Judge: Teresa A. Beaudet, Case: 20STCV19290, Date: 2022-10-06 Tentative Ruling

Case Number: 20STCV19290    Hearing Date: October 6, 2022    Dept: 50

THERE ARE TWO TENTATIVES:

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff Jason Dizon (“Plaintiff”) filed this action against Defendant Western Asset Management Company, LLC (“Defendant”) on May 20, 2020.  

 In the Complaint, Plaintiff asserts causes of action for (1) retaliation in violation of Equal Pay Act, (2) whistleblower retaliation, (3) retaliation in violation of FEHA, (4) retaliation in violation of Cal. Labor Code § 98.6, (5) discrimination on the basis of association with protected group in violation of FEHA, (6) failure to prevent discrimination and/or retaliation in violation of FEHA, (7) wrongful termination in violation of public policy, and (8) unlawful prohibition on discussing wages and working conditions.[1]

In the Complaint, Plaintiff alleges that Defendant employed him from about December 2015 until on or about March 20, 2020, and that he worked as a “Unix System Administrator” in the IT department. (Compl., ¶ 20.) In or about July 2019, Plaintiff became aware that his female co-worker, Jennifer Hua (“Hua”), was pursuing a lawsuit for discriminatory and unlawful pay practices on the basis of sex, race, and/or national origin/ancestry against Defendant. (Compl.,    ¶ 21.) Plaintiff alleges he opposed Defendant’s discriminatory and unlawful practices against Hua, by, including but not limited to, discussing his own compensation with Hua; providing her with corroborating evidence about her discrimination and unequal pay claims; being a witness in her lawsuit; providing Hua with a copy of his own pay records, performance evaluations, and other relevant documents accessible to him pertaining to Defendant’s alleged illegal and discriminatory pay practices; and protesting Defendant’s alleged illegal policies and practices. (Compl., ¶ 22.)

Plaintiff also alleges that he participated as a witness in Defendant’s internal investigation regarding providing his pay documents to Hua. (Compl., ¶ 23.) On March 20, 2020, Defendant terminated Plaintiff’s employment. (Compl., ¶ 30.) Plaintiff alleges he was terminated for pretextual reasons. (Compl., ¶ 26.)

Defendant now moves pursuant to California Code of Civil Procedure sections 128.5 and 128.7 for an order imposing monetary sanctions in the amount of $350,785.50 in attorney fees in this matter, plus any additional fees incurred between February 1, 2022 and the time of the Court’s ruling on this motion, against Plaintiff and his counsel in this action, Workplace Justice Advocates, PLC, including Tamara S. Freeze (“Workplace Justice”). Plaintiff opposes.

Evidentiary Objections

The Court rules on the Joint Statement Re: Defendant’s Objections to Evidence Submitted by Plaintiff in Support of his Opposition to Defendant’s Motion for Sanctions as follows:[2]

Objection No. 1: sustained as to “[w]hen I learned Ms. Hua is being underpaid by

Defendant,” overruled as to the remainder.

Objection No. 2: overruled

Objection No. 3: overruled

Objection No. 4: overruled

Objection No. 5: overruled

Objection No. 6: overruled

Objection No. 7: overruled

Objection No. 8: overruled

Discussion

Pursuant to Code of Civil Procedure section 128.5, subdivision (a), “[a] trial court may order a party, the party’s attorney, or both, to pay the reasonable expenses, including attorney’s fees, incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.” For purposes of Section 128.5, “‘[a]ctions or tactics’ include, but are not limited to, the making or opposing of motions or the filing and service of a complaint, cross-complaint, answer, or other responsive pleading.” (Code Civ. Proc., § 128.5, subd. (b)(1).) “‘Frivolous’ means totally and completely without merit or for the sole purpose of harassing an opposing party.” (Code Civ. Proc., § 128.5, subd. (b)(2).)

Code of Civil Procedure section 128.7 “authorizes trial courts to impose sanctions to check abuses in the filing of pleadings, petitions, written notices of motions or similar papers.” (Musaelian v. Adams (2009) 45 Cal.4th 512, 514.) “Subdivision (b) requires that parties and their attorneys certify that pleadings or other written matters presented to the courts have merit, ‘to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances.’” (Id. at p. 516.) One of the conditions to be met is that the allegations and other factual contentions have “evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery.” (Code Civ. Proc., § 128.7, subd. (b)(3).) To obtain sanctions under section 128.7, “the moving party must show the party’s conduct in asserting the claim was objectively unreasonable. A claim is objectively unreasonable if ‘any reasonable attorney would agree that [it] is totally and completely without merit.’” (Peake v. Underwood (2014) 227 Cal.App.4th 428, 440 [internal citations omitted].)

            Defendant contends that Plaintiff’s claims are frivolous. First, Defendant asserts that on March 20, 2022 it terminated Plaintiff’s employment, because Plaintiff violated Defendant’s Confidentiality Policy by sending Defendant’s confidential documents via email to Hua.[3] Defendant also argues that Plaintiff’s deposition testimony confirms that this is a “manufactured” case.

Defendant notes that Plaintiff alleged in his fifth cause of action that “During the course of his employment with Defendants…Plaintiff was subjected to discrimination due to his association with a female employee who was harmed by Defendants’ discriminatory and unlawful employment practices.” (Compl. ¶ 84) Defendant provides evidence that Plaintiff was asked in his deposition: “Q. Do you believe -- my question is, do you believe Western Asset discriminated against you in any way? A. No, I don’t believe they discriminated against me.” (Beilke Decl., ¶ 7, Ex. 4 (Dizon Depo.) at p. 46:21-23.) As set forth above, Plaintiff dismissed his fifth cause of action for discrimination on May 2, 2022.

            Defendant asserts that Plaintiff’s untimely dismissal of the discrimination cause of action confirms that it is frivolous and that Defendant is entitled to sanctions on this claim. “The availability of section 128.7 sanctions against an offending plaintiff that has voluntarily dismissed its action depends upon whether the sanctions motion was filed before or after the dismissal.” (Eichenbaum v. Alon (2003) 106 Cal.App.4th 967, 975.) “Hart, supra, 95 Cal.App.4th 410, followed a consistent line of authority to the effect that a motion for sanctions under section 128.7 may not be instituted after the termination of an action. But the relevant considerations point exactly the opposite in a case, such as this one, where a voluntary dismissal is taken after a motion for section 128.7 sanctions has been brought. In such a case, the defendant moves for sanctions only after the plaintiff has been allowed the 21-day (formerly 30-day) safe harbor to rectify its sanctionable conduct, but has not done so. In these circumstances, belated abandonment of the case does not fulfill the object of the statute, and the policies favoring allowance of sanctions remain extant notwithstanding the dismissal.” (Ibid. [internal citations omitted].)[4] In Eichenbaum, “appellants were given the full latitude of the safe harbor period. They ignored it, and did not withdraw their FAC, by dismissal, until after the sanctions motion had been filed, argued, and submitted for decision.” (Id. at p. 976.) The Court of Appeal found that “the voluntary dismissals did not deprive the court of power to grant the motion.” (Ibid.)
            Here, the certificate of service attached to Defendant’s instant motion indicates that it was served on April 5, 2022 by personal service. Plaintiff filed his request for dismissal of the fifth cause of action on May 2, 2022, 27 days after the motion for sanctions was served, and 6 days after the motion for sanctions was filed. As Defendant notes, Plaintiff filed the request for dismissal 6 days after the 21-day safe harbor period expired. Defendant also notes that Plaintiff does not dispute his deposition testimony that he does not believe Defendant discriminated against him. Plaintiff simply indicates in the opposition that “[e]ven though Mr. Dizon explained in discovery that he was discriminated for being associated with Ms. Hua, on May 2, 2022, Dizon dismissed his fifth cause of action for discrimination on the basis of association with    Ms. Hua.” (Opp’n at p. 11:4-6.) In addition, Plaintiff does not cite to any evidence of the foregoing discovery.  

With regard to the remaining causes of action (in addition to the discrimination cause of action), Defendant asserts that Plaintiff’s deposition testimony contradicts the allegations in his Complaint. Defendant notes that Plaintiff alleges he “provided evidence to Defendant’s human resources investigator supporting Ms. Hua’s discrimination claims as well as testimony regarding the documents he sent to Ms. Hua in support of her discrimination claims that she was paid less than her male peers.” (Compl., ¶ 24) Defendant asserts that these allegations are contradicted by the following deposition testimony: “Q. And did you ever make any complaints to any of your managers at Western Asset regarding harassment of any kind? A. No. Q. And did you ever complain to anyone at Western Asset that you had been retaliated against? A. Not that I recall.” (Beilke Decl., ¶ 7, Ex. 4 (Dizon Depo.) at p. 39:20-22, 44:4-6.)   

Defendant also notes that Plaintiff alleges he “participated in the internal investigation by revealing he had disclosed his own pay to Ms. Hua—key evidence in Ms. Hua’s discrimination and unequal pay lawsuit.” (Compl., ¶25) However, Defendant provides evidence of the following deposition testimony: “Q. Other than Ms. Hua, did you have a discussion with anyone else at Western Asset regarding Ms. Hua’s complaints regarding her pay? A. No.” (Beilke Decl., ¶ 7, Ex. 4 (Dizon Depo.) at p. 42:15-18.) “Q. And did you ever talk to anyone at Western Asset regarding any information that you were providing in support of Ms. Hua’s equal pay claim? A. No.” (Beilke Decl., ¶ 7, Ex. 4 (Dizon Depo.) at p. 45:13-16.) “Q. And did you tell anyone at Western Asset that you had provided a third party with any documents or information regarding Ms. Hua’s equal pay claim? A. No.” (Beilke Decl., ¶ 7, Ex. 4 (Dizon Depo.) at p. 46:6-9.) 

            Plaintiff also alleges that he participated as a witness in Defendant’s internal investigation regarding his disclosure of pay documents to Ms. Hua. (Compl., ¶23.) However, Defendant provides evidence of the following deposition testimony: “Q. Were you ever interviewed by anyone at Western Asset in connection with Ms. Hua’s equal pay claim? A. No.” (Beilke Decl.,  ¶ 7, Ex. 4 (Dizon Depo.) at p. 40:8-10.)

Plaintiff counters that facts show that Plaintiff’s claims of retaliation are valid and

that Defendant’s “legitimate reason” for terminating Plaintiff was merely pretextual.

As set forth above, Defendant asserts that Plaintiff was terminated for violating Defendant’s confidentiality policy. Plaintiff acknowledges that on July 31, 2019, he sent an email to Hua with the subject line “Career Slotting Documents for Shirin.” (Dizon Decl., ¶ 3, Ex. B). Plaintiff indicates that in this email he forwarded to Hua two attachments (“IT Career paths” and “Career Framework-Slotting Briefing”). (Dizon Decl., ¶ 3.) Defendant notes that Plaintiff testified in his deposition that he was trained on the company’s confidentiality policy, and in response to the question: “[a]nd under the confidentiality policy, it states that all documents, Western Asset documents, are presumed confidential; correct?” Plaintiff stated “It may be considered confidential.” (Beilke Decl., ¶ 7, Ex. 4 (Dizon Depo.) at p. 63:15-24.) Dizon contends that the documents attached to his July 31, 2019 email were available to numerous employees and were never stamped “Confidential.” (Dizon Decl. ¶ 3.)

Plaintiff also asserts that during Plaintiff’s deposition, Defendant’s attorney erroneously focused on whether Plaintiff complained to Defendant about Hua’s unequal pay claims. Plaintiff contends that this is “beside the point,” because he only needs to prove that he engaged in a protected activity and that it was a substantial motivating reason for his termination. “In order to establish a prima facie case of retaliation under the FEHA, a plaintiff must show (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.” (Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1042.) Protected activity includes opposing “any practices forbidden” under FEHA or filing a complaint, testifying, or assisting in any proceeding under FEHA. (Gov. Code, § 12940, subd. (h).)¿¿¿

Plaintiff provides evidence of portions of a deposition transcript for Hua, who was deposed on February 12, 2020. (Freeze Decl. ¶ 16, Ex. I.) In that deposition, Hua testified that Plaintiff provided his salary information to her, and that Plaintiff spoke to Hua’s attorney. (Freeze Decl. ¶ 16, Ex. I (Hua Depo.) at p. 9:13-20:7; 22:3-14). In addition, during her February 12, 2020 deposition, Hua testified that her salary should be either higher than her peers or at least at the same level as them, and then identified Plaintiff as one of her peers. (Freeze Decl. ¶ 16,  Ex. I (Hua Depo.) at p. 108:5-12.) Defendant acknowledges that Plaintiff was then placed on paid administrative leave in February 2020.[5]

Plaintiff asserts that “[a]s of February 12, 2020, the date of Ms. Hua’s deposition, [Defendant] became keenly aware that [Plaintiff] was engaging in a protected activity, by assisting Ms. Hua with her FEHA and Cal. Labor Code claims by providing his compensation information to Ms. Hua and her attorney, as well as educating Ms. Hua on WAM’s compensation practices and procedures (July 31, 2019 email with attachments).” (Opp’n at p. 14:6-10.)

            In addition, Plaintiff’s first cause of action is for retaliation in violation of the California Equal Pay Act (Labor Code section 1197.5). Labor Code section 1197.5, subdivision (k)(1) provides in pertinent part, “[a]n employer shall not discharge, or in any manner discriminate or retaliate against, any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this section. An employer shall not prohibit an employee from disclosing the employee’s own wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under this section.” Plaintiff indicates that he provided Hua’s attorney with his wage compensation documentation to support Hua’s gender discrimination and unequal pay claim. (Dizon Decl., ¶ 2.)

Based on the foregoing, the Court does not find that Defendant has shown that Plaintiff’s causes of action (other than the dismissed fifth cause of action) were brought in bad faith, are frivolous, or were solely intended to cause unnecessary delay. The Court also does not find that Defendant has shown that Plaintiff’s conduct in asserting his causes of action was objectively unreasonable.

However, the Court finds that Defendant has demonstrated good cause for sanctions in connection with Plaintiff’s cause of action for discrimination. As discussed, Defendant provides evidence that Plaintiff testified that he does not believe that Defendant discriminated against him. In addition, Plaintiff dismissed the discrimination cause of action outside of the Code of Civil Procedure section 128.7, subdivision (c)(1) safe-harbor period and after the instant motion for sanctions was filed. In the reply, Defendant asserts that “the dismissal of the discrimination claim confirms that [Defendant] is entitled to at least 16.67% (representing 1/6 of Dizon’s unique claims) of the fees it incurred between the time the Complaint was filed on May 20, 2020 and when the discrimination claim was dismissed on May 2, 2022 – this amounts to more than $78,000.” (Reply at p. 7:5-9.) Defendant cites to the Supplemental Declaration of Michele J. Beilke in support of this assertion. The Court notes that Plaintiff has not had the opportunity to respond to the new evidence presented by Defendant in connection with the reply. Moreover, the Court notes that Ms. Beilke’s supplemental declaration does not provide any substantiating billing records. Thus, the Court will require further briefing as to the amount of sanctions requested in connection with the discrimination cause of action. 

            The Court notes that Defendant also argues that Plaintiff’s counsel, Workplace Justice, breached their ethical obligation to return Defendant’s confidential information. Specifically, Defendant asserts that Workplace Justice induced Plaintiff to provide confidential information and documents belonging to Defendant that Workplace Justice knew it had no right to receive without Defendant’s consent.[6] Plaintiff counters that Workplace Justice did not breach its ethical obligations and did not violate the California Rules of Professional Conduct. Plaintiff provides evidence that on July 24, 2019, he contacted Hua’s attorney and asked her if she needed him to provide his wage statements or something more. (Dizon Decl., ¶ 2, Ex. A.) Hua’s counsel,      Ms. Forootan, replied: “Just wage statement is fine.” (Ibid.) Plaintiff then sent Ms. Forootan his wage compensation documentation. (Dizon Decl., ¶ 2.) Plaintiff provides evidence of the following testimony from Defendant’s Human Resources employee Gregory Twitchell’s deposition: “Q. Employee pay, you do not consider this information confidential; correct? A. Correct.” (Freeze Decl., ¶ 3, Ex. B (Twitchell Depo.) at p. 137:23-25; Dizon Decl., ¶ 2.)

Lastly, Plaintiff seeks sanctions pursuant to Code of Civil Procedure section 128.5, subdivision (g), which provides in part that “[a] motion for sanctions brought by a party or a party’s attorney primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation, shall itself be subject to a motion for sanctions.” In light of the foregoing, the Court does not find that Defendant’s motion was brought primarily for an improper purpose. Therefore, Plaintiff’s request for sanctions is denied.

Conclusion

Based on the foregoing, the Court denies the motion for sanctions as it relates to Plaintiff’s first, second, third, fourth, sixth, seventh, and eighth causes of action.

With regard to Defendant’s motion as it relates to Plaintiff’s fifth cause of action, the Court continues the hearing on the motion to _________________,  at 10:00 a.m. in Dept. 50. Defendant may file and serve a supplemental declaration with supporting billing records by _________________, with a courtesy copy delivered to Dept. 50. Plaintiff’s response, if any, is to be filed and served by _________________, with a courtesy copy delivered to Dept. 50.  

Defendant is ordered to provide notice of this ruling.   

DATED:  October 6, 2022                             ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court