Kai Ju Hu v. Hua Nan Commercial Bank LTD, et al.

DEMURRER TO FIRST AMENDED COMPLAINT

 

MOVING PARTY(S):  Defendants Hua Nan Commercial Bank, LTD; Fei-Hsuan Tung aka Bonnie Tung; Chi-Hua Lee aka Chris Lee; and Jui-Peng Wang aka Ray Wang

RESPONDING PARTY(S): Plaintiff Kai Ju Hu

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff Kai Ju Hu worked as a Compliance Associate for Defendant Hua Nan Commercial Bank, LTD. Over a multi-year period, Plaintiff alleges she was stalked and harassed by a male coworker, Paul Chen. Plaintiff alleges Defendants failed to discipline or take other action against Chen despite her complaints. Plaintiff eventually resigned from her position due to Defendants’ failure to prevent Chen’s harassment. 

Defendants now demurrer to the First, Second, Third, Fourth, Fifth, Ninth, and Tenth Causes of Action in the First Amended Complaint. Plaintiff opposed.

TENTATIVE RULING:

Defendants’ Demurrer as to the First, Fourth, Fifth, Ninth, and Tenth Causes of Action is SUSTAINED without leave to amend, except where expressly provided herein.

Defendants’ Demurrer to the Second and Third Causes of Action is SUSTAINED as to the individual Defendants only, without leave to amend. The Demurrer to the Second and Third Causes of Action is OVERRULED as to Defendant Hua Nan Commercial Bank, LTD.

Plaintiff is allowed to file a Second Amended Complaint, if so desired, within 30 days of this ruling.   If Plaintiff chooses not to amend, then the Defendants are to file an Answer within 21 days.

Moving party to give notice.

DISCUSSION:

Demurrer

I. Meet and Confer

II. Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action.  (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.)  When considering demurrers, courts read the allegations liberally and in context.  (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal. App. 4th 1216, 1228.)  In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice.  (CCP § 430.30(a).)  A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.  (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.)  Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.  (Id.)  The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.  (Hahn, 147 Cal.App.4th at 747.)

III. Analysis

Defendants demurrer to the First, Second, Third, Fourth, Fifth, Ninth, and Tenth Causes of Action in the First Amended Complaint. Each is addressed in turn.

A. First, Fourth, and Fifth Causes of Action

First, Defendants argue the First (Failure to Maintain Safe Workplace), Fourth (Failure to Prevent and Correct Harassment and Discrimination), and Fifth (Negligent Failure to Maintain Safe Workplace) causes of action fail to state facts sufficient to state a cause of action.

In opposition, Plaintiff “agrees…and subsequently concedes the striking” of these claims, and moreover, does not request leave to amend. (Opp. 2: 2.)   Accordingly, Defendants’ Demurrer to the First, Fourth, and Fifth Causes of Action is SUSTAINED without leave to amend.

B. Second Cause of Action for Unlawful Discrimination Based on Sex

Next, Defendants argue the second cause of action fails because there was no adverse employment decision. Rather, they contend the allegations demonstrate that Plaintiff “quit her job on her own accord.” Generally, to make prima facie case for FEHA discrimination, “the plaintiff must provide evidence that (1) [s]he was a member of a protected class, (2) [s]he was qualified for the position [s]he sought or was performing competently in the position [s]he held, (3) [s]he suffered an adverse employment action, such as termination, demotion, or denial of an available job, and (4) some other circumstance suggests discriminatory motive.”  (Guz v. Bechtel Nat. Inc. (2000) 24 Cal. 4th 317, 355.)  

Here, Plaintiff has alleged that her quitting was the result of a constructive discharge. (See FAC ¶¶ 108-112.) “Constructive discharge occurs when the employer's conduct effectively forces an employee to resign.” (Atalla v. Rite Aid Corp. (2023) 89 Cal. App. 5th 294, 319.) “The essence of the test is whether, under all the circumstances, the working conditions are so unusually adverse that a reasonable employee in plaintiff's position ‘would have felt compelled to resign.’” (Id. at 320.) “Constructive discharge, like actual discharge, is a materially adverse employment action.” (Steele v. Youthful Offender Parole Bd. (2008) 162 Cal.App.4th 1241, 1253.) Thus, accepting the allegations as true, Plaintiff has alleged a constructive discharge, which constitutes an “adverse employment action.” 

Defendants also argue that Plaintiff’s claim must fail against the individual employee Defendants. In Reno v. Baird (1998) 18 Cal.4th 640, 645, the Court held that FEHA’s definition of “employer,” which includes “any person acting as an agent of an employer,” does not impose liability on individuals.  Similarly, in Jones v. Lodge at Torrey Pines P'ship (2008) 42 Cal.4th 1158, the Court held that Government Code section 12940(h), which makes it unlawful for “any employer ... or person to discharge, expel, or otherwise discriminate against any person,” did not impose liability on individual “persons.” Therefore, the demurrer is well-taken as to the individual Defendants. 

Accordingly, Defendants’ Demurrer to the Second Cause of Action is SUSTAINED as to the individual Defendants only, without leave to amend. The Demurrer is OVERRULED as to Defendant Hua Nan Commercial Bank, LTD.

C. Third Cause of Action for Failure to Prevent Discrimination and Harassment

Next, Defendants argue Plaintiff’s Fourth Cause of Action fails because she has not sufficiently alleged discrimination or harassment. 

Plaintiff has alleged that she faced harassment and discrimination from a coworker, Paul Chen, both in and out of the workplace. Plaintiff alleges Chen “would regularly point his cellphone’s camera in her direction,”  “wait[] for her when she went to the workplace restrooms,” and “follow[] her as she left work.” (FAC ¶¶ 20, 23.) This is not to mention the additional allegations of harassment by Chen occurring outside of the workplace. (Id. ¶¶ 18, 21, 22, 24-30.) Plaintiff alleges that Defendants failed to take action to remedy the harassment despite her complaints, resulting in Plaintiff’s constructive discharge. (Id. ¶ 37.) Considering these allegations liberally and in context, Plaintiff has stated an adequate claim for failure to prevent discrimination and harassment against the entity Defendant, for pleading purposes.  (See Taylor, supra, 144 Cal. App. 4th at 1228.) 

Second, Defendants again argue that the claim must fail against the individual Defendants. As discussed in the preceding cause of action, that argument is again well-taken. 

Accordingly, Defendants’ Demurrer to the Third Cause of Action is SUSTAINED as to the individual Defendants only, without leave to amend. The Demurrer is OVERRULED as to Defendant Hua Nan Commercial Bank, LTD.

D. Ninth Cause of Action for Disparate Treatment

Defendants argue the Ninth Cause of Action for Disparate Treatment fails because it is duplicative of her Second Cause of Action for discrimination based on sex. In opposition, Plaintiff states “there may have been some confusion as to the difference between this Cause of Action and the Second Cause of Action.” (Opp. 9: 20-21.) 

An individual may establish discrimination by proving either “disparate treatment” or “disparate impact.” (Heard v. Lockheed Missiles & Space Co. (1996) 44 Cal. App. 4th 1735, 1748.) Under the disparate treatment theory, “an individual is discriminated against when the employer ‘treats some people less favorably than others because of their race, color, religion, sex or national origin.’” (Id.) 

Therefore, Plaintiff’s cause of action for “disparate treatment” is not a standalone cause of action, but rather, a means of proving discrimination. It is therefore encompassed by her second cause of action for unlawful discrimination.

Accordingly, Defendants’ Demurrer to the Ninth Cause of Action is SUSTAINED, without leave to amend. However, Plaintiff may amend her second cause of action to indicate she is proceeding with her discrimination claim on a disparate treatment theory. 

E. Tenth Cause of Action for Constructive Termination

Finally, Defendants argue Plaintiff’s Tenth Cause of Action for “Constructive Termination” is not a standalone cause of action. They are correct.

“Standing alone, constructive discharge is neither a tort nor a breach of contract, but a doctrine that transforms what is ostensibly a resignation into a firing. Even after establishing constructive discharge, an employee must independently prove a breach of contract or tort in connection with employment termination in order to obtain damages for wrongful discharge.”  (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal. 4th 1238, 1251.)

Accordingly, Defendants’ Demurrer to the Tenth Cause of Action is SUSTAINED, without leave to amend. However, Plaintiff may amend to indicate she is alleging a constructive discharge as her adverse employment action, as may be appropriate in one or more of her remaining causes of action

IT IS SO ORDERED.

Dated:   April 25, 2024 ___________________________________