In Vasquez v. Franklin Management Real Estate Fund, Inc., ___ Cal.App.4th ___ (Dec. 3, 2013; pub. ord. Dec. 31, 2013), the California Court of Appeal (Second Appellate District, Division Four) reversed the Los Angeles County Superior Court court’s ruling sustaining defendant employer’s demurrer to plaintiff’s claim of constructive discharge in violation of public policy.

Plaintiff filed claims against his former employer for violation of Labor Code Section 2802 (which requires employers to reimburse employees for necessary expenditures), intentional infliction of emotional distress and constructive discharge in violation of public policy based on the allegations that the employer required plaintiff to use his automobile for work but refused to reimburse him for mileage. The trial court sustained without leave to amend Defendant’s demurrer to the emotional distress and constructive discharge claims, finding that failure to reimburse for mileage was not sufficiently intolerable or aggravated to support a claim of constructive discharge and was not sufficiently outrageous and extreme conduct to support a claim for intentional infliction of emotional distress.

The appellate reversed, finding that the trial court abused its discretion in granting the demurrer to the constructive discharge claim without leave to amend.  The court acknowledged that, “in the typical case, an employer’s failure to reimburse an employee for expenses that should have been borne by the employer would not create such intolerable working conditions that the employee would have no option but to resign.” This case differed, however, because Defendant “required such extensive driving that the reimbursement to which [Plaintiff] was entitled represented a significant percentage of his already low salary     *      *     *     [and] [t]his left appellant in an untenable position. Forced to divert so much of his salary to gasoline and vehicle maintenance, he was unable to pay basic living expenses.”  Therefore, a trier of fact could conclude that Defendant “knowingly permitted working conditions that were so intolerable or aggravated at the time of the employee’s resignation that a reasonable employer would realize that a reasonable person in the employee’s position would be compelled to resign.”