Procedural Posture

Plaintiff employee sued defendant, his former employer, for breach of contract and fraud. In a bifurcated trial, the jury found in favor of plaintiff and awarded him $ 210,320 in compensatory damages, $ 50,000 in emotional distress damages, and $ 1 million in punitive damages. Defendant appealed from the judgment of the Superior Court of Kern County (California).

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Overview

Defendant alleged on appeal that there was insufficient evidence in the record to support: (1) judgment on the fraud claim, (2) judgment on the breach of contract claim, and (3) the economic damages award. The court of appeals found sufficient evidence to support judgment on the fraud claim. However, the court of appeals agreed with defendant’s latter two contentions. The record did not support plaintiff’s claim that he had either an express or implied contract for a minimum one-year term of employment. There was no evidence that the parties had agreed plaintiff would have a minimum one-year term of employment or would be terminated only for cause. In the published portion of its opinion, the court of appeals determined that the language in an employment agreement relating to a performance review after one year did not constitute a term of employment. The court of appeals also found that emotional distress damages arising from a claim of fraud in inducing employment were not barred by the workers’ compensation exclusivity doctrine.

Outcome

The judgment as to the fraud claim was affirmed. The judgment with respect to the contract cause of action was vacated. The economic and punitive damages award was reversed and remanded. Costs were awarded to defendant.