Judge Kerry Bensinger, Case Number: 22STCV36816, Date: 2023-11-08 Tentative Ruling

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This is a discrimination and constructive discharge action. Plaintiff, Allen Chen, was hired as an internal audit manager by KPMG, LLC (“KPMG”). During his employment, Plaintiff notified his Performance Management Leader, Alia Pallera, that he would be taking paternity leave on March 3, 2023 in anticipation of the birth of his child. On February 15, 2023, Plaintiff was terminated from his employment with KPMG.

On August 8, 2023, Plaintiff filed this action against Defendants, KPMG, Alia Pallera, Richard Ho, and Joseph Roppo, alleging causes of action for:

(2) Failure to Prevent Discrimination and Harassment (Cal. Govt. Code §§ 12940(j) and (k));

(3) Constructive Discharge in Violation of Cal. Govt. Code § 12940 et seq. (Cal. Govt. Code § 12940 et seq.);

(4) Constructive Discharge in Violation of Public Policy: Government Code Section 12940 et seq. (California Common Law);

(5) Constructive Discharge in Violation of Public Policy: California Constitution (California Constitution);

On January 25, 2024, Defendants filed this demurrer to the First, Sixth, and Seventh causes of action in Plaintiff’s Complaint.

A demurrer tests the legal sufficiency of the pleadings and will be sustained only where the pleading is defective on its face. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) “We treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions or conclusions of fact or law. We accept the factual allegations of the complaint as true and also consider matters which may be judicially noticed. [Citation.]” (Mitchell v. California Department of Public Health (2016) 1 Cal.App.5th 1000, 1007; Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 [“the facts alleged in the pleading are deemed to be true, however improbable they may be”].) Allegations are to be liberally construed. (Code Civ. Proc., § 452.) In construing the allegations, the court is to give effect to specific factual allegations that may modify or limit inconsistent general or conclusory allegations. (Financial Corporation of America v. Wilburn (1987) 189 Cal.App.3d 764, 769.)

A demurrer may be brought if insufficient facts are stated to support the cause of action asserted. (Code Civ. Proc., § 430.10, subd. (e).) “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Where the complaint contains substantial factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty will be overruled or plaintiff will be given leave to amend. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.) Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Ibid.)

“Before filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person, by telephone, or by video conference with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.”¿ (Code Civ. Proc., § 430.41, subd. (a).)¿ Here, defense counsel has complied with the meet and confer requirement. (See Declaration of Noel H. Hernandez, ¶¶ 3-7.)

Defendants advance the following arguments: (1) The First Cause of Action fails against the individual defendants because supervisors cannot be held individually liable for discrimination; (2) The Sixth and Seventh Causes of Action are barred by workers’ compensation, and (3) The Sixth and Seventh Causes of Action fail to allege sufficient facts to state causes of action. The court addresses each cause of action in turn.

1. First Cause of Action for Pregnancy Paternal Discrimination (Cal. Govt. Code § 12945)

Government Code section 12945 is the Pregnancy Disability Leave Law. It “is part of the FEHA and requires employers to provide employees up to four months of leave for disability due to an employee's pregnancy, childbirth or related medical conditions. (Chin & Wiseman, et al., Cal. Prac. Guide Employment Litigation (The Rutter Group 2024) ¶ 12:1420.)

Defendants argue the individual defendants Alia Pallera, Richard Ho, and Joseph Roppo cannot be held individually liable for discrimination under the FEHA. The court agrees. “[I]ndividuals who do not themselves qualify as employers may not be sued under the FEHA for alleged discriminatory acts.” (Reno v. Baird (1998) 18 Cal. 4th 640, 663.) As alleged, KPMG, and not Pallera, Ho, and Roppo was Plaintiff’s employer. (See Complaint, ¶¶ 4-7.) Therefore, individual defendants Pallera, Ho, and Roppo cannot be held liable for the allegedly discriminatory conduct. Plaintiff, having not filed an opposition does not offer any argument to the contrary.

2. Sixth Cause of Action for Negligent Supervision, Hiring and Retention (California Common Law)

The elements of a claim for Negligent Hiring, Supervision, or Retention of an employee are: (1) that the defendant hired the employee; (2) that the employee was/became unfit to perform the work for which they were hired; (3) that the employer knew or should have known that the employee was/became unfit and that they created a particular risk to others; (4) that the employee’s unfitness harmed the plaintiff; and (5) that the employer’s negligence in hiring or retaining the employee was a substantial factor in causing plaintiff’s harm. (CACI No. 426.) “Negligence liability will be imposed on an employer if it ‘knew or should have known that hiring the employee created a particular risk or hazard and that particular harm materializes.’ ”¿ (Phillips v. TLC Plumbing, Inc. (2009) 172 Cal.App.4th 1133, 1139.)

Defendants argue Plaintiff’s negligent hiring claim is barred by the workers’ compensation exclusivity rule. Not so. “The touchstone of the workers' compensation system is industrial injury which results in occupational disability or death. (Shoemaker v. Myers, supra, 52 Cal.3d 1, 16, 276 Cal.Rptr. 303, 801 P.2d 1054; Union Iron Wks. v. Industrial Acc. Com. (1922) 190 Cal. 33, 39, 210 P. 410.) Labor Code section 3208 defines “injury” as “any injury or disease arising out of the employment....” (Italics added.)” (Livitsanos v. Superior Ct. (1992) 2 Cal.4th 744, 752.) Contrary to Defendants’ position, Plaintiff does not allege injuries arising out of the employment. Rather, the gravamen of the allegations is injury resulting from his termination of employment. (See Complaint, ¶¶ 14-20.) Workers’ compensation exclusivity does not apply to Plaintiff’s claims.

Defendants next argue the Sixth Cause of Action fails to allege sufficient facts to state a cause of action. On this point, the court agrees. The allegations supporting the negligent hiring claim are boilerplate, bereft of factual allegations, and fail to differentiate between KPMG (the employer) and Pallera, Ho, and Roppo (Plaintiff’s supervisors). (See Complaint, ¶¶ 52-58.) The Sixth Cause of Action is uncertain and subject to demurrer on this ground.

3. Seventh Cause of Action for Intentional Infliction of Emotional Distress (California Common Law)

The elements of an intentional infliction of emotional distress (“IIED”) claim are: (1) that defendant’s conduct was outrageous; (2) that defendant intended to cause plaintiff emotional distress, or that defendant acted with reckless disregard of the probability that plaintiff would suffer emotional distress, knowing that plaintiff was present when the conduct occurred; (3) that plaintiff suffered severe emotional distress, and (4) that defendant’s conduct was a substantial factor in causing plaintiff’s severe emotional distress.¿ (CACI No. 1600; Hughes v. Pair (2009) 46 Cal.4th 1035, 1050-51.)¿ “It is not enough that the conduct be intentional and outrageous.¿ It must be conduct directed at the plaintiff, or occur in the presence of a plaintiff of whom the defendant is aware.”¿ (Christensen v. Superior Court (1991) 54 Cal.3d 868, 903-904.)¿

Defendants also assert the workers’ compensation exclusivity rule against Plaintiff’s IIED claim. The challenge fails for the reasons detailed above: Plaintiff’s alleged injuries did not arise from the course of his employment but rather the termination of his employment.

Defendants next argue the IIED claim fails to allege sufficient facts to constitute a cause of action. The court agrees. “A simple pleading of personnel management activity is insufficient to support a claim of intentional infliction of emotional distress even if improper motivation is alleged. If personnel management decisions are improperly motivated, the remedy is a suit against the employer for discrimination.” (Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55, 80.)

Here, the Complaint alleges that “the Defendants made various false statements about Plaintiffs [sic] work and productivity all without proof and which contradict various employee reviews of the Plaintiff.” (Complaint, ¶ 15.) “It is clear that the Defendants actions were to deny the Plaintiff lawful leave in order to save funds lawfully owed to the Plaintiff.” (Complaint, ¶ 16.) Under these allegations, Defendants made a personnel management decision to terminate Plaintiff’s employment. Ostensibly, the decision was based on Plaintiff’s flagging work and productivity, but as alleged, was a cover for the improper motivation to deny Plaintiff paternal pregnancy leave. As Janken instructs, such allegations are insufficient to state a claim for IIED. Plaintiff’s remedy, as he has done, is to pursue claims of discrimination. The Seventh Cause of Action is deficient.

As to the individual defendants Pallera, Ho, and Roppo, the demurrer to the First Cause of Action is sustained without leave to amend.

As to all defendants, the demurrer to the Sixth and Seventh Causes of Action is sustained with leave to amend.

Plaintiff is to serve and file the First Amended Complaint within 30 days of this order.

¿¿¿

¿ Kerry Bensinger¿¿

¿ Judge of the Superior Court¿

[1] A failure to oppose a motion may be deemed a consent to the granting of the motion. (Cal. Rules of Court, rule 8.54(c).)