Opinion
No. C 02-4041 CRB
February 14, 2003
MEMORANDUM AND ORDER
Plaintiff Young Kap-Cheong brings this lawsuit against his former employers, defendants Korea Express, USA, Inc. and The Korea Express Co., Ltd., for wrongful termination of his employment. Specifically, he alleges: 1) breach of contract; 2) breach of implied-in-fact contract; 3) breach of the implied covenant of good faith and fair dealing; 4) discrimination in violation of the California Fair Employment and Housing Act (FEHA); 5) unpaid wages in violation of California Labor Code §§ 201 et seq.; 6) violation of California Business Professions Code §§ 17200 et seq.; 7) declaratory relief, 8) defamation 9) intentional infliction of emotional distress; 10) negligent infliction of emotional distress; and 11) wrongful termination in violation of public policy.
Defendants now move to dismiss the third, fourth and eleventh causes of action, arguing that plaintiff fails to state a claim granting relief. After carefully considering the papers filed by the parties, and having had the benefit of oral argument, defendants' motion is GRANTED in part and DENIED in part.
BACKGROUND
The lawsuit arises from the following alleged facts: Plaintiff, a man of Korean descent, commenced his employment with the defendants in 1991.
Defendant Korea Express Co., Ltd. is a Korean-based company and the parent company to defendant Korea Express USA, Inc., a New York company doing business in California. Mr. Young Wook Kwak is the top employee of both organizations.
During his tenure with the defendants, plaintiff was promoted to Branch Manager of the San Francisco office. He also served as Branch Manager of the Los Angeles office. Defendants continually complimented plaintiff's performance.
Plaintiff alleges that on or about October 5, 2001, he met with Mr. Kwak who praised plaintiff's performance. That same evening, Mr. Kwak flew from San Francisco to Newark, New Jersey. Plaintiff contends that following the flight, Mr. Kwak vehemently complained to others in the company, including Mr. Oh, the President of Korea Express, USA, that he had "suffered greatly" because he had sat next to an African-American individual during the flight from San Francisco to Newark. Plaintiff alleges that Mr. Kwak blamed plaintiff for sitting Mr. Kwak next to an African-American passenger, and thereafter convinced Mr. Oh to terminate plaintiff. Mr. Oh initially refused to terminate plaintiff because plaintiff was too valuable to defendants' business. When Mr. Kwak persisted, plaintiff's employment was severed with the defendants on or about January 4, 2002.
Plaintiff contends that he was treated differently from non-Korean workers because Mr. Kwak believed plaintiff should have known, as a Korean, that Mr. Kwak would not want to sit next to an African-American person on the aircraft.
LEGAL STANDARD
Under Federal Rules of Civil Procedure 12(b)(6), a party may move to dismiss a cause of action which fails to state a claim upon which relief can be granted. On a motion to dismiss, all well-pleaded allegations of material fact are taken as true and construed in the light most favorable to the non-moving party. Wyler-Summit Partnership v. Turner Broadcasting System, Inc., 135 F.3d 658, 661 (9th Cir. 1998). The court must draw all reasonable inferences in favor of the non-moving party. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). The complaint "should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief" Id. (quoting Hydranautics v. Filmtec Corp., 70 F.3d 533, 535-536 (9th Cir. 1995)).
DISCUSSION
A. Breach of the Implied Covenant of Good Faith and Fair Dealing
Plaintiff alleges that defendants breached the implied covenant of good faith and fair dealing by terminating his employment without good cause and in violation of their policies.
The covenant of good faith and fair dealing implied in every contract, exists merely to prevent one contracting party from unfairly frustrating the other party's right to receive the benefits of the agreement Guz v. Bechtel National, Inc., 24 Cal.4th 317, 349 (2000). It cannot impose substantive duties or limits on the parties beyond those set forth in the terms of the agreement. Id. at 349-350. Further, "the covenant of good faith is . . . not to protect some general public policy interest not directly tied to the contract's purposes." Foley v. Interactive Data Corp., 47 Cal.3d 654, 690 (1988).
In Foley, the California Supreme Court refused to extend a cause of action for tort damages for breach of the implied covenant of good faith and fair dealing to the employment context, concluding that contractual remedies should remain the sole available relief for such violations.Id. at 696. In Gus, the Court incorporated the principles of Foley and explained that insofar as an employer's acts are directly actionable as a breach of implied-in-fact contract term, a claim that simply realleges such breach as a violation of the covenant of good faith and fair dealing is superfluous. Guz, 24 Cal.4th at 352. The reason for this is because the remedy for breach of an employment agreement, including the covenant of good faith and fair dealing is solely contractual. Id. The court went on to provide that in the employment context, an implied covenant claim affords no separate measure of recovery, such as tort damages. a "Allegations that the breach was wrongful, in bad faith, arbitrary, and unfair are unavailing." Id.
Assuming the facts alleged by plaintiff to be true, the allegations contained in plaintiff's claim for breach of the implied covenant of good faith and fair dealing (that he was terminated without good cause and in violation of defendants' policies) are duplicative of plaintiff's breach of contract and breach of implied-in-fact contract claims, and do not set forth an independent means of recovery. Therefore, under the reasoning ofGuz, plaintiff's third cause of action for breach of the implied covenant of good faith and fair dealing fails to state a claim and is dismissed. Furthermore, plaintiff did not oppose defendants' motion to dismiss this cause of action.
B. Discrimination Based on Race/Natural Origin in Violation of FEHA
Plaintiff also claims he was discriminated against by defendants on the basis of his race and/or national origin in violation of FEHA. California Government Code § 12940(a) provides that it is an unlawful employment practice for an employer, because of race or national origin (or various other protected classes, such as sex or religious creed) to discriminate against a person in compensation or in terms, conditions or privileges of employment.
The defendants argue that it is illogical that a Korean representative from a Korean company would discriminate against one of its Korean workers and therefore plaintiff's claim for race/natural origin discrimination must fail.
Defendants' argument is foreclosed by Ninth Circuit case law. In Kang v. U. Lim. America, Inc., 296 F.3d 810 (9th Cir. 2002), Mexican and American workers were permitted to work less hours, while their Korean counterparts were required to put in strenuous overtime because a supervisor believed that Korean workers were superior to Mexicans and Americans. Id. at 819. The Ninth Circuit held that the evidence was sufficient to show that the Korean plaintiff suffered discrimination based on his failure to conform to ethnic stereotypes, thus precluding summary judgment for the employer. id.
Kang is analogous to this case in that similarly situated non-Korean workers were treated more favorably than the plaintiff. Id. Plaintiff alleges that he was treated different from non-Korean workers in that Mr. Kwak expected him to have followed customary practices of Korean companies by ensuring that Mr. Kwak was not seated next to an African-American individual on the airplane. An inference that can be drawn is that defendants did not have the same expectations of non-Korean workers and thus treated plaintiff differently based on their expectations. Like the plaintiff in Kang, plaintiff here contends that he was terminated because of "his failure to conform to ethnic stereotypes."Id.
Thus, plaintiff adequately states a claim based on race/national origin discrimination in violation of FEHA and defendant's motion to dismiss this portion of the fourth cause of action is denied.
C. Association Discrimination in Violation of FEHA
Plaintiff further alleges that his employers violated FEHA, California Government Code §§ 12940 et seq., by discriminating against him on the basis of his association with a person in a protected cslass. Plaintiff claims that he was terminated because of Mr. Kwak's perception that plaintiff was somehow associated with the African-American individual on the aircraft.
California Government Code § 12926(m) states that discrimination based on race, religious creed, color, national origin, etc. includes a perception that the person has any of those characteristics or that the person is associated with a person who has, or is perceived to have any of those characteristics. (emphasis added). In addition, California Code of Regulations § 7287.9 provides that it is unlawful for an employer to deny employment benefits, harass, or intimidate any employee because the employer disapproves generally of the employee's association with individuals because they are in a category enumerated in the Act. (emphasis added). Thus, FEHA expressly provides a cause of action for unlawful discrimination based on an association with someone in a protected class. However, after a diligent search, this Court has not located any California case law discussing what type of conduct constitutes an "association."
Courts often rely upon decisions involving Title VII claims when interpreting analogous provisions of FEHA. See Bradley v. Harcourt, Brace and Co., 104 F.3d 267, 270 (9th Cir. 1996). The text of Title VII, unlike FEHA, does not specifically delineate a cause of action for unlawful discrimination based on association. Nonetheless, many federal courts have construed Title VII to protect individuals who are the victims of discriminatory animus towards third parties with whom the individual associates.
The federal cases analyzing Title VII in this regard are instructive as to what type of conduct constitutes an "association." In Tetro v. Elliot Popham Pontiac, Oldsmobile, Buick and GMC Trucks, Inc., 173 F.3d 988, 994 (6th Cir. 1999), the court found that plaintiff stated a claim for discrimination on the basis of race where a white employee was terminated because his child was biracial, even though the root of the discrimination was the child's race. The court reasoned that because the purpose of Title VII is consistent with allowing a cause of action for association discrimination, it was proper to interpret the statute in such a fashion. Id. at 995. The "the net effect" is that the employer allegedly discriminated against the plaintiff because of his race. Id.
Likewise, in Parr v. Woodmen of the World Ins. Co., 791 F.2d 888, 892 (1lth Cir. 1986), the Eleventh Circuit applied Title VII to a white plaintiff's claim that he was discriminated against because of his marriage to an African-American woman. The court held that plaintiff's complaint stated a claim under Title VII, since where a plaintiff alleges discrimination based on an interracial marriage or association, he alleges that he has been discriminated against because of his race. Id.
In Chacon v. Ochs, 780 F. Supp. 680, 682 (C.D. Cal. 1991), the district court for the Central District of California followed the Eleventh Circuit and recognized a cause of action for association discrimination. In Chacon, a white woman married to a Hispanic man alleged racial discrimination when persons at her workplace made derogatory comments about the Hispanic race, knowing that her husband and children were Hispanic. Id. at 680. The court denied the defendant's motion to dismiss and found that the complaint sufficiently alleged discriminatory practices in violation of Title VII. Id. at 682. The court stated that applying Title VII's protections to discrimination based on an interracial marriage comported with the spirit and purpose of Title VII, which is to eliminate racism in the workplace. Id.
Based on the federal authority discussed above, there must be some association, actual or perceived, in order to fall within the protection of Title VII or FEHA. In each of the above Title VII cases, there existed some type of relationship — personal, familial, or otherwise— between the plaintiff and the person whom the plaintiff claimed was the target of the employer's discriminatory animus. Conversely, the plaintiff in this action has not alleged any facts demonstrating the existence of any relationship between himself and the African-American man seated next to Mr. Kwak on the airplane, nor does it appear that he will be able to do so. Indeed, as defendants point out, "[t]here is no allegation plaintiff was on this flight, that plaintiff knew or was in any way related to this unidentified African-American passenger, that plaintiff was aware this passenger was to be seated next to Mr. Kwak on the flight, that he had any `association' with this African-American passenger . . ." See Defs.' Reply to Pl.'s Mot. Dismiss, Page 6, Lines 4-7 (Jan. 17, 2003).
Because the complaint fails to state facts supporting any association whatsoever between the plaintiff and the African-American individual on the airplane, that portion of the fourth cause of action for unlawful discrimination based on association is dismissed. Plaintiff has not cited any case law which suggests that the facts alleged in this case constitute an "association" within the meaning of FEHA.
D. Wrongful Termination in Violation of Public Policy
Last, plaintiff contends that the defendants violated public policy under FEHA and the California Constitution when they terminated his employment.
As discussed above, FEHA prohibits discriminatory employment practices based on race, sex, religious creed, or natural origin. Cal. Govt. Code § 12940(a).
Article 1, Section 8 of the California Constitution provides: "A person may not be disqualified from entering or pursuing a business, profession, vocation, or employment because of sex, race, creed, color, or national or ethnic origin."
The case law in this area is well-established. A cause of action for wrongful discharge in violation of public policy may be brought where the policy is: 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. Sistare-Meyer v. Young Men's Christian Assn., 58 Cal.App.4th 10, 14 (1997); Stevenson v. Super. Ct., 16 Cal.4th 880, 901 (1997). Violations of FEHA and/or the California Constitution based on race/national origin discrimination are issues of fundamental state public policy and fall under this category. See Sistare-Meyer, 58 Cal.App.4th at 14 (Art. 1, § 8 of the California Constitution "clearly states a . . . fundamental public policy against racism in private employment and in the workplace.").
The defendants claim that the eleventh cause of action fails because plaintiff did not identify specific portions of FEHA or the California Constitution as the basis of his public policy cause of action in the complaint. In support of their position, defendants cite to Turner v. Anhueser-Busch, Inc., 7 Cal.4th 1238 (1994), where the court granted the employer's motion to dismiss for plaintiff's failure to set forth the specific statutory provisions which formed the basis of the alleged public policy violation. Id. at 1257. In Turner, the plaintiff claimed his employer violated "Alcohol, Tobacco and Firearms (`ATF') laws." Id. The court rejected piaintift's cause of action for violation of public policy because his vague reference to ATE laws left "the court in the position of having to guess at the nature of the public policies involved." Id. The identification of a constitutional or statutory provision is also necessary to enable an employer to know the public policies that are expressed in the law. Sequoia Ins. Co. v. Super. Ct., 13 Cal.App.4th 1472, 1480 (1993).
Turner is distinguishable from this case in that plaintiff claims violations of FEHA and the California Constitution. Thus, neither the court nor the employer are "left to guess at the nature of the public policies involved." See Turner, 7 Cal.4th at 1257.
Since plaintiff has pled sufficient facts to state a claim for unlawful discrimination under FEHA and the California Constitution, defendants' motion to dismiss the eleventh cause of action for wrongful termination in violation of public policy is denied.
CONCLUSION
For the reasons stated herein, defendants' motion to dismiss is GRANTED with respect to plaintiff's third cause of action for breach of the implied covenant of good faith and fair dealing, and that portion of plaintiff's fourth cause of action for association discrimination under FEHA. Defendants' motion to dismiss is DENIED with respect to that portion of plaintiff's fourth cause of action for race/natural origin discrimination in violation of FEHA, and plaintiffs eleventh cause of action for wrongful termination in violation of public policy.