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Law School Case Brief

Wagenseller v. Scottsdale Mem'l Hosp. - 147 Ariz. 370, 710 P.2d 1025 (1985)

Rule:

One who intentionally and improperly interferes with the performance of a contract between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other. Whether a particular action is improper is determined by a consideration of seven factors: (a) the nature of the actor's conduct, (b) the actor's motive, (c) the interests of the other with which the actor's conduct interferes, (d) the interests sought to be advanced by the actor, (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other, (f) the proximity or remoteness of the actor's conduct to the interference, and (g) the relations between the parties.

Facts:

Plaintiff Catherine Wagenseller began her employment at defendant Scottsdale Memorial Hospital ("Hospital") as a staff nurse in March 1975, having been personally recruited by the manager of the emergency department, defendant Kay Smith. Wagenseller was an "at-will" employee. Smith was her supervisor. Wagenseller's employment was terminated in Nov. 1979. Wagenseller filed a lawsuit in Arizona state court against the Hospital, Smith and other Hospital employees, claiming that her refusal to engage in acts of public indecency while on a rafting trip was the proximate cause of her termination. She claimed that, after the rafting trip, Smith harassed her, used abusive language, and embarrassed her in the company of other staff. She appealed her dismissal in letters to Smith and to the Hospital's administrative and personnel department and claimed violations of the disciplinary procedure contained in the Hospital's personnel policy manual. When the internal appeal was denied, Wagenseller filed suit, asserting that her termination was wrongful, and that damages were recoverable under both tort and contract theories. The Hospital argued that Wagenseller, as an "at-will" employee, could be fired for cause, without cause, or for "bad" cause. The trial court granted summary judgment in favor of defendants. On appeal, the appellate court affirmed the judgment as to Hospital and certain employees, but reversed as to Smith finding that she had cause of action against Smith. Wagenseller appealed.

Issue:

Can an employee be fired for "bad cause?"

Answer:

No.

Conclusion:

The court held that an employee may be fired for good cause or for no cause, but not for "bad" cause. The court observed that, in an at-will hiring, there was a presumption or an implied covenant of termination at the pleasure of either party, whether with or without cause. Firing for bad cause—one against public policy articulated by constitutional, statutory, or decisional law—was not a right inherent in the at-will contract, or in any other contract, even if expressly provided. Such a termination violated rights guaranteed to the employee by law and was tortious. The court concluded that the termination of Wagenseller's employment premised upon her for refusal to participate in the public exposure of one's buttocks was a termination contrary to public policy. The court affirmed that part of the appellate court's decision that determined that Wagenseller stated a cause of action against Smith for intentional interference with her employment relationship with the Hospital and which remanded that matter to the trial court for further proceedings. The court affirmed the grant of summary judgment on the count seeking recovery for breach of the implied covenant of good faith and fair dealing.

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