Opinion
No. C-03-3712 MJJ.
September 24, 2004
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
INTRODUCTION
Before the Court is Defendant's motion for summary judgment or partial summary judgment ("Motion"). For the following reasons, the Court GRANTS IN PART and DENIES IN PART Defendant's Motion.
FACTUAL BACKGROUND
Plaintiff Deborah Salach ("Plaintiff"), a woman, was employed at the Sunnyvale, California office of Defendant Level 3 Communications, LLC ("Level 3" or "Defendant") from January 1999 until she was laid off on June 18, 2001. (Joint Statement of Undisputed Facts ("Joint Statement") at ¶¶ 1, 21.) Plaintiff was 53 years old at the time of her layoff. (Motion at 11.) Level 3 provides wholesale dial-up service to internet service providers ("ISPs") in North America and is the primary provider of Internet connectivity for millions of broadband subscribers through its cable and DSL partners. (Declaration of Scott Roberts ("Roberts Decl.") at ¶ 2.) Plaintiff worked for Level 3 as an Account Manager. As such, she was required to develop new customers for Level 3 and to manage those sales accounts. (Joint Statement at ¶¶ 1-2.)
In early 2000, David Belove became Plaintiff's manager. ( Id. at ¶ 3.) Defendant contends that at Plaintiff's request, Belove assigned her to the Intera account. ( Id. at ¶ 32.) Plaintiff says that she "had to fight to get this account." (Deposition of Deborah Salach ("Salach Dep.") at 240:24-241:8.) Plaintiff claims that she asked repeatedly to service premium or "enterprise" accounts that brought in very high commissions but that she was denied the opportunity. ( Id. at 286:16-287:9, 289:21-290:9, Ex. 4.) Plaintiff claims that there was no reason she could not handle these accounts. (Deposition of Sheila Wood ("Wood Dep.") at 28:4-14.)
Between January 1, 2000 and June 15, 2000, in response to growing demand for its products and growing competition in the marketplace, the number of Level 3 sales employees grew from 486 to 843. (Joint Statement at ¶ 5.) In 2000, during the expansion, Sheldon Samford — a sales representative in the Sunnyvale office — announced he was leaving Level 3. ( Id. at ¶ 6.) Plaintiff contends that she expressed a strong interest in taking over some or all of Samford's accounts. (Salach Dep. at 41:9-16.) Defendant contends that all of Belove's sales representatives, including Plaintiff, expressed an interest in taking over the Samford Accounts but that Level 3 hired Michael Palmaffy to handle these accounts instead. (Joint Statement at ¶¶ 33-34.) Palmaffy "was a very experienced sales guy" who had been selling Internet services for ATT. (Deposition of David Belove ("Belove Dep.") at 18:5-11.) Plaintiff also expressed an interest in handling the LogicTier account. (Joint Statement at ¶ 35.) Plaintiff contends that Tim Payne, a younger male account manager with significantly less experience than Plaintiff, was given that account. (Salach Dep. at 42:24-43:3.)
In August or September 2000, Plaintiff learned that she was the only sales representative in her office (male or female) who did not hold the title Senior Account Manager. (Joint Statement at ¶ 12.) Plaintiff claims that she brought it to the attention of Belove, who told Plaintiff that she would have to "prove [her] numbers" to "get to that next level." (Salach Dep. at 43:12-14.) Plaintiff alleges that she then e-mailed Belove documentation indicating that she was part of the "Quota Man Club" for the first two quarters of 2000. ( Id. at 43:22-25.) Plaintiff claims that Belove agreed to promote her but then "dropped the ball and never processed the paperwork." ( Id. at 44:1-4.)
In the fall of 2000, Belove was promoted and Michael Kokinos became Plaintiff's manager. (Joint Statement at ¶ 7.) Kokinos, who had started at Level 3 as a salesperson, had developed several customers into large accounts for the company, including Sun, Oracle, Hewlett Packard ("HP") and Symantec. (Declaration of Michael Kokinos ("Kokinos Decl.") at ¶ 3.) When Plaintiff was assigned to Kokinos, she was the only salesperson on his team. (Joint Statement at ¶ 37.) Plaintiff claims to have scheduled a meeting with Kokinos to talk about her goals and show him her portfolio. (Salach Dep. at 44:15-22.) Plaintiff claims that Kokinos was very impressed with her numbers, especially since she hadn't been given any named accounts. ( Id. at 44:23-45:1.) Defendant contends that Plaintiff already had several accounts. (Joint Statement at ¶ 37.) Plaintiff claims that she told Kokinos that she felt she had been passed over and Kokinos agreed and said that LogicTier, the account that went to Tim Payne, should have gone to Plaintiff. (Salach Dep. at 45:2-5.) Plaintiff claims that she then told Kokinos that as the only salesperson on his team, she wanted to acquire one of his large accounts and that Kokinos responded by "g[etting] up so quick and r[unning] out of that room with some false excuse that he had to go." ( Id. at 45:10-19.)
Defendant contends that Kokinos was tasked with assembling a sales team. (Deposition of Michael Kokinos ("Kokinos Dep.") at 23:9-24:2, 28:6-10.) Level 3 competed in a very tight market for qualified sales personnel. (Wood Dep. at 33:9-12, 34:8-19; Kokinos Decl. at ¶ 9.) Kokinos used the Sun, Oracle, HP, and Symantec accounts to recruit salespeople to Level 3 and build the required sales team. (Salach Dep. at 45:23-46:13, 304:8-306:23, Kokinos Dep. at 28:11-23, 30:16-31, 35:17-21, 37:1-12, 37:20-39:3.) In September 2000, Kokinos hired Chris Sinnett to take over the Symantec account. (Joint Statement at ¶ 8.) Sinnett had many years of sales experience in the telecommunications field and had worked with Level 3's Senior Vice President for North American Sales, Scott Roberts, at MFS, another telecommunications company. (Kokinos Dep. at 28:6-30:9, Salach Dep. at 221:6-223:6, Kokinos Decl. at ¶ 5, Deposition of Scott Roberts ("Roberts Dep.") at 27:22-29:4.) In October 2000, Guy Schalin was hired to take over the Sun account. (Joint Statement at ¶¶ 9-10.) Schalin had 15 years of sales experience in various industries and at his last job, he was one of the top sales representatives in the western region of the United States. (Kokinos Decl. at ¶ 7.) In October 2000, Steve Kurtaugh, who had worked for Sprint, a competitor of Level 3's, on its HP account, was hired to take over the HP account for Level 3. ( Id. at ¶ 6.) Sinnett, Schalin, and Kurtaugh were all hired as Senior Account Managers. (Joint Statement at ¶ 10.) They were given the "Senior" title in part because of their experience and in part because Level 3 had to use the title in order to entice them to join the company during competitive times. (Kokinos Decl. at ¶ 9.) Plaintiff contends that the three men Kokinos hired to handle the big accounts had "much less experience than [she]." (Salach Dep. at 46:2-13.) Plaintiff claims that at that point she had 13-14 years of experience in the business. ( Id.)
Plaintiff claims that she raised the promotion issue with Kokinos and that he agreed to inquire about it, but that nothing happened until December. ( Id. at 46:14-19.) Plaintiff claims that she contacted Human Resources herself to ask about the status of her promotion and she was told that no paperwork had been submitted. ( Id. at 46:20-22.) Plaintiff claims that HR then contacted Kokinos about the promotion. ( Id. at 46:23-25.) In December, 2000, Level 3 gave Plaintiff both the title of Senior Account Manager (retroactively) and a retroactive raise. (Joint Statement at ¶ 13.) Plaintiff achieved President's Club for the year 2000 and reports that she was among the top performing sales representatives in the region in 2001. ( Id. at ¶ 14.)
In early 2001, Sheila Wood, who had been promoted from sales representative to a sales manager position, became Plaintiff's manager. ( Id. at ¶ 15.) Defendant contends that as of May 31, 2001, the sales representatives on Wood's team included Michael Palmaffy, Julie Riley, Chris Sinnett, Plaintiff, Shirin Abbaszadeh, Guy Schalin, Steve Kurtaugh, and Tage Wolters. ( Id. at ¶ 49.) Defendant further contends that as of May 31, 2001, Michael Palmaffy's sales performance ranked him first of the eight sales representatives on Wood's team. ( Id. at ¶¶ 8-9.) Defendant claims that Plaintiff ranked fourth of the eight sales representatives. (Roberts Decl. at ¶ 6, Ex. 14.)
Defendant contends that in or around late 2000, the internet bubble burst and the demand for Level 3's products decreased dramatically. (Roberts Dep. at 10:18-11:2, Roberts Decl. at ¶ 8.) Consequently, in June 2001, Level 3 changed the focus of its business, deciding to cut costs by selling only to a small number of major national and global accounts. (Joint Statement at ¶ 16.) Level 3 identified three hundred large companies that it sought to retain or acquire as customers after the reorganization (the "Strategic Accounts"). ( Id. at ¶ 17.) Defendant contends that Level 3, through Neil Hobbs (the company's Group Vice President for Global Sales), Scott Roberts (the company's Senior Vice President for North American Sales), and various Human Resources personnel, determined which sales employees worked on the Strategic Accounts and/or had the best contacts or relationships with those accounts. (Roberts Dep. at 8:1-7, 10:7-17, 11:25-12:13, 15:20-16:7, 17:6-18.) Defendant contends that the Strategic Accounts included HP, Oracle, Symantec, and Sun, but not LogicTier or any of the Samford Accounts. Defendant claims that the employees who worked on Strategic Accounts and/or had the best contacts or relationships with the Strategic Accounts were retained and that all other sales employees were selected for layoff. ( Id. at 17:6-18:7, 22:4-24, 25:12-19.)
On June 18, 2001, Plaintiff was laid off. (Joint Statement at ¶ 21.) Plaintiff claims that she was called into a room with other account managers, none of whom were Senior Account Managers and all of whom had a history of poor sales performance. (Memorandum of Points and Authorities in Opposition to Defendant's Motion for Summary Judgment or Partial Summary Judgment ("Opposition" or "Oppo.") at 3-4.) Plaintiff alleges that she was being equated with poor performers although she was considered one of the best performers by Level 3's senior management. ( Id. at 4.) Plaintiff claims that she was being punished for her repeated requests to be treated fairly in the assignment of the premium accounts. ( Id.) Sinnett, Schalin, and Kurtaugh, the three men who had been hired to take over Symantec, Sun, and HP respectively, were laid off that same day. (Joint Statement at ¶ 18.) In fact, all the other sales representatives on Plaintiff's team, except Palmaffy, were laid off. ( Id. at ¶ 21.) After the layoff, Palmaffy managed PGE, Ignyte Technology, and Covad Communications. (Roberts Decl. at ¶ 11.) Tim Payne, who had been given responsibility for the LogicTier account was retained. ( Id. at ¶ 15, Ex. 19.) Kokinos was demoted to a sales representative position and resumed responsibility for the HP, Sun, Symantec, and Oracle accounts. (Joint Statement at ¶ 18.) Defendant contends that Level 3 had determined that Kokinos — who had developed the contacts at those companies while he was a sales representative — had the best contacts with those accounts. (Deposition of David Rosenberg ("Rosenberg Dep.") at 48:12-14, Roberts Decl. ¶ 10.) Sheila Wood, Plaintiff's then supervisor, was also demoted to an account manager position as part of the reorganization. (Joint Statement at ¶ 19.) Wood and Kokinos were asked to service many of the remaining accounts for Level 3 in the Silicon Valley area. ( Id. at ¶ 20.)
Plaintiff and the majority of her team were not the only employees laid off that day. A total of 1,400 employees — or 25% of Level 3's total employee population — were laid off. ( Id. at ¶ 23). Defendant contends that of the 41 employees in Plaintiff's group reporting to David Rosenberg, only 20 were retained. (Roberts Decl. at ¶ 15, Exs. 18, 19.) Of the 26 Account Managers in that group, only five were retained. ( Id.) Level 3 went through additional layoffs after June 2001. (Joint Statement at ¶ 24.) By March 2002, the layoff and attrition had so diminished the sales team in Level 3's Silicon Valley office that only four sales representatives remained: Michael Kokinos (aged 43 at the time of the layoff), Sheila Wood (aged 54 at the time of the layoff), Julie (Keller) Wilson (35 at the time of the layoff), and Charles Kregg Victory (39 at the time of the layoff). ( Id. at ¶ 25.)
By that date, Level 3's Silicon Valley office had moved from Sunnyvale to Santa Clara. (Roberts Decl. at ¶ 17.)
On April 24, 2002, Plaintiff filed a charge with the California Department of Fair Employment and Housing ("DFEH") and obtained an immediate right to sue. ( Id. at ¶ 26.) Plaintiff's DFEH charge claimed that she was subjected to discrimination by her layoff from Level 3. ( Id. at ¶ 27.) Plaintiff alleged as follows: "I believe I was fired from my job at Level (3) Communications, Inc. due to unlawful reasons based on age and gender." ( Id. at ¶ 28.)
On March 20, 2003, Plaintiff filed a civil complaint in the Superior Court of California alleging employment discrimination in violation of the California Fair Employment and Housing Act ("FEHA"). Plaintiff alleged that Defendant discriminated against her on the basis of sex and age when her supervisors delayed her promotion, denied her the opportunity to service premium accounts, and ultimately, included her in the June 2001 reduction in force. ( Id. at ¶¶ 30-31.) Plaintiff also alleged causes of action for Breach of Implied Contract Not to Terminate Except for Good Cause and Breach of Implied Covenant of Good Faith and Fair Dealing. The action was removed to this Court on August 8, 2003 on diversity grounds.
LEGAL STANDARD
The summary judgment procedure is a method for promptly disposing of actions. See Fed.R.Civ.Proc. 56. The judgment sought will be granted if "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.Proc 56(c). "[A] moving party without the ultimate burden of persuasion at trial may carry its initial burden of production by either of two methods. The moving party may produce evidence negating an essential element of the nonmoving party's case, or, after suitable discovery, the moving party may show that the nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial." Nissan Fire Marine Ins. Co., Ltd., v. Fritz Companies, 210 F.3d 1099, 1102 (9th Cir. 2000). If the movant meets its burden, the nonmoving party must come forward with specific facts demonstrating a genuine factual issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial, "the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In opposing summary judgment, the nonmoving party may not rest on his pleadings. He "must produce at least some `significant probative evidence tending to support the complaint.'" T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987) (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 290 (1968)).
The Court does not make credibility determinations with respect to evidence offered, and is required to draw all inferences in the light most favorable to the non-moving party. See T.W. Elec. Serv., Inc., 809 F.2d at 630-31 (citing Matsushita, 475 U.S. at 587). Summary judgment is therefore not appropriate "where contradictory inferences may reasonably be drawn from undisputed evidentiary facts. . . ." Hollingsworth Solderless Terminal Co. v. Turley, 622 F.2d 1324, 1335 (9th Cir. 1980).
ANALYSIS
The Court quickly disposes of two of Plaintiff's claims. Defendant argues that Plaintiff's causes of action for breach of contract and for breach of an implied covenant of good faith and fair dealing fail as a matter of law because Plaintiff was an at-will employee. Plaintiff concedes that she has no evidence to support those claims. The Court therefore GRANTS summary judgment as to those two claims. Defendant also argues that Plaintiff's sexual harassment claim fails as a matter of law. Plaintiff declares in her Opposition that she never alleged in her complaint that she was sexually harassed. (Oppo. at 5.) Therefore, the issue of sexual harassment is not before the Court. The remaining issue before the Court is whether a genuine issue of material fact exists as to Plaintiff's claims that she was unlawfully subjected to disparate treatment based on sex and age.
I. Exhaustion of Administrative Remedies
California's civil rights statute, the Fair Employment and Housing Act ("FEHA"), CAL. GOV. CODE § 12900 et seq. (2004), proscribes employment discrimination on the bases of, inter alia, age and sex. "In order to bring a civil action under FEHA, the aggrieved person must exhaust the administrative remedies provided by law." Yurick v. Superior Court, 209 Cal. App. 3d 1116, 1121 (1989). "`The failure to exhaust an administrative remedy is a jurisdictional, not a procedural, defect,' and thus that failure to exhaust administrative remedies is a ground for summary judgment." Martin v. Lockheed Missiles Space Co., 29 Cal. App. 4th 1718, 1724 (1994). To exhaust administrative remedies under FEHA, the aggrieved person must file a written charge with the Department of Fair Employment and Housing ("DFEH") no later than one year after the date upon which the alleged unlawful practice occurred and must then obtain notice from the DFEH of the right to sue. CAL. GOV'T. CODE §§ 12960 (b), (d), 12965 (2004).
FEHA protects those who are over 40 years old from discrimination on the basis of age. CAL. GOV. CODE § 12941(a).
The scope of the written charge defines the permissible scope of the subsequent civil action. Yurick, 209 Cal. App. 3d at 1121-23. Where the allegations in the civil complaint are "like or reasonably related to the allegations contained in the administrative charge," the plaintiff is deemed to have exhausted her administrative remedies. Id. at 1121. "The absence of a perfect `fit' between the administrative charge and the judicial complaint is therefore not fatal to judicial review if the policies of promoting conciliation and avoiding bypass of the of the administrative process have been served." Id. ( citing Ong v. Cleland, 642 F.2d 316, 319 (9th Cir. 1981)). The procedural requirements of FEHA, as with all provisions of FEHA, are to be construed "liberally in order to accomplish the legislative purpose." Romano v. Rockwell Int'l, Inc., 14 Cal. 4th 479, 493 (1996). However, the purpose of requiring the filing of an administrative charge prior to the filing of a lawsuit is to enable the administrative agency, here the DFEH, to "receive, investigate and conciliate complaints of unlawful employment discrimination." Okoli v. Lockhead Technical Operations, 36 Cal. App. 4th 1607, 1613 (1995). Therefore, "claims that [a]re neither like nor related to [the] DFEH claim and were not likely to be uncovered in the course of a DFEH investigation, . . . [are] barred by the exhaustion of remedies doctrine." Id. at 1617.
Plaintiff's April 24, 2002 DFEH charge alleged only that she was subjected to unlawful employment discrimination when she was terminated on June 18, 2001 based on her sex and age. Plaintiff's subsequent judicial complaint includes two additional claims of conduct that occurred during 2000 before Plaintiff's termination: (1) Defendant failed to give Plaintiff responsibility for premium accounts and (2) Defendant failed to promote Plaintiff. Defendant argues that Plaintiff's lawsuit should be limited to, at most, her layoff, and that the other conduct she alleges is not properly part of this action because she failed to exhaust her administrative remedies as to those earlier acts. Because these earlier acts were not alleged in Plaintiff's DFEH charge, Defendant contends, Plaintiff cannot now litigate these issues. Plaintiff counters that she did exhaust her administrative remedies as to the earlier conduct because the April 24, 2002 DFEH complaint should be construed to encompass the two additional allegations as they are "like or reasonably related to" the alleged discriminatory termination. It is undisputed that Plaintiff filed a timely claim with DFEH and that the DFEH issued a right-to-sue letter. The question is whether Plaintiff can maintain the instant action for alleged incidents of discrimination that were not specifically enumerated in her complaint before the DFEH.
Most California case law addressing whether newly-alleged claims are sufficiently related to allegations contained in a DFEH complaint focuses on newly alleged bases of discrimination rather than newly-alleged incidents of discrimination on the same basis. See e.g. Okoli, 36 Cal. App. 4th at 1617 (where the court found that the plaintiff, who had filed a discrimination charge with the DFEH alleging that he was denied a promotion based on race, had not exhausted his administrative remedies as to subsequent retaliation discrimination, newly alleged in his judicial complaint, because the DFEH could not be expected to uncover subsequent acts of retaliation in its investigation of a racially-discriminatory promotion decision); see also Yurick, 209 Cal. App. 3d 1116. These cases are not particularly instructive for the case at bar. Cases such as Baker v. Children's Hospital Medical Center, 209 Cal. App. 3d 1057 (1989) and Freeman v. Oakland Unified School Dist., 291 F.3d 632 (9th Cir. 2002) are more on point. Both Baker and Freeman address whether discriminatory conduct alleged in a judicial complaint that was not enumerated in the requisite administrative charge but is based on the same theory of discrimination alleged in the administrative charge is sufficiently like or reasonably related to the administrative complaint to be appropriate for inclusion in a lawsuit.
In Baker, a California appellate court allowed the plaintiff to pursue claims that had not been included in his DFEH charge because they were "like or reasonably related to" the claim that was made. 209 Cal. App. 3d 1057. In that case, the plaintiff was an African-American college student who worked at the defendant hospital during his summers off. In May 1984, the plaintiff filed a claim with the DFEH alleging that the previous summer, his requests to work on-call hours were denied in favor of white employees with less seniority. In his subsequent lawsuit for racial discrimination, the plaintiff additionally alleged that the hospital had harassed him, subjected him to differential treatment and biased evaluations, used racial epithets, and denied him promotions and pay raises. The court found that the general allegation of race discrimination in the DFEH complaint was sufficient to permit a more complete listing of racially discriminatory conduct in the complaint. Moreover, the court found that it was reasonable that an investigation of the allegations in the original DFEH complaint would lead to the investigation of subsequent discriminatory acts undertaken by the employer in retaliation for filing an internal grievance.
In Freeman, the Ninth Circuit Court of Appeals affirmed a district court's finding that the plaintiff had failed to exhaust his administrative remedies as to conduct alleged in his Title VII judicial complaint but not enumerated in his administrative charge with the EEOC even though the legal basis, race discrimination, was the same for both complaints. 291 F.3d 632. In Freeman, the plaintiff, a teacher, alleged in his EEOC charge that he had been discriminated against on the basis of race when three faculty members fixed a 1998 Faculty Council election. In his subsequent judicial complaint, the plaintiff claimed that the school district discriminated against him on the basis of race with respect to wholly different conduct: class size. The Court found that the newly-alleged conduct was not like or reasonably related to the conduct alleged in the EEOC charge. The conduct concerned completely different people and an EEOC investigation into the election would not focus beyond the plaintiff's ability to participate in administrative decision-making at the school. Freeman, 291 F.3d at 635.
Reliance on a federal decision that addresses employment discrimination under Title VII rather than FEHA is not inappropriate. "Since the antidiscrimination objectives and public policy objectives of [Title VII and FEHA] are the same, we may rely on federal decisions to interpret analogous parts of the state statute." Sandhu v. Lockheed Missiles Space Co., 26 Cal. App. 4th 846, 851 (1994).
The Court analyzes, under Freeman and Baker, the two instances of newly-alleged but earlier-occurring conduct in turn.
A. Delay in Promotion Not Like or Reasonably Related to Layoff
Plaintiff now claims that Defendant engaged in sex and age discrimination by delaying her promotion and pay raise in 2000. Plaintiff acknowledges that she was given a retroactive pay raise and a new title ("Senior Account Manager") in December 2000. (Joint Statement at ¶ 13.) Without making any determination about whether the delay in promotion was actually discriminatory, the Court finds that said conduct is not like or reasonably related to the wrongful termination Plaintiff alleged in her administrative complaint. Moreover, even though the Court cannot discern what, if any, investigation was pursued in response to Plaintiff's DFEH complaint, the Court finds that the DFEH investigation of the layoff would not likely have uncovered the delay in promotion that occurred more than six months earlier. First, unlike Baker, the promotion delay occurred in a wholly different time period from the conduct (wrongful termination) addressed in Plaintiff's DFEH complaint. Second, as in Freeman, the decision-makers were not the same people in the two actions. According to Plaintiff, the delay in promotion was caused by her direct supervisors, David Belove and Michael Kokinos, who "dropped the ball," not by a larger company scheme to deprive her of her rightful title and salary. (Salach Dep. at 44:1-4, 46:14-22.) The June 2001 decision to include Plaintiff in a 1,400-employee reduction-in-force, on the other hand, was not made by Kokinos and Belove, but was a company-wide decision made by Scott Roberts, Senior Vice President for North American Sales, Neil Hobbs, Vice President for Global Sales, and various Human Resources personnel. As in Freeman, where wholly different actors are involved, the investigation into one instance of conduct is not likely to uncover the other, particularly where, as here, the conduct is unrelated. Third, and perhaps most importantly, Plaintiff was actually given a promotion and a pay raise in December 2000, six months before she was laid off. Because at the time of the layoff there was no indication of a disparity between Plaintiff's rank or salary and those of other account managers who were retained, it is highly unlikely that the DFEH would have uncovered the 2000 delay in promoting Plaintiff while investigating the layoff. Without a hint to the administrative agency that her promotion and pay raise had been delayed, the Court finds it unreasonable to assume the DFEH would have learned of that delay during its investigation of the layoff, particularly since Plaintiff was eventually promoted.
The record before the Court suggests that the DFEH issued a right-to-sue letter nearly immediately after Plaintiff's complaint was filed.
Therefore, the Court finds that Defendant's alleged delay in promoting Plaintiff is not sufficiently related to the layoff alleged in her DFEH complaint and that her administrative remedies as to that allegation have not been exhausted. The delay in promotion claim is not properly before the Court and summary judgment as to that claim is hereby GRANTED.
B. Account Assignments Not Like or Reasonably Related to Layoff
Plaintiff also now claims that Defendant engaged in sex and age discrimination when during 2000, Defendant repeatedly and consistently denied Plaintiff's requests to service premium accounts. Here again, without making any judgment as to whether the account assignments or the layoff were discriminatory, the Court finds that Plaintiff's new allegation regarding assignment decisions is not like or reasonably related to the layoff nor would the DFEH reasonably have uncovered these issues in its investigation of her administrative complaint.
Again, the people making decisions about the assignment of accounts were not the same people who selected Plaintiff for inclusion in the layoff and the two events occurred nearly a year apart in time. Even if both sets of conduct were grounded, at least in part, in sex or age discrimination, the administrative agency could not reasonably be expected to discover, in its investigation of Plaintiff's termination, that she was repeatedly denied access to premium accounts. This is particularly true where, as here, the layoff involved 1,400 people, many of whom were men and many of whom were under 40 years of age. Common sense suggests that, given the size of the layoff, the DFEH would be unlikely to search as far back as a year before the layoff to determine whether any discriminatory conduct led, directly or indirectly, to Plaintiff's inclusion in the reduction-in-force.
Plaintiff's reliance on EEOC v. Farmer Bros. Co., 31 F.3d 891 (1994) is inapposite. In Farmer Bros., the Ninth Circuit affirmed a district court's finding that the plaintiff had exhausted her administrative remedies as to a claim (discriminatory layoff) that was not specifically enumerated in the administrative charge (discriminatory failure to recall and rehire). The district court had found that because the newly-alleged conduct, the layoff, was part of a discriminatory scheme to reduce the number of women employed by Defendant but to avoid the appearance of discrimination on the basis of gender. Defendant laid off equal numbers of men and women, did not re-hire anyone for a nine-month period, during which time "temporarily laid-off" employees (all men) retained recall rights, and then hired all men to fill the spots vacated during the layoff. Here, Plaintiff has not suggested, nor is there any evidence of, an elaborate, longstanding scheme concocted by Level 3 to get rid of its female over-40 account managers. The Court finds that Plaintiff has provided no evidence that the assignment decisions were part of a grand plot to get rid of her one year later, particularly since the bursting of the Internet bubble did not occur until after Plaintiff was denied responsibility for the premium accounts. Without any evidence of a broader discriminatory scheme, Plaintiff's case is not helped by Farmer Bros.
The Court finds that Plaintiff has failed to exhaust her administrative remedies as to her newly-alleged claims that Defendant discriminated against her on the bases of age and sex when her promotion was delayed and when she was denied responsibility for premium accounts. These newly-alleged instances of discriminatory conduct are not sufficiently like or reasonably related to the discriminatory layoff alleged in Plaintiff's DFEH complaint. Moreover, the Court finds that it is unreasonable to assume that the DFEH, in an investigation of Plaintiff's June 18, 2001 termination, would have uncovered allegedly discriminatory conduct that occurred nearly a year beforehand.
The Court therefore GRANTS Defendant's Motion for Summary Judgment as to the delayed promotion and assignment claims.
II. Statute of Limitations
Because the Court finds that Plaintiff's non-layoff allegations are not properly before the Court for failure to exhaust administrative remedies, the Court need not address Defendant's argument that the two-year statute of limitations under CAL. CIV. PROC. CODE § 335.1 has run as to those claims. The Court also need not address Plaintiff's continuing violations doctrine argument because the Court has found a failure to exhaust administrative remedies on other than statute-of-limitations grounds.
The "continuing violations doctrine" allows courts to consider conduct occurring outside the statute of limitations period if it is "sufficiently linked to unlawful conduct within the limitations period." Cucuzza v. City of Santa Clara, 104 Cal. App. 4th 1031 (2002).
III. Plaintiff Has Met Her Low Burden of Establishing a Prima Facie Case of Sex and Age Discrimination As To Her Layoff
FEHA proscribes employment discrimination on the bases of, inter alia, age and sex. Plaintiff's discrimination claims are based on a theory of disparate treatment. ( See Oppo. at 4.) "`Disparate treatment' is intentional discrimination against one or more persons on prohibited grounds." Guz v. Bectel Nat., Inc., 24 Cal. 4th 317, 354 n. 20 (2000) (emphasis in original). To assess the propriety of summary judgment on a disparate treatment discrimination claim brought under FEHA, courts rely on the familiar burden-shifting scheme formulated by the United States Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Caldwell v. Paramount Unified School Dist., 41 Cal. App. 4th 189, 197 (1995); see also Guz v. Bechtel Nat'l, Inc., 24 Cal. 4th 317, 354-55 (2000). The first step requires the plaintiff to establish a prima facie case of discrimination by demonstrating that (1) she is a member of a protected class, (2) she was performing according to her employer's legitimate expectations, (3) she was subject to an adverse employment action, and (4) similarly situated employees not in her protected class were treated more favorably. Id. The plaintiff's prima facie burden is "not onerous." Guz, 24 Cal. 4th at 355 ( citing Texas Dept. Of Community Affairs v. Burdine, 450 U.S. 248, 253 (1981)). If a plaintiff establishes a prima facie case, a rebuttable presumption of discrimination arises. Guz, 24 Cal. 4th at 355 (citation omitted). The defendant then bears the burden of "articulat[ing] some legitimate, nondiscriminatory reason" for the conduct of which the plaintiff complains. Caldwell, 41 Cal. App. 4th at 197. If the employer sustains that burden, the plaintiff must then demonstrate that the employer's proffered reason is pretext, that the employer's "ostensible reasons [for the action] were a mask for prohibited . . . bias." Guz, 24 Cal. 4th at 353. The plaintiff is "required to produce very little direct evidence of the employer's discriminatory intent to move past summary judgment." Morgan v. Regents of the Univ. of Cal., 88 Cal. App. 4th 52, 69 (2000) (citation omitted).
In the case at bar, Plaintiff claims that Defendant discriminated against her on the bases of sex and age when it unlawfully terminated her on June 18, 2001. Plaintiff has provided ample evidence that she satisfies the first three elements of a prima facie case of discrimination and Defendant does not appear to suggest otherwise. ( See Motion at 15.) First, Plaintiff is a woman who was 53 at the time of her termination and is therefore a member of the relevant protected class both for her gender and age discrimination claims, satisfying the first element. Second, as a member of the President's Club, an honor only bestowed upon the top 10% of the company's salesforce, Plaintiff has established that she was performing at or above her employer's expectations. (Belove Dep. at 24:11-23.) Moreover, Plaintiff's superior, Sheila Wood, testified that Plaintiff was "very qualified," and Mike Kokinos, Plaintiff's direct supervisor, acknowledged that Plaintiff was "a good employee" and "very successful at Level 3." (Wood Dep. at 16:13-18; Kokinos Dep. at 41:18-24, 50:12-13.) Plaintiff has clearly established the second element of her prima facie case. Third, Plaintiff was terminated by Level 3 which constitutes an adverse employment action, satisfying the third element. See e.g., Guz, 24 Cal. 4th at 355 (finding "termination, demotion, or denial of an available job" to be adverse employment actions). The dispute, here, lies in whether Plaintiff has provided sufficient evidence that similarly situated employees not in her protected class were treated more favorably, the fourth prong of a prima facie case of discrimination, sufficient to create a triable issue. The Court finds that she has.
Having determined that Plaintiff's claims of discriminationas to the delayed promotion and assignment decisions are barred for failure to exhaust administrative remedies, see discussion supra, the Court need not address whether Plaintiff has established a prima facie case as to these claims. The Court notes, however, that Plaintiff cannot establish a prima facie case as to the promotion claim. Having received a retroactive promotion and pay raise in December 2000, Plaintiff suffered no adverse employment action, the third requirement for a prima facie case of sex and age discrimination.
Defendant contends that Plaintiff cannot demonstrate that similarly situated employees were treated more favorably in the layoff decision because several male and under-40 Account Managers, similarly situated employees not in her protected class, were not treated more favorably than Plaintiff because they were terminated the very same day. Indeed, nearly half of Plaintiff's group (of which her sales team was apparently a part) was terminated and that those laid off were both male and female and were both under 40 and over 40 years of age. (Roberts Decl. at ¶ 15, Exs. 18, 19.) It is undisputed that the layoff included many similarly situated male and under-40 Account Managers; however, a review of Exhibits 18 and 19, charts attached to the Declaration of Scott Roberts showing who was in Plaintiff's group before and after the layoff, reveals that all five of the Account Managers who were retained following the layoff were either male or under-40 or both. Both Michael Palmaffy (41) and Tim Payne (33), male Senior Account Managers in the same group as Plaintiff, were retained. ( Id.) This is sufficient evidence to satisfy Plaintiff's less than onerous burden of demonstrating that similarly situated employees were treated more favorably than Plaintiff, the fourth prong. Having established a prima facie case of discrimination, Plaintiff has created a rebuttable presumption that Defendant's decision to terminate her was discriminatory.
Defendant specifically notes that Sinnett, Kurtaugh, and Schalin, the three men hired by Kokinos in 2000 to take over the premium accounts coveted by Plaintiff, were not retained. Those accounts instead reverted to Kokinos who had better relationships with the clients than the three relatively new male account managers had been able to develop. (Roberts Decl. at ¶ 10.)
The Court's review of Exhibits 18 and 19 reveal that 10 of the 12 male Account Managers who were under 40 were laid off the same day as Plaintiff.
IV. Plaintiff Has Met Her Low Burden of Showing That Defendant's Justifications Are Pretext for Discrimination
The second phase in the McDonnell Douglas burden-shifting scheme requires the defendant to articulate a legitimate, non-discriminatory reason for its decision to terminate the plaintiff to rebut the presumption of discrimination. Here, Defendant has met that burden of production by contending that the reason for the layoff had nothing to do with gender or age discrimination, but was merely a legitimate business decision. Defendant claims that due to the burst of the Internet bubble in 2000, the demand for Level 3's products had decreased dramatically and the company decided that the only course of action was to change the focus of its business and lay off 1,400 employees. Defendant contends that the Account Managers chosen for layoff were selected solely on the basis of the types of accounts that they handled. Those who handled Strategic Accounts or who had the best contacts with, or lived near, those customers were retained; all other Account Managers, such as Plaintiff, were terminated. Age and gender were, according to Defendant, simply not considerations in the selection process.
The decision to lay off employees because of economic pressures generally constitutes a legitimate justification for termination. See e.g. Guz, 24 Cal. 4th at 357-58. In Guz, the defendant, Bechtel, eliminated Mr. Guz's work unit, BNI-MI, terminated Mr. Guz, and then chose someone other than Mr. Guz to fill the vacant position in the SFRO-MI unit to which BNI-MI's functions were transferred. Bechtel explained that eliminating Mr. Guz's unit was a business decision and assigning his duties to an employee already familiar with SFRO-MI would be more efficient than keeping Mr. Guz on. Here, Defendant Level 3, faced with an enormous drop-off in the demand for its products, made the decision to lay off 1,400 people. It chose who to terminate based on who had the best relationships with the accounts Level 3 determined were going to continue to be profitable. Plaintiff was simply not one of those people, as she readily admits. (Oppo. at 4.) As in Guz, Defendant's "explanation of nondiscriminatory reasons was creditable on its face." Id. at 357. Therefore, the Court finds that Defendant has articulated a legitimate, nondiscriminatory justification for its decision to terminate Plaintiff. Unless Plaintiff can demonstrate that Defendant's proffered explanation is unworthy of credence or that the layoff was more likely motivated by discrimination, summary judgment is appropriate. Reeves v. Safeway Stores, Inc., 121 Cal. App. 4th 95, 112 (2004).
Plaintiff suggests that Defendant's justification is pretext by arguing that Defendant's earlier allegedly discriminatory conduct — denying Plaintiff the opportunity to service the premium accounts — led to her ineligibility for retention. Plaintiff does not pretend that gender and age discrimination were the sole motivating factors in Defendant's decision to terminate her and concedes that she did not have the experience or relationships with Strategic Accounts to avoid being laid off. Indeed, she argues that Defendant's motives were mixed. (Oppo. at 7.) She contends that the layoff was discriminatory because not having the prerequisites for retention was caused by her supervisors' discriminatory treatment of her throughout her employment at Level 3. Had she been given the opportunity to handle and develop relationships with Level 3's premium accounts, Plaintiff argues, she could have developed relationships with those premium clients that would have made her indispensable to Defendant such that she would have been retained. (Wood Dep. at 28:11-14.)
While Plaintiff fails to demonstrate a connection between the layoff decision-makers on the one hand and the assignment decision-makers on the other, the Court finds, based on the totality of the record, that Plaintiff has met her very low burden of raising an issue of fact that the layoff was pretextual and motivated by some discriminatory intent. Because the Court finds that there are genuine issues of material fact as to the layoff, summary judgment on that claim is hereby DENIED.
CONCLUSION
For the foregoing reasons, the Court hereby GRANTS Defendant's Motion for Summary Judgment as to the assignment and promotion claims and DENIES Defendant's Motion as to the layoff claim.IT IS SO ORDERED.