Bernard v. State Farm Mut. Auto. Ins. Co., 158 Cal. App. 4th 304 (2007)

William Bernard had an insurance agency, representing certain State Farm insurance companies. Bernard alleged he was forced to resign when he was unable to carry out the physical requirements of the sales program following injuries he sustained in a car collision. Among other things, Bernard sued State Farm for breach of the implied covenant of good faith and fair dealing based on certain misrepresentations that allegedly had been made by his supervisors. The agency agreement in question provided that “You or State Farm have the right to terminate this Agreement by written notice delivered to the other or mailed to the other’s last known address.” The Court of Appeal held that this provision rendered Bernard’s employment terminable at will – even in the absence of more precise language. Therefore, Bernard’s claim for breach of the implied covenant of good faith and fair dealing had been properly dismissed by the trial court.