones contravening the legislatively established statutory scheme against libel implicated considerations of substantial public policy and involved interests, beyond those of employer and employee, equivalent to the policy interests implicated by harassment. Hence, the alleged defamation would satisfy the outrageous behavior element of Sheppard’s cause of action for intentional infliction of emotional distress. (Cf. Fisher, supra,
Moreover, for purposes of pleading interference with contract and interference with prospective economic advantage, the alleged defamatory acts of Tree and Jones violating statutory proscriptions satisfied the requirement there be conduct qualifying as wrongful “ ‘beyond the fact of the interference itself.’” (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995)
C
The majority attempt to temper their sweeping new immunity by stating it is not intended “to limit coemployee liability for torts involving physical injury.” (Maj. opn., ante, at p. 343, fn. 4.) However, the majority’s need to create such undefined exception to their rule of coemployee nonliability for intentional malicious torts reflects the lack of analytical underpinning for the broad immunity established by the majority.
In his cause of action for intentional infliction of emotional distress, Sheppard pleaded he suffered “embarrassment, fear, worry, anxiety, loss of sleep, and related physical and emotional symptoms” and sought damages for those alleged “physical and emotional distress claims.” Although the superior court sustained the demurrers of Trees and Jones to such cause of action on the ground Sheppard’s sole and exclusive remedy was under the Workers’ Compensation Act, the majority fail to discuss the potentially dispositive narrower issue of workers’ compensation exclusivity. Further, in adopting their exception for a coemployee’s malicious intentional torts involving “physical injury,” the majority create additional analytical confusion by choosing a term of art (“physical injury”) no longer considered to be conceptually distinct from “emotional injury” for purposes of workers’ compensation exclusivity jurisprudence. (Livitsanos v. Superior Court (1992)
Moreover, although not defining the term “physical injury,” the majority’s exception for “torts involving physical injury” apparently reflects the majority’s acknowledgment that as a factual matter tortious conduct involving physical injury to the person may relate directly to a personnel action. For example, an employer may actively encourage or tacitly approve of coemployees’ malicious harassment (including battery) of a plaintiff employee as part of an ongoing scheme to culminate in termination of the plaintiff’s employment. To deal with such situations the majority, without explanation, create an exception for “torts involving physical injury” to the opinion’s rule of nonliability for intentional malicious acts “relating to personnel actions.” Two observations are pertinent. First, if the majority’s rule of nonliability as a matter of law is a product of legal analysis, one would expect the opinion to set forth the jurisprudential principles for the exception. However, the opinion essays none. The apparent reason is that the exception is a pure policy statement as is the rule of nonliability itself. Such policy-based rules are more properly within the province of the Legislature.
Second, the exception the majority create does not go far enough. Under certain circumstances, intentional destruction of property may also constitute conduct “relating to personnel actions.” For instance, as part of a scheme to manufacture the discharge of a plaintiff employee for incompetence/inability
D
In discussing cases from other jurisdictions, the majority allude to “the need to contain burgeoning liability theories in this arena.” (Maj. opn., ante, at p. 344, fn. 5.) The majority also refer to unspecified “deleterious effects on business if disciplined employees may avoid Foley’’ s [Foley v. Interactive Data Corp. (1988)
In the employment termination case of Cotran, supra,
Further, although recognizing that blanket coemployee immunity may leave some damaged employees without a direct remedy, the majority conclude such concern is mitigated by the investigative requirement imposed on the employer under Cotran, supra,
Finally, as noted by the majority (maj. opn., ante, pp. 345-346), the Supreme Court in Reno v. Baird, supra,
E
In sum, Sheppard’s lawsuit did not challenge a “personnel action” but instead alleged that Sheppard’s coemployees maliciously committed various intentional torts founded upon defamation and resulting in damage to Sheppard, including his discharge. The majority conclude that the “interest in allowing all employees the freedom to act and speak in relation to personnel actions without the threat of debilitating litigation outweighs the risk that a few employees will act maliciously and go undetected by their employers.” (Maj. opn., ante, at p. 347.) The majority also refer to “the purpose and balance struck in insulating employees from personal liability in order to allow, and indeed, encourage, employees to act and speak in relation to personnel actions.” (Ibid.) However, the Legislature has already struck the balance by granting immunity to all coemployees who act and speak without malice in relation to personnel actions. (Civ. Code, § 47, subd. (c).) If another balance is to be struck to create blanket immunity regardless of malice, the Legislature, not this court, should do the striking.
A petition for a rehearing was denied November 12, 1998, and the petitions of both appellant and respondents for review by the Supreme Court were denied February 3, 1999. Kennard, L, and Brown, J., were of the opinion that the petitions should be granted.
Although Sheppard’s declaration asserted he believed Hardiman harbored ill will toward him based upon an argument apparently related to her alleged affair with Freeman, any such ill will unconnected to a false publication proved nothing. (Cf. Live Oak Publishing Co. v. Cohagan (1991)
In Davaris v. Cubaleski, supra,
Also contrary to the majority’s characterization (maj. opn., ante, at p. 344), Jensen v. Hewlett-Packard Co. (1993)