Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC260368, Robert L. Hess, Judge. Affirmed in part; reversed in part.
Shegerian & Associates, Carney R. Shegerian; Urbanic & Associates, James Urbanic; Pine & Pine and Norman Pine for Plaintiffs and Appellants.
Paul, Hastings, Janofsky & Walker, William S. Waldo, George W. Abele, Stephen S. Sonnenbert, Jennifer S. Baldocchi; and Jay Price for Defendant and Appellant.
SUZUKAWA, J.
Plaintiffs Constance Tovar and Victoria Gacitua sued their former employer, defendant Bank of America, N.A. (bank), for wrongful termination, breach of implied contract not to terminate without good cause, and age-based harassment in violation of the Fair Employment and Housing Act (Gov. Code, § 12940, subd. (j)(1)) (FEHA). After the trial court entered a directed verdict for the bank on the wrongful termination and breach of implied contract claims, the jury found for plaintiffs on the harassment claim. The trial court entered judgment for plaintiffs based on the jury verdict. It denied the bank’s motion for judgment notwithstanding the verdict, but granted the bank’s motion for new trial. Both sides have appealed.
The complaint’s other claims were dismissed before trial.
We conclude that the evidence is legally insufficient to establish liability under any theory of the complaint. Accordingly, we affirm the directed verdict, reverse the order denying the motion for judgment notwithstanding the verdict, vacate the new trial order as moot, and remand with directions to enter judgment for the bank on all claims.
BACKGROUND
Plaintiffs were working at the bank’s Woodland Hills branch (branch or office), Tovar as a teller-coordinator and Gacitua as a teller-manager, when the bank terminated them on May 18, 2001. The bank’s stated reason for their termination was their violation of bank policy in processing two fraudulent wire transfers on May 4, 2001, resulting in a $98,000 loss to the bank (wire transfer incident or incident). Although plaintiffs admitted the policy violations during the bank’s internal investigation of the incident, they now deny the violations and any responsibility for the loss.
Tovar was hired by the bank in 1968. Tovar was 61 years old when the first amended complaint was filed on February 7, 2003.
Tovar elected to retire rather than be terminated. Gacitua was not eligible for retirement.
Based on their assertion that they were not at fault in the incident, plaintiffs allege it was used as a pretext by their branch manager, Ellie Nabili, to fire them in order to replace them with younger employees. They claim that during the six months before the incident, Nabili engaged in age-based harassment against them that created a hostile work environment. They contend that Nabili called Tovar old and slow, encouraged them to retire, directed Gacitua to get Tovar to retire, and ordered Gacitua to increase Tovar’s workload to unreasonable levels and write her up if she failed to perform. They further allege that, notwithstanding the at-will provisions in the bank’s employment application and handbook, they were terminated in breach of an implied agreement that they would not be terminated without good cause.
In October 2000, Nabili became the area manager of two branches, the El Camino branch and the Woodland Hills branch where plaintiffs were employed. Nabili spent “most of the time” at the El Camino branch.
The bank denies plaintiffs’ allegations. It contends that Nabili’s behavior did not amount to actionable harassment and that Nabili was not involved in either the investigation of the incident or the termination decision, both of which were handled in good faith by senior managers who were ignorant of plaintiffs’ allegations against Nabili. (It is undisputed that plaintiffs never complained of harassment during their employment.) The bank further contends that plaintiffs were at-will employees, but, in any event, their damaging admissions of bank policy violations, which were corroborated by the investigation, provided ample grounds for their termination.
I. Wire Transfer Process
The bank’s wire transfer process involves four steps: acceptance, approval, verification, and transmittal. The relevant procedures for each step are briefly summarized below.
Acceptance: Any teller may accept a wire transfer request from a customer. After the customer completes sections I and II of the wire transfer request form, the customer must sign the form in the teller’s presence and provide a driver’s license.
Approval: After the customer completes the request form, it must be approved by an authorized employee before the customer leaves the office. During the approval process, the authorized employee must visually observe the customer, examine the customer’s driver’s license, compare the signatures on the license and the request form, and confirm the existence of sufficient funds and lack of holds on the account. After the request is approved by an authorized employee, sections III and IV of the form are filled out with the customer’s driver’s license number and the authorized employee’s name, date, telephone number, account balance information, and time of approval. Although sections III and IV of the form may be filled out by any employee, the authorized employee must have seen the customer and approved the request while the customer was in the office. It is a violation of bank policy for the authorized employee to approve a request after the customer has left the office, which is a factor in this case.
Entry and Verification: After the request has been approved, the wire transfer information is entered into the bank’s computer by any employee. But before the information is transmitted, it must be verified for accuracy by an authorized employee. The authorized employee’s name and time of verification are then entered in section V of the form.
Transmittal: After the computer entry is verified, the information is transmitted to the wire room, which transfers the funds. It is a violation of bank policy to transmit the information before it has been verified by an authorized employee, which is another factor in this case.
II. The Incident, Investigation, and Termination
On May 4, 2001, Tovar assisted a customer who requested to send $98,000 and $80,000 by wire transfer to two Las Vegas casinos. Gacitua and Denise Berkowitz, a bank employee who is not a party to this action, assisted Tovar with the wire transfers. At the time, plaintiffs were unaware that the customer was an identity thief who fraudulently had obtained the account owner’s personal information and driver’s license.
Of the three employees involved in the incident, only Gacitua was authorized to approve and verify the amounts involved. According to the fraudulent wire transfer request forms, both requests were approved by Gacitua, and one request was verified by Gacitua and the other by Berkowitz.
Berkowitz was not authorized to verify the $98,000 transfer. According to the bank’s brief, Berkowitz was also terminated for her role in the incident, but the jury was not informed of that fact.
On May 7, 2001, the bank learned that the wire transfers were fraudulent. The bank recovered the $80,000 transfer, but the $98,000 transfer was lost. Later that day, Lisa Watson, the bank’s regional manager, discussed the incident during a conference call with Nabili, Tovar, Gacitua, and Berkowitz. During the conference call, Tovar and Gacitua admitted that they had violated bank policy while processing the fraudulent wire transfers. Tovar admitted that “[s]he did not get the wires approved prior to the client leaving the office,” which was a violation of bank policy. Gacitua, who stated that she was out to lunch when the wires were accepted, admitted that she had: (1) approved and verified the wires “after the fact”; and (2) “back dat[ed] the time in order to complete the wire form to meet audit requirements,” which were violations of bank policy. Tovar and Gacitua conceded that they had received the bank’s most recent wire transfer guidelines and were aware of their approval and verification limits, but “could not explain why they processed these wires outside of those guidelines.”
At the time, Watson was a senior level manager in charge of 39 banking centers in the West Valley area.
After the conference call, Watson notified Edward Garrison, the bank’s regional senior operations officer who was responsible for investigating bank losses. Garrison conducted an investigation and found discrepancies between the approval and verification times stated on the forms, and the times indicated in the bank’s computer records. The discrepancies were consistent with plaintiffs’ admissions that the forms had been falsified. Garrison testified that, according to the bank’s computer records, “our wire room actually received the wire five minutes before the verification process, and the wire was actually paid four minutes before the verification process because it paid at 2:21 and the verification time on the wire is at 2:25.”
According to the forms: (1) Gacitua approved both requests at 2:05 p.m; (2) Berkowitz entered the $98,000 transfer into the computer at 2:10 p.m., and Berkowitz verified the entry at 2:25 p.m.; and (3) Tovar entered the $80,000 transfer into the computer at 2:15 p.m., and Gacitua verified the entry at 2:30 p.m.
But according to the bank’s computer records: (1) the customer’s account information was not accessed until 2:07 p.m., which was after the 2:05 p.m. approval time stated on the forms; (2) the customer’s account information was accessed by Tovar’s computer, and not by Gacitua’s computer, which was consistent with plaintiffs’ admissions that the customer had left before the requests were approved; (3) the $98,000 transfer was transmitted at 2:21 p.m, which was before the 2:25 p.m. verification time stated on the form; and (4) the $80,000 transfer was transmitted at 2:26 p.m., which was before the 2:30 p.m. verification time stated on the form.
The investigation uncovered other issues regarding plaintiffs’ handling of the incident. Gacitua had added an unusual notation on the forms, “Accepted by Connie [Tovar] over limit,” which was outside bank procedures. In addition, neither plaintiff had questioned the discrepancy between the telephone number provided by the identity thief and the number contained in the bank’s records, which differed by one digit.
Based on plaintiffs’ admissions that they had violated bank policy, which were substantiated during the investigation, Watson and Garrison concluded that: (1) the wire transfer requests were never properly approved or verified by an authorized employee; (2) the funds were transmitted without proper approval or verification; (3) the forms were falsified to hide these violations; and (4) plaintiffs failed to exercise sound judgment while processing the fraudulent wire transfers.
Without any input from Nabili, Watson and Garrison concluded that plaintiffs should be terminated for their violations of bank policy and failure to exercise sound judgment in the incident. Watson prepared the termination notices, which she directed Nabili to sign and deliver to plaintiffs as their immediate supervisor. On May 18, 2001, Nabili and Watson met with plaintiffs, who were told by Nabili that “because of what happened to the wires, I am going to have to terminate you.”
Nabili told Tovar that because of her tenure and age, “she was going to let me retire. If I didn’t retire or quit, I would be fired.”
III. This Litigation
Plaintiffs sued the bank for wrongful termination based upon age discrimination, breach of implied contract not to terminate without good cause, and age-based harassment in violation of the FEHA. The matter was tried to a jury.
A. Plaintiffs’ Evidence
Contrary to their pretrial admissions, plaintiffs denied the violations of bank policy and claimed they were not at fault in the wire transfer incident. In contrast with their earlier statements that Gacitua was out to lunch while the customer was in the office, plaintiffs testified that Gacitua had approved the wire transfer requests in the customer’s presence. Plaintiffs accused Nabili of using the wire transfer loss, which was not their fault, as a pretext to fire them in order to hire younger workers. They testified that during the six-month period before the wire transfer incident, Nabili had engaged in age-based harassment by making age-based comments to Gacitua about Tovar (e.g., that Tovar was old and slow), urging them to retire, telling Gacitua that it was her job to get Tovar to retire, and ordering Gacitua to increase Tovar’s workload to unreasonable levels and write her up if she failed to perform.
Plaintiffs introduced evidence that, on the day after the conference call with Watson, Gacitua told Nabili that “[w]e followed all the procedures.” Nabili agreed, stating, “it looks like you did.”
Plaintiffs also claimed that Nabili was responsible for the wire transfer loss because she had failed to inform them of other recent fraudulent wire transfers to Las Vegas (the destination of the fraudulent wire transfers in this case) and of the new requirement that branch managers (in this case, Nabili) must approve all wire transfers to Las Vegas. The evidence showed that Nabili lied to Watson by falsely stating that she had provided this information to plaintiffs.
Based on their assertion that they were not at fault in the incident, plaintiffs sought damages for wrongful termination on the theory that the termination decision was made by Nabili, who harbored improper motives. Alternatively, plaintiffs contended that even if the decision was made by Nabili’s superiors, Watson and Garrison, Nabili’s improper motives should be imputed to them as mere conduits or instruments for carrying out her discriminatory motives.
Beverly Collier, a bank vice president, testified that in May 2001, Nabili stated, “I am going to kill her, and I am going to make sure they lose their jobs.” Collier stated that Nabili “scared me, you know, to threaten some employees. It just — you don’t do things like that.”
B. Bank’s Evidence
As previously discussed, the bank presented evidence that plaintiffs were terminated by Watson and Garrison who, in good faith, believed plaintiffs had violated bank policy and failed to exercise sound judgment during the incident. The bank introduced plaintiffs’ pretrial admissions that approvals were not obtained before the customer left the office and that the forms were falsified to hide that fact. Watson testified that failing to exercise sound judgment is a valid ground for termination because “[e]verything we do at the bank starts with the foundation of sound judgment and common sense. If I can’t rely on that, I could have all the policies and all the rules and procedures in the world in place, but again without common sense and sound judgment, there isn’t safety for our customer’s identity.”
The bank denied that Nabili was responsible for the wire transfer loss. The bank introduced evidence that, notwithstanding Nabili’s failure to warn plaintiffs about the fraudulent Las Vegas wire transfers, Watson had sent a voice mail fraud alert to Gacitua and had faxed a fraud alert to “every associate,” including Tovar and Gacitua, regarding the fraudulent Las Vegas wire transfers. Moreover, Watson testified that during the conference call, neither Tovar nor Gacitua said anything about not receiving the fraud alerts. Although Watson admitted that, had she known of Nabili’s failure to warn plaintiffs, she would have disciplined or possibly terminated Nabili, she denied that plaintiffs were terminated because of Nabili’s failure to approve the wire transfers. According to Watson, because the new approval requirement was not a bank policy, Nabili’s failure to approve the wire transfers was neither a violation of bank policy nor a causal factor in the termination decision. According to Garrison, plaintiffs’ errors in judgment went well beyond their failure to obtain Nabili’s approval of the wire transfers. He testified that even if he had known that plaintiffs were unaware of the fraud alert, he still would have terminated them because of their “clear violation of bank policy and procedures. There was no sound decision making here.”
C. Directed Verdict
After both sides rested, the trial court granted the bank’s motion for directed verdict on the wrongful termination and breach of implied contract claims, and struck the claim for punitive damages. The trial court stated that the evidence had shown, as a matter of law, that Nabili was not involved in the termination decision, which was made in good faith by senior managers Watson and Garrison, who were unaware of plaintiffs’ unreported harassment allegations against Nabili. The trial court rejected plaintiffs’ theory that Nabili had manipulated the investigation and termination process, stating that the evidence was “unequivocal and uncontroverted” that Watson and Garrison had independently investigated the incident and drawn their own conclusions. The trial court found that the evidence was undisputed that Watson and Garrison believed, in good faith, “that Gacitua and Tovar had in fact violated corporate policy.”
The bank had filed an alternative motion for nonsuit, to be heard at the close of plaintiffs’ case (Code Civ. Proc., § 581c, subd. (a)), or directed verdict, to be heard after both sides rested (Code Civ. Proc., § 630, subd. (a)). Given that the motion was heard after both sides rested, it was treated as a motion for directed verdict rather than nonsuit.
The trial court also rejected plaintiffs’ theory that Nabili’s failure to inform them of the fraud alert and the new approval requirement was a causal factor in their termination. The court stated, “The fact that Nabili may not have communicated certain things to the associates, and in that sense may have been derelict, does not affect [the] conclusion” that plaintiffs failed to exercise sound judgment and violated bank policy.
Regarding the claim for breach of an implied agreement not to terminate without good cause, the trial court concluded that plaintiffs had failed to rebut the at-will presumption contained in Labor Code section 2922 (“An employment, having no specified term, may be terminated at the will of either party on notice to the other”). The bank’s handbook, which contains an at-will provision and does not provide for progressive discipline, allows for immediate termination upon the bank’s loss of confidence in an employee or the employee’s falsification of bank records. The trial court found that the evidence relied upon to establish an implied contract to terminate only for cause (e.g., that other terminations involved good cause, that plaintiffs were long-term employees, and that plaintiffs received assurances that their jobs were secure) was legally insufficient to overcome the at-will presumption.
As for the punitive damages claim, the trial court concluded that the evidence failed to establish the existence of oppression, fraud, or malice on the part of the bank’s officers, directors, or managing agents. The court found there was insufficient evidence that Nabili was a managing agent or that the bank had ratified her conduct.
D. Jury Verdict
The trial court submitted the remaining claim for age-based harassment to the jury. It instructed the jury not to consider whether either “plaintiff was wrongfully or in any sense improperly terminated.” The trial court also instructed the jury to base any harassment award solely on pre-termination damages for emotional distress.
The jury returned a special verdict for plaintiffs on the harassment claim. It found that: (1) Tovar and Gacitua were subjected to unwanted harassment because of their age; (2) the harassment resulted in an objectively and subjectively hostile work environment; (3) the bank knew or should have known of the harassment but failed to take immediate and appropriate corrective action; and (4) the harassment was a substantial factor in causing emotional distress to plaintiffs. The jury awarded plaintiffs noneconomic damages for emotional distress in the amounts of $750,000 for Tovar ($500,000 past and $250,000 future damages), and $850,000 for Gacitua ($550,000 past and $300,000 future damages).
E. Judgment and New Trial Order
Based on the jury’s special verdict, the trial court entered judgment for Tovar and Gacitua in the amounts of $750,000 and $850,000, respectively. The trial court denied the bank’s motion for judgment notwithstanding the verdict, but granted a new trial of the harassment claim on both liability and damages. The trial court found that although there was sufficient evidence of harassment, the awards were so excessive as to indicate that the jury had disregarded the instruction that any awards were to be based solely on pre-termination damages for emotional distress. Noting that the jury had received far greater evidence of post-termination damages for emotional distress, the trial court stated that the evidence “appears to have confused the jury and led to a greatly excessive verdict.” The trial court concluded that “the only fair approach is to re-try the case as to both liability and damages, limiting the evidence to that directly pertinent to the age harassment claims. This will enable the jurors to evaluate damages based only on pre-termination conduct, if they find liability. The motion for a new trial is therefore granted under [Code of Civil Procedure section 657, subdivisions 5 and 6].” The trial court refused to grant a remittitur (Code Civ. Proc., § 662.5), stating that it was not “in a position to determine an appropriate figure at this time.”
The trial court stated that “[a]fter careful review of all the evidence, including the reasonable inferences to be drawn therefrom, the Court is persuaded that the awards of damages by the jury were not simply excessive, but grossly excessive to what was proved on the age harassment claims arising prior to termination. [Fn. omitted.] The Court has a firm conviction that, notwithstanding its instructions that the jury consider only damages arising from pre-termination claims, that the evidence surrounding the termination and the sometimes emotional testimony relating to damages from termination so influenced the jury as to lead to an excessive award, reached despite the Court’s instructions. In addition, the fact that the non-economic damages testimony (particularly in the post-termination period) made almost no attempt to differentiate between emotional distress caused by pre-termination harassment, and the far greater distress resulting from plaintiffs’ terminations (for which the Court’s judgment found defendant not to be liable) appears to have confused the jury and led to a greatly excessive verdict. [¶] The Court does not reach this conclusion lightly. Nevertheless, acting within the terms of its authority to grant a new trial, the Court is of the firm opinion that had only the issues of age harassment been presented to the jury, the outcome on damages — and conceivably also on liability — would have been very different. The effect of hearing the great mass of evidence on claims which ultimately were not presented to the jury clearly influenced the deliberations which the jurors were asked to undertake. [¶] The Court is persuaded that the only fair approach is to re-try the case as to both liability and damages, limiting the evidence to that directly pertinent to the age harassment claims. This will enable the jurors to evaluate damages based only on pre-termination conduct, if they find liability. The motion for a new trial is therefore granted under [Code of Civil Procedure section 657, subdivisions 5 and 6].”
F. This Appeal
Both sides have appealed. In their appeal, Tovar and Gacitua ask that we: (1) reverse the directed verdict on the wrongful termination and breach of implied contract claims; (2) reinstate the punitive damages claim; and (3) reverse the order granting a new trial on the harassment claim. In the cross-appeal, the bank requests that we: (1) affirm the directed verdict on the wrongful termination and breach of implied contract claims; (2) reverse the denial of its motion for judgment notwithstanding the verdict on the harassment claim; and (3) enter judgment in its favor on the entire complaint.
DISCUSSION
I. Directed Verdict for Wrongful Termination Was Proper
In an appeal from a directed verdict, we must view the evidence “in the light most favorable to [appellants], resolve all conflicts and inferences in [their] favor, and reverse the judgment if substantial evidence tends to prove all the elements of appellant[s’] case. [Citation.]” (Heller v. Pillsbury Madison & Sutro (1996) 50 Cal.App.4th 1367, 1392-1393.)
In order to establish a claim for wrongful termination based on age discrimination, the plaintiff “must ultimately prove that the adverse employment action taken was based on his or her age.” (Hersant v. Department of Social Services (1997) 57 Cal.App.4th 997, 1002.) Given that direct evidence of an employer’s unlawful motive is seldom available, courts often employ a burden-shifting method of proof to aid in the presentation and resolution of employment discrimination cases. (See ibid. and cases cited therein, including McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792, 800-803.) In this case, however, plaintiffs contend that because of the direct evidence of Nabili’s improper motive, the burden-shifting method of proof is unnecessary. According to plaintiffs, “the key issues are whether Nabili [was] the decision-maker and whether she decided to terminate plaintiffs’ employment because of her ageist beliefs.”
A. Nabili Was Not a Decision Maker
Plaintiffs seek a reversal of the directed verdict on the wrongful termination claim, arguing that a reasonable jury could find that Nabili had participated in the decision to terminate plaintiffs. Plaintiffs rely on the following evidence to show that Nabili was a decision maker: (1) she possessed authority to terminate employees with the approval of human resources; (2) she threatened to terminate plaintiffs upon learning of the fraudulent wire transfer incident; and (3) she stated, at the time of termination, “I am going to have to terminate you.” We are not persuaded.
At best, the evidence supports an inference that Nabili possessed the authority to terminate plaintiffs, but not that she actually did so. The evidence was undisputed that Nabili played no part in the investigation or decisionmaking process, which, because of the size of the loss, was handled at a higher level by Watson and Garrison. At trial, neither Tovar nor Gacitua identified Nabili as a decision maker in the termination decision. Even if Nabili could or wouldhave terminated plaintiffs, there was no evidence that she actually did so. We conclude that the evidence was insufficient to allow a reasonable jury to find that Nabili was involved in the termination decision.
B. Nabili Did Not Influence the Decision Makers
Plaintiffs alternatively contend that because a reasonable jury could have found that Nabili influenced the decisionmaking process, Nabili’s discriminatory attitudes may be imputed to Watson and Garrison, who were mere conduits for Nabili’s discriminatory attitudes. (Citing Reeves v. Safeway Stores, Inc. (2004) 121 Cal.App.4th 95, 113 (Reeves); Clark v. Claremont University Center (1992) 6 Cal.App.4th 639, 665-666.) This theory of imputed liability was discussed in Reeves as follows:“To establish an entitlement to judgment as a matter of law, it is not enough to show that one actor acted for lawful reasons when that actor may be found to have operated as a mere instrumentality or conduit for others who acted out of discriminatory or retaliatory animus, and whose actions were a but-for cause of the challenged employment action. If a supervisor makes another his tool for carrying out a discriminatory action, the original actor’s purpose will be imputed to the tool, or through the tool to their common employer.” (Reeves, supra, 121 Cal.App.4th at p. 113.)
In order for plaintiffs to prevail on an imputed liability theory, the evidence must reasonably support a finding that Watson and Garrison were mere conduits or instruments for Nabili’s discriminatory motives, and that Nabili’s actions were the legal cause of plaintiffs’ terminations. (Reeves, supra, 121 Cal.App.4th at p. 113.) The record fails to support such findings. There was no evidence that Nabili influenced either the investigation or the decision to terminate plaintiffs.
Plaintiffs cite Clark v. Claremont University Center, supra, 6 Cal.App.4th 639, for the proposition that the termination decision was so infected by Nabili’s discriminatory intent that the entire process was tainted, even if Watson and Garrison were free of discriminatory intent. Plaintiffs’ reliance upon Clark is misplaced. Clark is distinguishable because it involved a university’s multilevel tenure review process, in which “the most significant step in the entire process appears to be the departmental review, which lays the groundwork for subsequent levels of review.” (Id. at p. 669.) In this case, there was no multilevel review process. The evidence was undisputed that Watson and Garrison investigated the incident and drew their own conclusions without being influenced by Nabili.
Plaintiffs argue that because Nabili’s testimony was “evasive, unresponsive, and false,” a reasonable jury could have inferred that “the Bank’s decision-makers acted ‘as a sort of institutionalized “cat’s paw” to effectuate [Nabili’s discriminatory] intentions,’” quoting Reeves, supra,121 Cal.App.4th at page 119. The contention lacks merit. Given the lack of any evidence of Nabili’s participation in the decisionmaking process, Nabili’s credibility was not a relevant factor in the assessment of wrongful termination liability. We conclude that no reasonable jury could have found that the decisionmaking process was so tainted by Nabili’s discriminatory motives as to impute those motives to the bank.
C. Improper Investigation
Plaintiffs contend that because the investigation was so cursory, it served as a conduit for Nabili’s discriminatory intentions. Plaintiffs claim there was a “‘telling lack of thoroughness’” in the investigation, which led to the “perfunctory firing of two career employees without even a look at their personnel files.” We disagree that the investigation was cursory. The personnel files were irrelevant to the investigation, because not even the most exemplary personnel files could have compensated for the policy violations that were committed while processing the fraudulent wire transfers. The investigation was sufficient to uncover those violations, which were not only admitted by plaintiffs but had nothing to do with Nabili or her discriminatory intentions.
Plaintiffs argue that in light of the jury’s finding that Nabili had engaged in age discrimination, “[t]he jury could doubt the zeal and sincerity with which the investigation was conducted.” We are not persuaded. Given the lack of any causal relationship between Nabili’s discriminatory behavior or motives and Watson’s and Garrison’s good faith belief that plaintiffs had violated bank policy, the evidence fails to support a finding that the thoroughness of the investigation, or the lack thereof, was a factor in the termination decision.
D. Pretext
Plaintiffs contend that “[t]he wire transfer loss was a thin excuse for termination of employment — and had no legitimate basis in fact. Tovar and Gacitua followed the Bank’s procedures. Thus, the fraudulent wire transfer was merely a ‘policy loss’ — not something employees could be legitimately penalized for.” The contention lacks merit.
Even if plaintiffs were not at fault in the wire transfer loss, the evidence was undisputed that Watson and Garrison reasonably, honestly, and consistently believed that plaintiffs had violated bank policy and failed to exercise sound judgment during the incident. Whether Watson and Garrison were correct in their assessment is not the issue. “It is not enough for the employee simply to raise triable issues of fact concerning whether the employer’s reasons for taking the adverse action were sound. What the employee has brought is not an action for general unfairness but for age discrimination.” (Hersant v. Department of Social Services, supra, 57 Cal.App.4th 997, 1005.) “As several federal courts have stated: ‘The [employee] cannot simply show that the employer’s decision was wrong or mistaken, since the factual dispute at issue is whether discriminatory animus motivated the employer, not whether the employer is wise, shrewd, prudent, or competent. [Citations.] Rather, the [employee] must demonstrate such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer’s proffered legitimate reasons for its action that a reasonable factfinder could rationally find them “unworthy of credence,” [citation], and hence infer “that the employer did not act for the [the asserted] non-discriminatory reasons.” [Citations.]’ (Fuentes v. Perskie (3d Cir. 1994) 32 F.3d 759, 765, fn. omitted; Sheridan v. E.I. DuPont de Nemours and Co. (3d Cir. 1996) 100 F.3d 1061, 1072; Stewart v. Rutgers, The State University [(1997)] 120 F.3d 426.)” (Hersant, at p. 1005.)
Plaintiffs presented no evidence that the bank lacked an honest belief in the proffered reasons for their terminations, which is not surprising, given plaintiffs’ pretrial admissions that they had violated bank policy. As the bank points out in its brief, “[i]t is undisputed that during the Bank’s investigation, Gacitua said that she was out to lunch when the wires were accepted by Tovar, and that Gacitua wrote ‘accepted by Connie [Tovar] over limit’ on the wire forms. [Record citations omitted.] (‘Did Connie say that at the time the wires were accepted you were out to lunch. Answer: I remember saying that myself.’) Garrison reviewed the notes taken by Lisa Watson and Trudy Bell [Watson’s assistant] during the investigatory meeting which stated, among other things, ‘Vicki stated she was out to lunch when the wire was accepted. She admitted to approving and verifying the wires after the fact, acknowledging it being over Connie’s limit and back dating the time in order to complete the wire form to meet audit requirements.’ [Record citations omitted.]”
In their reply brief, plaintiffs argue that “[t]he fact that Gacitua said that she was ‘out to lunch’—a common euphemism for a mental lapse—is hardly dispositive, especially since the investigation allowed no meaningful input or explanation from Gacitua.” The context of the discussion, however, dispels any notion that the phrase “out to lunch” was used metaphorically. The context of the discussion, which concerned Tovar’s failure to obtain approval of the wires before the customer left the office and Gacitua’s falsification of the approval and verification times on the forms, permits only one reasonable conclusion, which is that Gacitua was literally “out to lunch” when Tovar was assisting the identity thief with the fraudulent wire transfers.
II. Directed Verdict for Breach of Implied Contract Was Proper
Plaintiffs contend that the directed verdict on the breach of implied contract claim must be reversed because the evidence permits conflicting inferences as to both the existence of an implied contract not to terminate without good cause, and the existence of good cause for termination. Plaintiffs argue that the jury should have decided whether the bank: (1) terminated plaintiffs in good faith; (2) investigated the incident in an appropriate manner; and (3) had reasonable grounds for finding them guilty of misconduct. We disagree.
Regardless of the existence of an implied contract not to terminate without good cause, the breach of implied contract claim must fail in light of plaintiffs’ pretrial admissions that they had violated bank policy by approving the wires after the customer left the office and falsifying the forms. The admissions provided ample cause for plaintiffs’ terminations, regardless of any wrongful acts or omissions by Nabili. Even if plaintiffs were unaware of the other fraudulent wire transfers and the new approval requirement for wire transfers to Las Vegas, no reasonable jury could have found that plaintiffs were terminated without cause.
The evidence leaves no room for doubt that Watson and Garrison honestly believed that plaintiffs had violated bank policy and failed to exercise sound judgment during the incident. Because the correctness of their belief is not the issue (Hersant v. Department of Social Services, supra, 57 Cal.App.4th at p. 1005), we conclude that plaintiffs are incapable of establishing that the directed verdict on the breach of implied contract claim was improper.
III. The Bank Was Entitled to Judgment Notwithstanding the Verdict on the Harassment Claim
In its cross-appeal, the bank contends that it was entitled to judgment notwithstanding the verdict on the harassment claim because the evidence was insufficient, as a matter of law, to support the jury verdict. We agree.
A. Standard of Review
Code of Civil Procedure section 629 provides that the trial court shall grant a motion for judgment “notwithstanding the verdict whenever a motion for a directed verdict for the aggrieved party should have been granted[.]”
“An ‘appeal from the trial court’s denial of the . . . motion for judgment notwithstanding the verdict is a challenge to the sufficiency of the evidence to support the jury’s verdict and the trial court’s decision. The standard of review is essentially the same as when the trial court has granted the motion.’ (Stubblefield Construction Co. v. City of San Bernardino (1995) 32 Cal.App.4th 687, 703.) In ruling on a motion for JNOV, ‘“the trial court may not weigh the evidence or judge the credibility of the witnesses, as it may do on a motion for a new trial, but must accept the evidence tending to support the verdict as true, unless on its face it should be inherently incredible. Such order may be granted only when, disregarding conflicting evidence and indulging in every legitimate inference which may be drawn from plaintiff’s evidence, the result is no evidence sufficiently substantial to support the verdict. [¶] On an appeal from the judgment notwithstanding the verdict, the appellate court must read the record in the light most advantageous to the plaintiff, resolve all conflicts in his favor, and give him the benefit of all reasonable inferences in support of the original verdict.”’ (Borba v. Thomas (1977) 70 Cal.App.3d 144, 151-152.)” (Carter v. CB Richard Ellis, Inc. (2004) 122 Cal.App.4th 1313, 1320.)
B. The Evidence
Nabili became the area branch manager in October 2000. Shortly thereafter, Gacitua and Nabili discussed Tovar’s request to take a medical leave. During that discussion, Nabili reviewed Tovar’s file and noticed that she had taken a prior leave for a brain aneurysm. Nabili told Gacitua, “when is this going to stop.” “No wonder she is so forgetful. . . . [S]he really needs to retire.” Nabili instructed Gacitua that it was “going to be [her] responsibility to be sure that [Tovar] retires.”
During Tovar’s medical leave, Gacitua asked Nabili for permission to hire additional staff. Nabili replied that she could do so “when Connie [Tovar] retires.” “Just be sure to convince her to retire when she comes back.”
After Tovar returned to work in early December 2000, Nabili discussed the bank’s “wonderful retirement plan” with Tovar in Gacitua’s presence. Nabili asked Tovar if she had thought about retiring and if she needed any help with the paperwork. Tovar replied that she was not thinking about retirement and that her son was her financial advisor. Nabili urged Tovar to get her son’s advice and call human resources for the retirement forms, which Nabili would help her complete. According to Gacitua, Nabili “was very pushy, but she pretended that she cared.”
Tovar testified that the meeting was “cordial,” but made her feel “very strange” because “I had never been approached by a manager . . . to discuss solely retirement.”
In January 2001, Nabili had a second meeting with Tovar and Gacitua. Nabili asked Tovar if she had contacted human resources or spoken to her son about retirement. Tovar replied that she did not think she could retire and did not want to retire. Nabili urged Tovar to call human resources and fill out the paperwork. According to Gacitua, Nabili was “[p]ushy, very pushy.” Later that day, Nabili told Gacitua to be sure to “get Connie to call human resources.”
Tovar testified that at the second meeting, Nabili “wasn’t as cordial as she was during the first. She was more insistent, and why I hadn’t, you know, spoken to my son or human resources, and she told me that, you know, all I have to do is just get the information, and she will help me calculate if I can afford to retire.” Nabili’s comments made Tovar feel “even worse.” “[A]fter the second meeting I was pretty sure that she definitely wanted me to retire, and she was getting more insistent upon it.”
Several days later, Gacitua was short of tellers and asked Nabili if she could hire additional help. Nabili replied that she had to wait until Tovar retired and urged Gacitua to have Tovar call human resources.
At some point, Nabili began mentioning the benefits of retirement to Gacitua. Nabili told Gacitua “that retirement for someone my age and Connie’s age would be a good thing for us.” Gacitua took this remark “very badly,” because she realized that Nabili was also trying to convince her to retire. Gacitua stated that this “made me feel terrible. It made me feel that I wasn’t wanted, I wasn’t — she didn’t want me around ‘cause I was old.”
Nabili called Gacitua “quite often on the phone to see how things were doing and to find out whether I had given Connie time to call human resources.” Nabili told Gacitua, “Vicky, you know, when you retire, you can have wonderful trips with your husband.” Nabili also told Gacitua that “your tellers are too old, and too slow. We need to get younger people here. The lines are not moving. You need to get young blood.”
In mid-February 2001, Gacitua told Nabili that Tovar was not going to retire and to stop asking about it. Nabili responded in a “quite angry” tone that “[i]f Connie doesn’t retire, then you got to cut her hours down and make her a regular teller.”
In late February or early March 2001, Nabili met with Tovar and Gacitua for a third time. Nabili asked Tovar “point blank, did you talk to human resources. Did you talk to your son about your retirement.” Tovar replied, “no, I hadn’t. I told her that I was a single woman. I supported myself. I did not have anybody to fall back on financially, and that I could not retire.” Nabili “got very upset that I hadn’t done what she wanted, and she just said okay, and she got up, and she slammed out, no good-byes.” Tovar felt “[v]ery scared.” “I figured if she was that insistent on getting me to retire she would, you know, find some reason to force me out.” Tovar testified that after the third meeting, Nabili “would say good morning to everybody, but she never came up to me and talked to me specifically.” This made Tovar “very anxious and very scared. I was going to start looking around to see if I could transfer out of that branch.”
In March 2001, Nabili instructed Gacitua to make a list of “all of Connie’s duties, and your duties,” “and be sure that Connie does them. If she doesn’t do them, you have to write her up.” When Gacitua objected that the job would be “too big” and Tovar “won’t be able to do all that,” Nabili replied, “what kind of teller manager are you. You have got to do that. It is good for the branch.” Gacitua prepared a list of her duties and Tovar’s duties, and gave the list to Tovar. Gacitua testified that “Connie would perform my duties when I wasn’t there, but, you know, not all the time. She wouldn’t be in the teller window if I wasn’t there. She would perform all the duties.” Tovar testified that “[t]here were very few things that [she wasn’t] already doing that were on that list.”
In April 2001, Nabili called Gacitua on a daily basis. Nabili told Gacitua that she needed to “tell Connie to retire. Retirement is not a bad thing for either one of you.” “S[h]e said people of your age it is a positive thing to retire.” Her comments made Gacitua feel “[t]errible. She — I felt very badly that she would tell me that I was an old person, and I could not work any more. She wanted to get rid of me. This is my impression from what she told me because of my age.” Gacitua testified: “I felt very uneasy. I felt anxious. I felt every morning in April before I went to work, I would get sick to my stomach. That has never happened to me, every morning knowing that I would get a call from her for different things regarding Connie’s retirement or mine.” “I was having nightmares and not only nightmares, but night terrors which are really scary.”
Before plaintiffs were terminated in May 2001, neither had complained of harassment. Tovar testified she did not consider Nabili’s age-related comments to be a violation of the bank’s harassment policy. “Q . . . There were no words spoken by anyone at the bank that you were subjected to that you believe were a violation of the bank’s harassment policy, were there? [¶] A No.” “Q Ms. Tovar, you were not subjected to any words by anyone at the bank that you considered to be a violation of the bank’s harassment policy, right? [¶] A No. Go by what is in the book, correct. [¶] Q My statement is correct? [¶] A Yes.”
C. Hostile Work Environment
Government Code section 12940, subdivision (j)(1) declares that it is unlawful for “an employer . . . or any other person, because of . . . age . . . to harass an employee.” Government Code section 12940, subdivision (k) requires an employer to “take all reasonable steps necessary to prevent discrimination and harassment from occurring.”
In order to prevail, “‘an employee claiming harassment based upon a hostile work environment must demonstrate that the conduct complained of was severe enough or sufficiently pervasive to alter the conditions of employment and create a work environment that qualifies as hostile or abusive to employees because of their sex. (See Aguilar v. Avis Rent A Car System, Inc. [(1999)] 21 Cal.4th [121,] 130 . . ., relying upon Harris v. Forklift Systems, Inc. (1993) 510 U.S. 17, 21 [(Harris)].)’ (Miller [v. Department of Corrections (2005)] 36 Cal.4th [446,] 462, italics added.) As the high court explained, a workplace may give rise to liability when it ‘is permeated with “discriminatory [sex-based] intimidation, ridicule, and insult,” [citation], that is “sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment[.]”’ (Harris, supra, 510 U.S. at p. 21.)” (Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 279 (Lyle).)
Neither party challenges the application of this standard, which applies to sexual harassment claims, to age harassment claims.
D. Insufficient Evidence
The bank contends that the evidence was insufficient to support the harassment verdict. We agree.
Whether the harassment was sufficiently severe to alter the conditions of employment and create an abusive working environment is judged objectively, “‘“by looking at all the circumstances [including] the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee’s work performance.” (Harris v. Forklift Systems, Inc., supra, 510 U.S. at p. 23.)’ (Miller, supra, 36 Cal.4th at p. 462.)” (Lyle, supra, 38 Cal.4th at p. 283.) “‘“[T]he objective severity of harassment should be judged from the perspective of a reasonable person in the plaintiff’s position, considering ‘all the circumstances.’ [Citation.]”’” (Ibid., quoting Miller, supra, 36 Cal.4th at p. 462.)
The evidence fails to meet this test. According to Tovar’s testimony, Nabili’s comments did not violate the bank’s harassment policy. Although Tovar received a list of job duties that were too numerous to complete on her own, she testified that she shared those duties with Gacitua and that “[t]here were very few things that [Tovar wasn’t] already doing that were on that list.” Even assuming that Nabili was biased against Tovar because of her age, the evidence was insufficient to support a finding that Nabili’s comments or behavior, whether viewed subjectively or objectively, were so severe that they altered the conditions of Tovar’s employment or created an abusive work environment.
As for Gacitua, we conclude that the evidence fails, as a matter of law, to show that she was subjected to age-based harassment. Almost all of Nabili’s age-based remarks were directed at Tovar, not Gacitua. Although Nabili pressured Gacitua to encourage Tovar to retire and increase Tovar’s workload, the evidence does not reasonably support a finding that Nabili was pressuring Gacitua to carry out these tasks because of Gacitua’s age. The fact that Nabili would not allow Gacitua to hire additional tellers until Tovar retired does not reasonably support a finding that Nabili was harassing Gacitua because of her age. Although Nabili directed a few remarks at Gacitua about her own retirement (e.g., retirement is not a bad thing, you could take wonderful trips with your husband), the remarks could not reasonably be construed as offensive or hostile. No reasonable person in Gacitua’s position would have considered such remarks to be so severe or pervasive as to alter the conditions of employment or create an abusive work environment.
IV. Punitive Damages and New Trial
Plaintiffs also challenge the dismissal of their punitive damages claim and the granting of a new trial of the harassment claim. In light of our determination that the evidence is legally insufficient to establish liability under any theory of the complaint, the issues are moot and require no discussion.
DISPOSITION
The judgment is affirmed in part and reversed in part as follows: the directed verdict on the wrongful termination and breach of implied contract claims is affirmed; and the order denying the motion for judgment notwithstanding the verdict on the harassment claim is reversed. The order granting a new trial is vacated as moot. The matter is remanded with directions to enter judgment for the bank on all claims. The bank is awarded its costs on appeal.
We concur: EPSTEIN, P. J., WILLHITE, J.
Gacitua was hired by the bank in 1964, but left in 1966 to start a family. She worked at several other financial institutions before being hired in 1987 by Security Bank, which merged with the bank in 1994. Gacitua was 56 years old when the first amended complaint was filed.