The court assumes there is a covenant of
gf and fd and proceeds to discuss what the remedies for breach should be.
The court states that most likely should only get K damages, but the issue is complex and should be left up to the legislature.
-Generally, breach of the duty leads to contract damages, but there is an exception to that rule in the context of insurance contracts (unequal bargaining power, lack of freedom to bargain, etc.), for which tort damages may be awarded.
-The exception should not apply in the employment context. An employee is not left in the same economic dilemma as an ID that does not receive payment on a claim. An employee can seek alternative employment. Also, EE and ER interests are generally aligned, not at odds as those of ID and IR.
ARGS for TORT DAMAGES:
1. K remedies are inadequate and inappropriate compensation. One cannot get damages for infliction of emotional distress, etc.
2. Torts help effectuate punishment for bad acts.
3. One does not enter an employment K for strictly commercial reasons.
DISSENT: A tort remedy should exist, but ONLY if there is a K and it has been breached. Most employment relationships today do not have Ks. Another dissenter (court rejects this argument) states that since the duty is imposed by law, tort remedies should apply because the duty is not based on the intention of the parties, but on the normative values of society as a whole.
-The practical impact of this case in California (and other states) is to slow down the number of employment cases. Without a tort remedy, lawyers are not as willing to take these cases.
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