Walker v. Blue Cross of California
7 I.E.R. Cas. (BNA) 659, 6 Cal. Rptr. 2d 184, 4 Cal. App.4th 985 (1992)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An employer's retroactive application of a new, stricter medical leave policy to a long-term employee may breach an implied-in-fact contract to terminate only for good cause. The existence of such a contract is determined by the totality of the circumstances, including length of service, consistent promotions, positive evaluations, and prior company policies.
Facts:
- Carretha Walker began working for Blue Cross of California in 1969 and was employed for nearly 20 years.
- Throughout her employment, Walker received consistent promotions, salary increases, and satisfactory or above-standard performance evaluations.
- In 1987, Walker needed ankle surgery and was informed by Blue Cross personnel that under the existing policy, her six-month medical leave could be extended up to twelve months with a doctor's statement and company approval.
- Walker began her approved medical leave on August 10, 1987.
- On January 1, 1988, while Walker was on leave, Blue Cross implemented a new policy capping all medical leaves at six months within an 18-month period.
- Blue Cross informed Walker that the new policy applied to her retroactively, denied her doctor-supported request for an extension, and demanded she return to work by March 4, 1988.
- After Walker attempted a provisional return on March 4, her doctor determined she needed one additional month off due to physical discomfort.
- Blue Cross terminated Walker's employment on March 28, 1988, for violating the new medical leave policy.
Procedural Posture:
- Carretha Walker filed an amended complaint for wrongful termination against Blue Cross of California in a California superior court (trial court).
- Blue Cross filed a motion for summary judgment.
- The trial court granted the motion for summary judgment in favor of Blue Cross.
- Walker, as the appellant, appealed the trial court's judgment to the California Court of Appeal, with Blue Cross as the respondent.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does an employer's termination of a long-term employee for failing to comply with a new, stricter medical leave policy, which was implemented while the employee was already on a pre-approved leave under a more lenient prior policy, raise a triable issue of fact as to whether the employer breached an implied contract to terminate only for good cause?
Opinions:
Majority - Merrill, J.
Yes. An employer's termination of a long-term employee based on the retroactive application of a new leave policy raises triable issues of fact as to whether there was an implied contract to terminate only for good cause and whether that contract was breached. The court reasoned that under the 'totality of the circumstances' test, Walker's 19.5 years of service, consistent promotions, salary increases, and positive evaluations created a triable issue of fact regarding the existence of an implied-in-fact agreement. The court noted that language in an employee handbook stating employment is 'at will' is not conclusive as a matter of law when not part of an integrated written contract. Furthermore, a triable issue exists as to whether Blue Cross had 'good cause' for termination, as the decision was based on retroactively applying a new policy to a long-term employee who began her leave under a different, more lenient policy. The court also found a triable issue of fact as to whether the company's stated reason was pretextual, given that a reduction in force occurred in her department shortly after her termination.
Analysis:
This decision reinforces the strength of the implied-in-fact contract doctrine in California employment law, limiting the pure 'at-will' presumption for long-term employees with good records. It serves as a caution to employers against unilaterally and retroactively changing significant personnel policies for employees who have relied on prior policies. The ruling emphasizes that 'good cause' for termination is not a matter of pure employer discretion but is subject to judicial review for fairness and pretext, especially when the circumstances suggest an alternative motive.
Unlock the full brief for Walker v. Blue Cross of California