## Facts

- Wayne K. Pugh began working for See’s Candies in January 1941 at its Bay Area plant.
- Over more than 30 years, Pugh received promotions, ultimately becoming vice president in charge of production and a board member.
- Pugh presented evidence of long, successful service, including recognition for his tenure and performance during major sales seasons.
- Pugh testified that an early company president told him that if he was loyal and worked hard, his future at See’s would be secure.
- Pugh offered evidence that later company presidents followed a practice of not terminating administrative personnel without good cause.
- In June 1973, See’s terminated Pugh without prior formal criticism and without stating a reason.
- Pugh sued See’s and a union, alleging wrongful discharge based on breach of an implied agreement requiring good cause for termination and discharge for reasons offensive to public policy.
- After Pugh’s case-in-chief, the trial court granted defendants’ motions for nonsuit.

## Issues

1. Whether Pugh presented sufficient evidence for a jury to find an implied-in-fact agreement that he would not be discharged except for good cause, notwithstanding the statutory presumption of at-will employment.
2. Whether the trial court properly granted nonsuit under the standard requiring plaintiff’s evidence and reasonable inferences to be viewed most favorably to the plaintiff.
3. Whether the evidence was sufficient to allow the public-policy wrongful discharge theory to proceed to the jury.

## Decision

- The Court of Appeal reversed the judgment of nonsuit and remanded for further proceedings.
- The court held that Pugh’s evidence was sufficient for a jury to find an implied-in-fact limitation on See’s ability to discharge him, requiring good cause.
- Applying the nonsuit standard, the court concluded reasonable jurors could differ on whether See’s had implicitly promised continued employment conditioned on competent performance.
- The court recognized that at-will employment is a rebuttable presumption and that limits may arise from implied agreement and public policy constraints.

## Legal Principles

- California’s at-will employment rule is a rebuttable presumption; parties may establish different termination terms by express or implied agreement.
- An implied-in-fact agreement limiting termination may be inferred from the totality of circumstances, including longevity of service, promotions, lack of criticism, employer assurances, and consistent personnel practices.
- The existence and scope of an implied-in-fact limitation on discharge commonly present questions of fact for the jury.
- Nonsuit is improper where, viewing the plaintiff’s evidence as true and drawing all reasonable inferences in the plaintiff’s favor, there is substantial evidence that could support a plaintiff’s verdict.
- Wrongful discharge liability may also arise where termination contravenes fundamental public policy, independently limiting the at-will presumption.

## Conclusion

The court held that the evidence of Pugh’s long service, advancement, employer assurances, and company practices could support a jury finding that See’s implicitly agreed not to terminate him without good cause, making nonsuit improper and requiring reversal and remand.


Pugh v. See’s Candies, Inc., 116 Cal. App. 3d 311 (Cal. Ct. App. 1981)