Miranda v. Helman Group

Filed 5/21/08 Miranda v. Helman Group CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

The Helman Group (Helman), its human resources manager, Christine Hess (Hess), and its employee, Alicia Castillo (Castillo), appeal from the judgment entered after jury trial. The jury rendered a verdict in favor of Helman's former employee, Genoveva Miranda (Miranda), on her claims for wrongful termination in violation of public policy against Helman, intentional infliction of emotional distress against Hess and Castillo, and defamation against Helman, Hess and Castillo.

The jury awarded Miranda $225,000 in compensatory damages and $48,600 in punitive damages as follows: for wrongful termination $75,000 in economic damages and $55,000 in noneconomic damages against Helman; for intentional infliction of emotional distress $3,500 in economic damages and $4,000 in noneconomic damages against Hess and $3,500 in economic damages and $6,500 in noneconomic damages against Castillo; for defamation $30,000 in economic damages, $15,000 in noneconomic damages and $45,000 in punitive damages against Helman, $3,500 in economic damages, $4,000 in noneconomic and $3,500 in punitive damages against Hess and $3,500 in economic damages, $21,500 in noneconomic damages and $100 in punitive damages against Castillo.

Appellants contend that the verdict on wrongful termination in violation of public policy was against California law because a complaint of workplace defamation does not implicate any matter of public concern. They also contend that damages for lost wages were not recoverable on any cause of action because Miranda was not wrongfully terminated. We reverse the judgment as to the award of $130,000 against Helman for wrongful termination, and otherwise affirm.

FACTS AND PROCEDURAL BACKGROUND

In 2005, Miranda was employed by Helman as a receptionist, where she had worked for five years with excellent reviews. Her employment was at-will. On Monday, March 7, 2005, she spent a day off with her family at Universal Studios. On the way home, her husband received a call from their mutual friend, Richard.

Richard's wife, Victoria, had received an anonymous email message from "honestyoxn@yahoo.com" announcing that Miranda and Richard were having an affair. The author stated, "I am a friend of a friend," "I know [Miranda] is cheating with Richard," "she tells me he is always calling her at work," "they meet at lunch," and "she talks about [Richard] like he's the husband." The email message caused great distress within both families. Victoria forwarded a copy of the message to Miranda. Forensic evidence presented at trial confirmed that someone had created the honestyoxn@yahoo.com email account on March 7, 2005, using Miranda's work computer. Neither Richard, Victoria nor Robert was employed by Helman.

When Miranda returned to work on March 8, she printed a copy of the email message and took it to Hess. Miranda told Hess that she suspected that one of her coworkers, Castillo or Elizabeth Perez (Perez), sent the message after finding Victoria's email address in the contacts directory of her computer. Castillo and Perez each had access to Miranda's computer when they covered the receptionist desk for her. Castillo knew Richard; Perez did not. Hess told Miranda that this was a personal matter having nothing to do with the workplace and that no action would be taken. He made a note in Miranda's personnel file that Miranda had falsely accused Castillo of causing personal problems.

Miranda went to the office of Helman's CEO, and showed him a copy of the email message. The CEO called Hess into his office and, in Miranda's presence, told Hess to investigate the email. On March 9, 2005, Helman had an IT professional remove Miranda's hard drive from her work station. Miranda heard nothing further about an investigation.

The email message and the alleged affair became the subject of workplace gossip. Castillo and Perez made derogatory comments to Miranda at work. When Miranda passed by them to use the time clock, they whispered, "home-wrecker," and "where is sancho [slang for a lover]?" among other things. Miranda reported these remarks to a supervisor. She requested permission to set up a portable time clock, so that she would not have to pass by Castillo and Perez each day. The supervisor declined the request.

Miranda was very upset. With permission, she took a week of vacation time and obtained medical and psychological treatment. She returned to work, but remained upset. According to Helman's CEO and another employee, Miranda accessed Castillo's voicemail and played a message to him and to a coworker to demonstrate that Castillo was looking for work elsewhere.

On April 5, 2007, Hess terminated Miranda. He told Miranda that she was being terminated because she was unable to let go of the email matter. After Miranda's termination, she developed a major depression, for which she obtained medical treatment. She was unable to sleep, she lost weight and her hair fell out. Because of the hair loss and her emotional state, she was too embarrassed to leave the house. She was totally inactive and unable to work.

Without Miranda's income, her family used their entire $20,000 in savings to make mortgage payments and to meet other expenses, including Miranda's psychological treatment and medication. Miranda no longer had health insurance through Helman. Miranda's husband paid his mother $150 a week to clean and cook for the family. Miranda's car was repossessed on Christmas Eve. Sexual activity between Miranda and her husband declined from two or three times a week to less than once a month. Miranda's severe depression was confirmed by psychological testing and evaluation.

Miranda's complaint against Helman, Hess and Castillo asserted five causes of action for: (1) violation of the Fair Employment and Housing Act (FEHA) against all defendants, alleging sexual harassment and retaliation in response to complaints about sexual harassment; (2) wrongful termination in violation of public policy against Helman, alleging termination in response to complaints of sexual harassment; (3) intentional infliction of emotional distress against Hess and Castillo; (4) violation of FEHA against Helman, alleging failure to protect Miranda from sexual harassment and retaliation; and (5) defamation against all defendants, alleging that they falsely stated to others that Miranda was a poor employee who deserved written warnings and disciplinary action and that she was dishonest, insubordinate, a home-wrecker, and an adulterer.

The court granted appellants' motion for nonsuit as to the FEHA causes of action, finding that the alleged conduct did not fall within the provisions of FEHA.[1] This left only the claims for defamation, intentional infliction of emotional distress, and wrongful termination.

Helman moved for directed verdict on the cause of action for wrongful termination in violation of public policy on the ground that, without any FEHA claims, the case no longer involved any issue of public concern. Miranda argued that her wrongful termination claim was still viable based on: (1) termination in response to complaints of defamation, an issue of public concern; and (2) termination in response to complaints of sexual harassment, even if she had not actually been sexually harassed so long as she reasonably believed that the conduct she complained of constituted sexual harassment. Appellants also moved for directed verdict on the causes of action for defamation and intentional infliction of emotional distress. The court took the motions under submission, and instructed the jury on wrongful termination, defamation and intentional infliction of emotional distress. Over Helman's objection, the court instructed the jury that it could find wrongful termination if Miranda's complaints of defamation "and/or" sexual harassment were a motivating reason for her discharge. The court denied each of the motions for directed verdict just before it read the jury's verdict.

The jury found appellants liable on each of Miranda's causes of action. In special verdicts, it found that Miranda's complaints of defamation were a motivating cause of her termination, but that her complaints of sexual harassment were not. It found that each of the appellants made specific false statements about Miranda, causing damage to her reputation, and that these statements were made with malice, oppression and fraud. The jury found that the conduct of Hess and Castillo was outrageous, reckless, and caused Miranda to suffer emotional distress.

Appellants filed motions for judgment notwithstanding the verdict (JNOV) and a filed notice of intent to move for new trial. The record on appeal does not include points and authorities or affidavits in support of the motion for new trial, and does not include the transcript of the arguments on the post-trial motions. On June 6, 2007, appellants filed a notice of appeal from the "judgment after jury trial." On June 12, the trial court issued a written order denying appellants' post-trial motions. In its order, the trial court noted that appellants' notice of appeal was filed before the court ruled on the post-trial motions. It found that the post-trial motions were timely, and ordered that, "The denial of the motions for JNOV and New Trial are to be included in the Helman Group's appeal filed June 6, 2007."

DISCUSSION

Wrongful Termination in Violation of Public Policy

Helman argues that, in the absence of a predicate public policy, Miranda had no cause of action for wrongful termination as a matter of law. We agree.

Employment is terminable at will, absent agreement to the contrary. (Lab. Code,  2922.) There is a public policy exception to the at-will doctrine which allows a discharged employee to sue her employer in tort for wrongful termination in violation of a fundamental public policy. (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 170 [termination for refusal to participate in illegal price-fixing scheme supports cause of action for wrongful termination]; Stevenson v. Superior Court (1997) 16 Cal.4th 880, 887 [termination in violation of public policy against age discrimination supports cause of action for wrongful termination].)

Miranda's jury specifically found that she was not terminated for complaining of sexual harassment or retaliation. We decline Miranda's invitation to review the trial court's nonsuit ruling on her FEHA claims, which she did not appeal. Thus, her cause of action for wrongful termination depends entirely upon the theory that she was terminated for complaining of workplace defamation and that workplace defamation is a matter of fundamental public policy.

A policy must meet specific requirements to support a cause of action for wrongful termination. It must be tethered to specific constitutional or statutory provisions, it must inure to the benefit of the public rather than serving only the interests of the individual, it must have been established at the time of discharge, and it must be fundamental and substantial. (Stevenson v. Superior Court, supra, 16 Cal.4th 880, 889-890.) These requirements avoid judicial interference with the legislative domain and ensure notice to employers of conduct that will subject them to tort liability. (Id. at p. 889.)

Defamation is prohibited by statute. (Civ. Code,  44-48.) However, the prohibition serves only to protect the interests of individuals. "Even where . . . a statutory touchstone has been asserted, we must still inquire whether the discharge is against public policy and affects a duty which inures to the benefit of the public at large rather than to a particular employer or employee." (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 669.) In Foley, an employee was fired after he informed his employer that his supervisor was under investigation for embezzlement. (Id. at p. 664.) The employee could not state a cause of action for wrongful discharge based upon Labor Code section 2854, which imposes a duty upon employees to serve their employers with care, but serves only the private interests of the employer. (Foley,at p. 671.) Like Labor Code section 2854, Civil Code sections 44 through 48 regulate conduct between private individuals and do not implicate fundamental public policy concerns. (Foley,at p. 669.)

The gossip to which Miranda was subjected injured her personally, but does not give rise to public concerns regarding employer-employee relationships. As we have held in another context, an injury caused by workplace gossip about an employee's personal life does not arise out of employment, and gossip about an employee's personal life is not part of the employee-employer relationship. (Atascadero Unified School Dist. v. Workers' Comp. Appeals Bd. (2002) 98 Cal.App.4th 880, 882 [injury suffered as a result of gossip concerning extramarital affair, including name calling such as "tramp," and "husband stealer," could not support a claim for workers' compensation].) Although Miranda was injured by "gossip [that] occurred at work," the workplace "merely provided a stage for the event," (id. at p. 885) and only her private interests were injured.

Miranda's reliance on Grant-Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 1361 is misplaced. In Grant-Burton, the plaintiff was terminated for discussing her compensation with coworkers. Labor Code section 232 prohibits termination for discussing wages, and both the state Legislature and the United States Congress have declared that it is public policy to guarantee employees freedom to discuss their compensation so that they may fairly negotiate terms and conditions of their employment. (Id. at p. 1372-1373; Lab. Code,  923; 29 U.S.C.  151.) Miranda's personal interest in protecting her reputation does not implicate any such declared public policy.

Courts proceed cautiously if called upon to declare public policy absent some prior legislative expression on the subject. (Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1095, overruled on other grounds in Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 80, fn. 6.) The Legislature has made no declaration of public policy with respect to the prohibition against defamation, and we decline to do so. "[I]t is generally agreed that 'public policy' as a concept is notoriously resistant to precise definition, and that courts should venture into this area, if at all, with great care and due deference to the judgment of the legislative branch." (Ibid.)

Lost Wages Awarded for Defamation and Intentional Infliction of Emotional Distress

Appellants contend that the jury should not have been allowed to consider lost wages with respect to any cause of action, because Miranda had no cause of action for wrongful termination. Helman has waived the contention by failing to provide an adequate record to support it. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.)

Helman did not object to the claim for lost wages at any time before the verdict was rendered. The record shows no objection to the instructions on lost wages. Helman represents that it moved for new trial on the ground that lost wages should not have been awarded, but its designated record does not include any points and authorities in support of its motion for new trial or a transcript of the arguments on post-trial motions.

The judgment awarding $130,000 to Miranda against Helman for wrongful termination is reversed. The judgment is otherwise affirmed. Respondent is awarded costs on appeal.

NOT TO BE PUBLISHED.

COFFEE, J.

We concur:

GILBERT, P.J.

YEGAN, J.

Ken Riley, Judge

Superior Court County of Ventura

______________________________

Callahan, McCune & Willis, Kellie S. Christianson, for Defendants Appellants.

Nordman Cormany Hair & Compton, Meghan B. Clark; Law Office of Nicolas C. Vrataric, Nicolas C. Vrataric, for Plaintiff and Respondent.

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[1] Miranda's FEHA claims against Hess had already been dismissed.