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An employer's authority over its employee does not include the right to demand that the employee commit a criminal act to further its interests, and an employer may not coerce compliance with such unlawful directions by discharging an employee who refuses to follow such an order. An employer engaging in such conduct violates a basic duty imposed by law upon all employers, and thus an employee who has suffered damages as a result of such discharge may maintain a tort action for wrongful discharge against the employer.
Plaintiff Gordon Tameny instituted the present action against his former employer, Atlantic Richfield Company (Arco), alleging that Arco had discharged him after 15 years of service because he refused to participate in an illegal scheme to fix retail gasoline prices. Tameny sought recovery from Arco on a number of theories, contending, inter alia, that Arco's conduct in discharging him for refusing to commit a criminal act was tortious and subjected the employer to liability for compensatory and punitive damages under normal tort principles. Arco demurred to the complaint, contending that Tameny’s allegations, even if true, did not state a cause of action in tort. Arco conceded that California authorities establish that an employee who has been fired for refusing to perform an illegal act may recover from his former employer for "wrongful discharge." Arco contended, however, that the employee's remedy in such cases sounds only in contract and not in tort. The trial court accepted Arco's argument and sustained a general demurrer to plaintiff's tort causes of action. Tameny now appeals from the ensuing judgment.
May an employee who has been discharged because of his refusal to commit an illegal act at his employer's behest maintain a tort action and recover damages traditionally available in such actions?
The court concluded that Tameny’s action for wrongful discharge was ex delicto and subjected Arco to tort liability. Arco’s authority over Tameny did not include the right to demand that he commit criminal acts on its behalf, and it could not coerce compliance with such unlawful directions by discharging Tameny who refused to follow such orders. Such conduct violated a basic duty imposed by law upon all employers, and thus Tameny who had suffered damages from being discharged could bring a tort action for wrongful discharge against Arco.