The California Supreme Court was tasked with resolving whether an employer's claim of "good cause" to terminate an employee is subject to judicial review. The lower courts were divided, with some believing the employee had an implied contract for life based on assurances, while others found the employer acted in good faith. The Supreme Court decided an employer's good cause determination should be subject to review considering the employee's position, reason for termination, information known to the employer, the employer's apparent good or bad faith, and other circumstances. The Court referred to the "Scott-Pugh standard" established in prior cases defining the role and outlook responsibilities of employers to employees, which it adopted.

1. GROUP 5
“Cotran v. Rollins Hudig Hall Case”
By
Natthawan Saethea (Mina)
Crystal Brooks
948 P.2nd 412 (Cal. 1998), noted on p. 322 of the text.

2. Fact…
• 1988 Ralph Cotran began working for RHH as Senior Vice President and Western Regional
International Manager. Because he great concerns about the position and job security he had three
demands
1. High salary
2. "Assurances [that] in the event that the international department did not work out
3. Would still have permanent employment with the company.
• March 1993 an employer Deborah Redmond reports to Human Resources that Cotran has sexually
harassed two women. (Carrie Dolce and Shari Pickett)
• Through a thorough investigation of the allegations against him he was eventually terminated from
RHH.

3. “Sexual
Harassment”
Investigation Terminated Sued
 Interviews with and Statements Provided by the Accusers: Ms. Redmond conducted separate
interviews with Ms. Dolce and Ms. Pickett. Each of the women was asked whether she was harassed.
Both said yes, identifying Mr. Cotran as the harasser.
 Interviews with other colleagues: The company's EEO office interviewed twenty-one people who had
worked with Mr. Cotran.
However, it is not simple like that Corhan did not believe that he was
fired correctly. So, he sued the company on the wrongful termination
action that solely on breach of the contract.

4. Implied Contracts

5. Express vs. Implied Contracts
Express Contract Implied Contract
An Express contract is one where the terms are
clearly stated in words, spoken or written.
For example, A wrote a letter to B stating “offer to
sell my car for $30,000 to you” B accepts the offer
by letter sent to A. This is an express contract.
Implied contract is made without any words spoken
and written, it arises from acts, conduct of parties,
course of dealing or circumstances.
For example, A went into a restaurant and had a cup
of tea. It is implied contract that A will pay for the
cup of tea

6. 1. What is the narrow “question” the California Supreme
Court says it wants to “resolve”?
• Personal decisions
• California court has concluded about “ Good Cause”

7. 2. Explain how the Courts of Appeal were divided over the
question; i.e., how were the lower courts approaching the
question differently?
• Trial Court believed that Cotran had a right to sue the company
because “Contract for life”
• California Court of Appeals thinks Cotran should be retired due to the
employer acted with “ a fair and honest cause or reason regulated by
good faith”

8. 3. What does the court decide is the proper way to resolve the
question? What is the court’s reasoning?
Do you agree? Why or why not?
In our view, the majority rule is more sound than the rule articulated in Wilkerson. We therefore hold
that an employer's claim of good cause to terminate an employee is subject to judicial review, and that resolution
of the issue by the trier of fact must take into account (1) the employee's position, (2) the reason given to the
employee for his or her termination, (3) the information the employer knew or should have known at the time the
employee was terminated (which would require an evaluation of the investigation conducted by the employer),
(4) the employer's apparent good faith or lack thereof, and (5) such other circumstances as may be appropriate in
any given case.
"To say it is very bad policy to have twelve randomly selected men and women second-guess good-faith,
honest judgments made by management personnel acting out of genuine concern for worker safety, is not to
trumpet a 'counter-revolution against worker's rights.'" (911 F.2d at p. 212, fn. 11, dis. opn. of Kozinski, J.)

9. 4.What is the court referring to when it refers to the “Scott-Pugh
standard”? Did the court adopt this standard? Do you agree
with it? Why or why not?
• Two cases that helps to put into alignment the role that an employer has to their
employees and the outlook of the company.
• Pugh v. See’s Candies, Inc. (1981) 116 Cal.App.3d 311, 330 (Pugh I) and Scott v. Pacific Gas
& Electric Co. (1995) 11 Cal.4th 454, 467 (Scott)