Stevenson v. Superior Court

Facts

Joan Stevenson worked for Huntington Memorial Hospital for over 30 years, “performing her job competently and receiving commendations and pay increases.” (16 Cal.4th at p. 885.) In 1992, shortly before her discharge, she took a hospital-approved medical leave; under the personnel manual, an employee returning from such leave was “guaranteed reinstatement to the same job classification and shift,” or, if that was “not possible for business reasons,” to another available job with a right to later reassignment. (Ibid.) When Stevenson notified the hospital she was ready to return, it refused to restore her original classification and shift and denied her reinstatement to any other position with a reassignment opportunity. (Id. at pp. 885–886.) The hospital terminated her after December 31, 1992, allegedly “because of [her] age and to deny her the opportunity to obtain benefits to which she was entitled . . . as a 30-year employee.” (Id. at p. 886.) She was 60. (Ibid.) Stevenson sued for, among other things, wrongful discharge in violation of the public policy against age discrimination. (Ibid.)

Procedural history

The case reached the Supreme Court on demurrer, so the complaint’s allegations were taken as true. (16 Cal.4th at p. 885.) The hospital demurred to the age-discrimination public-policy claim, contending no Tameny claim could rest on the FEHA’s age-discrimination policy and that the FEHA’s remedies were exclusive. (Id. at pp. 886–887.) The trial court overruled the demurrer to the contract claims but sustained it without leave to amend as to the public-policy tort claims; the Court of Appeal denied Stevenson’s writ petition, reasoning that Jennings’s logic led “ineluctably” to the conclusion that age discrimination violates no fundamental public policy “no matter how many employees an employer regularly employs,” while “respectfully urg[ing] the Supreme Court to explore further this troubling area of the law.” (16 Cal.4th at pp. 886–887.) The Supreme Court granted review to decide the question it had expressly reserved in Jennings v. Marralle (1994) 8 Cal.4th 121, and held the age-discrimination claim viable (Stevenson having abandoned a separate medical-leave theory). (Id. at pp. 884–887, 909 & fn. 2.)

Issue

May an older worker discharged by an employer subject to the FEHA (five or more employees) bring a common-law tort claim for wrongful discharge in violation of the public policy against age discrimination — and does the FEHA’s statutory remedial scheme bar such a claim as the exclusive remedy? (16 Cal.4th at pp. 884–885.)

Holding

Reasoning

1. The at-will baseline and the tort’s origins. The Court began from first principles. In California “an employment relationship may generally be terminated by either party ‘at will’” (Lab. Code, § 2922) — a rule “[f]irmly entrenched in traditional American common law” as “a particular application of the . . . freedom to contract.” (16 Cal.4th at pp. 887–888 & fn. 3.) But “employers have [sometimes] abused the at will relationship by discharging employees for reasons contrary to public policy,” and so “courts have created an exception”: “[a]n employer may not discharge an at will employee for a reason that violates fundamental public policy,” enforced “through tort law.” (Id. at p. 888.) The Court traced the exception to Petermann v. International Brotherhood of Teamsters (1959) 174 Cal.App.2d 184 and its recognition in Tameny. (Id. at pp. 888–889.)

2. The question left open in Jennings. In Jennings v. Marralle (1994) 8 Cal.4th 121, the Court had held that an older worker fired by an employer with fewer than five employees — and thus outside the FEHA — could not bring a public-policy tort claim, but it “specifically left for future determination” whether such a claim lies against an employer with five or more workers. (16 Cal.4th at pp. 884–885.) Stevenson answered that reserved question. (Ibid.)

3. The four-part Tameny test. Synthesizing Tameny, Foley, and Gantt, the Court set out the now-canonical framework: “to support a tortious wrongful discharge claim, [the policy] must be: (1) delineated in either constitutional or statutory provisions; (2) ‘public’ in the sense that it ‘inures to the benefit of the public’ rather than serving merely the interests of the individual; (3) well established at the time of the discharge; and (4) substantial and fundamental.” (16 Cal.4th at p. 894.) The Court reaffirmed Gantt’s teaching that “[a] . . . public policy exception carefully tethered to fundamental policies that are delineated in constitutional or statutory provisions strikes the proper balance.” (Id. at p. 889, quoting Gantt, 1 Cal.4th at p. 1095.)

4. Age-discrimination policy meets every criterion. Three criteria were “not reasonably subject to dispute.” (16 Cal.4th at pp. 894–895.) The policy “has been fully delineated by statute” — the FEHA both “declares a general policy against age discrimination” and “expressly prohibits discrimination against older workers.” (Id. at p. 895.) It is “public,” protecting society’s interest in a workforce free of arbitrary age bias rather than merely the individual; and it was “well established” at the time of Stevenson’s 1992 discharge. (Id. at pp. 895–900.) The Court then held the policy “substantial and fundamental.” (16 Cal.4th at pp. 895–900.) Acknowledging it had “not articulated a test for determining when a public policy is sufficiently substantial and fundamental,” the Court reasoned that age discrimination, like race and sex discrimination, offends the basic societal commitment that workers be judged “by merit, rather than by reference to group stereotypes.” (Id. at pp. 895–896.) It surveyed the breadth of the condemnation — California statutes addressing age bias across multiple contexts, the laws of other states, and the federal Age Discrimination in Employment Act — concluding that “the policy against age discrimination in employment is sufficiently substantial and fundamental to support a tort claim for wrongful” discharge. (Id. at pp. 896–900.) The “stereotyping of and discrimination against” older workers, the Court emphasized, inflicts a harm on society at large, not merely on the individual employee. (Id. at p. 896.)

5. The FEHA does not make its remedies exclusive. The Court rejected the hospital’s exclusivity argument on the statute’s own terms. The FEHA’s remedies “are cumulative rather than exclusive,” and Government Code section 12993, subdivision (a), provides that the Act’s provisions “shall be construed as . . . [not] repeal[ing] . . . any other [law] . . . relating to discrimination” — confirming that common-law claims survive. (16 Cal.4th at pp. 887, 904–905.) Because the FEHA expressly disclaims preemption of other anti-discrimination remedies, a Tameny claim built on the FEHA’s own declared policy “is consistent” with the statutory scheme rather than displaced by it. (Ibid.)

6. Answering the comprehensive-scheme objection. The Court distinguished cases barring common-law claims where a statute creates a self-contained, exclusive remedial scheme. (16 Cal.4th at pp. 904–909.) The FEHA is different: it supplies a policy and a set of remedies but, by section 12993, deliberately leaves other remedies intact. The age-discrimination policy thus may serve as the foundation for the independent Tameny tort, with its broader (including tort) damages. (Ibid.)

7. The concurrence and the dissent. Justice Baxter concurred in the judgment but on a deliberately “narrow ground” — “that a fundamental public policy against discrimination on the basis of age exists independent of the [FEHA],” so the Court “need not address any broader question.” (16 Cal.4th at p. 909 (conc. opn. of Baxter, J.).) He pointedly “d[id] not agree with the conclusion of the majority” regarding the FEHA’s non-exclusivity analysis, preferring to rest the result on the independent statutory expression of the policy. (Ibid.) Justice Brown dissented, invoking Karl Llewellyn’s counsel to approach “‘any new development with canny caution.’” (Id. at pp. 911–912 (dis. opn. of Brown, J.), quoting Llewellyn, The Common Law Tradition (1960) p. 281.) She would not have extended the Tameny tort to a policy “articulated in a statutory scheme that provides comprehensive remedies both to redress the aggrieved employee and to vindicate the [public interest],” fearing the common-law action would swallow the Legislature’s carefully calibrated FEHA remedies. (Id. at p. 912.)

Significance

Stevenson is doubly important. First, it is the decision that crystallized the four-part test now used to evaluate every Tameny public-policy claim — statutory/constitutional, public, well established, and substantial/fundamental — drawing the threads of Tameny, Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, and Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083 into a single rubric. Second, it confirms that the FEHA’s remedies are cumulative, so a plaintiff may pursue both a FEHA statutory claim and a parallel common-law wrongful-discharge tort grounded in the FEHA’s policy — a significant advantage because the tort carries remedies (and pleading flexibility) the statute alone may not. The decision sits beside City of Moorpark v. Superior Court (1998) 18 Cal.4th 1143 (disability) and Rojo v. Kliger (1990) 52 Cal.3d 65 (sex), which likewise hold FEHA policies non-exclusive, and it is routinely cited whenever a defendant argues that a statutory scheme forecloses a common-law claim. See the Review’s coverage of the wrongful-termination and retaliation lines.

Key quotes

To support a wrongful-discharge claim, the policy “must be: (1) delineated in either constitutional or statutory provisions; (2) ‘public’ in the sense that it ‘inures to the benefit of the public’ rather than serving merely the interests of the individual; (3) well established at the time of the discharge; and (4) substantial and fundamental.” (Stevenson, supra, 16 Cal.4th at p. 894.)

“[T]he policy prohibiting employment discrimination against older workers satisfies each of the criteria . . . [it] has been articulated in a statute (the FEHA), benefits society at large, is ‘substantial’ and ‘fundamental,’ and was well established at the time of the discharge.” (Id. at p. 885.)

“[B]ecause the FEHA expressly does not preempt any common law tort claims, the FEHA’s age discrimination remedies are not exclusive.” (Ibid.)

Read the full opinion (California Supreme Court — full text) →

Practice pointer

Open questions

Where a statutory scheme is genuinely exclusive (unlike the FEHA), a common-law Tameny claim may still be barred — and courts continue to litigate which statutes supply a non-exclusive policy versus a self-contained remedy. The reach of Stevenson to policies expressed in regulations (after Green v. Ralee) and to newer FEHA-adjacent protections, and the precise content of the “substantial and fundamental” inquiry, remain recurring questions.