Procedural Posture

Appellant employee challenged the judgment of the Superior Court of San Diego County (California), which sustained without leave to amend respondent employer’s demurrer to appellant’s first amended complaint for fraud and bad faith.

California Business Lawyer & Corporate Lawyer, Inc. provides more information about Labor Code 1050

Overview

Appellant employee brought action against respondent employer for fraud and bad faith. Appellant alleged that respondent induced her to accept employment by intentionally misrepresenting certain facts regarding the shop’s security after a recent burglary. Appellant was injured as a result of a subsequent burglary after being on the job for only a month. The trial court dismissed the action, holding that it had no subject matter jurisdiction because workers’ compensation was appellant’s exclusive remedy. The court affirmed and held that appellant’s allegation of fraud did not avoid the exclusivity provisions of the workers’ compensation act, Cal. Lab. Code § 3600 et seq. The court further found that appellant sustained injury resulting from respondent’s alleged fraud and discovered such alleged fraud only during the employment relationship. The court ruled that to allow a claim for workplace intentional misconduct to be maintained would undermine the underlying premise on which the workers’ compensation system was based. The court also held that appellant’s cause of action for bad faith was simply a recharacterization of her claim for fraud.

Outcome

The court affirmed the trial court’s decision, holding that appellant employee’s causes of action for fraud and bad faith were compensable only under the workers compensation act and could not be maintained as an action at law.