Court Opinion

ID: 9570485
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:23:42.433859+00
Date Added: 2024-06-11T12:05:07.763728
License: Public Domain

*164BIRD, C. J.
I respectfully dissent. Today, this court holds that an employer, who purposefully injures an employee and subjects him to a campaign of harassment and humiliation so extreme that it “ *exceed[s] all bounds usually tolerated by a decent society’ ” (Agarwal v. Johnson (1979) 25 Cal.3d 932, 946 [160 Cal.Rptr. 141, 603 P.2d 58], quoting Newby v. Alto Riviera Apartments (1976) 60 Cal.App.3d 288, 297 [131 Cal.Rptr. 547]), is shielded from tort liability by the workers’ compensation exclusivity provisions.1 The majority’s rationale for limiting an employee’s remedy to workers’ compensation is that the employer’s outrageous behavior here constitutes “actions which are a normal part of the employment relationship . . . . ‘ (See maj. opn., ante, at p. 160.)2
I respectfully disagree. Cole alleges that the defendants “conspired to humiliate, harass and intimidate” him. Such a sustained and deliberate psychological assault designed to injure an employee is not a normal risk or condition of employment and is not “conduct normally occurring in the workplace.” (See maj. opn., ante, at p. 151.)
Calling such behavior normal tacitly condones it. I cannot join in that view. Since workers’ compensation does not compensate an employee for pain and suffering (1 Larson, Workmen’s Compensation Law (1986) § 2.40, p. 11) and does not allow for punitive damages (Johns-Manville Products Corp. v. Superior Court (1980) 27 Cal.3d 465, 478 [165 Cal.Rptr. 858, 612 P.2d 948, 9 A.L.R.4th 758]) it does not sufficiently deter employers from engaging in such egregious conduct. Accordingly, I would hold that an employee’s action at law for intentional infliction of emotional distress, which alleges that the employer acted “deliberately for the purpose of *165injuring the employee” (Johns-Manville, supra, at p. 476), is impliedly exempted from the exclusive-remedy provisions of the Workers’ Compensation Act and is not barred.3
The workers’ compensation system represents an equitable compromise between the interests of employees and employers. “ [I]t affords the exclusive remedy for the injury by the employee or his dependents against the employer and insurance carrier. This is part of the quid pro quo in which the sacrifices and gains of employees and employers are to some extent put in balance, for, while the employer assumes a new liability without fault, he is relieved of the prospect of large damage verdicts.” (2A Larson, Workmen’s Compensation Law, supra, § 65.11, pp. 12-1 to 12-6, fns. omitted.) As the majority note, however, the exclusivity provisions of the Workers’ Compensation Act do not always prevail when the employer’s misconduct is intentional. (See maj. opn., ante, at p. 161.)
In Johns-Manville, this court recognized that where the employee’s injuries result from an unsafe workplace, the employee is generally limited to his or her workers’ compensation remedy. (Johns-Manville, supra, 27 Cal.3d at pp. 473-474.) This is true even if the employer’s failure to ensure a safe workplace is deliberate and “intentional or even deceitful.” (Id., at p. 474.) However, this court has held that “where the employer is charged with intentional misconduct which goes beyond his failure to assure that the tools or substances used by the employee or the physical environment of a workplace are safe, some cases have held that the employer may be subject to common law liability.” (Id., at p. 475.)
For example, our courts have permitted an action for damages where: 1) the employer physically assaulted an employee (Magliulo v. Superior Court (1975) 47 Cal.App.3d 760 [121 Cal.Rptr. 621]); 2) the employer conspired with a third party to conceal the latter’s liability for the injury (Ramey v. General Petroleum Corp. (1959) 173 Cal.App.2d 386, 400-403 [343 P.2d 787]); and 3) the employer’s workers’ compensation insurer conducted a deceitful investigation of a claim (Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616 [102 Cal.Rptr. 815, 498 P.2d 1063]).
*166In these cases, the courts characterized the employer’s intentional misconduct as outside the scope of the normal risks or conditions of employment. (See Magliulo, supra, 47 Cal.App.3d at p. 779; Ramey, supra, 173 Cal.App.2d at pp. 402-403; Unruh, supra, 7 Cal.3d at p. 630; maj. opn., ante, at p. 159.) In Johns-Manville, this court concluded that our caselaw reflects “a trend toward allowing an action at law for injuries suffered in the employment if the employer acts deliberately for the purpose of injuring the employee or if the harm resulting from the intentional misconduct consists of aggravation of an initial work-related injury.” (Johns-Manville, supra, 27 Cal.3d at p. 476, italics added.)
Here, the employer’s misconduct is analogous to incidents in which an employer physically assaults an employee. In Magliulo, the Court of Appeal held that an employee’s action against an employer for physical assault is an implied exception to the exclusive-remedy provisions of the Workers’ Compensation Act. (See Magliulo, supra, 47 Cal.App.3d at pp. 777-778, 779.) The court in Magliulo noted that such activity has a “questionable relationship to the general conditions of employment.” (47 Cal.App.3d at p. 779.)
Magliulo was explained in Johns-Manville. “[Although an employee might be willing to surrender his right to an action at common law for the ordinary type of work-related injuries, it is not equally clear that when he accepts employment he contemplates his employer might assault him or if an assault occurs he must be satisfied with the additional compensation provided by section 4553.” (27 Cal.3d at p. 477; Magliulo, supra, 47 Cal.App.3d at p. 778.)
It is similarly inconceivable that an employee would contemplate that his employer would deliberately subject him to a campaign of extreme and outrageous psychological assault for the purpose of injuring him and that, if such an assault occurred, he would have to be satisfied with the limited compensation provided by the Workers’ Compensation Act. Such an intentional course of harassment and humiliation, like a physical assault, is not a normal risk or condition of employment and the Legislature could not have intended to bar actions at law for such egregious assaults.
This conclusion is supported by an examination of the goal of the workers’ compensation system. Workers’ compensation is not designed to make injured workers whole, “but to keep them from becoming burdens on the community.” (Note, Intentional Torts Under Workers’ Compensation statutes: A Blessing or a Burden? (1983) 12 Hofstra L.Rev. 181, 185 (hereafter Intentional Torts).) Therefore, “[t]he only injuries compensated under Workers’ Compensation are those which produce disability and, thereby, *167affect earning power. Damages for pain and suffering are not available . . . .” (Ibid.)
Under the workers’ compensation system, the “employee relinquishes the right to recover a potentially greater award for damages” and “the employer assumes liability without fault. . . .” (Iverson v. Atlas Pacific Engineering (1983) 143 Cal.App.3d 219, 223 [191 Cal.Rptr. 696].) The employee receives “swift and certain compensation for injury” and the employer “is relieved of the prospect of a large civil verdict.” (Ibid.)
While this bargain appears fair where the employer’s conduct is negligent or even reckless, it is difficult to justify shielding the employer from “the full brunt of liability” where, as here, the employer has acted intentionally and with the purpose of injuring the employee. (Com., Johns-Manville Products Corp. v. Superior Court: The Not-So-Exclusive Remedy Rule (1981) 33 Hastings L.J. 263, 270 (hereafter The Not-So-Exclusive Remedy Rule); Tomita, The Exclusive Remedy of Workers’ Compensation for Intentional Torts of the Employer: Johns-Manville Products v. Superior Court (1982) 18 Cal. Western L.Rev. 27, 45 (hereafter Tomita).)
Since the workers’ compensation system shields the employer from full liability, it does not provide a deterrent sufficient to prevent employers from engaging in such egregious behavior. A workers’ compensation award will normally be much smaller than a tort damages award (see Intentional Torts, supra, 12 Hofstra L.Rev. at pp. 185-186) and, at any rate, the workers’ compensation award will be paid by the employer’s insurance carrier. Moreover, punitive damages are not available under the Workers’ Compensation Act; they are “afforded only in an action at law.” (Johns-Manville, supra, 27 Cal.3d at p. 478.)
Although section 4553 of the Labor Code provides that “[t]he amount of compensation otherwise recoverable shall be increased one-half’ when the employer’s misconduct is “serious and willful,” this “is additional compensation and does not represent exemplary damages” (Johns-Manville, supra, 27 Cal.3d at p. 478, fn. 12).4 In sum, “the deterrent effect of large damage awards, one of the basic objectives of tort law and of any loss-distribution system, is not realized when workers’ compensation is the exclusive remedy for an intentional tort.” (The Not-So-Exclusive Remedy Rule, supra, 33 Hastings L.J. at p. 270.)
*168Despite the policy considerations weighing in favor of allowing an action at law where, as here, the employer acts with the purpose of causing emotional distress, the majority argue that the Legislature could not have intended such a result because “permitting such [] action[s] would throw open the doors to numerous claims already compensable under the compensation law.” (Maj. opn., ante, at p. 160.)
The majority contend that “[a]n employer’s supervisory conduct is inherently ‘intentional’ ” and employees may consider such conduct, at times, to be “improper and outrageous.” Moreover, “demotions, promotions, criticism of work practices, and frictions in negotiations as to grievances” are a standard part of the workplace. (Maj. opn., ante, at p. 160.) However, Cole does not allege merely a series of “adverse personnel decisions. . . .” (See ibid.) He states that his employer singled him out and subjected him to an extreme and outrageous campaign of humiliation and harassment for the purpose of causing him emotional distress.
Contrary to the majority’s characterization, Cole has not alleged merely “[s]ome harassment by superiors . . . .” (Maj. opn., ante, at p. 161.) Instead, he contends that the defendants conspired to humiliate him and, with knowledge of his hypertension, subjected him to unconscionable and unreasonable psychological pressure. Cole alleges, inter alia, that he was made to answer trumped-up charges of misconduct, was wrongly demoted, and was subjected to repeated public humiliation. He further alleges that these acts were engaged in for the purpose of causing him injury.
I cannot accept the majority’s conclusion that such conduct “can be expected to occur with substantial frequency in the working environment.” (Maj. opn., ante, at p. 161.) Therefore, allowing an action at law in circumstances such as these poses no real threat to the workers’ compensation system.
The majority contend that if this court were to exempt claims such as these from the workers’ compensation exclusivity provisions, employees could always get into court by alleging outrageous conduct and an ulterior purpose to injure. However, under the rule that I would propose, an employee, in order to file an action at law, would have to allege: 1) intentional infliction of emotional distress, i.e., conduct that is so outrageous that it “exceeds all bounds usually tolerated by a decent society’” (Agarwal v. Johnson, supra, 25 Cal.3d at p. 946, quoting Newby v. Alto Riviera Apartments, supra, 60 Cal.App.3d at p.297); and 2) that the employer acted *169“deliberately for the purpose of injuring the employee” (Johns-Manville, supra, 27 Cal.3d at p.476).5
The majority apparently assume that the plaintiffs and their attorneys would allege such serious misconduct even when the charges could not be proved. However, plaintiffs cannot recover in an action at law unless they prove their claims of intentional and purposeful wrongdoing. If they cannot do so, plaintiffs or their attorneys must bear the substantial cost of prosecuting the tort action. I do not share the majority’s belief that recognition of this implied exception to the workers’ compensation exclusivity provisions would “be contrary to the compensation bargain and unfair to the employer.” (Maj. opn., ante, at p. 160.)6
Finally, the majority distinguish the situation presented here from the facts alleged in other California cases that have permitted recovery in tort for intentional misconduct by the employer. Those cases, they argue, “have involved conduct of an employer having a ‘questionable’ relationship to the employment, an injury which did not occur while the employee was performing service incidental to the employment and which would not be viewed as a risk of the employment, or conduct where the employer or insurer stepped out of their proper roles.” (Maj. opn., ante, at p. 161.) *170However, the psychological assault described in Cole’s complaint, like the physical assault in Magliulo, bears a “questionable relationship to general conditions of employment.” (Magliulo v. Superior Court, supra, 47 Cal.3d at p. 779.) Also, the employer certainly stepped out of its proper role by conspiring to injure Cole. (See Unruh v. Truck Insurance Exchange, supra, 7 Cal.3d at p. 630 [employer stepped out of proper role when it intentionally embarked on a deceitful course of conduct that injured the employee].) Like the fraud perpetrated in Ramey v. General Petroleum Corp., supra, 173 Cal.App.2d 386, the Legislature never intended that the conduct alleged here was a normal risk of employment. (Id., at pp. 402-403.)
Since Cole has alleged that his employer singled him out and subjected him to an extreme and outrageous campaign of harassment for the purpose of causing him injury, his cause of action for intentional infliction of emotional distress is not barred by the exclusivity provisions of the Workers’ Compensation Act.7
Appellants’ petition for a rehearing was denied February 11, 1987.

 For the text of former Labor Code sections 3600 and 3601, which govern this case, see majority opinion, ante, at page 154, footnotes 4 and 5.

 The majority hold that conduct normally occurring in the workplace, which causes an injury compensable under the Workers’ Compensation Act, may not serve as the basis for an action at law for intentional infliction of emotional distress. (Maj. opn., ante, at p. 160.) The majority apparently would not reach the question as to whether conduct that meets one but not the other of these standards is similarly barred by the act’s exclusive remedy provisions.
The majority confuse the issue by noting that “when the essence of the wrong is personal physical injury or death, the action is barred by the exclusiveness clause no matter what its name or technical form. . . .” (Maj. opn., ante, at p. 160.) Determining whether the “essence” of the injury is physical or nonphysical is of limited value in construing the exclusive remedy provisions of the Workers’ Compensation Act. California, unlike some states, provides workers’ compensation benefits for both disabling-psychological and -physical injuries. (See Traub v. Board of Retirement (1983) 34 Cal.3d 793, 799 [195 Cal.Rptr. 681, 670 P.2d 335]; Georgia-Pacific Corp. v. Workers' Comp. Appeals Bd. (1983) 144 Cal.App.3d 72, 75 [192 Cal. Rptr. 643]; Albertson’s Inc. v. Workers’ Comp. Appeals Bd. (1982) 131 Cal.App.3d 308, 310 [182 Cal.Rptr. 304]; Baker v. Workmen’s Comp. Appeals Bd. (1971) 18 Cal.App.3d 852, 861 [96 Cal.Rptr. 279]; Annot. (1980) 97 A.L.R.3d 161, 167, 174-176.)

 This rule is similar to rules in other states where an employee is free to sue his employer when the employer acts deliberately to injure the employee. (See e.g., Johnson v. Kerr-McGee Oil Industries, Inc. (Ariz.App. 1981) 129 Ariz. 393 [631 P.2d 548, 552-553]; Serna v. Statewide Contractors, Inc. (1967) 6 Ariz.App. 12 [429 P.2d 504, 507]; Griffin v. George’s, Inc. (1979) 267 Ark. 91, 96 [589 S.W.2d 24, 27]; Great Western Sugar Co. v. District Ct. (1980) 188 Mont. 1 [610 P.2d 717, 720]; Bakker v. Baza’r, Inc. (1976) 275 Ore. 245, 253-254 [551 P.2d 1269, 1274]; Houston v. Bechtel Assoc. Professional Corp. (D.D.C. 1981) 522 F.Supp. 1094, 1096; see also Ariz. Rev. Stat. Ann. § 23-1022 (1986 Supp.); Ky. Rev. Stat. Ann. § 342.610(4) (Baldwin 1986); Md. Ann. Code art. 101, § 44 (1957); Ore. Rev. Stat. § 656.156(2) (1985); Wash. Rev. Code Ann. § 51.24.020 (1987 Supp.); W. Va. Code Ann. § 23-4-2 (Michie 1985).)

 The majority argue that section 4553 creates a “substantial deterrent” to intentional employer misconduct because an employer cannot insure against such liability. (Maj. opn., ante, at pp. 160-161.) However, given the “low benefits” payable under the workers’ compensation system (see The Not-So-Exclusive Remedy Rule, supra, 33 Hastings L.J. at p. 266, and fn. 20), an out-of-pocket payment of one-half of such an amount will not necessarily suffice to deter employer misconduct.

 The second requirement would limit the number of cases that could evade the exclusive remedy provisions of the Workers’ Compensation Act. For example, an intentional infliction of emotional distress action based on “reckless disregard of the probability of causing emotional distress” (Agarwal v. Johnson, supra, 25 Cal.3d at p. 946, quoting Newby v. Alto Riviera Apartments, supra, 60 Cal.App.3d at p. 297) does not involve purposeful conduct. (See Tomita, supra, 18 Cal. Western L.Rev. at p. 45.) Moreover, not all intentionally tortious acts are done with the purpose of causing injury. (Prosser & Keeton, Torts (5th ed. 1984) § 8, pp. 34, 35 [“intent is broader than a desire or purpose to bring about physical results. It extends not only to those consequences which are desired, but also to those which the actor believes are substantially certain to follow from what the actor does”].)

 The majority argue that actions such as Cole’s should be barred because the employer “must pay disability benefits while the employee sues and may not recover such payments, because disabilities caused by stresses in the workplace are compensable whether or not the employer was at fault.” (Maj. opn., ante, at p. 160.) This argument is unpersuasive. The obligation to pay workers’ compensation benefits is statutory and obviously applies even where an action at law is not filed. Allowing the employee to sue would be unfair to the employer only if the successful plaintiff were allowed to retain workers’ compensation benefits received for the same injuries. Such double recovery would not occur, however, because the employer is entitled to a setoff against any damages already awarded the employee for work-related injuries. (See Johns-Manville, supra, 27 Cal.3d at pp. 478-479.)
Furthermore, the majority contended that allowing an action at law in these circumstances is unfair because “[t]he employer . . . may have to pay the costs of a successful defense.” (Maj. opn., ante, at p. 160.) However, assuming that “[l]iability for intentionally inflicting injury is not insurable,” (maj. opn., ante, at p. 160), employers may still contract with their insurers to cover the cost of defending an action alleging such misconduct. (See Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 277, 278 [54 Cal.Rptr. 104, 419 P.2d 168]; The Not-So-Exclusive Remedy Rule, supra, 33 Hastings L.J. at p. 267, fn. 27; see also maj. opn., ante, at p. 155.)

 Since Cole’s claims should not be barred by the Workers’ Compensation Act, I would find that his wife’s claims were properly before the trial court.