Opinion ID: 1453310
Heading Depth: 1
Heading Rank: 5

Heading: The Tort of Breach of the Implied Covenant of Good Faith and Fair Dealing (Bad Faith Tort)

Text: In K Mart Corp. v. Ponsock, 103 Nev. 39, 51, 732 P.2d 1364, 1372 (1987), we held that the covenant of good faith and fair dealing implied in an employment contract for indefinite future employment could, under certain limited circumstances, be the basis for tort liability in a manner comparable to the tort liability incurred by insurance companies when they deal in bad faith with their policyholders. In K Mart we made it clear that mere breach of an employment contract does not of itself give rise to tort damages and that the kind of breach of duty that brings into play the bad faith tort arises only when there are special relationships between the tort-victim and the tort-feasor... . K Mart, 103 Nev. at 49, 732 P.2d at 1370. Where the employer-employee relationship becomes analogous to or approximates the kind of special reliance, trust and dependency that is present in insurance cases, we concluded in K Mart that betrayal of this kind of relationship may go well beyond the bounds of ordinary liability for breach of contract and may result in the offending party's being held tortiously liable for such perfidy. Id. at 48, 732 P.2d at 1370. Although Jones relies most heavily on his claim for tortious discharge on Western States's violation of this state's public policy favoring safety in the workplace, he also asserts a right to recovery under a claim of tortious bad faith discharge. Preliminarily we note that the facts of this case are rather far removed from those in K Mart insofar as the relationship of the parties is concerned. In K Mart, the employee, Ponsock, had been a faithful employee for almost ten years with every expectation of continuing his employment for an indefinite period of time and at least until he became eligible for a retirement pension. Ponsock was hired until retirement, and his contract of continued employment was not only terminated arbitrarily but by artifice and fraud. Id. at 42, 732 P.2d at 1366. The kind of relationship that existed between K Mart and Ponsock does not exist here; neither is there the kind of pretension, misrepresentation and betrayal that was the essence of bad faith tort liability in K Mart. Jones's employment relationship with Western States presents a strong contrast to that of Ponsock and K Mart. Although Jones had been designated as a permanent employee at the time of his dismissal, he had worked less than two years. Ponsock, on the other hand, had been hired on a more permanent basis, that is, until retirement, id. at 42, 732 P.2d at 1366, and, after almost ten years on the job, had no reason to suspect that he was going to be arbitrarily terminated, much less fraudulently deprived of his employment and retirement rights. If we use K Mart as the exemplar for that narrow class of cases in which, because of the relationship of employer to employee, the offending conduct goes well beyond the bounds of ordinary liability for breach of contract, id. at 48, 732 P.2d at 1370, we can see why Jones does not fall within that class. Because the requisite relationship cannot have ripened under the facts of this case, and, more importantly, because the kind of deception and perfidy which was the essence of the bad faith tort in K Mart is not present here, we must reject any claim by Jones for tort damages based on breach of the implied covenant of good faith and fair dealing. Next we consider whether Jones has sustained a tort claim for tortious discharge.