CACI No. 2401. Breach of Employment Contract - Unspecified Term - Actual or Constructive Discharge - Essential Factual Elements

Judicial Council of California Civil Jury Instructions (2020 edition)

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2401.Breach of Employment Contract - Unspecified Term - Actual
or Constructive Discharge - Essential Factual Elements
[Name of plaintiff] claims that [name of defendant] breached their
employment contract [by forcing [name of plaintiff] to resign]. To
establish this claim, [name of plaintiff] must prove all of the following:
1. That [name of plaintiff] and [name of defendant] entered into an
employment relationship. [An employment contract or a provision
in an employment contract may be [written or oral/partly written
and partly oral/created by the conduct of the parties]];
2. That [name of defendant] promised, by words or conduct, to
discharge [name of plaintiff][specify the nature of the alleged
agreement, e.g., only for good cause];
3. That [name of plaintiff] substantially performed [his/her/nonbinary
pronoun] job duties [unless [name of plaintiff]’s performance was
excused [or prevented]];
4. That [name of defendant] [constructively] discharged [name of
plaintiff][e.g., without good cause];
5. That [name of plaintiff] was harmed; and
6. That [name of defendant]’s breach of contract was a substantial
factor in causing [name of plaintiff]’s harm.
New September 2003; Revised November 2018
Directions for Use
Element 3 on substantial performance should not be confused with the “good cause”
defense: “The action is primarily for breach of contract. It was therefore incumbent
upon plaintiff to prove that he was able and offered to fulfill all obligations imposed
upon him by the contract. Plaintiff failed to meet this requirement; by voluntarily
withdrawing from the contract he excused further performance by defendant.” (Kane
v. Sklar (1954) 122 Cal.App.2d 480, 482 [265 P.2d 29], internal citation omitted.)
Element 3 may be deleted if substantial performance is not a disputed issue.
An employee may be “constructively” discharged if the employer intentionally
created or knowingly permitted working conditions to exist that were so intolerable
that a reasonable person would have had no reasonable alternative except to resign.
(Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1251 [32 Cal.Rptr.2d 223,
876 P.2d 1022].) If constructive rather than actual discharge is alleged, include “by
forcing [name of plaintiff] to resign” in the introductory paragraph and
“constructively” in element 4. Then also give CACI No. 2510, “Constructive
Discharge” Explained.
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Elements 2 and 4 may be modified for adverse employment actions other than
discharge, for example demotion. The California Supreme Court has extended the
implied contract theory to encompass adverse employment actions that violate the
terms of an implied contract. (See Scott v. Pac. Gas & Elec. Co. (1995) 11 Cal.4th
454, 473-474 [46 Cal.Rptr.2d 427, 904 P.2d 834].) See CACI No. 2509, “Adverse
Employment Action” Explained.
For an instruction on damages, give CACI No. 3903P, Damages From Employer for
Wrongful Discharge (Economic Damage). See also CACI No. 304, Oral or Written
Contract Terms, and CACI No. 305, Implied-in-Fact Contract.
Sources and Authority
• At-Will Employment. Labor Code section 2922.
• Contractual Conditions Precedent. Civil Code section 1439.
• “Where there is no express agreement, the issue is whether other evidence of the
parties’ conduct has a ‘tendency in reason’ to demonstrate the existence of an
actual mutual understanding on particular terms and conditions of employment.
If such evidence logically permits conflicting inferences, a question of fact is
presented. But where the undisputed facts negate the existence or the breach of
the contract claimed, summary judgment is proper.” (Guz v. Bechtel National,
Inc. (2000) 24 Cal.4th 317, 337 [100 Cal.Rptr.2d 352, 8 P.3d 1089], internal
citations omitted.)
• The employee bears the ultimate burden of proving that he or she was
wrongfully terminated. (Pugh v. See’s Candies, Inc. (Pugh I) (1981) 116
Cal.App.3d 311, 330 [171 Cal.Rptr. 917].)
• “The presumption that an employment relationship of indefinite duration is
intended to be terminable at will is therefore ‘subject, like any presumption, to
contrary evidence. This may take the form of an agreement, express or implied,
that . . . the employment relationship will continue indefinitely, pending the
occurrence of some event such as the employer’s dissatisfaction with the
employee’s services or the existence of some “cause” for termination.’ ” (Foley
v. Interactive Data Corp. (1988) 47 Cal.3d 654, 680 [254 Cal.Rptr. 211, 765
P.2d 373], internal citation omitted.)
• “In Foley, we identified several factors, apart from express terms, that may bear
upon ‘the existence and content of an . . . [implied-in-fact] agreement’ placing
limits on the employer’s right to discharge an employee. These factors might
include ‘ “the personnel policies or practices of the employer, the employee’s
longevity of service, actions or communications by the employer reflecting
assurances of continued employment, and the practices of the industry in which
the employee is engaged.” ’ ” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th
317, 336-337 [100 Cal.Rptr.2d 352, 8 P.3d 1089], internal citations omitted.)
• “Standing alone, constructive discharge is neither a tort nor a breach of contract,
but a doctrine that transforms what is ostensibly a resignation into a firing. Even
after establishing constructive discharge, an employee must independently prove
CACI No. 2401 WRONGFUL TERMINATION
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a breach of contract or tort in connection with employment termination in order
to obtain damages for wrongful discharge.” (Turner v. Anheuser-Busch, Inc.
(1994) 7 Cal.4th 1238, 1251 [32 Cal.Rptr.2d 223, 876 P.2d 1022], original
italics, internal citation omitted.)
• “Constructive discharge occurs when the employer’s conduct effectively forces
an employee to resign. Although the employee may say, ‘I quit,’ the employment
relationship is actually severed involuntarily by the employer’s acts, against the
employee’s will. As a result, a constructive discharge is legally regarded as a
firing rather than a resignation.” (Turner, supra, 7 Cal.4th at pp. 1244-1245,
internal citation omitted.)
• “In order to amount to a constructive discharge, adverse working conditions
must be unusually ‘aggravated’ or amount to a ‘continuous pattern’ before the
situation will be deemed intolerable. In general, ‘[s]ingle, trivial, or isolated acts
of [misconduct] are insufficient’ to support a constructive discharge claim.
Moreover, a poor performance rating or a demotion, even when accompanied by
reduction in pay, does not by itself trigger a constructive discharge.” (Turner,
supra, 7 Cal.4th at p. 1247, internal citation and fns. omitted.)
• “Whether conditions were so intolerable as to justify a reasonable employee’s
decision to resign is normally a question of fact.” (Valdez v. City of Los Angeles
(1991) 231 Cal.App.3d 1043, 1056 [282 Cal.Rptr. 726].)
• “In some circumstances, a single intolerable incident, such as a crime of
violence against an employee by an employer, or an employer’s ultimatum that
an employee commit a crime, may constitute a constructive discharge. Such
misconduct potentially could be found ‘aggravated.’ ” (Turner, supra, 7 Cal.4th
at p. 1247, fn. 3.)
• “[T]he standard by which a constructive discharge is determined is an objective
one - the question is ‘whether a reasonable person faced with the allegedly
intolerable employer actions or conditions of employment would have no
reasonable alternative except to quit.’ ” (Turner, supra, 7 Cal.4th at p. 1248,
internal citations omitted.)
• “In order to establish a constructive discharge, an employee must plead and
prove, by the usual preponderance of the evidence standard, that the employer
either intentionally created or knowingly permitted working conditions that were
so intolerable or aggravated at the time of the employee’s resignation that a
reasonable employer would realize that a reasonable person in the employee’s
position would be compelled to resign. [¶] For purposes of this standard, the
requisite knowledge or intent must exist on the part of either the employer or
those persons who effectively represent the employer, i.e., its officers, directors,
managing agents, or supervisory employees.” (Turner, supra, 7 Cal.4th at p.
1251.)
• “The length of time the plaintiff remained on the job may be one relevant factor
in determining the intolerability of employment conditions from the standpoint
of a reasonable person. Neither logic nor precedent suggests it should always be
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dispositive.” (Turner, supra, 7 Cal.4th at p. 1254, original italics.)
• “ ‘Good cause’ or ‘just cause’ for termination connotes ‘ “a fair and honest cause
or reason,” ’ regulated by the good faith of the employer. The term is relative.
Whether good cause exists is dependent upon the particular circumstances of
each case. In deciding whether good cause exists, there must be a balance
between the employer’s interest in operating its business efficiently and
profitably and the employee’s interest in continued employment. Care must be
exercised so as not to interfere with the employer’s legitimate exercise of
managerial discretion. While the scope of such discretion is substantial, it is not
unrestricted. Good cause is not properly found where the asserted reasons for
discharge are ‘trivial, capricious, unrelated to business needs or goals, or
pretextual.’ Where there is a contract to terminate only for good cause, the
employer has no right to terminate for an arbitrary or unreasonable decision.”
(Walker v. Blue Cross of California (1992) 4 Cal.App.4th 985, 994 [6
Cal.Rptr.2d 184], internal citations omitted, abrogated on another ground in Guz,
supra, 24 Cal.4th at p. 351.)
• “The general rule is that the measure of recovery by a wrongfully discharged
employee is the amount of salary agreed upon for the period of service, less the
amount which the employer affirmatively proves the employee has earned or
with reasonable effort might have earned from other employment.” (Parker v.
Twentieth Century-Fox Film Corp. (1970) 3 Cal.3d 176, 181 [89 Cal.Rptr. 737,
474 P.2d 689], internal citations omitted.)
Secondary Sources
Chin et al., Cal. Practice Guide: Employment Litigation ¶¶ 4:2, 4:8, 4:15, 4:65, 4:81,
4:105, 4:270-4:273 (The Rutter Group)
1 Wrongful Employment Termination Practice (Cont.Ed.Bar 2d ed.) Contract
Actions, §§ 8.4-8.20B
4 Wilcox, California Employment Law, Ch. 60, Liability for Wrongful Termination
and Discipline, §§ 60.05, 60.07 (Matthew Bender)
21 California Forms of Pleading and Practice, Ch. 249, Employment Law:
Termination and Discipline, §§ 249.10, 249.15, 249.43, 249.90, Ch. 250,
Employment Law: Wage and Hour Disputes, § 250.66 (Matthew Bender)
5 California Points and Authorities, Ch. 50, Contracts, §§ 50.10, 50.11 (Matthew
Bender)
10 California Points and Authorities, Ch. 100, Employer and Employee: Wrongful
Termination and Discipline, §§ 100.21, 100.22, 100.28, 100.29, 100.31 (Matthew
Bender)
California Civil Practice: Employment Litigation §§ 6:9-6:11 (Thomson Reuters)
2402. Revoked November 2018.
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