Judge: Martha K. Gooding, Case: 22-01281351, Date: 2023-07-24 Tentative Ruling
1) Motion for Summary Judgment and/or Adjudication
2) Motion for Summary Judgment and/or Adjudication
Before the Court is the Motion by Defendant Pacific College (the “College” or “Pacific College”), Sandy Sarge (“Sarge”) and Louis Garcia (“Garcia”) (collectively, “Defendants”) for summary judgment/adjudication of the First Amended Complaint (“FAC”) filed by Plaintiff Marcus Tromp (“Tromp”) and by Cross-Complainant Pacific College on the third cause of action for declaratory relief in its Cross-Complaint (“XC”) against Tromp.
Plaintiff Tromp sues Defendants Pacific College, Sarge, and Garcia for:
2. Wrongful termination in violation of public policy
3. Breach of oral contract
4. Hostile work environment
5. Declaratory relief
The FAC is the operative pleading. (ROA 9)
In addition, Defendant Pacific College filed a Cross-Complaint. (ROA 25). It has since been dismissed against all of the originally-named plaintiffs except Tromp (ROA 148), leaving only the following remaining claims against him:
1. Breach of FRPA Agreement
2. Breach of terms of employment agreement
3. Declaratory relief re Tromp
The Court DENIES Defendants’ Motion for Summary Judgment.
Defendant’s Motion for Summary Adjudication asks the Court to summarily adjudicate 13 issues. The Court GRANTS the Motion for Summary Adjudication only as to Issue 7. The Court finds that Defendant Garcia is entitled to judgment on the fourth cause of action in the FAC for Hostile Work Environment under Government Code section 12940(j) because the undisputed facts show that Garcia did not subject Tromp to a hostile work environment in violation of law.
The Motion for Summary Adjudication as to the remaining Issues is DENIED.
Requests for Judicial Notice
The Court grants the moving, opposing, and reply requests for judicial notice.
Evidentiary Objections
The Court overrules Tromp’s objections nos. 1-318.
The Court sustains the College’s objection nos. 24, 25, 26, 29, 34, 44, and 59. The remainder are overruled.
Merits
1. Issues 1, 2, 3, 4, 10, 11, 12, and 13 as identified in the Notice of Motion and Separate Statement involving the third and fifth causes of action for breach of oral contract and declaratory relief in the FAC; and adjudication of the third cause of action for declaratory relief in the XC
The Court finds triable issues of material fact, many requiring the weighing credibility, that prevent adjudicating these issues regarding whether the parties formed an oral agreement for Tromp to receive an equity stake in the College.
Tromp held the positions of Vice President of Operations or Senior Vice President at Defendant Pacific College from November 2016 until his termination in December 2020. (SSUF 1)
Tromp’s breach of oral contract claim alleges that Pacific College, William Nelson, and Donna Woo orally offered him “a 5% equity stake in Pacific College” in or about November 20, 2018. (SSUF 7; FAC ¶¶ 33, 104.) Tromp alleges that Pacific College breached the oral contract by terminating him without “providing him, or compensating him for” the equity stake. (SSUF 8; FAC ¶107.)
Tromp offers facts in opposition that create triable issues regarding whether a contract was formed, the terms of that agreement, and whether it could be formed without Board approval. (Additional Material Facts (“AMF) 6-23.) When College President and Founder William Nelson was asked at his deposition whether there was any restriction he knew of that prevented him from providing some of his own equity in the College to Tromp directly, Nelson’s answer was an unequivocal “no.” (AMF No. 13.) Tromp continued to work for the College for two more years in reliance on the oral agreement (AMF 18), which can constitute consideration. (See e.g. Hunter v. Sparling (1948) 87 Cal.App.2d 711, 723; Youngman v. Nevada Irrig. Dist. (1969) 70 Cal.2d 240, 249-250.)
There are disputed facts as to whether Board approval was required and whether Tromp was informed that the Board apparently denied the agreement. (AMF 13-23.)
Further, the parties’ intent and credibility must play a role in the adjudication of these issues.
“[W]hen parties agree on the material terms of a contract with the intention to later reduce it to a formal writing, failure to complete the formal writing does not negate the existence of the initial contract.” (CSAA Ins. Exchange v. Hodroj (2021) 72 Cal.App.5th 272, 276.)
There is no definitive writing showing a further agreement is required before contract formation. (See e.g. Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307, internal citations omitted; Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 358.)
Further, the Court finds triable issues as to whether the statute of imitations has run on the oral agreement. Tromp’s verified discovery responses set the date of his acceptance of the College’s offer, creating the contract, on December 13, 2018. (SSUF 210.) He admits he was entitled to “immediate performance” of the contract for shares upon his acceptance of the contract. (SSUF 211.)
The statute of limitations for breach of an oral contract is two years. (Civ. Proc. Code §339.) Tromp argues that he testified that Ms. Woo’s offer, which he accepted, was “$50,000 per year in shares over three years.” (Tromp Depo. Trans. 45:3-5).
“A cause of action for breach of contract does not accrue before the time of breach.” (Romano v. Rockwell Internat., Inc. (1966) 14 Cal. 4th 479, 488.)
Here, there are disputed facts as to when the breach occurred if a contract was formed and when performance was required. Where the contract does not fix the time for performance by one or both parties, the law implies a promise to perform within a reasonable time. [Civ. Code § 1657] The statute of limitations, therefore, does not begin to run until expiration of a “reasonable time,” which may be “coincidental with the statute of limitations.” (Pitzer v. Wedel (1946) 73 Cal.App.2d 86, 91.) Here whether the money was due annually in December of 2019 or within an undetermined reasonable time-period, is for the finder of fact to decide.
Finally, the College has not shown that acknowledging the Employee Handbook supersedes any oral agreement reached. The College cites only to Grey v. American Management Services (2012) 204 Cal.App.4th 803, 807-808. In Grey, the California Court of Appeal found that the parties’ integrated employment agreement, which required arbitration of claims “arising out of the alleged breach of any other provision of this Agreement,” superseded the parties’ earlier arbitration agreement, which reached a broader set of claims. There, the subsequent employment agreement was not silent as to arbitration, but, rather, it specifically narrowed the scope of arbitrable claims and thereby contradicted the terms of the earlier arbitration agreement. (Id. at 212).
The Court is not persuaded by this argument. (Brawthen v. H & R Block, Inc. (1972) 28 Cal. App. 3d 131, 137, “[T]he determination may not be made from the writing alone; the proffered collateral parol agreement itself must be considered, as well as the circumstance surrounding the transaction, and its subject matter, nature and object.”) Parol proof is to be allowed of “such an agreement as might naturally be made as a separate agreement by parties situated as were the parties to the written contract.' . . .' But it is to be disallowed if ”the additional terms are such that, if agreed upon, they would certainly have been included in the document in the view of the court, . . .“ (Brawthen, supra, at p. 137 citing Masterson v. Sine (1968) 68 Cal.2d 222, 228.)
2. Issue 8 and 9, as identified in the Notice of Motion and Separate Statement, involving the first and second causes of action in the FAC for retaliation under FEHA and wrongful termination in violation of public policy
As an exception to an employer's general broad authority to discharge an at-will employee, California recognizes a common law tort claim for damages “when an employer's discharge of an employee violates fundamental principles of public policy.” (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 170; see Kelly v. Methodist Hospital of Southern Cal. (2000) 22 Cal.4th 1108, 1112,“Tameny claims permit wrongful termination damages when a termination is undertaken in violation of a fundamental, substantial and well-established public policy of state law grounded in a statute or constitutional provision.”) The implicated 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.’ ” (City of Moorpark v. Superior Court (1998) 18 Cal.4th 1143, 1159.)
Tromp bases his wrongful termination claim on Labor Code sections 98.6 and 1102.5. Both can form the basis for a common law wrongful termination claim. (See e.g. Siri v. Sutter Home Winery, Inc. (2019) 31 Cal.App.5th 598, 604 [section 1102.5].)
When a plaintiff alleges retaliatory employment termination or a claim for wrongful employment termination in violation of public policy, and the defendant seeks summary judgment, California follows the burden-shifting analysis of McDonnell Douglas to determine whether there are triable issues of fact for resolution by a jury. (Diego v. Pilgrim United Church of Christ (2014) 231 Cal. App. 4th 913; Loggins v. Kaiser Permanente Internat. (2007) 151 Cal. App. 4th 1102; Faust v. California Portland Cement Co. (2007) 150 Cal. App. 4th 864.)
In the first stage of the burden-shifting analysis, the plaintiff must show that (1) he or she engaged in a protected activity, (2) the employer subjected the employee to an adverse employment action, and (3) a causal link existed between the protected activity and the employer's action. (Id.; see also CACI 2430)
If the employee successfully establishes these elements and thereby shows a prima facie case exists, the burden shifts to the employer to provide evidence that there was a legitimate, nonretaliatory reason for the adverse employment action. (Diego v. Pilgrim United Church of Christ (2014) 231 Cal. App. 4th 913; Loggins v. Kaiser Permanente Internat. (2007) 151 Cal. App. 4th 1102.)
If the employer produces evidence showing a legitimate reason for the adverse employment action, the presumption of retaliation drops out of the picture, and the burden shifts back to the employee to provide substantial responsive evidence that the employer's proffered reasons were untrue or pretextual. (Id.)
Here, the College argues that it had a legitimate reason for demoting Tromp and then terminating his employment, because he used a personal email account in violation of a Federal Educational Rights and Privacy Act (FERPA) agreement signed on September 10, 2015. (SSUF 248-250.) The College asserts that in December 2020, Tromp used his Pacific College email account to send College documents and computer files containing sensitive, confidential student information, including financial aid information and banking information, to a non-College email address that Tromp controlled. (SSUF 250.)
But Tromp presents the required evidence of pretext. Tromp provides facts to show that he used a personal email because the College’s attorney, Eliot Krieger (who is also one of the defense attorneys in this case), instructed him to; and Defendants omit mention of the fact that Mr. Nelson and Ms. Woo did so as well. (AMF No. 24; Tromp Depo. 275:11-276:24; Tromp Decl., ¶ 24.) Tromp, Woo, and Nelson all used personal e-mail accounts for sending and receiving PC documents prior to, during and after the investigation, and the practice was widespread at the time Tromp’s employment was terminated. (AMF No. 24.)
Further, the College does not challenge that Tromp engaged in protected activities close in time to his termination. (AMF 28-30, 32-43.)
Finally, the College argues it would have terminated Tromp’s employment if it had known about his criminal conviction before December 2020.
Plaintiffs making a retaliation claim under the FEHA do not have to demonstrate their protected activity was the “but for” cause of the adverse employment action. Rather, they must demonstrate that the protected conduct was a “substantial motivating factor” in the adverse employment decision. [Alamo v. Practice Mgmt. Information Corp. (2013) 219 CA4th 466, 478.] Similarly, in some cases, the evidence may indicate that both legitimate and illegitimate factors contributed to the employment decision. To establish a Tameny claim, plaintiff need only show that an illegitimate factor was “a substantial motivating reason” for the employment decision. [Davis v. Farmers Ins. Exch. (2016) 245 CA4th 1302, 1321-1322.]
“Requiring the plaintiff to show that discrimination was a substantial motivating factor, rather than simply a motivating factor, more effectively ensures that liability will not be imposed based on evidence of mere thoughts or passing statements unrelated to the disputed employment decision. At the same time, … proof that discrimination was a substantial factor in an employment decision triggers the deterrent purpose of the FEHA and thus exposes the employer to liability, even if other factors would have led the employer to make the same decision at the time.” [Harris v. City of Santa Monica (2013) 56 C4th 203, 230-232 (emphasis in original); see Mendoza v. Western Med. Ctr. Santa Ana (2014) 222 CA4th 1334, 1341-1342—trial court erred in failing to instruct jury on proper standard of causation under Harris; Davis v. Farmers Ins. Exch. (2016) 245 CA4th 1302, 1322—requirement to show a “substantial motivating factor” for a “same decision” defense applies both to FEHA claims and claims for wrongful termination in violation of public policy; Wallace v. County of Stanislaus (2016) 245 CA4th 109, 134—employer's reason for placing employee on leave was, as matter of law, substantial factor in causing employee's economic loss]
Thus, the fact that Tromp would have been terminated if other facts were known does not insulate the College from liability on summary judgment.
3. Issue 5, 6 and 7, as identified in the Notice of Motion and Separate Statement, involving the fourth causes of action in the FAC for hostile work environment
The FEHA specifically prohibits harassment based on “race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or veteran or military status.” [Gov. C. § 12940(j)(1); see Aguilar v. Avis Rent A Car System, Inc. (1999) 21 C4th 121, 130—verbal harassment in workplace (epithets, derogatory comments or slurs) violates both FEHA and Title VII].
Because the employer cloaks a supervisor with authority over the victim, even a single act by a supervisor may be severe enough to alter the conditions of employment. Thus, when a supervisor makes a single racial slur, it exacerbates the severity of the remark and may create a hostile work environment. (See Dee v. Vintage Petroleum, Inc. (2003) 106 CA4th 30, 36 (brackets in original; internal quotes omitted)—single racial slur by supervisor, coupled with calling her a “bitch,” asking her to lie for him, and blaming her for acts he ordered her to perform; see also Ash v. Tyson Foods, Inc. (2006) 546 US 454, 456, depending on context, employer's use of the term “boy” in addressing African-American employees may by itself show racial animus.]
Hostile work environment claims based on racial harassment are reviewed under the same standard as those based on sexual harassment. Thus, allegations of a racially hostile workplace must be assessed from the perspective of a reasonable person belonging to the same racial or ethnic group as plaintiff. [See National R.R. Passenger Corp. v. Morgan (2002) 536 US 101, 116; McGinest v. GTE Service Corp. (9th Cir. 2004) 360 F3d 1103, 1115—recognizing that certain words or conduct that appear innocent to nonmembers of the group may be “intolerably abusive” to members of the targeted group].
California courts apply similar standards to racial discrimination claims under the FEHA: “To establish a prima facie case of a racially hostile work environment, [plaintiff] was required [and failed] to show that (1) he was a member of a protected class; (2) he was subjected to unwelcome racial harassment; (3) the harassment was based on race; (4) the harassment unreasonably interfered with his work performance by creating an intimidating, hostile, or offensive work environment; and (5) the [employer] is liable for the harassment.” [Thompson v. City of Monrovia (2010) 186 CA4th 860, 876; see also Nazir v. United Airlines, Inc. (2009) 178 CA4th 243, 264—whether workplace harassment is sufficiently “severe” or “pervasive” is assessed from the “perspective of a reasonable person belonging to the racial or ethnic group of the plaintiff”].
The standard is very similar to that applicable to sexual harassment claims in that “occasional, isolated, sporadic, or trivial” acts are usually not enough to alter the conditions of employment and create a hostile environment. [Aguilar v. Avis Rent A Car System, Inc., supra, 21 C4th at 130-131; Manatt v. Bank of America, NA (9th Cir. 2003) 339 F3d 792, 798—“simple teasing” and “offhand comments” are nonactionable; see Serri v. Santa Clara Univ. (2014) 226 CA4th 830, 870—supervisor's comments to Puerto Rican plaintiff that her shawl looked like a poncho and that her curly hair looked “more relaxed and professional” when she blew it dry, and coworker's remarks concerning nearby taquerias, were neither the type that would have interfered with a reasonable employee's job performance nor pervasive enough to support a claim for harassment].
Section 12923 provides, in part: “(b) A single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment if the harassing conduct has unreasonably interfered with the plaintiff’s work performance or created an intimidating, hostile, or offensive working environment.” (Govt. C. 12923(b).)
Here, Tromp has raised a triable issue of fact as to this claim against Defendants Sarge and the College.
Tromp asserts that Chief Financial Officer Sandy Sarge made demeaning and racist remarks to and about Mr. Tromp on multiple occasions, creating a hostile workplace environment and causing him emotional distress. Specifically, she belittled him, calling him “boy,” saying he was a poor writer and that she wanted to “spank” him; she mocked his intellectual abilities and his literacy; and she said, to Mr. Tromp and another Black employee, Tonya Parker-Jones, when she (Ms. Sarge) showed up late to a meeting, that she was “running on CPT,” a phrase that stands for “Colored People Time.” The use of the phrase, uttered by a white supervisor to two Black employees, when the two Black employees were on time for the meeting, and the white supervisor is the one who arrived late, is particularly egregious and offensive. Ms. Sarge also stated to Black employees that “you people get confused” and told Mr. Tromp that he didn’t use correct language. Ms. Sarge subsequently filed falsified and backdated “disciplinary memos” accusing Mr. Tromp of “insubordination” for bringing his concerns about the College’s continued financial misconduct to Ms. Woo, rather than going through her (Ms. Sarge). (AMF No. 27; Tromp Depo. pp..237:21-239:21; Tromp Decl. ¶ 27; Tromp Dec. Ex. E.)
As to Defendant Garcia, however, the Motion is granted. The following facts are undisputed by Tromp. The FAC alleges no specific incidents of harassment of Tromp by Louis Garcia. (SSUF 220) Louis Garcia did not harass Tromp on the basis of his race or gender. (SSUF 221) Louis Garcia did not supervise Tromp and was instead Tromp’s subordinate. (SSUF 222).
Defendants are ordered to give notice.