Court Opinion

ID: 9726479
Source: CourtListenerOpinion
Date Created: 2023-08-26 12:52:26.204052+00
Date Added: 2024-06-11T18:25:26.254257
License: Public Domain

TODD, J.
I respectfully dissent.
The City of Oceanside (City) appeals a $125,000 judgment entered after a jury returned its verdict in favor of William Green on his amended complaint for damages for breach of contract by wrongful termination and for violation of the covenant of good faith and fair dealing. City asserts: the trial court lacked jurisdiction because Green failed to exhaust his administrative remedies; Green’s exclusive remedy for emotional distress was a workers’ compensation claim; the jury was improperly instructed that it could substitute its own judgment for that of the employer on what is or is not good faith and fair dealing and what constitutes good cause for termination; and the trial court erred in not granting City’s nonsuit motion because Green did not present evidence sufficient to make out a prima facie case of wrongful termination.1 Finding merit in City’s arguments on exhaustion of administrative remedies, the exclusive remedy doctrine, and jury instructions, I would reverse.
My colleagues have presented a thorough review of the pertinent facts, and I adopt parts II and III of the majority opinion here.
Discussion
I
City’s contention Green failed to exhaust his administrative remedies thus depriving the trial court of jurisdiction is founded on the provisions of the agreement, effective between July 3, 1983, and June 30, 1985, between the City and Oceanside City Employees’ Association (association) setting forth the five-step grievance procedure and the undisputed evidence that *231Green did not challenge his discharge except by this lawsuit.2 City also points out Green was properly notified of his right to appeal the discharge in the four-page letter of September 8, 1983, giving him notice of suspension and discharge.3
The well established rule, as the majority states, is that “[wjhen an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act; this is ‘not a matter of judicial discretion, but is a fundamental rule of procedure . . . .’ (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 292-293 . . .; see also United States v. Superior Court (1941) 19 Cal.2d 189, 194 . . . .)” (Hayward v. Henderson (1979) 88 Cal.App.3d 64, 70 [151 Cal.Rptr. 505].) “Jurisdiction to entertain an action for judicial relief is conditioned upon a completion of the administrative procedure.” (United States v. Superior Court (1941) 19 Cal.2d 189, 194 [120 P.2d 26].) The rule applies as well when the administrative procedure is provided by regulation, resolution or ordinance. (See Hayward v. Henderson, supra, 88 Cal.App.3d 64, 68-70; see also Sea & Sage Audubon Society, Inc. v. Planning Com. (1983) 34 Cal.3d 412, 415, 417-418 [194 Cal.Rptr. 357, 668 P.2d 664]; and see Tielsch v. City of Anaheim (1984) 160 Cal.App.3d 570, 574 [206 Cal.Rptr. 738].) A brief explanation of the rule is: “The administrative claim or ‘cause of action’ is within the special jurisdiction of the administra*232tive agency, and the courts may act only to review the final administrative determination. Allowing a suit prior to such a final determination would constitute interference with the subject matter jurisdiction of another tribunal. Accordingly, the exhaustion of an administrative remedy is a jurisdictional element in California. (2 Witkin, Cal. Procedure (2d ed. 1970) Actions, § 181, p. 1045[4].)” (Hayward v. Henderson, supra, 88 Cal.App.3d 64, 70.)
At this point I depart from the majority’s view of the exhaustion of administrative remedies doctrine. I believe there is no error in the views of many courts, including this court (see Jacobs v. Retail Clerks Union, Local 1222, supra, 49 Cal.App.3d at p. 963 [123 Cal.Rptr. 309]), that Abelleira announced a rule of subject matter jurisdiction. “Jurisdiction to entertain an action . . . conditioned upon a completion of the administrative procedure,” as referred to in United States v. Superior Court, supra, 19 Cal.2d 189, 194, is rather clearly a reference to subject matter jurisdiction. Abelleira and the passage from Hayward v. Henderson, supra, 88 Cal.App.3d 64, 70, speaking of “interference with the subject matter jurisdiction of another tribunal” imply rather directly that the underlying rationale of the exhaustion doctrine is the separation of powers of the judicial branch of government from the executive branch. It is fundamental that neither branch properly may interfere in advance with the lawful functions of the other. (Cal. Const., art. III, § 3; Bixby v. Pierno (1971) 4 Cal.3d 130, 141 [93 Cal.Rptr. 234, 481 P.2d 242]; 5 Witkin, Summary of Cal. Law (8th ed. 1974) Constitutional Law, § 75, pp. 3312-3313.) That these are side benefits of judicial and administrative economy in the proper application of the rule does not furnish the primary basis for the rule. I cannot consider the exhaustion doctrine as merely a “procedural” rule subject to waiver on appeal if not properly raised in the trial court. It is a rule of subject matter jurisdiction albeit there are exceptions to the rule. If the conditions are present to permit an exception, the proper conclusion is that the jurisdictional exhaustion doctrine does not apply. The presence of an exception to the rule does not lead to the conclusion, as the majority suggests, that the rule is not one having to do with subject matter jurisdiction.
Exceptions to the rule requiring exhaustion of administrative remedies occur when the subject of the controversy lies outside the administrative agency’s jurisdiction, when pursuit of an administrative remedy would result in irreparable harm, when the administrative agency cannot grant an adequate remedy, and when the aggrieved party can positively state what the administrative agency’s decision in his particular case would be. (Edgren v. Regents of University of California (1984) 158 Cal.App.3d 515, 520-*233521 [205 Cal.Rptr. 6]; and see 3 Witkin, Cal. Procedure (3d ed. 1985) Actions, §§ 238-246, pp. 269-275.) However, on the record before this court there is no basis for application of any such exception to this case. Green had successfully pursued the grievance procedure in earlier disputes and he makes no showing here that his appeal of the termination notice would have been futile.
Thus, failure to exhaust administrative remedies “deprives a court of subject matter jurisdiction (Holderby v. Internat. Union etc. Engrs., 45 Cal.2d 843, 846 . . .; American Society of Composers, Authors & Publishers v. Superior Court, 207 Cal.App.2d 676, 684 . . .). . . lack ofjurisdiction is not subject to waiver and may be raised at any stage of the proceedings (Sampsell v. Superior Court, 32 Cal.2d 763, 773 . . . [disapproved on other grounds in Robinson v. Superior Court (1950) 35 Cal.2d 379]; People v. Coit Ranch, Inc., 204 Cal.App.2d 52, 57 . . .).” (Jacobs v. Retail Clerks Union, Local 1222, supra, 49 Cal.App.3d at p. 963 [123 Cal.Rptr. 309], italics added.) The exhaustion of remedies doctrine fully applies to actions seeking damages, including tort claims, for an allegedly wrongful termination of private or public employment endeavors. (Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, 476-477 [131 Cal.Rptr. 90, 551 P.2d 410]; Edgren v. Regents of University of California, supra, 158 Cal.App.3d 515, 520.)
An additional concept attending employment termination where there is an administrative remedy is that failure to apply for judicial review of decisions and findings of the administrative agency pursuant to Code of Civil Procedure section 1094.5 precludes a terminated employee from filing a complaint for damages. (Westlake Community Hosp. v. Superior Court, supra, 17 Cal.3d 465, 469; City of Fresno v. Superior Court (1987) 188 Cal.App.3d 1484, 1491 [234 Cal.Rptr. 136]; Logan v. Southern Cal. Rapid Transit Dist. (1982) 136 Cal.App.3d 116, 122-124 [185 Cal.Rptr. 878].) Moreover, if administrative adjudication of the issue whether the employment was wrongfully terminated is unfavorable to the terminated employee, it must be successfully challenged by the mandamus procedure before filing a tort action based on the same alleged wrong. (Westlake Community Hosp. v. Superior Court, supra, 17 Cal.3d at pp. 476, 483-484; City of Fresno v. Superior Court, supra, 188 Cal.App.3d 1484, 1493.)
The only grounds Green puts forth to avoid application of the exhaustion of administrative remedies doctrine are that “the evidence was incomplete . . . and the testimony was in conflict with the document discussed at R.T. 244 [and] [i]f any error was committed, Oceanside induced the commission of the error and should be estopped from asserting it as a ground for reversal.” On the matter of the evidentiary basis, as shown above, Green *234testified with candor and clarity that he did not file any protest as a result of his termination. This admission permits no doubt as to the factual basis of City’s nonexhaustion of remedies contention and makes it a matter that is undisputed. Further, Green’s claim of conflict between the testimony and the “document discussed at R.T. 244” is unsupported by the record.5 From reading the record in proper context, it is very clear the document referred to was Green’s claim filed with the City under the California Tort Claims Act. (Gov. Code, § 900 et seq., §§ 910-915.4.) This had nothing to do with any pursuit of Green’s administrative remedies under the agreement. On this record all that is required is the application of legal principles to undisputed facts, i.e., a determination of a question of law by the court. (See Wilkinson v. Norcal Mutual Ins. Co. (1979) 98 Cal.App.3d 307, 317-318 [159 Cal.Rptr. 416].)
Concerning Green’s suggestion the City should be estopped to assert non-exhaustion of administrative remedies because it induced the error by not pressing the contention in the trial court, I might find merit but for the fact the rule goes to the subject matter jurisdiction of the superior court. Parties may not confer such jurisdiction by waiver or consent, and as stated, the rule is that lack of jurisdiction may be raised at any stage of the proceedings. (See Jacobs v. Retail Clerks Union, Local 1222, supra, 49 Cal.App.3d 959, 963, and cases cited; see also Taylor v. Taylor (1923) 192 Cal. 71, 78 [218 P. 756, 51 A.L.R. 1074], and Harrington v. Superior Court (1924) 194 Cal. 185, 188 [228 P. 15] [“Jurisdiction in any proceeding is conferred by law; that is, by the constitution or by statute. Jurisdiction of the subject matter cannot be given, enlarged, or waived by the parties.”].) Accordingly, *235I conclude the nonexhaustion of administrative remedies doctrine may be raised, as here, for the first time on appeal.6 This important doctrine, well rooted in California law, is much more than “a ‘procedural prerequisite.’ ” (See majority opn., ante, at pp. 221-222.)
There is apparent similarity between this case and Civil Service Assn. v. City and County of San Francisco (1978) 22 Cal.3d 552 [150 Cal.Rptr. 129, 586 P.2d 162], insofar as it deals with police department employee Jacqueline Robinson. The Supreme Court set forth San Francisco’s contentions in the trial court, none of which mentioned the exhaustion doctrine. Yet, affirming the denial of a writ of mandate as to Robinson who was challenging the legality of a short-term suspension for disciplinary reasons on the basis of Skelly v. State Personnel Bd. (1975) 15 Cal.3d 194 [124 Cal.Rptr. 14, 539 P.2d 774], the court said: “It appears that appellant Jacqueline Robinson, an employee of the police department, had an opportunity for a postdisciplinary hearing. (S.F. Charter, § 8.343.) The complaint does not allege a demand for a hearing nor a denial of such demand. Thus, it does not appear that appellant Robinson has exhausted her administrative remedies, a prerequisite to seeking judicial relief. (Fiscus v. Dept. of Alcoholic Bev. Control (1957) 155 Cal.App.2d 234 . . . ; cf. South Coast Regional Com. v. Gordon (1977) 18 Cal.3d 832 . . . .) As to appellant Robinson the complaint thus shows no ground for judicial intervention.” (Civil Service Assn. v. City and County of San Francisco, supra, 22 Cal.3d at p. 565.)
It is worthy of note that the Fiscus case, cited as the authority for the Supreme Court’s conclusion, includes the statement: “Exhaustion of administrative remedies is a jurisdictional prerequisite to resort to the courts. (Abelleira v. District Court of Appeal, supra, p. 293; United States v. Superior Court, 19 Cal.2d 189, 194 . . . .)” (Fiscus v. Dept. Alcoholic Bev. Control (1957) 155 Cal.App.2d 234, 236 [317 P.2d 993].)
From the undisputed evidence showing Green did not exhaust his administrative remedies, I conclude the trial court was without jurisdiction to proceed with Green’s action for breach of contract by wrongful termination and for violation of the covenant of good faith and fair dealing.7
*236II
City contends the award of damages for emotional distress was improper because any such damages were subject to the exclusive remedy rule. (Lab. Code, §§ 3600, 3601, 3602.)8 In Green’s amended complaint, his second cause of action for “Breach of Covenant of Good Faith and Fair Dealing” includes a paragraph 15 which alleges: “15. City’s actions in this respect were willful. City acted with the intent to cause Green financial harm, severe emotional distress, embarrassment and humiliation. City accomplished its aims.” (Italics added.)
In Green’s first cause of action for wrongful termination, he alleges the existence of an oral contract with the City containing specified terms of employment. He also alleges he began to work as a City employee, became a participating member of City’s employment benefit programs, reasonably relied on all of City’s representations, and worked for City for more than 13 years until he was wrongfully fired. The first cause of action further alleges: “7. Green performed all of the duties and obligations required of him by the terms of the parties’ contract.
“8. On or about September 23, 1983, without any good cause, City breached the terms of its oral employment contract with Green by wrongfully firing him.
“9. Green is informed and believes and on that basis says he was terminated, in part, because he sustained a job-related injury.
“10. As a proximate result of City’s acts, Green has been damaged in an amount he will prove with certainty at the time of his trial. Green will also seek to recover his lost retirement benefits.”
*237Green incorporates these allegations into his second cause of action for breach of the covenant of good faith and fair dealing and alleges, in pertinent part: “14. City breached this covenant in the following respects:
“A. City wrongfully fired Green depriving him not only of his right to earn a living, but also the full value of his retirement benefits;
“B. City decided to fire Green because he was critical of certain City activities and employees. As a result of its preconceived decision to terminate Green, City papered its file with untrue, exaggerated and partially fabricated criticisms of Green’s performance; and
“C. City attempted to pressure Green to voluntarily resign and when Green refused to do so, City fired him.”
There followed the allegations City acted with intent to cause Green emotional distress and accomplished its aims. Part of the prayer of Green’s amended complaint is for “damages caused by the severe emotional distress suffered by Green.”
City did not raise the exclusive remedy defense in its answer. However, City moved to exclude evidence of emotional distress damages based on the exclusive remedy rule. In the hearing on the motion conducted with City’s second motion for nonsuit, the trial court said: “[T]he instructions to the jury are going to have to be framed in a manner to advise the jury that they are not entitled to award any damages if they find any liability for stress for which Mr. Green may have been suffering that preceded his termination.” Green agreed to this instruction. The trial court also ruled: “[T]he Court will permit the jury to consider the damages that may arise out of the alleged intentional act of violating the covenant of good faith and fair dealing.”
Earlier in the trial, during argument of City’s first motion for nonsuit after Green’s opening statement, City also moved to exclude evidence of emotional distress or stress during Green’s employment. The court then pointed out Green’s case was “not an intentional infliction of emotional distress case,” after which Green’s counsel assured the court he was “only concerned with the emotional distress that occurred after the termination” and “I am going to only present evidence of emotional distress that has been suffered after termination.” The court did not rule on City’s evidentiary motion at that time, instead asking counsel for more argument and briefing on the subject. Evidence of Green’s workers’ compensation claim was admitted later during the trial.
*238The jury was instructed that emotional distress damages were recoverable only for post-termination distress. The City offered this instruction.
In sum, this is a case in which Green does not state a cause of action for infliction of emotional distress but instead seeks recovery for emotional distress as a part of his breach of the covenant of good faith and fair dealing cause of action. On the other hand, City has not raised the exclusive remedy defense in its answer and has done so only by way of its motions to exclude evidence of emotional distress during the existence of the employment relationship. Finally, the view of the trial court that this is not an intentional infliction of emotional distress case is not challenged, and I accept this posture of the case. It is thus clear that the exception from the exclusive remedy rule for certain cases of intentional infliction of purely emotional distress without physical injury or disability (see Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 155-156 [233 Cal.Rptr. 308, 729 P.2d 743]; Renteria v. County of Orange (1978) 82 Cal.App.3d 833, 838 et seq. [147 Cal.Rptr. 447]) does not apply to this case. Nor is there any concern in the case for any form of emotional distress that may have occurred before Green’s employment terminated (see Spratley v. Winchell Donut House, Inc. (1987) 188 Cal.App.3d 1408, 1414 [234 Cal.Rptr. 121]). The basic force and thrust of Green’s theory concerning emotional distress is that as a result of City’s conduct during the employment relationship he suffered emotional distress after that relationship terminated.
On the matter of preserving the exclusive remedy defense, Doney v. Tambouratgis (1979) 23 Cal.3d 91, 96-97 [151 Cal.Rptr. 347, 587 P.2d 1160], sets forth the rule: “It has long been established in this jurisdiction that, generally speaking, a defendant in a civil action who claims to be one of that class of persons protected from an action at law by the provisions of the Workers’ Compensation Act bears the burden of pleading and proving, as an affirmative defense to the action, the existence of the conditions of compensation set forth in the statute which are necessary to its application. (Popejoy v. Hannon (1951) 37 Cal.2d 159, 173 . . .; see also Gillespie v. Rawlings (1957) 49 Cal.2d 359, 361, fn. 1 . . .; Coleman v. Silverberg Plumbing Co. (1968) 263 Cal.App.2d 74, 79 . . .; Ramey v. General Petroleum Corp. (1959) 173 Cal.App.2d 386, 401 . . .; see generally 2 Witkin, Summary of Cal. Law (8th ed. 1973) p. 863; Cal. Workmen’s Compensation Practice (Cont.Ed.Bar 1973) § 17.23, p. 630.) ‘The employee is pursuing a common law remedy which existed before the enactment of the statute and which continues to exist in cases not covered by the statute. It is incumbent upon the employer to prove that the Workmen’s Compensation Act is a bar to the employee’s ordinary remedy.’ (Popejoy v. Hannon, supra, 37 Cal.2d 159, 173-174.)
*239“An exception to this general rule of pleading and proof by the defendant appears in the situation where the complaint affirmatively alleges facts indicating coverage by the act. Then, unless the complaint goes on to state additional facts which would negative the application of the act, no civil action will lie and the complaint is subject to a general demurrer. (Singleton v. Bonneson (1955) 131 Cal.App.2d 327, 331 . . .; see also Coleman v. Silverberg Plumbing Co., supra, 263 Cal.App.2d 74, 79; Deauville v. Hall (1961) 188 Cal.App.2d 535, 540, 544 . . .; see generally 2 Witkin, Summary of Cal. Law, supra, p. 863.)” (Fn. omitted.)
Here, the exception applies for a situation in which coverage by the Workers’ Compensation Act is affirmatively alleged and no additional factual allegations negative application of the act. The proof is consistent with the allegations. As mentioned, there is no other source of the emotional distress after Green’s termination than City’s actions which occurred during the employment relationship. City may assert the exclusive remedy rule without having affirmatively pleaded the defenses in its answer.
California law has been read as holding “that an injury in the form of emotional distress caused by termination of employment is within the course and scope of an employment relationship even when the emotional distress occurs subsequent to the date of termination.” (Russell v. Mass. Mut. Life Ins. Co. (9th Cir. 1983) 722 F.2d 482, 493, citing Ankeny v. Lockheed Missiles & Space Co. (1979) 88 Cal.App.3d 531, 534 [151 Cal.Rptr. 828] and Gates v. Trans Video Corp. (1979) 93 Cal.App.3d 196, 201-203 [155 Cal.Rptr. 486].9 ) Since the only injury Green asserts for emotional distress is that which occurred after the employment relationship *240terminated and since this could only relate to nonintentional, pretermination conduct for which City could be held liable, i.e., under facts indicating coverage by the Workers’ Compensation Act, it is to be concluded Green did not allege or prove facts sufficient to state a cause of action. A complete failure to state a cause of action may be raised for the first time on appeal. (See Code Civ. Proc., § 430.80, subd. (a); 9 Witkin, Cal. Procedure (3d ed. 1985) Appeal, § 315, p. 326; and see Parker v. Bowron (1953) 40 Cal.2d 344, 351 [254 P.2d 6].)
In this contention, I note the dissent in Doney v. Tambouratgis, supra, 23 Cal.3d 91, 100-101, expresses the view that the exclusive remedy rule raises a question of subject matter jurisdiction which may be raised for the first time on appeal. Writing for the dissent, Justice Richardson stated, in part, “if plaintiff’s injuries arose out of, and in the course of, her employment with defendant (and the majority does not dispute that fact), the trial court herein lacked jurisdiction over the subject matter of plaintiff’s action.” {Id. at p. 100.) In light of the legislative changes to Labor Code section 3602, among other sections, made since the 1979 Doney decision reflecting clearer language of legislative intent regarding the exclusive remedy rule (Stats. 1982, ch. 922, §§ 3-5, pp. 3365-3366, eff. Jan. 1, 1983), in my view the position of the dissent in Doney is strengthened.
To the extent the post-termination emotional distress which Green asserts could possibly be viewed as coming within an independent theory of recovery for emotional distress, it is clear Green did not state a cause of action to support this theory. (See Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d 148, 155, fn. 7, setting forth elements of cause of action for intentional infliction of emotional distress; and see Soto v. Royal Globe Ins. Corp. (1986) 184 Cal.App.3d 420, 430 [229 Cal.Rptr. 192].) Rather, Green asserted his post-termination emotional distress was a result of the breach of the covenant of good faith and fair dealing, and he cites no City conduct after his termination that would support a cause of action for intentional infliction of emotional distress. Accordingly, there is a complete failure to state such a cause of action, even viewing Green’s emotional distress case under an independent theory.
Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d 148, 160, points out “disabilities caused by stresses in the workplace are compensable [under the Workers’ Compensation Act] whether or not the employer was at fault.” Cole dealt with a physical disability case rather than a pure emotional distress situation and involved a case that arose before the exclusive remedy statutes were changed effective January 1, 1983 (Stats. 1982, ch. 922, supra). Yet, I believe its test for application of the exclusive remedy rule , that is, whether the acts complained of were “a normal part of the *241employment relationship” (43 Cal.3d at p. 160, citing as examples, “demotions, promotions, criticism of work practices, and frictions” {ibid.)) should be applied to a case such as Green’s. It is clear his discharge fits within this test. It is equally clear Green’s case does not involve “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. [Citations.]” (Cole, supra, 43 Cal.3d at p. 161.) All of City’s conduct of which Green complains in his suit for breach of the covenant of good faith and fair dealing was a normal part of the employment relationship. Thus, City’s conduct was within the application of the exclusive remedy rule.
I conclude City properly may raise the exclusive remedy rule for the first time on appeal. Further, the pleadings and proof, as delineated by the parties and the trial court, demonstrate Green does not state a cause of action allowing recovery for emotional distress because the exclusive remedy rule applies.
Ill
Having reached the foregoing conclusions in parts I and II of this dissent, I would not ordinarily address any of the remaining issues the City raises since it would be unnecessary to do so. However, in light of the majority resolution of the instructional issue with which I disagree, a brief statement of my position is here presented:
The jury was instructed: “The terms ‘just cause’ and ‘good cause’ for termination of an employment mean a fair and honest cause or reason regulated by good faith on the part of the party exercising the power.
“The question of what is or is not good faith and fair dealing between an employer and employee, or what constitutes ‘good cause’ for termination is for you to decide in light of the evidence and law in this case.”
As the majority points out, these instructions must be considered in the context of all of the instructions given, including the instructions on Green’s burden to prove “a breach of that contract by the defendant’s wrongful discharge of plaintiff, without good or just cause” and “that he was terminated wrongfully.” I nevertheless believe, viewed in this context, the given instructions leave the jury with unguided power to determine the nature and presence or absence of “good cause” without recognition of the employer’s right to make a “legitimate exercise of managerial discretion.” (Pugh v. See’s Candies, Inc. (1981) 116 Cal.App.3d 311, 330, fn. omitted [171 *242Cal.Rptr. 917].) The second sentence of City’s requested special instruction No. 4, reading, “In deciding the issue, you must take care, however, not to interfere with the legitimate exercise of managerial discretion by the employer,” given immediately after the first sentence defining “just cause” and “good cause” as quoted above, would have properly tempered the definition so as to prevent an unbridled jury determination ignoring the employer’s managerial discretion as recognized in Pugh. Given the facts of this case, I deem the error in not giving this requested instruction as creating a reasonable probability of a different result, thus calling for reversal. (People v. Watson (1956) 46 Cal.2d 818, 836 [299 P.2d 243]; Williams v. E. W. Robinson Van Lines (1955) 46 Cal.2d 14, 17-18 [291 P.2d 453].)10
Finally, I would comment on the dilemma faced by the experienced trial judge in this case. Recognizing vitality in City’s affirmative defense raising the exhaustion of administrative remedy issue, the court sought City’s argument and briefing thereon. Inexplicably, City failed to perform its agreement to supply further briefing and never mentioned the matter again. In light of City’s concessions concerning the covenant of good faith and fair dealing, most trial judges would have followed the course taken below. But for the extreme importance of the issues upon which I dissent, I would gladly have left City in the position in which it worked so hard to place itself.
I would reverse.
Appellant’s petition for review by the Supreme Court was denied October 29, 1987.

I am aided in reaching my views by an amicus curiae brief in support of the City filed on behalf of the League of California Cities, Legal Advocacy Committee, by Edward J. Cooper, City Attorney of Santa Ana. Seven additional cities and their city attorneys have requested to join in the amicus brief.

 Green testified: “Q. Well, did you file a formal protest with the City as a result of your termination?
“A. No, sir.
“Q. Mr. Green, after the Hunt incident in December of 1982 and after the weed eater incident in February of 1983 and after the Gest incident in May of 1983, and after the creeper incident in August of 1983, after each one of those incidents, you filed a grievance or a protest with the City; did you not?
“A. Yes, sir.
“Q. But on the occasion of your termination, you didn’t file any protest at all?
“A. No, sir.”

 Under section X.A. of the Agreement, discharge is specified as a form of disciplinary action available for employee misconduct. Causing damage to or waste of public property through misconduct or negligence and deliberate dishonesty related to the performance of an employee’s duties are among the definitions of misconduct in the Agreement. (Agreement, §§ X.A.3., X.A.8.) In the agreement, City agrees that employees will be disciplined only for just cause. (Agreement, § XI.A.) The Agreement spells out procedure to be followed in imposing discipline, including giving written notice with a statement of the reason, a copy of the charges of misconduct and whenever practical a copy of the material or documents upon which the charges are based. (Agreement, §§ XI.B., XI.B.l. and XI.B.2.) The employee’s right to respond is set forth as well. (Agreement, § X1.B.3.)
City’s Code section 23.44 makes similar provisions regarding notice and right to respond.
Section XII of the Agreement establishes the grievance procedure, first defining a grievance as “an alleged violation of a specific clause of the Agreemnt [s/c].” (Agreement, § XII.A.)
It thus clearly appears this grievance procedure applies to City’s action of discharging Green for the misconduct alleged in the September 8, 1983, letter, which specifically cites Agreement sections X.A.3., X.A.8., X.A. 11., X.A. 13. and X.A. 14. as the misconduct on which the disciplinary action of discharge is based.

See now 3 Witkin, California Procedure (3d ed. 1985) Actions, section 234, pages 264 to 266.

Reporter’s Transcript page 244 reads: “Mr. Larabee [Green’s Counsel]: I want to—
“Mr. Groszkruger [City’s Counsel]: I am mystified. I don’t know why I am being shown that.
“Mr. Larabee: I would like to introduce that, but I want to cover out the amount, $20 million. And I just don’t want him cross-examined on the amount of that because it was sent in my [j/c] by his attorney. But it goes to a filing of a claim with the City and also being told what to do by the City Council.
“Mr. Groszkruger: As part of the pleading requirements, plaintiff had already pled that he filed a claim and that the claim was rejected. I don’t know what it proves. There is no issue regarding the fact that the City denied his claim.
“The Court: Will you stipulate for the record, then, that the plaintiff filed a claim against the City and that the City rejected the claim?
“Mr. Groszkruger: Yes.
“Mr. Larabee: And that the last part of the instruction, that he was told that he had six months to file a lawsuit?
“The Court: What does that have to do with anything?
“Mr. Larabee: Well, I don’t know whether we are going to get into this administrative grievance or his failure to exhaust is [hc] remedies, but he has been questioned.
“The Court: If it comes in, at that time then you can raise this.”
On the next page of the transcript, the court accepts City’s stipulation that Green filed the claim and it was rejected.

I caution that this conclusion should not serve as any encouragement for such a wasteful method of resolving the issue of exhaustion of administrative remedies. The jurisdictional issue properly is to be raised at the earliest opportunity in a case such as this.

 Having reached this conclusion, I do not consider the arguments of amicus propounding the concepts that public employment is by statute, not by contract, that the theory of wrongful discharge as a tort or implied contract is not applicable to a public entity, and that an aggrieved employee may only seek judicial relief by way of administrative mandamus.

 Labor Code section 3600 provides that liability for compensation under the Workers’ Compensation Act where the described conditions of compensation exist is “in lieu of any other liability whatsoever to any person except as otherwise specifically provided in Sections 3602, 3706, and 4558 . . . .” (Subd. (a).) Section 3600 also refers to “specific exemptions to the employee’s exclusive remedy set forth in subdivision (b) of Section 3602 . . . .” (Subd. (b)0
Labor Code section 3601 provides that where the conditions of compensation concur, the right to recover compensation against another employee is, subject to two exceptions, “the exclusive remedy for injury or death of an employee . . . .” (Subd. (a).)
Labor Code section 3602, specifically setting forth the exclusive remedy rule with respect to suits against employers, provides in part: “(a) Where the conditions of compensation set forth in Section 3600 concur, the right to recover such compensation is, except as specifically provided in this section and Sections 3706 and 4558, the sole and exclusive remedy of the employee or his or her dependents against the employer, and the fact that either the employee or the employer also occupied another or dual capacity prior to, or at the time of, the employee’s industrial injury shall not permit the employee or his or her dependents to bring an action at law for damages against the employer.”

 The Ninth Circuit, in Russell, held that plaintiff Russell’s state law causes of action for negligent and intentional infliction of emotional distress arising out of her employer’s handling of her disability benefits by suspending the benefits for a time were preempted by the Employee Retirement Income Security Act of 1974 (ERISA; see 29 U.S.C.A. §§ 1109(a), 1132(a)). (Russell v. Mass. Mut. Life Ins. Co., supra, 722 F.2d at p. 493.) However, Russell held that while plaintiff’s cause of action for negligent infliction of emotional distress arising from the termination of her employment was barred by the exclusive remedy rule under the California Workers’ Compensation Act, plaintiff’s intentional infliction of emotional distress cause of action arising from the termination of her employment was not similarly barred. (Id. at pp. 493-495.) Plaintiff had alleged she suffered emotional injury accompanied by physical effects. (See Renteria v. County of Orange, supra, 82 Cal.App.3d 833, 842.)
The United States Supreme Court reversed the Ninth Circuit’s judgment. (Massachusetts Mut. Life Ins. Co. v. Russell (1985) 473 U.S. 134 [87 L.Ed.2d 96, 105 S.Ct. 3085].) The Ninth Circuit had held that ERISA authorized not merely contractual damages for loss of plan benefits but also damages for all losses and injuries sustained as a direct and proximate cause of the breach of fiduciary duty, including damages for mental or emotional distress and punitive damages. (473 U.S. at p. 138 [87 L.Ed.2d at p. 101, 105 S.Ct. at p. 3088.) Referring to the damages as “extra-contractual damages,” our highest court held that under ERISA there is no “cause of action for extra-contractual damages caused by improper or untimely processing of benefit claims.” (Id. at p. 148 [87 L.Ed.2d at p. 107, 105 S.Ct. at p. 3094.)

I wish to note in connection with both of Green’s causes of action relying upon an underlying contract of employment that since City has admitted a covenant of good faith and fair dealing applies to the employment relationship between Green and City, it is not appropriate in this case to discuss the arguments of amicus that public employment is by statute, not by contract, and the theory of wrongful discharge as a tort or implied contract is not applicable to a public entity.
In light of the conclusions I have reached, I do not address City’s remaining contention of error in denying City’s motion for nonsuit.