Opinion ID: 1259224
Heading Depth: 1
Heading Rank: 3

Heading: age discrimination in employment

Text: (5) An action in tort seeking damages for discharge from employment in contravention of public policy is an exception to the general rule, now codified in Labor Code section 2922, [6] that unless otherwise agreed by the parties, an employment is terminable at will. That exception was recognized in Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167 [164 Cal. Rptr. 839, 610 P.2d 1330, 9 A.L.R.4th 314] ( Tameny ), where the court noted that a growing number of states permitted a tort action for termination which contravenes public policy. The specific holding, however, was only that an employer's authority over its employee does not include the right to demand that the employee commit a criminal act.... An employer engaging in such conduct violates a basic duty imposed by law upon all employers, and thus an employee who has suffered damages as a result of such discharge may maintain a tort action for wrongful discharge against the employer. ( Id., at p. 178.) Because the Tameny decision and its progeny (see Rojo v. Kliger, supra, 52 Cal.3d 65; Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654 [254 Cal. Rptr. 211, 765 P.2d 373]) did not make clear the scope of the exception to the terminable-at-will employment relationship, we addressed that question in Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083 [4 Cal. Rptr.2d 874, 824 P.2d 680]. There the court concluded that only termination in violation of a fundamental public policy expressed in a statute or a constitutional provision will support a wrongful discharge action. ( Id., at p. 1095.) After reviewing the sources of public policy recognized by other states in which a wrongful termination action is permitted, we held: (1) The public policy exception to the right to terminate an employee at will must be found in either a constitutional or statutory provision; (2) [W]hile an at-will employee may be terminated for no reason, or for an arbitrary or irrational reason, there can be no right to terminate for an unlawful reason or a purpose that contravenes fundamental public policy. ( Id., at p. 1094.) Gantt did not involve alleged discriminatory hiring and retention practices or public policy declared in the FEHA, however. Whether discrimination in employment on the basis of age violates a fundamental public policy has not been resolved by this court. We need not decide that question here since the public policy on which plaintiff relies is not applicable to defendant. He is not an employer subject to the age discrimination provisions of the FEHA. (6) The FEHA is a statute which clearly states a public policy against discrimination on the basis of age in employment. However, the FEHA, which declares the right to employment without discrimination to be a civil right and establishes that right as public policy of this state, simultaneously limits the application of the act's enforcement provisions to employers of five or more persons. Thus, while the Legislature has made a broad statement of policy, it has not extended that policy to small employers. The FEHA gives plaintiff no remedy as defendant does not regularly employ five or more persons. The absence of an FEHA remedy would not negate the existence of a common law tort remedy if another law created the right on which this action is predicated. The FEHA expressly preserves rights created in other statutes, stating in section 12993, subdivision (a): The provisions of this part shall be construed liberally for the accomplishment of the purposes thereof. Nothing contained in this part shall be deemed to repeal any of the provisions of the Civil Rights Law or of any other law of this state relating to discrimination because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, or age, unless those provisions provide less protection to the enumerated classes of persons covered under this part. (Italics added.) Age discrimination in employment has been subject to statutory limitations since 1961, when former section 2072 was added to the Unemployment Insurance Code as part of chapter 9.5, entitled Employment of Older Workers. (Stats. 1961, ch. 1623, § 1, p. 3517.) That legislation also declared an age-related public policy in section 2070 of the Unemployment Insurance Code: It is the public policy of the State of California that manpower should be used to its fullest extent. This statement of policy compels the further conclusion that human beings seeking employment, or retention thereof, should be judged fairly and without resort to rigid and unsound rules that operate to disqualify significant portions of the population from gainful and useful employment. Accordingly, use by employers, employment agencies, and labor organizations of arbitrary and unreasonable rules which bar or terminate employment on the ground of age offend the public policy of this State. (Stats. 1961, ch. 1623, § 1, p. 3517.) The Legislature established discrimination on the basis of age as an unlawful employment practice in 1972 when it repealed Unemployment Insurance Code section 2072 and enacted former section 1420.1 of the Labor Code, a part of the Fair Employment Practices Act. (Stats. 1972, ch. 1144, § 1, p. 2211.) Former section 1420.1 of the Labor Code made it an unlawful employment practice for an employer to refuse to hire or employ, or to discharge, dismiss, reduce, suspend, or demote, any individual between the ages of 40 and 64 solely on the ground of age, except in cases where the law compels or provides for such action.... Former section 1420.1 of the Labor Code and former section 2072 of the Unemployment Insurance Code each made it unlawful to refuse to hire or employ, or to discriminate against, persons between the ages of 40 and 64 solely on the ground of age. However, the Labor Code definition of employer limited application of the statutory provisions to employers of five or more persons. (Lab. Code, former § 1413.) Under the Unemployment Insurance Code provision the threshold had been six employees. (Unemp. Ins. Code, former § 2071, subd. (4).) When former section 1420.1 of the Labor Code was adopted in 1972 as part of the Fair Employment Practices Act (Lab. Code, former § 1410 et seq.; see Stats. 1959, ch. 121, p. 1999 [the Fair Employment Practices Act]), it replaced former section 2072 of the Unemployment Insurance Code. Although the language of the new ban on age discrimination was substantially identical to that of the prior statute, the Legislature did not add age discrimination to the categories of discrimination declared to be violations of public policy in former sections 1411 and 1412 of the Labor Code. When the FEHA was enacted the Fair Employment Practices Act, including former section 1420.1 of the Labor Code, was repealed. Therefore, while the Legislature declared its intent that the FEHA not repeal other state laws governing discrimination in employment, it expressly repealed the former statutory bar to age discrimination. At the time subdivision (a) of section 12993 was enacted, although Unemployment Insurance Code section 2070 declared arbitrary age discrimination in employment to be contrary to public policy, there was no statutory prohibition of age discrimination in employment, and there had never been one applicable to small employers. As the Court of Appeal recognized, and plaintiff concedes, there is presently no law of this state other than the FEHA which proscribes discrimination on the basis of age. Thus, while the FEHA is cumulative to preexisting common law and statutory rights ( Rojo v. Kliger, supra, 52 Cal.3d 65, 79), it is not so with respect to a cause of action for age discrimination in employment. Because Tameny was decided while the FEHA was still undergoing the legislative process, [7] and age was included among the types of discrimination declared to be in violation of public policy under sections 12920 and 12921 (Stats. 1980, ch. 992, § 4, pp. 3142-3143), the Legislature may have been aware when it adopted the FEHA that the court would recognize some violations of public policy in the discharge of an at-will employee as a basis for a tort action. Nonetheless, the FEHA ban on discrimination in employment applies only to employers of five or more persons (§ 12926, subd. (d)). It seems clear, therefore, that the Legislature did not intend to make the right to be free of age discrimination by a small employer a fundamental public policy and to thereby subject employers who are not within the FEHA's statutory prohibitions and remedies to Tameny -based common law civil liability for age discrimination. The Court of Appeal concluded that the absence of FEHA remedies for age discrimination by employers of fewer than five persons reflected only the Legislature's creation of an arbitrary cutoff of liability for the convenience of the administrative agency charged with responsibility for administering the FEHA remedies. As this court explained in Robinson v. Fair Employment & Housing Com. (1992) 2 Cal.4th 226 [5 Cal. Rptr.2d 782, 825 P.2d 767], however, that was not the sole purpose of the small employer exemption. That purpose had two aspects: relieving the administrative body of the burden of enforcement where few job opportunities are available, and ... keeping the agency out of situations in which discrimination is too subtle or too personal to make effective solutions possible. ( Id., at p. 240, italics added.) The Court of Appeal also concluded that no public policy outweighed the protection against age discrimination in employment established by section 12920, and saw no reason to deny plaintiff a common law remedy based on the public policy expressed in the statute. Therefore, the court held, while a person covered under the act is required to exhaust FEHA remedies and may not base a claim on the policy expressed in the act, noncovered persons may base a common law cause of action on that policy. In so doing, the Court of Appeal distinguished Strauss v. A.L. Randall Co. (1983) 144 Cal. App.3d 514 [194 Cal. Rptr. 520], in which another court held that there is no common law cause of action for age discrimination in employment based on the FEHA statement of public policy. The employee in Strauss, the court reasoned, was a person covered by the FEHA and thus had a FEHA remedy while Jennings did not. The Court of Appeal acknowledged that this court had discussed the Strauss decision at length in Rojo v. Kliger, supra, 52 Cal.3d 65, and had not disapproved that court's conclusion that no common law cause of action was created by the public policy statements in the FEHA. Nonetheless, the Court of Appeal reasoned, Jennings must be allowed a remedy if the employee is a victim of the discrimination prohibited under the public policy of the state. Defendant, who relies on the history of the FEHA explored in Robinson v. Fair Employment & Housing Com., supra, 2 Cal.4th 226, argues that the age discrimination ban in the FEHA does not reflect a fundamental public policy of the type which the court held would support a common law action in Gantt v. Sentry Insurance, supra, 1 Cal.4th 1083. Relying on the history of the FEHA small employer exemption discussed in Robinson v. Fair Employment & Housing Com., supra, 2 Cal.4th 226, he contends that the conclusion of the Court of Appeal is contrary to the legislative intent in limiting statutory remedies for age discrimination to discrimination by persons who regularly employ five or more persons. That history included the explanation of the FEHA small employer exception offered in Tobriner, California FEPC (1965) 16 Hastings L.J. 333, 342: A sense of justice and propriety led the framers to believe that individuals should be allowed to retain some small measure of the so-called freedom to discriminate; besides, they feared the political repercussions of eliminating totally an area of free choice whose infringement had been so bitterly opposed. In the second place, the framers believed that discrimination on a small scale would prove exceedingly difficult to detect and police. Third, it was believed that an employment situation in which there were less than five employees might involve a close personal relationship between employer and employees and that fair employment laws should not apply where such a relationship existed. Finally, the framers were interested primarily in attacking protracted large-scale discrimination by important employers and strong unions. Their aim was not so much to redress each discrete instance of individual discrimination as to eliminate the egregious and continued discriminatory practices of economically powerful organizations. Thus, they could afford to exempt the small employer. (Fn. omitted; see also Brennan, State Legislation Prohibiting Discrimination in Employment Because of Age (1967) 18 Hastings L.J. 539, 551.) Therefore, defendant argues, the legislative intent underlying the inclusion of age in the public policy declarations in sections 12920 and 12921 must be gleaned by reading those sections in conjunction with the definition of employer found in section 12926, which includes the small employer exemption and also exempts nonprofit religious associations and corporations. Amicus curiae California Dental Association, noting these exceptions, argues that to qualify as a fundamental public policy within the meaning of Gantt v. Sentry Insurance, supra, 1 Cal.4th 1083, and thus support a common law cause of action, the policy must be one of universal application. That test, it argues, is supported by the reasoning of the court in Foley v. Interactive Data Corp., supra , where the court concluded that there was no distinct public interest at stake unless an employer violated a fundamental duty imposed on all employers for the protection of the public interest. (47 Cal.3d at p. 670, fn. 12.) Plaintiff concedes that age is not entitled to the same broad protection as are race and gender, that it does not enjoy constitutional protection, and that age-based preferences have been upheld where age is a bona fide occupational qualification or some other legitimate governmental interest warrants such treatment. She argues, however, that the limitation of FEHA remedies to employers of five or more persons does not signal approval of age-based discrimination by smaller employers. The public policy declared in section 12920, she claims, is not limited to employment by employers of five or more persons. We agree with plaintiff that the public policy declared by the Legislature in section 12920 applies to all employers. It does not follow, however, that in declaring that policy the Legislature intended to create the basis for a common law tort action and to thereby subject employers whom it expressly exempted from FEHA coverage to liability for age discrimination. That it did not is suggested by the statement in section 12993 that the act does not repeal any other laws relating to discrimination. That statement reflects an intent to create new rights within the FEHA statutory scheme while leaving existing rights intact, not intent to create new common law rights. The exemption of small employers from the statutory bar to discrimination on the basis of age, an exemption which is not based on bona fide occupational qualifications and which is not found in section 12940, distinguishes the age-related rights created by the FEHA from the fundamental rights against discrimination on other bases, rights which predate the FEHA and have their origin in the Constitution, other statutes, or common law. We conclude therefore that, notwithstanding the inclusion of age in the policy and civil rights provisions of the FEHA, the Legislature did not intend by those provisions to establish age discrimination by a small employer as a new fundamental right for violation of which a wrongful termination action would lie. The reasoning which supported our holding in Gantt v. Sentry Insurance, supra, 1 Cal.4th 1083, makes it clear that the inclusion of age in the policy statement of the FEHA alone is not sufficient to establish a fundamental public policy for the violation of which an employer may be held liable in a common law tort action. The Legislature's decision to exclude small employers from the FEHA and the omission of any other legislation barring discrimination on the basis of age precludes finding a fundamental policy that extends to age discrimination by small employers. We explained in Gantt 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 v. Sentry Insurance, supra, 1 Cal.4th at p. 1095, italics added.) While the FEHA includes age among the categories protected by public policy against discrimination in employment, it does not make discrimination by an employer of less than five persons unlawful. Employers of four or fewer persons are exempt under the FEHA and no other law makes discrimination on the basis of age unlawful. It would be unreasonable to expect employers who are expressly exempted from the FEHA ban on age discrimination to nonetheless realize that they must comply with the law from which they are exempted under pain of possible tort liability. We do not ascribe such a purpose to the Legislature. Permitting such actions is not shown to be necessary to achieve the Legislature's goal in including a limited ban on age discrimination in the FEHA. The Legislature intended of FEHA itself to provide effective remedies which will eliminate the discriminatory practices condemned by the act. (§ 12920.) Those practices, declared to be unlawful employment practices, are such only when engaged in by employers, i.e., a person regularly employing five or more persons. (§ 12926, subd. (d).) The trial court did not err in denying Jennings's motion for leave to amend to state a common law Tameny -based cause of action for age discrimination. [8]