Judge Bruce G. Iwasaki, Case Number: 21STCV07074, Date: 2024-02-02 Tentative Ruling

Matter: Motion for Summary Judgment or, in the alternative, Summary Adjudication

Tentative Ruling: The motion for summary judgment is denied. The motion for summary adjudication is granted as to Issues Nos. 1-3, and 6, and denied as to Issues No. 4-5.

This is an employment discrimination case brought by Plaintiffs Thomas Villanueva (Villanueva) and Hernando Quitero (Quitero) (Plaintiffs) against former employer, Robbins Brothers Jewelry, Inc., and their former supervisor, Mark Pimental (Pimental) (jointly, Robbins Brothers). Plaintiffs allege their employment was terminated based on their religion and for reporting unlawful activity.

The operative complaint asserts the following five causes of action: (1) discrimination based on religion; (2) harassment based on religion; (3) retaliation for complaints of religious discrimination and/or harassment; (4) retaliation for reporting violations of law (Labor Code § 1102.5 and 1102.6); and (5) wrongful termination.

Now, Defendants move for summary judgment, or in the alternative, summary adjudication. Plaintiffs oppose the motion.

The motion for summary judgment is denied. The motion for summary adjudication is granted in part and denied in part.

Plaintiff’s objections to Defendants’ evidence are ruled as follows: Nos. 1-13 are overruled.

Defendant objections to Plaintiffs’ evidence are ruled as follows: Nos. 1-44, 46-48, 51-56, 58-67, 69-79, 81-108, 110-115, 117-162, 165-172 are overruled, and Nos. 45, 49-50, 57, 68, 80, 105, 109, 116, 164 are sustained.[1] Objection No. 163 contains an objection but provides no legal basis for it and, therefore, is overruled. Objections Nos. 173-190 fail to cite to any the specific objectionable material and are overruled.

Defendants’ objections to the declaration of Villanueva are ruled as follows: Nos. 1-8 are overruled. Defendant’s objections to the declaration of Quintero are ruled as follows: Nos. 1-6 are overruled. Defendant’s objections to the declaration of Leslie are ruled as follows: Nos. 1, 6 are overruled, and Nos. 2-5, 7 are sustained. Defendant’s objections to the declaration of Bradley are ruled as follows: Nos. 1, 3-7 are overruled, and No. 2 is sustained.

“The party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A triable issue of material fact exists if the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. (Ibid.)

“When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal. App. 4th 463, 467; Code Civ. Proc., § 437c, subd. (c).)

“California uses the three-stage burden-shifting test established by the United States Supreme Court for trying claims of discrimination based on a theory of disparate treatment,” known as the McDonnell Douglas test. (Scotch v. Art Institute of California (2009) 173 Cal.App.4th 986, 1004.) Under the McDonnell Douglas test, “the plaintiff [first] has the burden of establishing a prima facie case of discrimination. Second, if the plaintiff meets this burden, the employer must offer a legitimate nondiscriminatory reason for the adverse employment decision. Third, and finally, the plaintiff bears the burden of proving the employer's proffered reason pretextual.” (Knight v. Hayward Unified School Dist. (2005) 132 Cal.App.4th 121, 129.)

” ‘A defendant employer's motion for summary judgment slightly modifies the order of these [McDonnell Douglas] showings.’ “ (Scotch, supra, 173 Cal.App.4th at p. 1005.) To prevail on summary judgment, the defendant employer is “required to show either that (1) plaintiff could not establish one of the [prima facie] elements of the FEHA claim, or (2) there was a legitimate, nondiscriminatory reason for its decision to terminate plaintiff's employment.” (Avila v. Continental Airlines, Inc. (2008) 165 Cal.App.4th 1237, 1247.)

Defendants Robbins Brothers move for summary judgment on the grounds that Plaintiff cannot establish all the elements of their claims and there are no triable issue of material fact in dispute.

Defendants move for summary adjudication of the first cause of action on the grounds that Plaintiffs cannot establish prima facie case for discrimination and Defendants had a legitimate, non-discriminatory reason for Plaintiffs’ termination.

Government Code section 12940, subdivision (a) makes it “unlawful” “[f]or an employer, because of the race, religious creed, color, national origin, ancestry, physical disability, mental disability, reproductive health decisionmaking, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or veteran or military status of any person... of any person, ... to discriminate against the person in compensation or in terms, conditions, or privileges of employment.”

In cases alleging adverse employment actions in violation of FEHA, the trial courts generally apply the same three-stage, burden-shifting test established by the United States Supreme Court for trying claims of discrimination based on a theory of disparate treatment. (See McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792, 802–804.) “This so-called McDonnell Douglas test reflects the principle that direct evidence of intentional discrimination is rare, and that such claims must usually be proved circumstantially.” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 354.) The McDonnell Douglas test is inapplicable where the plaintiff presents direct evidence of discrimination, that is, evidence which, if believed, proves the fact of discriminatory animus without inference or presumption. (Trop v. Sony Pictures Entertainment, Inc. (2005) 129 Cal.App.4th 1133, 1144–1145.)

“[T]he FEHA's discrimination provision addresses only explicit changes in the ‘terms, conditions, or privileges of employment’ (§ 12940, subd. (a)); that is, changes involving some official action taken by the employer. [Citation.]” (Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 706.) Such official action by an employer with respect to an employee includes “hiring, firing, failing to promote, adverse job assignment, significant change in compensation or benefits, or official disciplinary action.” (Ibid.)

To make out a FEHA violation based on direct evidence, a causal connection must be shown between discriminatory attitudes by supervisors expressed in words or actions and the adverse employment actions in issue. (Trop, supra, at pp. 1146–1149; see also DeJung v. Superior Court (2008) 169 Cal.App.4th 533, 550.)

Here, the evidence shows that Plaintiff Villanueva was employed by Robbins Brothers from October 2000 to May 2020. (DSS 2.) He was also a Jehovah’s Witness and was baptized as a Jehovah’s Witness in June 2014. (DSS 4.) Plaintiff Quintero was employed by Robbins Brothers from October 2005 to May 2020. (DSS 5.) He was also a Jehovah’s Witness and was baptized as a Jehovah’s Witness in June 2006. (DSS 7.) Both Plaintiffs discussed their religious beliefs at work. (DSS 9.)

In September 2017, Plaintiff Villanueva submitted a complaint to then Director of Human Resources Cheryl Albert (Albert) on behalf of Plaintiff Quintero and other members of the Credit/Collection Department, asserting that members of the Credit/Collection Department who identified as Jehovah’s Witnesses felt they were being mistreated, harassed, and discriminated against by Carolyn Shearer (Shearer) and Credit/Collections Manager Alex Iglesias (Iglesias). (DSS 14.)[2]

Following an investigation by Albert and Human Resources Manager Gina Ortiz (Ortiz), Plaintiff Quintero (writing on behalf of himself and two other employees in the Credit/Collections Department) sent Cheryl Albert and Bruce Ross an email stating “the harassment and discrimination [they] were experiencing seems to have stopped for now” and “appreciate[d] all of [their] hard work in this matter.” (DSS 18.) Thereafter, Shearer voluntarily resigned from her position with Robbins Brothers on February 16, 2018. (DSS 19.)

In March 2018, a meeting was held between Defendant Pimental, CEO Andy Heyneman, Plaintiff Villanueva, Plaintiff Quintero, and Kelvin Bradley (an employee in the Credit/Collections Department who also identifies as a Jehovah’s Witness); at the meeting, Heyneman and Pimental asked Villanueva, Quintero and Bradley to prepare a list of suggestions of what they would like to see happen to address their concerns. (DSS 21.) After the discussions, some of Quintero and Bradley’s suggestions were adopted by Robbins Brothers. (DSS 24.) One measure that Robbins Brothers took to address Plaintiffs’ concerns was the creation of the Asset Protection Department and the promotion of Plaintiff Villanueva to Asset Protection Director and Plaintiff Quintero to Asset Protection Associate. (DSS 25.)

Plaintiffs assumed their new roles on June 1, 2018. (DSS 27.) They both received pay increases in connection with these new roles. (DSS 27.) Defendant Pimental oversaw the Asset Protection Department, with Plaintiff Villanueva reporting directly to Defendant Pimental and Plaintiff Quintero reporting directly to Plaintiff Villanueva. (DSS 28.)

Then, on or around March 20, 2020, Robbins Brothers was required to close its stores due to the COVID-19 pandemic. (DSS 29.) In response to these store closures, Defendant Robbins Brothers laid off 32 employees in 2020, which represented approximately 11% of Robbins Brothers’ workforce at the time. (DSS 35.)

Plaintiffs were two of the 32 employees impacted by the reduction in force (RIF). (DSS 35.) Defendants’ evidence shows that the decision to include Plaintiffs’ positions in the RIF was made after weighing the services provided and the need to reduce costs – not based on any discriminatory animus. (DSS 38.)

To prove discriminatory intent, Plaintiffs must establish that their religion was a “substantial motivating factor” for the adverse action. (Harris v. City of Santa Monica (2013) 56 Cal. 4th 203, 231-232.) Defendant argues that the only evidence related to discriminatory animus came from conduct alleged against Shearer but who resigned before any adverse employment decision was made with respect to Plaintiffs.

Based on the foregoing evidence, Defendants have shifted their initial burden of showing that Plaintiffs’ positions for the reduction in force was not motivated by discriminatory animus. (DSS 29-41.)

The opposition argues there is ample evidence of discriminatory motive for the adverse employment decision.

Plaintiffs first point to an exchange between Robbins Brothers’ CEO Marc Friedant (Friedant) and Plaintiffs in August 2018 (shortly after Friedant became CEO) where Plaintiffs’ asked Friedant if he was aware of Plaintiffs’ history of complaints of religious discrimination and harassment at Robbins Brothers; Friedant said he was, and he called Plaintiffs “schmucks.” (PMF 21.)

In another instance, on November 15, 2018, Friedant sent a text message to Robbins Brothers VP of Finance Christine Benigo (Benigo), in which Friedant made a comment about Jehovah’s witnesses, writing “I said your doorbell rang. Could’ve been Jehovahs [sic] Witnesses!” in response to Benigo writing that she “can’t get [her] work done cuz too busy with late nite booty calls.” (PMF 22.)

Finally, on July 13, 2019, Friedant and Benigo had another text exchange in which Benigo wrote that she had “peed on a stick” and it “came back [positive] … Does that mean I’m having twins?” Friedant wrote, “Probably not, but it does mean that Thomas Villanueva is getting thrown out of Kingdom Hall…,” referring to the Jehovah’s Witness place of worship. Benigo responded with laughing emoji and wrote “Good one!!!” (PMF 23.)

Plaintiffs also argue Defendant Pimental demonstrated discriminatory animus based on a number of management decisions that suggests disparate treatment based on religion and comments. In a February 25, 2019 meeting, Pimental referred to Plaintiffs as martyrs during a conversation in which Plaintiffs were complaining about retaliation and interference with their asset protection duties. (PMF 146, 147.) In March 21, 2019, after Villanueva quoted scripture in an email to another employee, Pimental told Villanueva that this employee was uncomfortable with discussions about God and asked Villanueva not to quote scripture in emails. (PMF 149–151.) In April 2019, Pimental instructed Villanueva to read a book by an evangelical minister, which contained an entire chapter on spirituality, and attend a seminar about the book. (PMF 152–154.)

Additionally, in February 2020, Plaintiffs were “singled out” to sign documentation requiring Plaintiffs to preserve records relating to former employee James Leslie, who had sued Robbins Brothers after being terminated. (PMF 158.) In response, Plaintiffs expressed concern in writing that this was a continuation of the pattern of discrimination against them and asked if non-Jehovah’s Witnesses were also being asked to sign the document. (PSS 158-160.)

Plaintiffs argue that Pimental treated Plaintiffs differently than other direct reports he managed by insisting that he be on the asset protection email distribution list and requiring Plaintiffs to create a project tracker so that Pimental could monitor every task Plaintiffs completed. (PMF 145.)

Plaintiffs’ evidence is insufficient to shift their burden of demonstrating discriminatory animus by either direct or circumstantial evidence.

Here, with respect to the two texts written by Friedant touching on Plaintiffs’ religion, the Court notes that they occurred eight months apart. Moreover, while the comments are unprofessional, they do not demonstrate bias based on Plaintiffs’ religion that casts the religion in a derogatory light. (See e.g., Serri v. Santa Clara University (2014) 226 Cal.App.4th 830, 867 [no discriminatory motive from stray remarks raising only weak suspicion of discrimination].) That is, the comments are not derogatory in nature against Plaintiffs’ religion.

Similarly, the evidence of Pimental’s management provides no evidence of religious discrimination, and fails to shift Plaintiffs’ burden. That is, while Plaintiffs argue they were treated differently by Pimental than other employees, they Plaintiffs fail to show that other employees were similarly situated such that inference of disparate treatment based on religion is supported by the evidence.

Further, Defendants’ evidence also demonstrates a legitimate, nondiscriminatory reason for its actions.

In a reduction in force case, “where jobs are eliminated and duties reallocated during a general work force reduction, the issue of discriminatory motive becomes more complicated.” (Guz, supra, 24 Cal.4th at p. 366.)

For example, in the case of an age discrimination case, a plaintiff must “show, prima facie, that persons significantly younger, but otherwise similarly situated, were ‘ “treated more favorably.” ‘ “ (Ibid.) This is because “the decision to discharge a qualified, older employee is not inherently suspicious [and in] a [reduction in force], qualified employees are going to be discharged.” (Brocklehurst v. PPG Industries, Inc. (6th Cir.1997) 123 F.3d 890, 896.)

Robbins Brothers laid off employees from a variety of positions across multiple departments. (DSS 37.) Plaintiffs’ positions were not filled by other employees that were not Jehovah Witnesses but were absorbed by several others Robbins Brothers’ employees – including Pimental, Director of Store Operations Carlos Batista, and Director of Infrastructure Micah Resley. (DSS 41.)

Plaintiffs argue that Plaintiffs were the only employees in Operations who were not offered a transfer before being terminated, and the Asset Protection Department, which consisted solely of Plaintiffs, was the only Department eliminated in the RIF. (PMF 30, 34, 35, 69–75.) Despite Defendants’ profitability in 2020, Defendants did not offer Plaintiffs their jobs back. (PMF 87–91.)

None of this opposition evidence demonstrates pretext. Rather, the evidence suggests that this newly formed department, Asset Protection Department, was deemed non-critical. (DSS 31-41; PMF 56-58.) Plaintiffs argue that security and fraud prevention are critical to Robbins Brothers’ profitability as a retailer of jewelry, suggesting specifically that Plaintiffs’ Asset Protection Department is essential. (PMF 33, 61.) However, the evidence shows Robbins Brothers was “unusually” profitable in 2021 – after the Asset Protection department had been eliminated. (PMF 29, 87.)

To avoid summary judgment by indirect evidence, an employee in this situation cannot “simply show the employer's decision was wrong, mistaken, or unwise. Rather, the employee ‘ “must demonstrate such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer's proffered legitimate reasons for its action that a reasonable factfinder could rationally find them ‘unworthy of credence,’ [citation], and hence infer ‘that the employer did not act for the [ ... asserted] non-discriminatory reasons.’ [Citations.]” [Citations.]” (Horn v. Cushman & Wakefield Western, Inc. (1999) 72 Cal.App.4th 798, 807; Hersant v. Department of Social Services, supra, 57 Cal.App.4^th at 1005.) This, Plaintiffs fail to do.

Thus, Plaintiffs have failed to raise a triable issue of material fact by showing discriminatory animus by the decision-makers for the adverse employment action or that Defendants’ legitimate, nondiscriminatory reason for its actions was pretextual. Plaintiffs’ first cause of action fails.

Defendants move for summary adjudication of the second cause of action on the grounds that it fails as a matter of law because the undisputed facts show that neither Robbins Brothers nor Pimental subjected Plaintiffs to severe or pervasive unlawful conduct to meet the legal standard for actionable harassment.

“ ‘The law prohibiting harassment is violated “[w]hen the workplace is permeated with discriminatory intimidation, ridicule and insult that is ‘ “sufficiently severe or pervasive to alter the conditions of the victim's employment and create an abusive working environment.” ’ ” ’ ” (Caldera v. Department of Corrections and Rehabilitation (2018) 25 Cal.App.5th 31, 38; see Serri v. Santa Clara University (2014) 226 Cal.App.4th 830, 869). “Since ‘there is no possible justification for harassment in the workplace,’ an employer cannot offer a legitimate nondiscriminatory reason for it.” (Cornell v. Berkeley Tennis Club (2017) 18 Cal.App.5th 908, 927.)

First, Defendants argue that – to the extent Plaintiffs’ harassment claim is based on alleged conduct by Shearer and/or Iglesias that occurred in 2017 or earlier – the claim is time barred.

In 2016, Quintero’s supervisor, Shearer, told Quintero that he would have to accept a birthday gift from her even though she knew Quintero did not celebrate birthdays as a result of his faith. (PMF 102, 103.) Between 2016 and 2018, Shearer “taunted” Quintero 15 to 20 times about not participating in holidays activities. (PMF 106.) Between October 2016 and September 2017, Shearer repeatedly harassed Quintero on account of his faith. (PMF 107.) In front of Quintero, Shearer mockingly asked another Jehovah’s Witness employee, Keith Perez, if Perez had thrown his Jehovah’s Witness Bible at a colleague. (PMF 110, 111.) Further, in late 2016 and throughout 2017, Shearer repeatedly denied Quintero’s requests for religious accommodations to his scheduled shifts. (PMF 112.) Shearer removed Quintero’s language concerning Jehovah from the personal comments section of Quintero’s 2016 performance review. (PMF 113.) In July 2017, Shearer called Quintero “shady” and stated that she wanted to get rid of him. (PMF 114.)

The conduct attributable to Shearer ceased in 2017 when she resigned on February 16, 2018. (Pimentel Decl., ¶ 11.) Likewise, no conduct is attributed to Iglesias after 2017. (PMF 107-109, 112, 115, 125-126.)

Under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA), an administrative complaint alleging harassment must be filed with the Department of Fair Employment and Housing “after the expiration of one year from the date upon which the alleged unlawful practice ... occurred....” (Gov. Code, § 12960, subd. (d).) Once the department provides a “right-to-sue” letter, the plaintiff may file an action based on the allegations made in the administrative complaint. (Gov. Code, § 12965, subd. (b).) The employee must file his or her civil action under FEHA within one year of the DFEH's right-to-sue notice. (Gov. Code, § 12965, subd. (b).)

Here, Plaintiffs filed claims with the Department of Fair Employment and Housing (DFEH) against Robbins Brothers Jewelry, Inc., concerning the unfair employment practices, on June 5, 2020. (FAC ¶ 3.) The Complaint in this action was not filed until February 23, 2021. Thus, a harassment claim is barred to the extent it is based on conduct predating this statute of limitations period.

In response, Plaintiffs argue that they are not pursuing claims based on conduct prior to May 30, 2018.[3]

Rather, Plaintiff takes the position that there was a “culture of discrimination against Jehovah’s Witnesses at Robbins Brothers that dates back to 2012, and which included the termination of two other Jehovah’s Witnesses who had complained about religious discrimination and top executives who mocked Jehovah’s Witnesses in private texts.” (Opp. 19:24-28.) Notwithstanding this argument, Plaintiffs point to no actionable harassment conduct that occurred within the limitations period.

This conduct does not constitute harassment as a matter of law. That is, an employment decision, generally, cannot constitute harassment under FEHA.

“Harassment includes but is not limited to ... [v]erbal harassment, e.g., epithets, derogatory comments or slurs on a basis enumerated in the Act.” (Cal. Code Regs., tit. 2, § 11019, subd. (b)(2)(A); see Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 129.) “ ‘[H]arassing conduct takes place “outside the scope of necessary job performance, conduct presumably engaged in for personal gratification, because of meanness or bigotry, or for other personal motives.” [Citation.] “Thus, harassment focuses on situations in which the social environment of the workplace becomes intolerable because the harassment (whether verbal, physical, or visual) communicates an offensive message to the harassed employee.” ’ ” (Serri v. Santa Clara University, supra, 226 Cal.App.4th at p. 869; see Roby v. McKesson Corp., supra, 47 Cal.4th at p. 706.) “Harassment is not conduct of a type necessary for management of the employer's business or performance of the supervisory employee's job.” (Reno v. Baird (1998) 18 Cal.4th 640, 646.)

For example, the court in Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55 explained that “commonly necessary personnel management actions such as hiring and firing, job or project assignments, office or work station assignments, promotion or demotion, performance evaluations, the provision of support, the assignment or nonassignment of supervisory functions, deciding who will and who will not attend meetings, deciding who will be laid off, and the like, do not come within the meaning of harassment. These are actions of a type necessary to carry out the duties of business and personnel management. These actions may retrospectively be found discriminatory if based on improper motives, but in that event the remedies provided by the FEHA are those for discrimination, not harassment. Harassment, by contrast, consists of actions outside the scope of job duties which are not of a type necessary to business and personnel management. This significant distinction underlies the differential treatment of harassment and discrimination in the FEHA.” (Id. at pp. 64–65.)

Plaintiff also points to conduct by Pimental, during a February 25, 2019 meeting, Pimental sarcastically referred to Plaintiffs as martyrs during a conversation in which Plaintiffs were complaining about retaliation and interference with their asset protection duties. (PMF 146, 147.) In that conversation, Pimental also clapped his hands at Plaintiff. (PSS 146.)

As noted in the discrimination discussion above, Plaintiffs also identify several other situations that they felt demonstrated religious discrimination and/or harassment – such as being asked not to quote scripture in company emails or being asked to read a book as part of company training that was written by an evangelical minister. (PMF 149-154, 162.)

The conduct identified by Plaintiffs in this limited statute of limitations period is neither severe nor pervasive.

When the severity of harassment is at issue “ ‘ “[t]hat inquiry requires careful consideration of the social context in which particular behavior occurs and is experienced by its target.... The real social impact of workplace behavior often depends on a constellation of surrounding circumstances, expectations, and relationships which are not fully captured by a simple recitation of the words used or the physical acts performed. Common sense, and an appropriate sensibility to social context, will enable courts and juries to distinguish between simple teasing or roughhousing ... and conduct which a reasonable person in the plaintiff's position would find severely hostile or abusive.” ‘ “ (Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 283.) The conduct Plaintiffs complain of does not approach the severity required to constitute harassment.

“With respect to the pervasiveness of harassment, courts have held an employee generally cannot recover for harassment that is occasional, isolated, sporadic, or trivial; rather, the employee must show a concerted pattern of harassment of a repeated, routine, or a generalized nature. [Citations.] That is, when the harassing conduct is not severe in the extreme, more than a few isolated incidents must have occurred to prove a claim based on working conditions.” (Lyle, supra, 38 Cal.4th at pp. 283–284.) Here, the isolated interactions do not evince pervasive harassment. And in the case of asking Plaintiff not to quote scripture in business emails, the directive was appropriate.

Defendants also move for summary adjudication against plaintiffs’ third cause of action for retaliation for making complaints of religious discrimination and/or harassment. Plaintiffs’ claims fail as a matter of law because the undisputed facts show: (1) Plaintiffs cannot establish a causal connection between their alleged protected conduct and any adverse employment action; (2) Robbins Brothers had legitimate, non-retaliatory reasons for its actions; and (3) Plaintiffs cannot produce any substantial, responsive, admissible evidence that Robbins Brothers’ legitimate, nonretaliatory reasons for its actions were pretextual or motivated by retaliatory animus. (DSS 1-59.)

FEHA states that an employer may not “discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under” FEHA. (Gov. Code, § 12940, subd. (h).) “Employees may establish a prima facie case of unlawful retaliation by showing that (1) they engaged in activities protected by the FEHA, (2) their employers subsequently took adverse employment action against them, and (3) there was a causal connection between the protected activity and the adverse employment action.” (Miller v. Department of Corrections (2005) 36 Cal.4th 446, 472; accord, Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1042; see Mamou v. Trendwest Resorts, Inc. (2008) 165 Cal.App.4th 686, 713-715.)

Like claims for discrimination, retaliation claims based on FEHA are subject to the McDonnell Douglas burden-shifting analysis. (Loggins v. Kaiser Permanente Internat. (2007) 151 Cal.App.4th 1102, 1108-1109.)

Thus, for the same reasons the Court granted the motion for summary adjudication of the first cause of action, the third cause of action fails. Defendants proffered a legitimate, nonretaliatory reason for the adverse employment action that Plaintiffs alleged in their complaint—the decision to terminate Plaintiffs’ employment.

Moreover, the evidence shows that after Plaintiffs made their internal complaints, they were promoted and received pay raises. (UMF 25, 27.) Plaintiffs were not terminated until over two years later, when Defendants reduced their workforce by 11% in response to the COVID-19 pandemic. (DSS 35-36.) Plaintiffs fail to show they were dismissed in retaliation for their complaints of religious discrimination and harassment.

Fourth Cause of Action for Retaliation pursuant to Labor Code section 1102.5 (Issue No. 4):

Defendant moves for summary education to Plaintiffs’ fourth cause of action for retaliation for reporting violations of law in violation of Labor Code sections 1102.5 and 1102.6 on the grounds that (1) Plaintiffs did not engage in conduct protected under Labor Code sections 1102.5 and 1102.6; (2) Plaintiffs’ alleged protected conduct was not a contributing factor to any adverse employment action; (3) Defendants had legitimate, non-retaliatory reasons for its actions which would have occurred regardless of any protected conduct by Plaintiffs; and (4) Plaintiffs cannot produce any admissible evidence that Defendants legitimate, non-retaliatory reasons for its actions were pretextual or motivated by retaliatory animus.

Labor Code section 1102.5 provides that “[a]n employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information, or because the employer believes that the employee disclosed or may disclose information, to a government or law enforcement agency, to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance . . . if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee's job duties.” (Labor Code, § 1102.5, subd. (b).)

To establish a prima facie case of retaliation under section 1102.5(b), a plaintiff “ ‘must show (1) she engaged in a protected activity, (2) her employer subjected her to an adverse employment action, and (3) there is a causal link between the two.’ ” (McVeigh v. Recology San Francisco (2013) 213 Cal.App.4th 443, 468.) An employee engages in protected activity under section 1102.5, subdivision (b), when he or she discloses to a governmental agency or employer reasonably based suspicion of illegal activity. (McVeigh, supra, at p. 469; Mueller v. County of Los Angeles (2009) 176 Cal.App.4th 809, 821-822 [Section 1102.5(b) “requires that to come within its provisions, the activity disclosed by an employee must violate a federal or state law, rule or regulation. [Citation.]”].)

Labor Code section 1102.6 provides the framework for evaluating a claim of whistleblower retaliation under section 1102.5: “Once an employee-whistleblower establishes by a preponderance of the evidence that retaliation was a contributing factor in the employee’s termination, demotion, or other adverse action, the employer bears the burden of demonstrating by clear and convincing evidence that it would have taken the same action ‘for legitimate, independent reasons.’” (Lawson v. PPG Architectural Finishes, Inc. (2022) 12 Cal.5th 703, 707.) Our Supreme Court explained that burden shifting under section 1102.6 is different than under FEHA. Unlike the FEHA claim, “[u]nder section 1102.6, a plaintiff does not need to show that the employer’s nonretaliatory reason was pretextual. Even if the employer had a genuine, nonretaliatory reason for its adverse action, the plaintiff still carries the burden assigned by statute if it is shown that the employer also had at least one retaliatory reason that was a contributing factor in the action.” (Id. at p. 716.)

Here, Plaintiffs’ whistleblower retaliation claim is premised on two alleged fraudulent schemes that they purportedly uncovered and disclosed: (1) “fake sales” fraud wherein employees were allegedly ringing up fake sales to meet their sales quotas and boost their commissions; and (2) “fake paystubs” fraud wherein fake paystubs or paychecks were created so that credit would be extended to customers who otherwise would not qualify. (FAC ¶¶ 12-17.)

In moving for summary adjudication, Defendants first argue that evidence does not show Plaintiffs engaged in any protected activity because Pimental was already aware of alleged illegal activity that Plaintiffs reported.

However, as a matter of law, Pimental’s knowledge of this alleged illegal activity does not negate Plaintiffs’ engagement in the protected activity of reporting this illegal conduct. (People ex rel. Garcia-Brower v. Kolla's, Inc. (2023) 14 Cal.5th 719 [explaining that protected disclosures include information that was already known to the employer or government agency to which it was disclosed].)

Next, Defendants argue that Plaintiff Quintero did not personally report the “fake sales” issue to Pimental and, learned of the “fake paystub” fraud from Plaintiff and Pimental. (DSS 64, 73-74.) Thus, Defendants argue, Plaintiff Quintero did not engage in any protected activity. (DSS 64.)

In opposition, Plaintiffs concede that Quintero did not personally report either of the fraudulent schemes to Pimental, but that Quintero was involved in both investigations through his work in the Asset Protection Department. (PMF 183, 163.)

Plaintiffs’ evidence is sufficient to raise a triable issue of material fact regarding Quintero’s involvement in participating in the protected activity.

Finally, Defendants argue there was no causal connection between the protected activity and the adverse employment action because they had a legitimate, non-whistleblowing reason for Plaintiffs’ termination. (DSS 31-41.)

In opposition, Plaintiffs submit evidence that suggest Defendants viewed Plaintiffs’ discovery and investigation of illegal activity with hostility.

With respect to the causal connection element, an employee need not show that retaliation was the “ ‘but for’ cause of the employment decision” but must show that retaliation was at least a “substantial motivating factor” for the decision. (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 230, 232.) “ ‘ “The causal link may be established by an inference derived from circumstantial evidence, ‘such as the employer's knowledge that the [employee] engaged in protected activities and the proximity in time between the protected action and allegedly retaliatory employment decision.’ ” [Citation.]’ [Citation.] ‘Essential to a causal link is evidence that the employer was aware that the plaintiff had engaged in the protected activity.’ [Citation.]” (Morgan v. Regents of University of California (2000) 88 Cal.App.4th 52, 69–70.) A causal connection can also be demonstrated by a “sudden change of position” toward an employee after a disclosure is made. (Mokler v. County of Orange (2007) 157 Cal.App.4th 121, 141, disapproved of on another ground by Lawson, supra, 12 Cal.5th 703.)

In June 2019, Plaintiffs investigated fake sales fraud as part of their asset protection duties. (PMF 177, 178.) After interviewing employees of the Costa Mesa store, Plaintiffs discovered that the manager and other employees were charging customers’ credit cards for fake sales prior to the end of the month to earn commissions and bonuses, and then canceling the transactions after receiving bonuses and commissions. (PMF 179, 180, 186.) Plaintiffs also learned that Costa Mesa employees were hiding merchandise to carry out this scheme and circumvent Robbins Brothers’ revenue recognition rules. (PMF 188, 189.)

After Pimental tried to prevent Plaintiffs from recording the interviews, Plaintiffs met with Pimental and Friedant to complain and recommended that Defendants notify affected customers and banks. (PMF 183.) Rather than address the security concerns, Friedant became “upset” with Plaintiff and “screamed” that Plaintiffs should not be recording the interviews. (PMF 185.)

Plaintiffs’ evidence suggests that Defendants undertook no efforts to notify third-party credit provider Synchrony that employees were charging customers for merchandise without customers’ consent. (PMF 194, 199, 203, 208–210.)

In early 2020, Villanueva learned of another fraudulent practice at Robbins Brothers: employees using fake paystubs to help customers access third-party credit to purchase jewelry. (PMF 193–196.) On February 25, 2020, Plaintiffs complained to Pimental that he was excluding them from asset protection duties, including the investigation into paystub fraud. (PMF 163.) Villanueva raised the same concerns to Pimental again in March 2020, conveying that Villanueva felt he was being pushed out of the company; Pimental responded with silence. (PMF 164, 165, 197, 198.)

Plaintiffs’ evidence suggests that Defendants engaged in acts intended to hinder Plaintiffs’ investigation and instead prioritized actions to keep the fraudulent conduct “quiet.” (PMF 177-211, 213) Thus, the evidence is sufficient to create a triable issue of material fact in dispute. (See Killgore v. SpecPro Pro. Servs., LLC (2022) 51 F.4th 973, 980–81, 988 [holding that plaintiff had created factual dispute regarding whether his complaint was a contributing factor in his termination where plaintiff was terminated within a month or two of making the complaint].)

Here, given the different standard applicable to Section 1102.5 claims as compared to a FEHA retaliation claim, the temporal proximity to between Plaintiff engaging in protected activity and the adverse employment action, and Defendants’ conduct, which can be characterized as hostility to Plaintiff’s involvement in the investigation – Plaintiffs have raised a triable issue of material fact on the issue of a causal connection.

Defendants also move for summary adjudication of the fifth cause of action for wrongful termination because the undisputed facts show Plaintiffs cannot establish a violation of the underlying statutes upon which this claim is based.

As a statutory cause of action, a claim for retaliation in violation of section 1102.5(b) is treated by the courts as a stand-alone theory of recovery distinct from a common law Tameny claim. “To support a common law wrongful discharge claim, the public policy ‘must be: (1) delineated in either constitutional or statutory provisions; (2) “public” in the sense that it “inures to the benefit of the public” rather than serving merely the interests of the individual; (3) well established at the time of the discharge; and (4) substantial and fundamental.’ ” (Haney v. Aramark Uniform Services, Inc. (2004) 121 Cal.App.4th 623, 642.)

Where an employer terminates an employee who seeks to further such public policy “by responsibly reporting suspicions of illegal conduct to the employer,” a cause of action for wrongful termination in violation of public policy is supported. (Collier v. Superior Court (1991) 228 Cal.App.3d 1117, 1127; accord, Ferrick v. Santa Clara University (2014) 231 Cal.App.4th 1337, 1345; cf. McVeigh v. Recology San Francisco, supra, 213 Cal.App.4th at 463-464 [California False Claims Act protects whistleblowers who report possible false claims based on reasonable suspicions].)

Here, Plaintiffs’ Labor Code claims provide the factual and legal basis for Plaintiffs’ claims of wrongful termination in violation of public policy. As explained above, Plaintiffs have created a genuine factual dispute on this claim, and, therefore, Defendant’s motion for summary adjudication of Plaintiffs’ wrongful termination claim must also be denied.

Finally, Defendants move for summary adjudication of the request for punitive damages because Plaintiffs cannot establish by clear and convincing evidence that any officer, director, or managing agent of Robbins Brothers engaged in oppression, fraud, or malice towards Plaintiffs or authorized or ratified such conduct.

As a preliminary matter, there can be no punitive damages arising from the FEHA claims, as result of the Court’s ruling on summary adjudication. However, punitive damages are also available for a violation of Labor Code section 1102.5. (Mathews v. Happy Valley Conference Center, Inc. (2019) 43 Cal.App.5th 236, 268.)

“[S]ummary judgment ‘on the issue of punitive damages is proper’ only ‘when no reasonable jury could find the plaintiff’s evidence to be clear and convincing proof of malice, fraud or oppression.’” (Johnson & Johnson v. Superior Ct. (2011) 192 Cal.App.4th 757, 762 [citation omitted].)

Punitive damages are recoverable where the defendant has been guilty of oppression, fraud, or malice, express or implied. (Civ. Code § 3294.) “Something more than the mere commission of a tort is always required for punitive damages. There must be circumstances of aggravation our outrage, such as spite or malice, or a fraudulent or evil motive on the part of the defendant, or such a conscious and deliberate disregard of the interests of others that his conduct may be called willful or wanton.” (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894.) Specific intent to injure is not necessary for a showing of malice—it is sufficient that the defendant’s conduct was so “wanton or so reckless as to evince malice or conscious disregard of others’ rights.” (McConnell v. Quinn (1925) 71 Cal. App. 671, 682.)

In moving for summary adjudication, Defendants argue that Plaintiffs have not submitted any evidence, let alone clear and convincing evidence, to establish that any officer, director, or managing agent of Robbins Brothers engaged in oppression, fraud, or malice.

Plaintiffs argue that a reasonable jury could find clear and convincing evidence of malice, fraud, or oppression. In support, Plaintiffs point to their exclusion from the investigation into fake paystub fraud and the fake sales fraud. (PMF 163, 183.) This evidence does nothing more than raise an inference of a causal connection between the protected activity and the adverse employment action. The evidence does not demonstrate malice, fraud, or oppression arising from the Labor Code retaliation claim.

The motion for summary judgment is denied. The motion for summary adjudication is granted as to Issues Nos. 1-3, and 6, and denied as to Issues Nos. 4 and 5.

[1] Defendants’ objections cite pages and pages of depositions testimony making it difficult to determine the specifically objectionable material based on the objection asserted; in such cases, the objections are overruled. (Cf. Fibreboard Paper Products Corporation v. East Bay Union of Machinists, Local 1304, United Steelworkers of America, AFL–CIO, et al. (1964) 227 Cal.App.2d 675, 712 [“The objection to such exhibit was, however, a general one. An inadmissible portion of a document, the remainder of which is admissible in evidence, cannot be reached by a general objection to the admission of the entire document, but the inadmissible portion must be specified.”].)

[2] Plaintiff Villanueva did not contend that any of the alleged inappropriate conduct identified in the September 2017 Complaint was directed at him. (DSS 15.)

[3] In fact, on May 30, 2018, Plaintiff Villanueva signed a release agreement in connection with his promotion to Asset Protection Director, which provided a full release for any claims that may have arisen prior to this date. (DSS 26.) Nonetheless, Plaintiffs’ opposition then goes on to specifically cite conduct that pre-dates this time period. Specifically, Plaintiffs argue “in January 2018, Quintero was asked to sign a timekeeping and attendance policy that targeted Jehovah’s Witnesses and seemed designed to prevent them from having lunch together.” (Opp., 20:9-11.)