Scott V. Pacific Gas & Electric Co‪.‬

C. Byron Scott and Al Johnson were engineers employed by Pacific Gas and Electric Company (PG&E) in a senior managerial capacity when they were demoted. The demotion resulted in an approximately 25 percent reduction in salary and benefits, as well as a loss of all supervisorial authority. They sued, claiming, among other things, that PG&E had breached an implied-in-fact contract term not to demote their employees except for good cause. The jury, in special findings, found in fact that such a contract existed and had been breached, and awarded each plaintiff a substantial amount in compensatory damages for past and anticipated future lost earnings. The trial court entered judgment for Scott and Johnson, but the Court of Appeal reversed, holding that courts should not recognize or enforce such agreements for various reasons of law and public policy. Because the Court of Appeal's Conclusion contravenes well-established principles of law relating to employment contracts recognized in Foley v. Interactive Data Corp. (1988) 47 Cal. 3d 654, 254 Cal. Rptr. 211, 765 P.2d 373 (Foley), and in numerous cases preceding and following Foley, we conclude that judgment must be reversed.