Krystal Merlin v. Mania Topanga Mall, LLC, et al.

DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION

 

MOVING PARTY: Defendants Mania Topanga Mall, LLC, Elior Perez, and Maor Ben Shimol

RESPONDING PARTY(S): Plaintiff Krystal Merlin

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff Krystal Merlin brings this action against Defendants Mania Topanga Mall, LLC, Elior Perez, and Moar Ben Shimol for violations of FEHA and the Labor Code. Plaintiff alleges Defendants demoted Plaintiff from her role as shift manager after she complained of harassing conduct by Defendant Shimol. Plaintiff was later terminated, which Defendants attributed to the Covid-19 pandemic. Plaintiff now brings causes of action for (1) FEHA Disparate Treatment Discrimination, (2) FEHA Quid Pro Quo Sexual Harassment, (3) FEHA Work Environment Harassment, (4) FEHA Retaliation, (5) FEHA Failure to Prevent Harassment, Discrimination, or Retaliation, and (6) Labor Code 1102.5 retaliation. 

Defendants now move for summary judgment, or in the alternative, summary adjudication.  Plaintiff opposed.

TENTATIVE RULING:

Defendants’ Motion for Summary Judgment is DENIED. 

Defendants’ Alternative Motion for Summary Adjudication is also DENIED.

Plaintiff is ordered to give notice, unless waived.

DISCUSSION:

Motion for Summary Judgment 

I. Legal Standard

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843. In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.  Thus, summary judgment is granted when, after the Court’s consideration of the evidence set forth in the papers and all reasonable inferences accordingly, no triable issues of fact exist and the moving party is entitled to judgment as a matter of law.  Code Civ. Proc. § 437c(c); Villa v. McFarren (1995) 35 Cal.App.4th 733, 741. 

As to each claim as framed by the Complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520. Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” Dore v. Arnold Worldwide, Inc.¿(2006) 39 Cal.4th 384, 389. A defendant has met its burden of showing that a cause of action has no merit if it demonstrates the absence of any single essential element of plaintiff’s case or a complete defense to plaintiff’s action.  Code Civ. Proc. § 437c(o)(2); Bacon v. Southern Cal. Edison Co. (1997) 53 Cal.App.4th 854, 858.  Once the defendant moving party has met the burden, the burden shifts to the plaintiff to show via specific facts that a triable issue of material facts exists as to a cause of action or a defense thereto.  § 437c(o)(2).

II. Untimely Opposition

An opposition to a motion for summary judgment is due 14-days before the hearing. (See CCP § 437c(b)(2). Plaintiff filed her opposition on November 11, 2024, only 11 days before the hearing. Plaintiff does not explain the untimely filing. 

Here, given the issues at stake and the lack of any undue prejudice to Defendants, the court will exercise its discretion to consider the untimely opposition and supporting papers. 

III. Objections to Evidence

There are no formal objections to evidence.

IV. Analysis

A. After Acquired Evidence (All Causes of Action)

In support of the motion for summary judgment, Defendants first argue that the “after-acquired evidence doctrine” bars each of Plaintiff’s claims. “In general, the after-acquired-evidence doctrine shields an employer from liability or limits available relief where, after a termination, the employer learns for the first time about employee wrongdoing that would have led to the discharge in any event. Employee wrongdoing in after-acquired-evidence cases generally falls into one of two categories: (1) misrepresentations on a resume or job application; or (2) post-hire, on-the-job misconduct.” (Camp v. Jeffer, Mangels, Butler & Marmaro (1995) 35 Cal. App. 4th 620, 632.)

In support of that argument, Defendants present evidence that prior to Plaintiff’s employment at MTM, Plaintiff had three felony convictions—two for possession of illegal substances and one for theft—as well as an additional conviction for driving under the influence (DUI). (SSUMF 19.) Plaintiff attended six months of court-ordered rehabilitation related to her DUI and use of crystal meth. (Id. 21.) Plaintiff was still on probation when she applied for the job and started working at MTM. (Id. 22.) Plaintiff concealed her prior criminal convictions and court-ordered rehabilitation when she applied for and interviewed for the position at MTM. (Id. 23.) 

Despite Plaintiff’s lack of opposition, the evidence Defendants rely on is insufficient to carry their initial burden. Elior Perez, the owner and operator of Mania Retail USA—the parent company of MTM—merely states (in conclusionary fashion) in his declaration that Plaintiff “concealed her prior criminal convictions” and that MTM “would not have offered employment to Plaintiff or employed Plaintiff if MTM had been aware of Plaintiff’s prior conduct, criminal convictions, and ongoing probation status.” (Perez Decl. ¶ 16.) Dionne Coward, the CEO of MTM, likewise attests in declaration that Plaintiff concealed these facts and that MTM would not have hired Plaintiff had it known these facts. (Coward Decl. ¶ 11.)  

But importantly, while Defendants maintain that Plaintiff “concealed” her prior convictions (SSUMF 23), Defendants have not provided any evidence whatsoever that they ever asked Plaintiff about her criminal record or probation history at any time of the hiring process. Therefore, Defendants have not met their initial burden of proof on this issue.

Moreover, even assuming Defendants met their initial burden, Plaintiff has, at the very least, established a triable issue of material fact as to whether she lied about her history during the employment hiring process. Plaintiff maintains that she was never asked anything about her prior criminal history during the hiring process. Indeed, Plaintiff provided a copy of her Application for Employment, which did not ask about any criminal history. (See Merlin Decl. ¶ 6, Exh. B.   See also, Plaintiff’s Response to Defendants’ Separate Statement, No. 23.)

It is worth noting that Plaintiff does not dispute that MTM would not have offered her employment if it had been aware of her criminal history. (See P’s RDSS No. 24 [stating it is “undisputed” that “MTM would not have offered employment to Plaintiff or employed Plaintiff if MTM had been aware of Plaintiff’s prior conduct, criminal convictions, and ongoing probation status”].) Be that as it may, because Plaintiff was never asked and cannot be said to have lied about her history, there remains a triable issue of material fact. 

Based on these disputed facts, the after-acquired evidence doctrine is not a bar at this time to Plaintiff’s claims, and the motion for summary judgment or adjudication on this basis is DENIED.  The trier of fact must determine whether such a doctrine is a viable defense or not.

B. Whether MTM is an “Employer” Under the FEHA (First, Fourth, and Fifth Causes of Action)

Defendants next argue that the First, Fourth, and Fifth Causes of Action fail because at all relevant times, MTM employed four or less employees, and therefore was not an “employer.” Under FEHA, employer “includes any person regularly employing five or more persons.” (Gov. Code § 12926(d).)  [FN 1]

Defendants present a copy of MTM’s quarterly income-tax reports between July 2019 and March 2020, which lists five employees. (SSUMF 7; Perez Decl. ¶ 4, Exh. H.) Coward, Shimol, and Perez all state in their declarations that MTM “was a small clothing store which at all relevant times had less than five employees.” (Coward Decl. ¶ 3; Shimol Decl. ¶ 3; Perez Decl. ¶ 4.) Defendants have therefore met their initial burden on this point.

In opposition, Plaintiff contends MTM employed more than five individuals. She states that she supervised “at least six (6) other employees,” including “Genice Young, Kenya Usher, Lior, Channel, Keshawn, Yuval and Eli.” (Merlin Decl. ¶ 10.) Plaintiff also presents evidence that MTM shared employees with Noizz Topanga Mall, LLC, the store next-door. Plaintiff attests that supervisors such as Mille Dacles and Ben Shimol handled issues at both stores, and “the employees of Noizz and MTM would look after each other’s store.” (Merlin Decl. ¶¶ 12, 13.) Some employees “would take shifts both at MTM and at Noizz, interchangeably.” (Id.) Notably, MTM and Noizz were both franchisees of the same parent company, OR Mania U.S.A., Inc. (SSUMF 9, 10.)

Here, Plaintiff has established a triable issue as to whether MTM employed more than five employees. Though MTM lists fewer than five employees on its quarterly income tax reports, the structure of the organization calls that representation into question. Plaintiff presents evidence that OR Mania, MTM, and Noizz essentially shared employees and maintained an overlap in their management and operations. It goes without saying that an employer cannot side-step the protections of FEHA by structuring its business in such a way. 

In so concluding, this court is mindful that it must “liberally construe the evidence” and “resolve doubts concerning the evidence in” Plaintiff’s favor. (See Dore, supra, 39 Cal.4th at 389.) This is also consistent with the “well-settled rule that courts must broadly construe FEHA provisions to implement the legislative intent to provide protections to workers and end the practice of sexual (and other forms of) harassment in the workplace, and to hold those with the ability and authority to prevent and remedy the situation responsible for addressing the problem.” (Hirst v. City of Oceanside (2015) 236 Cal. App. 4th 774, 791.)

Accordingly, Defendants’ Motion for Summary Adjudication of the First, Fourth, and Fifth Causes of Action is DENIED.

C. Harassment Causes of Action and Failure to Prevent Harassment (Second, Third, and Fifth Causes of Action)

 Next, Defendants argue Plaintiff’s causes of action for FEHA Quid Pro Quo Sexual Harassment (Second) and FEHA Work Environment Harassment (Third) fail because Plaintiff cannot establish the elements of her claims.

“Courts have generally recognized two distinct categories of sexual harassment claims: quid pro quo and hostile work environment. Quid pro quo harassment occurs when submission to sexual conduct is made a condition of concrete employment benefits.” (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 607, internal citation omitted.) “A cause of action for quid pro quo harassment involves the behavior most commonly regarded as sexual harassment, including, e.g., sexual propositions, unwarranted graphic discussion of sexual acts, and commentary on the employee’s body and the sexual uses to which it could be put. To state a cause of action on this theory, it is sufficient to allege that a term of employment was expressly or impliedly conditioned upon acceptance of a supervisor’s unwelcome sexual advances.” (Mogilefsky v. Superior Court (1993) 20 Cal.App.4th 1409, 1414, internal citations omitted.)

As to hostile work environment sexual harassment, “the adjudicator’s inquiry should center, dominantly, on whether the discriminatory conduct has unreasonably interfered with the plaintiff’s work performance. To show such interference, ‘the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment.’ It suffices to prove that a reasonable person subjected to the discriminatory conduct would find, as the plaintiff did, that the harassment so altered working conditions as to ‘make it more difficult to do the job.’ ” (Harris v. Forklift Sys. (1993) 510 U.S. 17, 25, conc. opn. of Ginsburg, J.; see Gov. Code, § 12923(a) endorsing this language as reflective of California law.) “[A] hostile work environment sexual harassment claim requires a plaintiff employee to show she was subjected to sexual advances, conduct, or comments that were (1) unwelcome [citation]; (2) because of sex [citation]; and (3) sufficiently severe or pervasive to alter the conditions of her employment and create an abusive work environment [citations]. In addition, she must establish the offending conduct was imputable to her employer. [Citation.]” (Id. at 279.) “‘To plead a cause of action for ... sexual harassment, it is “only necessary to show that gender is a substantial factor in the discrimination, and that if the plaintiff ‘had been a man [or a woman he or] she would not have been treated in the same manner.’ ” [Citation.]’ [Citations.] Accordingly, it is the disparate treatment of an employee on the basis of sex—not the mere discussion of sex or use of vulgar language—that is the essence of a sexual harassment claim.” (Id.)

To establish a FEHA claim for harassment, a plaintiff must show that “(1) [she] is a member of a protected class; (2) [she] was subjected to unwelcome harassment; (3) the harassment was based on her protected status; (4) the harassment unreasonably interfered with [her] work performance by creating an intimidating, hostile, or offensive work environment; and (5) defendants are liable for the harassment.”  (Galvan v. Dameron Hosp. Assn. (2019) 37 Cal. App. 5th 549, 563.)

“Actionable harassment consists of more than “annoying or ‘merely offensive’ comments in the workplace,” and it cannot be “occasional, isolated, sporadic, or trivial; rather, the employee must show a concerted pattern of harassment of a repeated, routine, or a generalized nature.” (Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 283.)  Harassment “must be assessed from the ‘perspective of a reasonable person belonging to [same protected class as] the plaintiff.’ ”  (Cornell v. Berkeley Tennis Club, (2017) 18 Cal. App. 5th 908, 940.)

“Whether the conduct of the alleged harassers was sufficiently severe or pervasive to create a hostile or abusive working environment depends on the totality of the circumstances. These may include the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee's work performance. Common sense, and an appropriate sensibility to social context, will enable courts and juries to distinguish between simple teasing or roughhousing and conduct that a reasonable person in the plaintiff's position would find severely hostile or abusive.” (Serri v. Santa Clara Univ. (2014) 226 Cal. App. 4th 830, 870 [cleaned up].)

Here, there are two alleged forms of harassment. First, Plaintiff alleges Defendant Shimol “would speak inappropriately to [her] including openly discussing his sexual conquests,” “mak[ing] statements physically describing women with whom he engaged in sexual activity,” and “brag[ging] about having threesom[e]s.” (FAC ¶ 19.) Second, Plaintiff alleges that Shimol “propositioned [her] to marry him for his immigration paperwork” in exchange for monthly cash payments. (Id. ¶¶ 22, 23.) 

Defendants attempt to argue that Plaintiff cannot establish her harassment claims because Plaintiff entertained Defendant Shimol’s marriage proposal, and the marriage proposal had nothing to do with sex, only marriage. 

But this ignores the reality of the employment dynamic. Defendant Shimol was the MTM store manager and Plaintiff’s direct supervisor. (Merlin Decl. ¶ 18.) Plaintiff attests that she felt pressured and feared she would lose her job if she denied Shimol’s proposal. (Id. ¶¶ 25, 27, 30.) In connection with the marriage proposal, Plaintiff attests that Shimol offered to take her on dates and invite her out for drinks. (Id. ¶ 24.) Shimol would also comment on Plaintiff’s physical appearance and tell her that her “ass looked nice in my jeans and ask me for hug.” (Id. ¶ 20.) With this evidence, Plaintiff has established a triable issue on her harassment causes of action.

Accordingly, Defendants’ Motion for Summary Adjudication of the Second, Third, and Fifth Causes of Action is DENIED.

D. Whistleblower Retaliation Under Labor Code Section 1102.5 (Sixth Cause of Action)

Next, Defendant argues Plaintiff’s Sixth Cause of Action for Labor Code section 1102.5 retaliation fails because Plaintiff failed to report any acts of harassment or misconduct until after she had been demoted. Defendant also asserts it has evidence that Plaintiff was demoted for legitimate, non-discriminatory reasons. 

Labor Code section 1102.5 provides whistleblower protections to employees who disclose wrongdoing to authorities. It prohibits an employer from retaliating against an employee for sharing information the employee “has reasonable cause to believe ... discloses a violation of state or federal statute” or of “a local, state, or federal rule or regulation” with a government agency, with a person with authority over the employee, or with another employee who has authority to investigate or correct the violation. (§ 1102.5, subd. (b).) “This provision,” the Supreme Court of California has explained, “reflects the broad public policy interest in encouraging workplace whistle-blowers to report unlawful acts without fearing retaliation.” (Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 77.) A claim for violation of Labor Code section 1102.5 requires “(1) the plaintiff establish a prima facie case of retaliation, (2) the defendant provide a legitimate, nonretaliatory explanation for its acts, and (3) the plaintiff show this explanation is merely a pretext for the retaliation. [Citations.] To establish the first element, the plaintiff must show (1) the plaintiff engaged in protected activity, (2) the defendant subjected the plaintiff to an adverse employment action, and (3) there is a causal link between the two.” (Ross v. Cnty. of Riverside (2019) 36 Cal. App. 5th 580, 591–92.)

Defendants present evidence that Plaintiff testified at her deposition that she did not raise concerns with the marriage proposal to Elior Perez or Dionne Coward—those with authority over Plaintiff and Ben Shimol—until after Plaintiff was demoted. (SSUMF 30.)
Defendants have met their initial burden on this issue, and it switches the burden to Plaintiff to establish a triable issue of material fact. 

Plaintiff apparently concedes that she did not raise the marriage issue with her superiors until after she was demoted. Even so, she argues and presents evidence that she complained to Mr. Perez about Shimol’s inappropriate sexual comments before the demotion. (SSDMF 30.) Perez was dismissive and did nothing to stop Shimol’s comments. (Id.) Plaintiff has established a triable issue on this point.

Defendants then contend that MTM’s actions were based upon legitimate, non-discriminatory reasons. In particular, Defendants present evidence that while working as shift manager, Plaintiff failed to timely open the store on multiple occasions. (SSUMF 41.) She was also constantly on her phone while working and would disregard instructions from Mr. Shimol when he asked her to put away her phone or complete tasks around the store. (SSUMF 42.) On February 3, 2024, Elior Perez and Shimol discussed Plaintiff’s performance in a phone call and decided to demote Plaintiff the next day. (SSUMF 43-46.) 

Plaintiff concedes that she opened the store late “about two times,” but asserts she was never disciplined for this until after she refused Shimol’s marriage proposal. (SSUMF 41.) Plaintiff also points to the absence of any writeups or other formal warning in the record to demonstrate she was disciplined for being on her phone or not following orders. She notes that she was notified of the demotion the same day that she told Shimol that she could not marry him for his paperwork. (SSDMF 44.) 

On these disputed facts, (1) Plaintiff has established a prima facie case of retaliation, (2) Defendants have provided a legitimate, nonretaliatory explanation for Plaintiff’s demotion, and (3) Plaintiff has presented evidence to create a triable issue on whether the explanation was merely a pretext for the retaliation.

Accordingly, Defendants’ Motion for Summary Adjudication of the Sixth Cause of Action is DENIED.

IT IS SO ORDERED.

Dated:   November 15, 2024 ___________________________________

FN 1- As the parties recognize, “employer” is defined differently for purposes of harassment claims brought under section 12940(j). In that case, “employer” means “any person regularly employing one or more persons.” (Gov. Code 12940(j)(4)(A) [emphasis added].) Thus, Plaintiff’s harassment claims (2nd and 3rd Causes of Action) can survive even if Defendant had less than five employees.