Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC401315 Rita Miller, Judge.
Law Offices of Faryan Andrew Afifi, Faryan Andrew Afifi for Plaintiff and Appellant.
Fox Group Legal, Mykhanh P. Shelton, Laura D. Heckathorn for Defendants and Respondents.
BOREN, P.J.
The trial court entered summary judgment against a sales manager who was fired for harassing his subordinates, ending his lawsuit for breach of contract and unpaid wages. We affirm the judgment. Plaintiff admitted in his deposition that he made the offensive statements detailed by his subordinates. Even without plaintiff’s admissions, no triable issue exists as to the employer’s good faith in making the decision to terminate, based on an appropriate investigation that provided reasonable grounds for believing that plaintiff engaged in misconduct. The employer paid plaintiff all of the wages he was due at the time of termination.
FACTS
Plaintiff’s Employment with Defendants
In January 2000, Sean McCormack was hired by Fox Sports Net, Inc. (Fox Sports) as an advertising sales manager. Later that year, McCormack’s sales group was absorbed into Fox Television Stations, Inc. (Fox TV). Fox TV and Fox Sports are separate corporate entities with independent finance, payroll, human resource departments and executive management. McCormack supervised six account executives.
McCormack testified that in December 2006, he transferred back from Fox TV to Fox Sports: the transfer was documented by a “Personnel Action Form.” After the transfer, Fox Sports became his employer. He was “still housed” at Fox TV while awaiting a move to downtown Los Angeles. The entire sales group-including McCormack’s supervisor and his subordinates-transferred with McCormack. After McCormack’s transfer, Fox TV had no further control over the conditions of his employment, his compensation, his performance evaluations or his benefits. Fox Sports had exclusive control over McCormack’s continued employment and discipline.
Plaintiff’s Contract
McCormack entered a series of one year employment contracts with Fox TV in September 2001, September 2003, and September 2005. Each contract gave the employer an option to extend the term for one year, which it exercised. The final contact was in force until September 2007. McCormack is certain that he read each employment contract in its entirety before signing. He “absolutely” understood that the terms of his 2005 contract with Fox TV continued to apply after he transferred to Fox Sports in 2006. At his deposition, McCormack did not dispute that Fox Sports took over his employment agreement.
McCormack’s employment contract contains a termination clause. It permits termination “at any time based on a good faith and reasonable belief that ‘cause’ exists.” Enumerated causes for termination include “sexual or other prohibited harassment of others, ” and a “a willful or continuing violation of Company’s policies or rules.”
The termination clause reads, “Company may terminate your employment and this agreement effective at any time based on a good faith and reasonable belief that ‘cause’ exists. The term ‘cause’ as used herein shall include, but not be limited to, the following: insubordination; dishonesty; theft in any amount, conviction of any felony or a misdemeanor involving moral turpitude; actual or threatened violence against another employee; sexual or other prohibited harassment of others; unauthorized disclosure or use of trade secrets; a willful or continuing violation of Company’s policies or rules; willful misconduct or habitual neglect of duties; use or possession of illegal drugs or alcohol during working hours or off duty if such use affects the performance of duties or Company’s interests; unethical business practices; any material breach of this Agreement; or any matter constituting cause under applicable laws.”
Fox’s Anti-Harassment Policy
In 2002 and 2005, McCormack received and read “Fox Facts, ” an employee handbook. The handbook details company policy against harassment. Conduct that may be considered harassment includes “verbal conduct, including making degrading comments, epithets, slurs, or jokes, verbal abuse of a sexual nature or graphic verbal commentaries about an individual’s body; or suggestive or obscene letters, notes, e-mail or invitations.” A memorandum accompanying the handbook states, “any violation of Company policies can lead to disciplinary action up to and including termination of employment.”
McCormack testified that the company’s anti-harassment policy is important because it ensures that “people aren’t taken advantage of, to make sure things are equal, things are fair among everyone” and that employees “can get along and be civil....” He knew that the policy applies to all Fox employees, and that violations of it could lead to termination. He understood that it was his responsibility as a manager to maintain a working environment that conformed with company policy forbidding harassment, and he had a duty to report policy violations.
Plaintiff’s Termination
In February 2007, one of McCormack’s subordinates, David Anzivino, complained about McCormack’s conduct in the workplace. Two corporate vice-presidents-one from Fox Sports human resources and one from the employee relations department of parent corporation Fox Networks Group-met with Anzivino. The two executives are responsible for conducting investigations into employee misconduct. One of them is a lawyer who specializes in employment litigation.
Anzivino told the executives that McCormack’s misconduct began in 2002 and grew over the years to become a weekly, if not daily, experience. Coworkers and clients were offended by and uncomfortable with McCormack. Anzivino did not disclose the misconduct earlier because he feared retaliation, but he was ready to quit because he no longer wanted to work in such a hostile environment.
Anzivino described various incidents involving McCormack, who referred to him regularly as a “pussy, ” “weak, ” and “soft, ” and told him he dressed like a “faggot” in front of other employees. When another employee tried to apologize to Anzivino for McCormack’s verbal abuse, McCormack said, “Shut up, you are fucking buzz kill.” In December 2006, McCormack called Anzivino a “functioning retard” in front of Fox executives. When Anzivino reproached him, McCormack responded, “Stop being a pussy, no one cared.” In January 2007, McCormack threatened to “get a knife and slash [Anzivino] to pieces.” Anzivino saw McCormack offend a client by referring to the client and a friend as “Asian porn stars.” Some clients refused to attend events if they knew that McCormack would be present, because of his behavior.
The Fox executives interviewed Anzivino’s coworkers, without revealing the source of their information to maintain confidentiality. They spoke to account executive Kelly Reed. In a tearful interview, Reed described why she felt that McCormack was sexually harassing her: McCormack told Reed that she should “blow” him if he allowed her to switch assistants; he once yelled at her, “My house, 8 o’clock, bring knee pads, fellatio”; he said “nice tits” to her when she was meeting with another employee; he told her she looked “hot” and said, “I’d bend you over my desk if you didn’t work for me”; he told a client that Reed was “a hot blonde” who was “pretty to look at”; and when Reed rebuffed McCormack’s attempt to invite himself to her family Christmas gathering, he angrily denied her vacation request. Reed heard McCormack use the words “pussy, ” “functioning retard, ” “fucking buzz kill, ” and “Asian porn stars.” Reed feared that McCormack would retaliate against her if she complained.
Account executive Mike Rubin corroborated his colleagues’ statements. He heard McCormack tell Reed that she had “nice tits”; McCormack voiced a desire to date Reed; and he tried to invite himself to Reed’s Christmas gathering. McCormack referred to Rubin as a “pervert, ” and publicly (and falsely) accused Rubin of sleeping with a client, though Rubin is married. Rubin and executive vice president Kyle Sherman were present when McCormack referred to Anzivino as a “functioning retard.”
Account executive Ray Panepinto stated that McCormack called him a “pussy, ” and used this word with other employees. Panepinto observed that McCormack behaved inappropriately with Reed, and heard McCormack say “nice underwear” to Reed when she bent over at work. Account executive Lori Taylor described McCormack as demeaning, condescending and disrespectful, publicly mocking her when she made her first sale. Taylor heard McCormack call Panepinto a “pussy.”
The investigating Fox executives met with McCormack to discuss the complaints made against him. He denied using sexual or demeaning words in the workplace, or asking for sexual favors. He did not identify any employees, including managers, who used offensive language in the workplace. McCormack pointed to the work performance of other employees when asked for his reaction to the complaints against him. He suggested that the investigators speak to his colleagues Heather McPherson and David Vogel. When contacted, McPherson and Vogel did not advocate for McCormack. Instead, they indicated their awareness that McCormack made sexual invitations to Reed, he called staff members “pussy, ” “pervert” and “gay, ” and clients tried to avoid him.
The Fox investigators reviewed the evidence and determined that McCormack’s subordinates were credible because they recalled specific incidents in detail and were consistent. The two witnesses identified by McCormack actually corroborated the accounts given by McCormack’s subordinates. McCormack’s categorical denials were not credible. The investigators concluded that McCormack had continuously violated company policy against harassment since 2002, and that termination was appropriate due to the egregious nature of his conduct as a supervisor toward his subordinates. He was terminated for cause on March 1, 2007.
At his deposition, McCormack acknowledged using the word “pussy” in the workplace, although “not derogatorily, ” “because everybody spoke like that.” The same was true with calling people “gay, ” because “everybody in our office said it.” When asked whether he called specific employees a “pussy, ” McCormack answered, “I could have said it to them all, you know.” Asked whether he called a client an “Asian porn star, ” McCormack conceded that “I could have easily said” it, but the client was offended so McCormack stopped insulting him. He explained that he used the word “retard” with subordinates because “everybody used it in the office. It’s the same thing, it’s like gay, it’s like retarded. This is so retarded.” Continuing on, McCormack denied telling Kelly Reed that she had “nice tits”; however, he informed Reed that a security guard said she “had nice whatever” and used his hands to gesture where a woman’s breasts are. This was witnessed by coworker Mike Rubin. When asked why he felt it necessary to share this anatomical observation with Reed and Rubin, McCormack stated, “It just came up.” McCormack agreed that he told Reed, “You look hot today” because people “said things like that to everybody every day. You look good, you look hot.”
In his declaration, McCormack states that “I had never before the termination[] heard any employee tell me that they took issue with something I said to them as harassment, insulting, abusive or otherwise intolerable.” Moreover, his supervisors did not chastise or criticize him for his behavior. He complains that he was “completely ambushed and attacked” when he was called to meet with the Fox executives to respond to the complaints of his subordinates. He observed that other employees at Fox bragged about their sexual exploits or expressed admiration or desire for celebrities or people who worked outside the office. Also, coworkers made jokes at other’s expense, such as referring to McCormack as “ADD Boy” because he has Attention Deficit Hyperactive Disorder. McCormack believed that his employment at Fox was entirely secure, as he was once told “that a person would have to virtually ‘kill someone’ to get fired” from Fox. McCormack received positive performance evaluations from his supervisors.
Plaintiff’s Wages
It is undisputed that McCormack was paid all of his salary up to the date of termination. He normally received quarterly incentive bonuses if his group achieved sales that exceeded its budget. A person who is not working for the company at the end of the quarter cannot receive a bonus, as McCormack acknowledged in his deposition. Even if McCormack had not been terminated, he would not have received a bonus for the last two quarters (January-March and March-June 2007) because his department failed to reach budget: no managers in his department received bonuses.
The company’s fiscal year begins on July 1 and ends on June 30.
Defendants offer an annual “executive incentive plan” bonus; however, payment of this bonus is discretionary. At his deposition, McCormack referred to it as “the mystery bonus” because no one knew how it was formulated, “it just showed up.” He believes that it is based on Fox’s global performance. Individuals who are not employed at Fox at the end of the year do not receive the bonus. Pro rata portions of the annual bonus are not offered, and no one promised to pay McCormack a bonus if he was terminated.
Plaintiff’s Lawsuit
McCormack filed suit against Fox Sports and Fox TV, alleging that he worked for both entities. In his amended complaint, he asserts that he was terminated because he complained about his supervisor, not for “cause.” He seeks at least $1.88 million in contractual damages through 2009 (assuming a renewal of his contract in 2007), as well as unpaid wages under the Labor Code.
Defendants brought a motion for summary judgment, arguing that McCormack was terminated “with cause” based on a good faith and reasonable belief that he willfully violated company policies forbidding sexual harassment. McCormack is not owed unpaid wages, or a bonus, or pension benefits, or stock options. In opposition to the motion, McCormack contended that he was terminated “without good cause”: he denies making any of the statements attributed to him by his coworkers. McCormack maintained that his employment contract is with Fox TV (not Fox Sports), and is nonassignable. Fox TV never terminated his employment and so remains liable for the full amount due through September 2007, in McCormack’s view.
The trial court granted defendants’ motion, finding that “there is no triable issue of Defendants’ good faith and reasonable belief that Plaintiff had engaged in sexual harassment, ” in violation of his written employment contract and defendants’ policy. McCormack presented no evidence refuting his employer’s good faith and reasonable belief that “cause” existed to terminate his employment. The court also found “there is no triable issue that Plaintiff was paid all wages earned and unpaid at the time of discharge.” The court gave judgment to defendants on November 5, 2009. McCormack filed a timely appeal from the judgment.
DISCUSSION
1. Appeal and Review
The judgment is final and appealable. (Code Civ. Proc., § 437c, subd. (m)(1).) A motion for summary judgment “shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Id., subd. (c).) “The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Review of the ruling on summary judgment is de novo. (Kahn v. East Side Union High School Dist. (2003) 31 Cal.4th 990, 1003.)
2. The Termination of McCormack’s Employment
a. Fox TV Ceased to Be McCormack’s Employer in December 2006
McCormack contends that he was never terminated by his employer, Fox TV, and that Fox TV is obligated to pay wages until his contract expired in September 2007. McCormack’s contention is belied by his testimony, in which he unequivocally states that his employer was Fox Sports, following his transfer in December 2006. McCormack cannot argue that he worked for Fox TV in 2007, after testifying that Fox Sports was his employer at that time. Statements in McCormack’s declaration that contradict his deposition testimony can be ignored. (Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1521-1522 [a party opposing summary judgment is barred from filing a “self-serving” declaration “that purports to impeach his or her own prior sworn testimony”]; Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 652-653.)
McCormack testified: “Q. Who did you understand to be your employer after your transfer in [ ] December of 2006? A. FSN [Fox Sports Net]. But I was still housed in FTS. Q. But you believed FSN was your employer at that time?... A. Yes.” McCormack did not dispute that Fox Sports “took over” his employment agreement and that he was paid by Fox Sports after the transfer.
McCormack posits that his employment contract was not and could not be assigned from Fox TV to Fox Sports. The argument fails for several reasons. First, McCormack never objected to the assignment: he testified that Fox Sports was his employer after December 2006, and that his contract applied to Fox Sports following his transfer. McCormack accepted paychecks from Fox Sports. Second, the clause limiting assignment applies to the employee, not to the employer. It provides that “you will not assign” rights or duties under the contract; however, the contract “shall inure to the benefit of the successors and general assigns of Company” and to any corporate “affiliate of Company to which this Agreement is assigned.” (Italics added.)
The clause reads, “Except as herein provided, this Agreement shall be nonassignable. You agree that you will not assign, sell, transfer, delegate, or otherwise dispose of, whether voluntary or involuntary [sic], or by operation of law, any rights or obligations under this Agreement. Any such purported assignment, transfer, or delegation shall be null and void. This Agreement shall inure to the benefit of the successors and general assigns of Company and to the benefit of any other corporation or entity which is a parent, subsidiary or affiliate of Company to which this Agreement is assigned, and any other corporation or entity into which Company may be merged or with which it may be consolidated.” The term “you” in the contract refers to McCormack, while the term “Company” refers to Fox TV.
There is no ambiguity in the assignment clause: it plainly allows McCormack’s contract to be assigned to a Fox TV affiliate, like Fox Sports. Following the transfer, Fox Sports had exclusive control over McCormack’s continued employment and discipline, and was charged with paying his wages. There is no evidence that Fox TV continued to be liable for McCormack’s wages after the transfer.
b. McCormack Admitted Making Degrading Comments, Epithets, Slurs or Jokes to Subordinates
During his interview with the Fox investigators, McCormack categorically denied making any lewd or derogatory remarks to his coworkers. During his deposition, McCormack changed tack and admitted to using the crude language. He justified his use of profanity on the grounds that “everybody else did it.” He acknowledged using the word “pussy, ” noting that he could have said that to everyone in the office. The same was true of referring to coworkers as “gay” and “retarded.” McCormack testified that he made a remark to Kelly Reed about her breasts, in front of another employee, but claimed that he was just passing along the comments of a security guard, as if that made it an appropriate topic of conversation to raise with a female subordinate. McCormack acknowledged telling Reed that she looked “hot, ” and referring to a client as an “Asian porn star, ” in the presence of the client, Fox employees, and the client’s companions. He knew that the client was offended by the remark.
McCormack’s admissions demonstrate that he violated company policy against harassment. He made degrading comments; used epithets and slurs; verbally abused others by calling them “pussy;” and made a graphic commentary about a female employee’s body. Violation of the company anti-harassment policy is grounds for termination. It is no excuse that others may have used loose language. McCormack testified that it was his responsibility as a manager to enforce company policy forbidding harassment, and he had a duty to report violations of that policy. Calling subordinates sexually degrading names is indefensible, because underlings are unlikely to complain about abuse, for fear of retaliation.
c. Fox Had a Reasonable, Good Faith Belief That There Was Cause to Terminate
Under the terms of McCormack’s employment contract, his employer only had to form “a good faith and reasonable belief” that McCormack willfully or continuously violated company policy, giving “cause” to terminate. An employer is not required to prove that a terminated employee “in fact” committed the acts that led to his dismissal. (Cotran v. Rollins Hudig Hall Internat., Inc. (1998) 17 Cal.4th 93, 107 (Cotran).) Instead, the employer “decides whether acts of an employee amounting to just cause have occurred-and [ ] the role of the jury is to assess, through the lens of an objective standard, the reasonableness of that decision under the circumstances known to the employer at the time it was made....” (Id. at p. 103.)
Defendants moved for summary judgment on the grounds that McCormack engaged in a “willful or continuing violation of company policy.” McCormack makes an odd argument suggesting that sexual harassment is not a violation of company policy, so defendants are barred from asserting that his conduct constituted harassment. “Fox Facts”-the employee manual-defines company policy: the policy prohibits harassment.
The facts of Cotran are instructive. An insurance company manager was accused of sexually harassing two female employees. During interviews with the firm’s human resources director, the employees detailed Cotran’s misconduct. Cotran was confronted with the women’s statements, but said nothing about his accusers and offered no explanation for their complaints. He was terminated, then sued for breach of contract. At trial, Cotran testified that he said nothing during his interview because he felt “‘ambushed’” and was frightened and upset. (17 Cal.4th at pp. 97-98) The trial court instructed the jury to determine whether the misconduct claimed by the female employees actually occurred. (Id. at p. 99.)
The Supreme Court reversed, finding that the governing standard is whether the employer had “fair and honest reasons, regulated by good faith on the part of the employer, that are not trivial, arbitrary or capricious, unrelated to business needs or goals, or pretextual. A reasoned conclusion, in short, supported by substantial evidence gathered through an adequate investigation that includes notice of the claimed misconduct and a chance for the employee to respond.” (Cotran, supra, 17 Cal.4th at p. 108.) The employer need not conduct a trial; rather, “‘[t]hey can obtain information in any way they think best, ’” so long as there is a fair opportunity to correct or contradict prejudicial statements (Ibid.) “[T]he question critical to defendants’ liability is not whether plaintiff in fact sexually harassed other employees, but whether at the time the decision to terminate his employment was made, defendants, acting in good faith and following an investigation that was appropriate under the circumstances, had reasonable grounds for believing plaintiff had done so.” (Id. at p. 109.)
In his brief, McCormack focuses on the absence of sworn testimony from the complaining employees. He wants defendants to prove that acts of harassment actually occurred in the workplace, arguing that “[t]here is not a single piece of admissible evidence offered by Respondents in their motion which states or suggests that Appellant ever made the comments at issue or conducted himself as alleged by the other employees.” McCormack misapprehends the employer’s burden: the employer need only establish its good faith state of mind when it terminated him, not that the acts actually occurred. As a result, it is not necessary to present declarations or testimony from eyewitnesses to the events of harassment.
McCormack contends that defendants relied on inadmissible hearsay, because the Fox investigators did not hear McCormack utter the offensive statements and have no personal knowledge that he made them. The claim fails. For one thing, McCormack admitted in his deposition that he made offensive statements to subordinates, thereby mooting the need for eyewitness declarations. Even if McCormack had not already admitted making the statements, declarations would still be admissible to show the appropriateness of the employer’s investigation in this case.
The issue of admissibility was resolved in Silva v. Lucky Stores, Inc. (1998) 65 Cal.App.4th 256. There, a supermarket manager was discharged for sexually harassing two female employees. The manager sued for breach of the implied covenant to terminate only for good cause. On summary judgment, the employer introduced the reports of its human resources representative, who interviewed 15 store employees including the complaining witnesses. The plaintiff “objected to the reports on hearsay grounds. The objection is without merit. Where the reasonableness of a person’s conduct is at issue, statements of others on which he acted are admissible. [Citations.] Thus, materials generated during the employer’s investigation of misconduct under Cotran are admissible to establish that the investigation took place, that it was appropriate under the circumstances and that the termination decision was reasonable based on that information.” (Id. at p. 265.)
The declarations in this case are admissible to establish the adequacy and appropriateness of defendants’ investigation, and the basis for their belief that “cause” to terminate existed. After David Anzivino complained that McCormack regularly abused him with sexually derogatory language, the investigators interviewed at least six employees under McCormack’s supervision: they corroborated each other, and had complaints about their treatment. The investigators did not reveal the source of their information to the employees who were interviewed, to maintain confidentiality. McCormack was given an opportunity to present his version of events. He never claimed during his interview that he was emulating other employees, or that the company had a “culture” of “openly sexual and loose language, ” as described in his brief. The investigators honored McCormack’s request that they speak to two additional Fox colleagues: these interviews did not assist McCormack, but rather reconfirmed his misconduct.
There is no triable issue of bad faith. The executives who investigated the complaints do not work in McCormack’s department. They are human resources experts, and one of them is a lawyer who specializes in employment matters. There is no evidence that the investigators harbored a grudge against McCormack, or were predisposed to terminate him. The investigators spoke to multiple employees, individually, to see if there was a pattern of misconduct. There is no evidence that defendants had some ulterior motive or needed a pretext to get rid of McCormack, and to this end convinced an entire department to fabricate lies about him in an orchestrated performance. McCormack notes that his work performance “was impeccable” and he received positive annual reviews from his supervisors. That being the case, Fox had no motive to fire a reliable employee, absent serious complaints from his coworkers that pointed to violations of company policy and state law.
Defendants’ written policy does not require that an employee be given prior warning before termination for cause occurs. While McCormack protests that Fox should have conducted a mini-trial complete with “counter-testimony [and] a proper defense, ” the Supreme Court has noted that no trial is required and the employer may conduct its investigation in the manner it deems fitting. (Cotran, supra, 17 Cal.4th at p. 108.) McCormack flatly denied all accusations during his interview. His denials were not credible given the consistent statements of all of his coworkers. Moreover, the investigators interviewed witnesses McPherson and Vogel, at McCormack’s request, to uncover potentially exculpatory information. These witnesses provided additional damning information against McCormack, not exculpation.
Illegal harassment occurs “‘[w]hen the workplace is permeated with discriminatory intimidation, ridicule and insult that is “‘sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment.’”’” (Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 263.) If harassment comes to light, an employer must take “all reasonable steps” to prevent it. (Gov. Code, § 12940, subd. (j)(1).) McCormack admitted in his deposition to using ridicule and sexually derogatory insults in the workplace. Defendants did not need to wait until they were sued by McCormack’s subordinates to fire him for misconduct. A question of fact is presented if the evidence logically permits conflicting inferences. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 337.) Where, as here, the undisputed facts negate a claimed breach of contract, summary judgment is proper. (Ibid.)
3. Plaintiff’s Claim for Wages
McCormack’s employment was properly terminated for good cause in March 2007. His employer is responsible for paying all “wages earned and unpaid at the time of discharge.” (Lab. Code, § 201, subd. (a).) McCormack does not assert that he is owed money earned before discharge. He cannot maintain a claim for the salary or bonuses he could have earned after March 2007, had he not been discharged.
DISPOSITION
The judgment is affirmed.
We concur: DOI TODD, J., CHAVEZ, J.