Opinion
A096347. A097583.
11-7-2003
MARLENA PALACIO et al., Plaintiffs and Respondents, v. LONGS DRUG STORES CALIFORNIA, INC., Defendant and Appellant.
A jury awarded six plaintiffs $50,000 each in compensatory damages for their former employers intentional infliction of emotional distress in detaining and interrogating them for suspected theft. However, the jury also concluded that the employers detention and interrogation did not constitute false imprisonment, specifically finding that the employer did not "intentionally exercise force or the express or implied threat of force, menace, fraud or deceit, or unreasonable duress to restrain, detain or confine" plaintiffs. The employer appeals, contending that investigation of employee theft is a normal part of the employment relationship and thus civil suit damages are barred by the workers compensation exclusivity provisions. (Labor Code, §§ 3600, 3602.) We agree, and reverse the judgment.
In a separate appeal, the employer challenges the amount of attorney fees and costs awarded to it for prevailing on wage claims and other causes of action. (Code Civ. Proc., § 1032; Labor Code § 218.5.) Having consolidated the appeals for purposes of argument and decision, we affirm the attorney fee award on the wage claims, and remand for a recalculation of costs.
I.
FACTS
Appellant Longs Drug Stores (Longs) detained and interrogated several of its employees for suspected theft. The interrogations lasted from about 30 to 60 minutes. The method of interrogation followed a similar pattern in each instance, with the most detailed description provided by plaintiff Marlena Palacio.
Palacio testified that she was summoned to an office at the back of the store where she worked. Two female loss prevention officers were waiting for her, and one of the loss prevention officers, Balinda Davis, motioned for Palacio to have a seat. Palacio sat down and Davis told her that the store had been suffering some losses and that they were there to ask a few questions. Davis sat down across from Palacio about an arms length away, and the other agent sat at a desk taking notes. Palacio signed a form consenting to the interview and acknowledging that Palacio could leave the interview at any time.
Davis asked Palacio if Palacio let friends use her employee discount card in making purchases, and Palacio denied doing so. Davis sat back, waited, and then repeated the same question over and over. Davis said "Youre not being truthful." Davis raised her voice, was upset, and had an "abusive" tone. Palacio also characterized Daviss tone of voice as "stern" and "threatening," but stated that Davis was not "yelling." At some point in the interrogation, Davis told Palacio that the company had surveillance cameras that watch the employees "every movement." Davis also showed Palacio a manila folder and said that Davis had "evidence" in that folder against Palacio. Palacio felt "intimidated," "uneasy," "scared," and "extremely uncomfortable."
Davis asked other questions, including whether Palacio had stolen anything, or if coworkers had ever "under rang" Palacio, and Palacio said no. Davis again accused Palacio of being untruthful. Davis asked Palacio to guess how much money Palacio had lost the company. Palacio initially denied losing the company any money, but then said 50 cents and eventually said $ 5 because Davis was "hammering" at her and Palacio "just wanted to be able to go home." Davis told Palacio to "start naming names" and, referring to the manila folder, said "[i]f you dont start naming them, Ill name them for you." Palacio randomly named coworkers because she felt "pressured," even though no one had misused employee discount cards or under rung purchases.
Palacio said she needed to use the restroom, and the note-taking loss prevention officer accompanied her to the ladies room and then returned with her to the office. Palacio wrote a statement, dictated "word for word" by one of the loss prevention officers as they "hovered" over her. Palacio wrote that she was "`writing this statement as my own free will without any threats or promises made by any agents of Longs or itself, "but Palacio testified that she wrote the statement because "they told me I had to." In this statement, Palacio admitted that she had under rung friends, been under rung by others, and taken merchandise without paying for it, causing the company a total loss of $225. Longs fired Palacio. Longs paid Palacio accrued wages and vacation pay, but demanded $225 as restitution, which Palacio paid. At trial, Palacio testified that her written statement admitting theft was untrue.
II.
trial court proceedings
Six causes of action by nine plaintiffs were submitted to the jury: false imprisonment, conversion, intentional infliction of emotional distress, defamation against two plaintiffs, violation of Labor Code section 201 as to two plaintiffs [failure to pay earned wages upon discharge], and violation of Labor Code section 221 [illegal recovery of wages previously paid]. The jury returned defense verdicts in Longss favor on every cause of action except intentional infliction of emotional distress as to six plaintiffs. The jury found that Longs acted with malice, oppression, or fraud sufficient to support punitive damages, but did not assess any punitive damages.
The trial court denied Longss motion for judgment notwithstanding the verdict (jnov) on the intentional infliction of emotional distress cause of action, mistakenly believing that the matter had been previously decided on motion for summary adjudication. ~(CT 1446-1447)~ In fact, Longss pretrial motion was denied on grounds that a triable issue of material fact existed because respondents alleged false imprisonment and the "alleged false imprisonment is not within the contemplated bargain of employment" barred by the workers compensation exclusivity provision. The pretrial ruling did not preclude jnov for Longs after the jury weighed the false imprisonment allegations and rejected them. The question properly raised on jnov, and now on appeal, is whether, under the facts as determined by the jurys verdict, the exclusive remedy provision of the Workers Compensation Act does or does not bar respondents claim. (Gunnell v. Metrocolor Laboratories, Inc. (2001) 92 Cal.App.4th 710, 718-719.)
III.
discussion
A. Intentional Infliction of Emotional Distress
California has a long-established workers compensation system, in which injured workers receive compensation for workplace injuries without proof of fault. Under this system, "[t]he employee is afforded relatively swift and certain payment of benefits to cure or relieve the effects of industrial injury without having to prove fault but, in exchange, gives up the wider range of damages potentially available in tort." (Shoemaker v. Myers (1990) 52 Cal.3d 1, 16.) This "compensation bargain" entails that workers compensation benefits are generally the sole and exclusive remedy for work-related injuries, and employees are barred from pursuing civil damages. (Labor Code, §§ 3600, 3602.) "[T]he exclusive remedy provisions apply notwithstanding that the injury resulted from the intentional conduct of the employer, and even though the employers conduct might be characterized as egregious." (Shoemaker v. Myers, supra, at p. 15.)
An employers intentional infliction of emotional distress falls within the exclusivity bar, except in limited circumstances. (Shoemaker v. Myers, supra, at p. 15; Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 159-161.) Civil recovery for emotional distress damages has been permitted for violent or coercive conduct exceeding the scope of the work relationship, such as false imprisonment; or for firing an employee in violation of fundamental public policy, such as antidiscrimination and whistle-blower protection statutes. (Fermino v. Fedco, Inc. (1994) 7 Cal.4th 701, 722-723; Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1099-1101 [overruled on other grounds in Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 80, fn. 6]; Shoemaker v. Myers, supra, 52 Cal.3d at pp. 7, 20-23.)
Recovery for a distinct cause of action for intentional infliction of emotional distress has commonly been denied. (E.g. Shoemaker v. Myers, supra, 52 Cal.3d 1 at p. 25.) Nevertheless, our Supreme Court has not categorically precluded recovery for distinct causes of action alleging infliction of emotional distress. In Livitsanos v. Superior Court (1992) 2 Cal.4th 744, 755-756, the high court stated that employer misconduct exceeding "the normal risks of the employment relationship" may permit prosecution of causes of action for infliction of emotional distress. Livitsanos presented the extraordinary situation of an employee alleging "a campaign of outrageous and harassing conduct," including falsely accusing the employee of embezzlement, compelling the employee to sell his independent company, and forcing the employee to sign a $100,000 promissory note under threat of retaliation. (Id. at p. 756.) The employee occupied a dual status as both employee and independent distributor in Livitsanos, which bolstered the finding that the kind of conduct at issue did not wholly occur within the scope of an employment relationship. (Ibid.)
The determination of whether employer misconduct is a normal part of employment, and thus covered by workers compensation exclusivity provisions, turns upon the kind of conduct at issue and not the motivation behind it. Accordingly, "when the misconduct attributed to the employer is actions which are a normal part of the employment relationship, such as demotions, promotions, criticism of work practices, and frictions in negotiations as to grievances, an employee suffering emotional distress causing disability may not avoid the exclusive remedy provisions of the Labor Code by characterizing the employers decisions as manifestly unfair, outrageous, harassment, or intended to cause emotional disturbance resulting in disability." (Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d at p. 160.)
The question here is whether Longss interrogation of its employees for suspected theft was a normal part of the employment relationship. It has been held that "all reasonable attempts to investigate employee theft, including employee interrogation, are a normal part of the employment relationship." (Fermino v. Fedco, Inc., supra, 7 Cal.4th at p. 717.) However, an employers actions that go beyond the bounds of reasonable interrogation and detention, and constitute false imprisonment, are not a normal aspect of the employment relationship. (Id. at p. 723.) In Fermino, a department store salesperson alleged that her employer summoned her to a windowless room to accuse her of stealing the proceeds of a $4.95 sale to a customer, and physically compelled her to remain in the room for over an hour. The loss prevention manager "`hurled profanities" at the salesperson and a security guard stood in front of the door when she rose to leave. (Id. at pp. 706-707.) The Court held that the salesperson had stated a cause of action for false imprisonment, and that her allegations of false imprisonment could not be defeated on demurrer by raising the workers compensation exclusivity bar. (Id. at p. 724.)
We are concerned here not with judgment following demurrer, but following a jury trial in which the jury rejected the employees causes of action for false imprisonment. The jury specifically found, by way of special verdict, that Longs did not "intentionally exercise force or the express or implied threat of force, menace, fraud or deceit, or unreasonable duress to restrain, detain or confine" plaintiffs-respondents. Respondents assert on appeal that they were "harshly interrogated," and we acknowledge that the jury awarded emotional distress damages upon the express finding that the employers conduct was "outrageous." However, we understand Fermino to hold that investigations of employee theft are within the workers compensation exclusivity provisions as long as the investigations do not constitute false imprisonment or other violent or coercive acts against the employee. (Fermino v. Fedco, Inc., supra, 7 Cal.4th at pp. 722-723.) Characterizing the employers conduct as "harsh" or "outrageous" does not alter the analysis. "[C]onduct may be characterized as intentional, unfair or outrageous," but "nevertheless covered by the workers compensation exclusivity provisions." (Shoemaker v. Myers, supra, 52 Cal.3d at p. 25.)
Nor is it relevant that respondents claim emotional distress unaccompanied by physical injury. Earlier cases once made such a distinction, holding that a cause of action for intentional infliction of emotional distress is outside the scope of the workers compensation system where the injury is purely emotional and no physical disability is alleged. (E.g. Renteria v. County of Orange (1978) 82 Cal.App.3d 833, 838.) Respondents heavy reliance upon Renteria and similar cases is misplaced given our Supreme Courts express disapproval of Renteria and its emotional versus physical dichotomy. (Livitsanos v. Superior Court, supra, 2 Cal.4th at pp. 752, 754.) For over a decade, the relevant inquiry in determining application of the workers compensation exclusivity bar to emotional distress claims has been whether the employers conduct either contravenes fundamental public policy or exceeds the inherent risks of employment. (Id. at p. 755.) Longss conduct in interrogating its employees for suspected theft neither contravened fundamental public policy nor exceeded the inherent risks of employment, and thus emotional injury resulting from the interrogations are subsumed under the exclusive remedy provisions of workers compensation.
B. Attorney Fees and Costs
The Labor Code contains a reciprocal attorney fee and costs provision, mandating that "the court shall award attorneys fees and costs to the prevailing party" in any action brought for the "nonpayment of wages" seeking attorney fees and costs. (Labor Code, § 218.5; see Earley v. Superior Court (2000) 79 Cal.App.4th 1420, 1427-1431 [contrasting reciprocal fee provision of Labor Code § 218.5 with prevailing plaintiff fee provision of Labor Code § 1194 for overtime wages].) Respondents pled causes of action for violations of Labor Code section 201 (failure to pay earned wages upon discharge), and violation of Labor Code section 221 (illegal recovery of wages previously paid), and sought recovery of their attorney fees and costs in prosecuting the claims.
The trial court granted Longss motion for nonsuit on the Labor Code section 201 claims as to seven of the nine plaintiffs, and the jury rendered verdicts in Longss favor on all remaining Labor Code claims. The trial court determined that Longs was the prevailing party on the Labor Code causes of action, and awarded Longs $70,794.30 in fees for defense of the Labor Code claims. Longs argues on appeal that it is entitled to its entire defense fees of over $1.7 million, without apportionment of defense fees incurred on the multiple causes of action.
We discern no abuse of discretion in the trial courts fee award. "When a cause of action for which attorney fees are provided by statute is joined with other causes of action for which attorney fees are not permitted, the prevailing party may recover only on the statutory cause of action." (Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1133.) Longs is correct in noting that a trial court is not required to apportion fees "when incurred for representation of an issue common to both a cause of action for which fees are permitted and one for which they are not." (Ibid.) However, the decision whether to apportion attorney fees among causes of action is a matter of trial court discretion. "Nothing in Akins prohibits the trial court from doing what it did here: allocating attorneys fees based on its determination of the reasonable value of services attributed to the cause of action for which attorneys fees are allowed." (Track Mortgage Group, Inc. v. Crusader Ins. Co. (2002) 98 Cal.App.4th 857, 868.)
As to costs, we need not address Longss claims of entitlement to additional costs. Our reversal of the judgment against Longs for intentional infliction of emotional distress necessitates redetermination of the prevailing party and thus recalculation of costs under Code of Civil Procedure section 1032.
IV.
CONCLUSION
The judgment is affirmed except as to the judgment against Longs for intentional infliction of emotional distress. The matter is remanded for entry of judgment in favor of Longs and recalculation of costs under Code of Civil Procedure section 1032. The post judgment award of attorney fees under Labor Code section 218.5 is affirmed. The parties shall bear their own costs and attorney fees incurred on appeal.
We concur Reardon, Acting P.J. and Rivera, J.