Life after Foley: The Future of Wrongful Discharge Litigation

Until recently, wrongful discharge suits could be based on at least three theories: retaliatory discharge in violation of an important public policy, bad faith discharge, and breach of contract for firing without good cause. Based on the first two theories a plaintiff could, and in a few well-publicized cases did, get substantial tort damages. The California Supreme Court's decision in Foley v. Interactive Data Corporation may have changed all of that by eliminating tort damages for wrongful discharge except in situations when an employee is discharged in violation of an important public policy. At the same time, the court may have made it easier for a plaintiff to prove an implied promise not to fire without good cause.

This Article considers the possible effects of Foley on wrongful discharge cases. Will the decision stem the flow of wrongful discharge filings? How much of a difference, in dollars, will result from switching from tort to contract? The Article attempts to answer these questions and concludes by suggesting ways in which employee's lawyers may offset Foley's effects by finding independent torts based on employer wrong-doing to support claims of emotional distress and punitive damages.