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Keywords

contractattorneytrialpleawrongful terminationleasecorporationimplied contractattorney-client privilege
contracttortattorneystatuteappealtrialpleacorporationoverruledattorney-client privilege

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General Dynamics Corp. v. Superior Court, 7 Cal.4th 1164, 876 P.2d 487, 32 Cal.Rptr.2d 1, 63 USLW 2065, 128 Lab.Cas. P 57,741, 9 IER Cases 1089

Facts

Andrew Rose began working for General Dynamics Corporation in 1978 and was promoted to a position where he was in line to become general counsel. He was abruptly fired in 1991, with the company claiming a loss of confidence in his abilities. However, Rose alleged that his termination was actually due to his attempts to address issues such as drug use among employees and legal advice he provided that displeased company officials. He filed a complaint claiming wrongful termination based on implied contract and public policy violations.

Andrew Rose, an attorney, began working for General Dynamics Corporation (hereafter General Dynamics) as a 27–year–old contract administrator at its Pomona plant in 1978. He progressed steadily within the organization, earning repeated commendations and, after 14 years with the company, was in line to become a division vice-president and general counsel. On June 24, 1991, he was fired, abruptly and wrongfully.

Issue

Whether an in-house attorney's employment status bars the pursuit of implied-in-fact contract and retaliatory discharge claims against their employer following wrongful termination.

Specifically, we are asked to decide whether an attorney's status as an employee bars the pursuit of implied-in-fact contract and retaliatory discharge tort causes of action against the employer that are commonly the subject of suits by non-attorney employees who assert the same claims.

Rule

An in-house attorney may pursue claims for wrongful termination based on implied-in-fact contracts and public policy violations, as their employment relationship does not inherently preclude such claims.

We conclude that, because so-called “just cause” contractual claims are unlikely to implicate values central to the attorney-client relationship, there is no valid reason why an in-house attorney should not be permitted to pursue such a contract claim in the same way as the nonattorney employee.

Analysis

The court analyzed the nature of the employment relationship between in-house counsel and their employer, concluding that the economic dependence of in-house attorneys on their employers is similar to that of non-attorney employees. The court emphasized that the ethical obligations of attorneys do not negate their rights to pursue claims for wrongful termination, especially when such claims do not breach attorney-client privilege.

On balance, these considerations favor allowing a tort claim for discharges for reasons that contravene an attorney's mandatory ethical obligations or for which a non-attorney employee could maintain such a claim and a statute or ethical code provision permits the attorney to depart from the usual rule that client matters remain confidential.

Conclusion

The Supreme Court affirmed the trial court's decision to overrule the employer's demurrer, allowing Rose's claims to proceed. The court held that in-house attorneys are entitled to the same protections against wrongful termination as non-attorney employees.

Thus, we also hold that, in those instances where the attorney-employee's retaliatory discharge claim is incapable of complete resolution without breaching the attorney-client privilege, the suit may not proceed.

Who won?

Andrew Rose prevailed in the case because the court recognized his right to pursue claims for wrongful termination despite his status as in-house counsel, emphasizing the importance of protecting employees from retaliatory discharge.

The trial court overruled the demurrer and the Court of Appeal denied General Dynamics's ensuing petition for a writ of mandate, ruling that, at least at the pleading stage, the complaint was sufficient to survive a general demurrer as to both theories of relief.

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