Judge: Jon R. Takasugi, Case: 25STCV02558, Date: 2025-04-25 Tentative Ruling

Case Number: 25STCV02558    Hearing Date: April 25, 2025    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ demurrer is SUSTAINED IN PART, OVERRULED IN PART:

-          Defendants’ demurrer is SUSTAINED, WITH 15 DAYS LEAVE TO AMEND, as to the eighth cause of action.

-         Defendants’ demurrer is SUSTAINED, WITHOUT LEAVE TO AMEND, as to the fifth cause of action against Defendant Chung, individually.

-         Defendants’ demurrer is OVERRULED in all other respects.

            On 1/30/2025, Plaintiff Terri Hodges (Plaintiff) filed suit against Mad Minds Entertainment, Inc. and Willis Chung (collectively, Defendants), alleging: (1) constructive discharge; (2) gender discrimination; (3) hostile work environment; (4) retaliation; (5) retaliation; (6) intentional infliction of emotional distress (IIED); (7) unlawful and unfair business practices; (8) failure to pay overtime wages; (9) meal and rest period violations; (10) failure to indemnify all necessary business expenditures; (11) failure to provide complete and accurate wage statements; (12) failure to timely pay unpaid wages due at time of separation; and (13) individual liability.

            On 3/11/2025, Defendants demurred to Plaintiff’s Complaint. 

Discussion

            Defendants argue that Plaintiff’s Complaint is insufficiently pled.

            After review, the Court disagrees in part.

            As for the first cause of action, Defendants argue that “the Complaint fails to allege conditions so intolerable that a reasonable person would feel compelled to resign.” (Motion, 7: 13-14.) However, this is a factual determination not properly made at the pleadings stage.

Plaintiff alleges that CEO Willis Chung began subjecting her to undeserved scathing castigations in the presence of her co-workers, including false allegations that she had failed to perform tasks that were never assigned to her, and withholding access to information necessary to perform her duties. (Compl. ¶ 23). She further alleges that that after intervening in a dispute involving a coworker and refusing Chung’s directive to misrepresent the coworker’s termination to the EDD, Chung ostracized her—ceasing communication, yelling at her, and issuing a “false warning notice” in January 2024. Plaintiff alleges that at one point “Chung stormed into her office and began cursing and yelling at her. Because Chung’s conduct got so aggressive and his physical proximity to Ms. Chang, Plaintiff feared he would assault her. Accordingly, Plaintiff left her desk to intervene, telling Chung he needed to stop and back away from Ms. Chang.” (Compl. ¶ 25.)  Whether or this is simply workplace conflict, or rises to the level of intolerable working conditions, is a factual determination not properly made here.  

            As for the second cause of action, Defendants argue that she has not alleged an actionable adverse employment action because she voluntarily resigned. However, as set forth above, the Court finds her constructive discharge claim to be adequately pled at the pleading stage. Plaintiff alleges that the treatment which led to her constructive discharge was based in part on her gender. (Compl. ¶ 48). Moreover, Plaintiff alleges that she was paid differently based on her gender. (Id.) This is sufficient at the pleadings stage.

            As for the third cause of action, Defendants argue that the harassment alleged does not rise to the level of “severe or pervasive.” (Lyle v. Warner Bros. Television Prods. (2006) 38 Cal.4th 264, 283.)  However, Plaintiff’s allegations, accepted as true, could show conduct harassing which could be severe or pervasive. Whether or not it was, in fact severe or pervasive, is not properly decided at this stage.

            As for the fourth cause of action, Defendants argue that Plaintiff fails to show that her discipline was a result of her complaints rather than reasons related to her job performance. However, Plaintiff clearly alleges that after she refused to make false representations at the behest of Chung, that he “falsely accused her of failing to complete assignments and inept performance,” thereby leading to her constructive discharge. (Compl. ¶¶ 26-27).

            As for the fifth cause of action, Defendants argue that Plaintiff fails to establish that her complaints resulted in any material adverse employment action. For the reasons set forth above, this is unpersuasive.

            As for the sixth cause of action, Defendants argue that Plaintiff has not alleged conduct that was extreme or outrageous, nor has she provided details of medical or psychological harm. For the reasons set forth above, whether or not Defendants conduct was, in fact, extreme or outrageous is a factual determination not properly made at this stage. Plaintiff’s allegations are sufficient at this stage to put Defendants on notice of alleged medical and psychological harm.

            As for the seventh cause of action, Defendants argue that Plaintiff has not alleged how Defendants’ practices were unlawful, unfair, or harmful to her outside of her other claims. However, Plaintiff alleges:

DEFENDANTS’ acts and omissions, as alleged herein, constitute unfair business practices prohibited by Business & Professions Code§ 17200 et seq. DEFENDANTS’ business practices of discriminating against PLAINTIFF and other women engineers and non-white engineers caused harm to PLAINTIFF that outweighs any reason DEFENDANTS may have had for doing so. DEFENDANTS’ business practices as alleged herein are also immoral, unethical, oppressive, unscrupulous, and offensive to the established public policies of ensuring women and non-white employees are paid equally to male and/or white individuals for performing substantially similar work, as reflected in the PEHA and California Equal Pay Act, Cal. Labor Code § 1197 .5 et seq. As a result of its unlawful and/or unfair business practices during the course of PLAINTIFF’S employment, DEFENDANTS reaped unfair and illegal profits at the expense of PLAINTIFF.

            (Comp. ¶ 80.)

            This is sufficient at the pleadings stage.

            As for the eighth cause of action, Defendants argue that this cause of action improperly consolidates two distinct claims—Meal Break Premiums and Rest Break Premiums—into a single cause of action. The Court agrees. However, the Court finds that the substantive underlying allegations are sufficient. The Court will grant leave to amend to allow Plaintiff to separate these distinct claims.

            As for the ninth cause of action, Defendants argue that the claims lacks sufficient factual detail, and fails to state a cause of action against Chung, individually, because the Complaint lacks sufficient factual detail and fails to establish individual liability. The Court disagrees. Plaintiff’s allegations are sufficient at the pleading stage, indicating that the wage statements did not include total hours worked or correct rates. At the pleadings stage, Plaintiff need not “identify specific pay periods during which these deficiencies occurred or provide an example of how the wage statements were misleading.” (Demurrer, 15: 6-7.)

            Moreover, in Jones v. Superior Court (1986) 179 Cal. App. 3d 1011, 1019, the court held that individual supervisors could be liable for wage violations if they were personally involved in or responsible for the actions that led to the violation . Plaintiff clearly alleges that Chung was personally involved, as the cause of action not only alleges conduct by “Defendants”, but Plaintiff asserted a cause of action entitled “individual liability” which specifically stages that Chung personally failed to “adequately compensate Plaintiff for her time and work performed with Mad Minds, including, but not limited to, unpaid overtime, unpaid meal and rest break premiums, and unpaid waiting time penalties.” (Compl. ¶ 127.) These allegations speak to Chung’s personal involvement and are sufficient at this stage to show that Chung could be personally liable for this alleged violation.

            As for the tenth cause of action, Defendants argue that “Plaintiff claims to have used her personal phone, computer, and vehicle for work but provides no specifics, such as the nature and frequency of these expenses, how they were necessary for her job functions, or any policies or directives from Mad Minds that required them.” (Demurrer, 15: 26-28.) This cause of action is not subject to heightened pleadings requirements, and is sufficient at the pleadings stage.

            As for the eleventh cause of action, Defendants argue that Plaintiff’s Complaint lacks specific allegations regarding when the final wages were due and when they were actually paid and does not allege that Defendants willfully failed to pay these wages. However, Plaintiff not only alleges that Defendants “intentionally adopted policies or practices incompatible with the requirements of Labor Code Sections 201 or 202,” but also that “When Defendants failed to timely pay hourly workers all unpaid wages earned at the time of termination or within 72 hours of resignation, Defendants knew what they were doing and intended to do what they did.” (Compl. ¶ 80.)

            As for the individual liability cause of action, Defendants argue that Chung’s role as a chief executive does not, by itself, give rise to personal liability for wage-and-hour violations. However, Plaintiff’s Complaint makes clear that it alleges direct participation by Chung in the alleged misconduct. Whether or not this is, in fact, true, is a factual determination not properly made at the pleadings stage.

            However, the Court agrees that Plaintiff cannot maintain a claim against Chung for whistleblower retaliation (5^th COA), as California courts have held that supervisors can be held liable for harassing actions towards employees. However, supervisors cannot be held liable for discriminatory or retaliatory actions. (Jones v. Lodge at Torrey Pines (2008) 42 Cal.4th 1158.)

            Based on the foregoing, Defendants’ demurrer is sustained in part, overruled in part. Defendants’ demurrer is sustained, with 15 days leave to amend, as to the eighth cause of action. Defendants’ demurrer is sustained, without leave to amend, as to the fifth cause of action against Defendant Chung, individually. Defendants’ demurrer is overruled in all other respects.

It is so ordered.

Dated:  April    , 2025

   Hon. Jon R. Takasugi
   Judge of the Superior Court

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