Judge Bruce G. Iwasaki, Case Number: 24STCV01887, Date: 2024-05-14 Tentative Ruling

This case is an employment discrimination suit. Plaintiff Lawrence Ambrosio (Plaintiff) filed suit against his employers, Defendant Lithia Motors, Inc. and DCH Torrance Imports Inc. for (1.) discrimination based on sexual orientation, (2.) sexual harassment in violation of FEHA, (3.) retaliation in violation of FEHA, (4.) failure to prevent discrimination, harassment and retaliation in violation of FEHA, (5.) unpaid meal periods, (6.) failure to pay overtime, (7.) violation of Labor Code sections 226 and 1174, and (8.) unfair business practices.

On April 8, 2024, Defendants Lithia Motors, Inc. and DCH Torrance Imports Inc. (Defendants) demurred to the Complaint. Defendants also moved to strike allegations in the Complaint. Plaintiff opposed the demurrer and the motion to strike.

The demurrer to the Complaint is sustained in part and overruled in part. The motion to strike is granted.

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . ..” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.)

First Cause of Action for Discrimination Based on Sexual Orientation and Third Cause of Action for Retaliation in Violation of FEHA:

Defendants demur to the first and third causes of action on the grounds that Plaintiff has failed to state a claim because he has failed to allege any adverse employment actions.

To allege a cause of action for discrimination based on sexual orientation, the plaintiff must provide evidence that (1) he was a member of a protected class, (2) he was qualified for the position he sought or was performing competently in the position he held, (3) he suffered an adverse employment action, and (4) some other circumstance suggests discriminatory motive. (Slatkin v. University of Redlands (2001) 88 Cal.App.4th 1147, 1158.)

To prevail on any retaliation-related cause of action, plaintiff must plead and prove that (1) the employee engaged in a protected activity, (2) there was an adverse employment action following the protected activity, and (3) there is a causal connection between the two. (Flait v. North American Watch Corp. (1992) 3 Cal.App.4th 467, 476.)

“In California, an employee seeking recovery on a theory of unlawful discrimination or retaliation must demonstrate that he or she has been subjected to an adverse employment action that materially affects the terms, conditions, or privileges of employment, rather than simply that the employee has been subjected to an adverse action or treatment that reasonably would deter an employee from engaging in the protected activity.” (St. Myers v. Dignity Health (2019) 44 Cal.App.5th 301, 318.)

Here, Defendants argue that the Complaint fails to allege that Plaintiff suffered any adverse employment actions as result of his sexual orientation and in retaliation for undertaking protected activity.

In opposition, Plaintiff argues that he has sufficiently alleged an adverse employment action. Specifically, he “was subject to an adverse employment action by Zarin Haroon when Zarin Haroon, knowing that Plaintiff was not interested in his sexual advances, ridiculed, and treated Plaintiff rudely in front of the rest of employees.” (Opp., 5:12-15; Compl., ¶¶ 24-25.)

“A change that is merely contrary to the employee's interests or not to the employee's liking is insufficient.” (Akers v. County of San Diego (2002) 95 Cal.App.4th 1441, 1455.) “ ‘[W]orkplaces are rarely idyllic retreats, and the mere fact that an employee is displeased by an employer’s act or omission does not elevate that act or omission to the level of a materially adverse employment action.’ [Citation.] If every minor change in working conditions or trivial action were a materially adverse action then any ‘action that an irritable, chip-on-the-shoulder employee did not like would form the basis of a discrimination suit.’ ” [Citation.]” (Thomas v. Department of Corrections (2000) 77 Cal.App.4th 507, 511.) “The plaintiff must show the employer's retaliatory actions had a detrimental and substantial effect on the plaintiff's employment. [Citations.]” (McRae v. Department of Corrections & Rehabilitation (2006) 142 Cal.App.4th 377, 386; St. Myers v. Dignity Health (2019) 44 Cal.App.5th 301, 318.)

Here, the conduct alleged is childish and churlish criticism of Plaintiff. However, these allegations do not demonstrate any actionable change in Plaintiff’s employment conditions. (Pinero v. Specialty Restaurants Corp. (2005) 130 Cal.App.4th 635, 646 [“nitpicking” and criticisms of employee did not constitute adverse action where plaintiff's “job responsibilities and title did not change, he was not demoted, and his salary, bonus structure, benefits and all other forms of compensation suffered no impact”].)

Additionally, with respect to the retaliation claim, Plaintiff has failed to allege any protected activity.

The retaliation provision of FEHA forbids an employer “to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under” FEHA. (Gov. Code. § 12940, subd. (h).) That is, the person has engaged in protected activity. California courts have generally held that in order to qualify as a “protected activity” an employee's conduct must “demonstrate some degree of opposition to or protest of the employer's conduct or practice based on the employee's reasonable belief that the employer's action or practice is unlawful.” (Moore v. Regents of the Univ. of California (2016) 248 Cal. App. 4th 216, 246.)

“Employees need not explicitly and directly inform their employer that they believe the employer's conduct was discriminatory or otherwise forbidden by FEHA.” (Castro-Ramirez v. Dependable Highway Express, Inc. (2016) 2 Cal.App.5th 1028, 1046.) That is, ‘an employee is not required to use legal terms or buzzwords when opposing discrimination. The court will find opposing activity if the employee's comments, when read in their totality, oppose discrimination.’ ” (Yanowitz, supra, 36 Cal.4^th at p. 1047.) “ ‘The relevant question ... is not whether a formal accusation of discrimination is made but whether the employee's communications to the employer sufficiently convey the employee's reasonable concerns that the employer has acted or is acting in an unlawful discriminatory manner.’ ” (Yanowitz, supra, at p. 1047.)

Here, the Complaint alleges a single instance of sexual harassment by Zarin Harron against Plaintiff; in response to this alleged harassment, Plaintiff “was in disbelief after this sexual misconduct of inappropriate touching and did not respond positively to Zarin Haroon.” (Compl., ¶ 22.) There are no other allegations that Plaintiff reported this conduct to any other person or otherwise communicated his opposition to Harron’s conduct aside from not responding “positively.”

Therefore, the demurrer to the first and third causes of action are sustained with leave to amend.

Fourth Cause of Action for Failure to Prevent Discrimination Harassment, and Retaliation in Violation of FEHA:

Defendant argues that the fourth cause of action for failure to prevent discrimination, harassment, or retaliation fails for the same reasons as the third cause of action for retaliation; that is, there are no allegations of protected activity.[1]

However, the failure to prevent cause of action does not require that the Plaintiff engage in protected activity.

Rather, FEHA makes it unlawful for an employer to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring. (Gov. Code § 12940(k).) A claim for failure to prevent discrimination or harassment includes three elements: (1) plaintiff was subjected to discrimination, harassment, or retaliation, (2) defendant failed to take all reasonable steps to prevent discrimination, harassment, or retaliation, and (3) this failure caused injury to the plaintiff. (Caldera v. Department of Corrections and Rehabilitation (2018) 25 Cal.App.5th 31, 43.)

The motion to strike seeks to strike the punitive damages request from the Complaint. In particular, Defendants argue that Plaintiff failed to identify a managing agent and failed to identify any individual that may have had the responsibilities of a managing agent.

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 or 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, 894-895 [quoting Prosser, Law of Torts].) 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.)

A request for punitive damages that is not supported with specific allegations of oppression, fraud, or malice is subject to a motion to strike. Conclusory allegations that defendants acted “willfully,” “maliciously,” or with “oppression, fraud, or malice” are not, without more, sufficient to give rise to a claim for punitive damages, but such language is permissible where the complaint contains sufficient factual support for the conclusions. (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6-7.)

Further, Civil Code section 3294, subdivision (b), provides as follows: “An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.”

Here, the Complaint fails to allege any facts establishing conduct attributable to any managing agent.[2] In fact, the Complaint fails to identify any managing agent at all.

Thus, the Complaint fails to allege facts sufficient to support the punitive damages request against Defendants Lithia Motors, Inc. and DCH Torrance Imports Inc. in the Complaint.

The demurrer to the Complaint is sustained as to the first and third causes of action with leave to amend. The demurrer to the fourth cause of action is overruled. The motion to strike is granted. Plaintiff shall have leave to amend. The amended complaint shall be filed and served on or before June 14, 2024.

[1] Defendant argues that Plaintiff’s Fourth Cause of Action also requires the identification of an adverse employment action because that claim requires proving that the employer failed to prevent an adverse employment action. (Dem., 5:9-12.) As noted above, Plaintiff has not stated a claim for discrimination or retaliation. However, the Complaint also alleges a claim for harassment; thus, Plaintiff’s claim for failure to prevent can be based on this harassment claim. This underlying claim is sufficient to meet the first element of this cause of action; that is, in addition to making sexual harassment unlawful, the FEHA also demands that employers take all reasonable steps to prevent harassment.

[2] Generally, “principal liability for punitive damages [does] not depend on employees’ managerial level, but on the extent to which they exercise substantial discretionary authority over decisions that ultimately determine corporate policy.” (White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 576–577.) Thus, to establish that an individual is a managing agent, a plaintiff seeking punitive damages must show that “the employee exercised substantial discretionary authority over significant aspects of a corporation's business.” (Id. at p. 577.) In this context, “corporate policy” refers to “ ‘formal policies that affect a substantial portion of the company and that are of the type likely to come to the attention of corporate leadership.’ ” (Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 715; Cruz v. HomeBase (2000) 83 Cal.App.4th 160, 167–168 [“ ‘corporate policy’ is the general principles which guide a corporation, or rules intended to be followed consistently over time in corporate operations,” and thus “[a] ‘managing agent’ is one with substantial authority over decisions that set these general principles and rules”].)