Appellant franchisee sought review of a judgment from the Superior Court of Tulare County (California), which granted respondent franchiser’s motion for judgment notwithstanding the verdict in appellant’s action for breach of contract in violation of public policy. The court consulted with business and labor attorney.

Overview

Appellant franchisee brought an action against respondent franchiser, alleging mistreatment by respondent in retaliation for appellant’s failure to comply with respondent’s pricing dictates and for appellant’s report of an underground gas leak to the authorities. The trial court granted respondent’s motion for judgment notwithstanding the verdict and reduced appellant’s recovery to his breach of contract claim. The court affirmed the judgment in part, concluding that the trial court correctly held that appellant had no cause of action for tortious breach of contract. The court determined that strong public policy reasons militated against extending the cause of action for tortious breach of contract to circumstances other than employer-employee. The court found that appellant’s claim for breach of commercial contract in violation of public policy did not fit within any exception to the traditional contract remedy restrictions. The court reversed and remanded for retrial as to appellant’s cause of action for fraud because the trial court improperly excluded a memorandum from respondent’s representative to a third party.

Outcome

The court affirmed in part a judgment that granted respondent franchiser’s motion for judgment notwithstanding the verdict in appellant franchisee’s action for breach of contract in violation of public policy where such action did not extend to circumstances other than employer-employee. The court reversed and remanded as to appellant’s claim for fraud because the trial court improperly excluded respondent’s memorandum.

Procedural Posture

This was an appeal from the Superior Court of the City and County of San Francisco (California), which dismissed plaintiff former employee’s actions against defendant former employer for wrongful termination in violation of public policy, breach of an implied promise not to terminate without cause, and breach of an implied covenant of good faith and fair dealing.

Overview

Plaintiff appealed the trial court’s dismissal of plaintiff’s complaint alleging breach of an employment contract by defendant. Plaintiff was allegedly fired in retaliation for his attempts to change defendant’s strip search policy. Plaintiff also alleged that defendant told him he would not be fired without just cause. The court reversed, finding that plaintiff stated a cause of action for wrongful termination in violation of public policy where he alleged that defendant’s policy violated public policy, he protested the policy, and he was fired in retaliation for the protest. Plaintiff stated a cause of action for breach of an implied in fact promise only to terminate for good cause. Plaintiff’s oral contract was not barred by the statute of frauds. Plaintiff did not state a cause of action for breach of an implied covenant of good faith and fair dealing. Plaintiff did not allege the bad faith denials of the existence of an employment contract or bad faith pretextual reason for termination.

Outcome

The court reversed the trial court’s decision, finding that plaintiff stated an action for wrongful termination on public policy grounds because plaintiff alleged that defendant violated state policy against strip searches, and plaintiff was fired for protest; an action for breach of good cause termination was stated, and leave to amend was granted for the implied covenant action.