Tameny v. Atlantic Richfield Co

In Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, a former employee of the oil company alleged he had been terminated because he refused to participate in an illegal scheme to fix retail gasoline prices. (Id. at p. 171.) Our state Supreme Court reversed the dismissal of the plaintiff's claim for wrongful termination in violation of public policy, reasoning that although employers have broad discretion to terminate employees, "fundamental principles of public policy and adherence to the objectives underlying the state's penal statutes require the recognition of a rule barring an employer from discharging an employee who has simply complied with his legal duty and has refused to commit an illegal act." (Id. at p. 174.) In concluding the plaintiff's claim sounded in both contract and tort, the court noted, "California decisions . . . have long recognized that a wrongful act committed in the course of a contractual relationship may afford both tort and contractual relief, and in such circumstances the existence of the contractual relationship will not bar the injured party from pursuing redress in tort." (Id. at pp. 174-175.) As Tameny supra, 27 Cal.3d 167 recognized, "numerous decisions . . . confirm that '"it is well established in this state that if the cause of action arises from a breach of a promise set forth in the contract, the action is ex contractu from a contract, but if it arises from a breach of duty growing out of the contract it is ex delicto from a tort."'" (Id. at p. 175.) As the court explained, if a duty depends on express or implied promises in the contract itself, any action on the duty sounds in contract, but if the cause of action depends upon "a duty imposed by law upon all employers in order to implement the fundamental public policies embodied in the state's penal statutes," it may also be pleaded in tort. (Id. at p. 176.)