## Facts

- Charles Hunter worked for Up-Right, Inc. from 1973, becoming welding supervisor in 1980.
- Hunter claimed he received excellent evaluations and that Up-Right followed a policy of terminating only for good cause.
- On September 10, 1987, Hunter’s supervisor allegedly said corporate headquarters eliminated Hunter’s position and told him to resign or be terminated; Hunter resigned in reliance on that statement.
- The supervisor disputed this account, testifying Hunter resigned voluntarily for personal reasons and denying any corporate decision to eliminate the job.
- Hunter sued for breach of contract, breach of the implied covenant of good faith and fair dealing, and tort claims including fraud and deceit.
- A jury found Up-Right lacked good cause and found for Hunter on fraud, awarding $120,000 including tort damages.

## Issues

1. Whether an employee may recover tort damages for fraud and deceit based on a misrepresentation made to effect termination, where the resulting damages are essentially the economic loss from the termination itself.

## Decision

- The California Supreme Court reversed the Court of Appeal’s affirmance of the fraud judgment.
- The Court held that wrongful termination ordinarily does not support a fraud/deceit tort recovery merely because a misrepresentation was made in connection with the termination.
- Tort recovery for fraud is available only when the misrepresentation is separate from the termination and causes damages independent of the job loss.
- Because Hunter’s claimed fraud injury was not independent of the termination, he was limited to contract remedies.

## Legal Principles

- Outside the public-policy wrongful-termination context, the employment relationship is fundamentally contractual, and contract damages are the standard remedy for wrongful termination.
- An employer’s termination-related misrepresentation does not, by itself, convert a discharge dispute into a tort claim for fraud or deceit.
- A fraud claim in the employment-termination setting requires proof of all fraud elements and a misrepresentation that is separate from the termination decision, producing damages that do not flow from the termination itself.
- Courts will not permit recharacterizing ordinary termination disputes as tort actions to obtain broader remedies (including punitive damages) when the loss is the job itself.

## Conclusion

The court limited termination disputes to contract remedies and barred fraud tort damages where the alleged misrepresentation merely induced resignation and the employee’s losses were the same as those resulting from the termination.


Hunter v. Up-Right, Inc., 6 Cal. 4th 1174 (Cal. 1993)