Free Memorandum in Opposition - District Court of California - California

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MARGARET HART EDWARDS, Bar No. 65699 JOSHUA D. KIENITZ, Bar No. 244903 LITTLER MENDELSON A Professional Corporation 650 California Street, 20th Floor San Francisco, CA 94108.2693 Telephone: 415.433.1940 Facsimile: 415.358.4566 Attorneys for Defendant GEORGIA-PACIFIC LLC

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,

Case No. C 07 3944 SBA DEFENDANT GEORGIA-PACIFIC LLC'S OPPOSITION TO CHARGING PARTY JANET STEGE'S MOTION TO INTERVENE Date: Time: Courtroom: Judge: March 4, 2008 1:00 p.m. 3 The Hon. Saundra B. Armstrong

13 v. 14 GEORGIA-PACIFIC LLC, 15 Defendant. 16 17 18 19 20 21 22 23 24 25 26 27 28
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DEF'S OPPOSITION TO CHARGING PARTY'S MOTION TO INTERVENE

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TABLE OF CONTENTS Page I. II. INTRODUCTION................................................................................................................1 STATEMENT OF FACTS ...................................................................................................2 A. B. Stege's Work History At Georgia-Pacific..................................................................2 In April 2004, Georgia-Pacific Gave Stege The Option Of Continuing Employment At The New San Leandro Plant, With The Understanding That She Would, On Occasion, Be Required To Work Mandatory Overtime.....................2 In November 2004, Stege Timely Filed An EEOC/DFEH Charge Based On The Events Of April 2004. ........................................................................................3 The EEOC Investigated Stege's Charge Until March 2005 And Attempted To Conciliate With Georgia-Pacific Until June 2005. .....................................................3 After Many Of The Individuals Involved In The Events Of April 2004 Had Left The Company, Stege Requested And Received A Reasonable Accommodation In February 2006. ...........................................................................4 Stege's February 2006 Reasonable Accommodation .................................................5 Stege Has Taken More Than Seven Months Of Leave Since December 1, 2004, When She Received The Right-To-Sue Letter. ................................................6 Twenty-Six Months After The End Of Conciliation, The EEOC Filed The Instant Lawsuit In August 2007. ...............................................................................6 Forty-Five Months After The "Ultimatum," 38 Months After She Filed Her EEOC Charge, 37 Months After She Received Her Right-To-Sue Letter, And 31 Months After She Was Informed That Conciliation Had Been Unsuccessful, Stege Filed The Instant Motion To Intervene. .....................................6 Corrugated Is Stege's Employer; Holdings Is Not. ....................................................7

C.

E.

F. G.

I.

LEGAL ARGUMENT .........................................................................................................7 Stege's Motion Is Barred By The Applicable Statute Of Limitations. ........................7 Stege's FEHA Claims Were Equitably Tolled During The Pendency Of The EEOC's Investigation, Determination And Conciliation Process, Which Ended On Or Before June 9, 2005. .......................................7 Stege Has A Right To Intervene In This Action But No Right To Bring Claims Otherwise Barred By The SOL. .........................................................9 Stege's FEHA Claims May Not Be Tolled Under A "Continuing Violation" Theory. ......................................................................................10

3.

Stege's Motion Is Barred By The Doctrine Of Laches.............................................11 i.

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TABLE OF CONTENTS (continued) Page 1. The EEOC Filed Its Complaint After An Unreasonable Delay Of More Than 26 Months After The Close Of Conciliation; Stege Delayed For 31 Months. ..................................................................................................12

C.

Georgia-Pacific Suffered Prejudice As A Result Of The EEOC's And Stege's Unreasonable Delay. ...............................................................................................13 Stege's Motion To Intervene Against Defendant Georgia-Pacific Holdings, LLC Should Be Denied Because Georgia-Pacific Holdings, LLC Has Never Been Stege's Employer. ..........................................................................................15 Corrugated Is Stege's Employer Under The Economic Reality Test. ...........15 Corrugated Is Stege's Employer Under The Single Employer Test. .............16

Stege Has No Facts To Show That Holdings Is The Alter Ego Of Corrugated.........18

CONCLUSION..................................................................................................................22

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TABLE OF AUTHORITIES PAGE CASES American Telephone & Telegraph Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586 (9th Cir. 1996) ......................................................................................................20 Assoc. Vendors, Inc. v. Oakland Meat Co., 210 Cal. App. 2d 825 (1962) ....................................................................................................19 Bell Atlantic Bus. Sys. Servs. v. Hitachi Data Sys. Corp., 849 F. Supp. 702 (N.D.Cal. 1994) ............................................................................................19 Bonnette v. California Health & Welfare Agency, 704 F.2d 1465 (9th Cir. 1983) ..................................................................................................16 Boone v. Mechanical Specialties Co., 609 F.2d 956 (1979)..................................................................................................... 11, 13, 14 Brown-Mitchell v. Kansas City Power & Light Co., 267 F.3d 825 (8th Cir. 2001) ...................................................................................................11 Catani v. Chiodi, 2001 WL 920025, *3-5 (D.Minn. Aug. 13, 2001).....................................................................21 Cellini v. Harcourt Brace & Co., 51 F. Supp 2d 1028 (S.D. Cal. 1999) ........................................................................................18 Chao v. A-One Medical Servs., Inc., 346 F.3d 908 (9th Cir. 2003) ....................................................................................................16 Daniels v. Kerr McGee Corp., 841 F. Supp. 1133 (D. Wyo. 1993)...........................................................................................21 Danjaq LLC v. Sony Corp., 263 F.3d 942 (9th Cir. 2001) ........................................................................................ 12, 13, 14 Doe v. Unocal Corp., 248 F.3d 915 (9th Cir. 2001) ..............................................................................................20, 21 Doney v. TRW, Inc., 33 Cal. App. 4th 245 (1995) .....................................................................................................19 Downs v. Department of Water & Power, 58 Cal. App. 4th 1093 (1997) ...............................................................................................8, 11 EEOC v. Alioto Fish Company, Ltd., 623 F.2d 86 (9th Cir. 1980) .......................................................................................... 11, 12, 13 EEOC v. Bell Helicopter, 426 F. Supp. 785 (N.D. Tex. 1976)) .........................................................................................12 EEOC v. Firestone Tire and Rubber Co., 626 F.Supp. 90 (M.D. Ga., 1985) .........................................................................................8, 12 EEOC v. Liberty Loan Corp., 584 F.2d 853 (8th Cir. 1978))...................................................................................................12 Fidenas AG v. Honeywell, Inc., 501 F. Supp. 1029 (S.D.N.Y. 1980)..........................................................................................21

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TABLE OF AUTHORITIES (CONTINUED) PAGE Frank v. U.S. West, Inc., 3 F.3d 1357 (10th Cir. 1993) ........................................................................................ 15, 17, 18 Heath v. AT & T Corp., 2005 WL 2206498, *7 (N.D. Cal., 2005)....................................................................................8 Institute of Veterinary Pathology, Inc. v. Cal. Health Labs., 116 Cal. App. 3d 111 (1981) ..............................................................................................19, 20 International T. & T. Corp. v. General T. & E. Corp., 518 F.2d 913 (9th Cir. 1975))...................................................................................................11 Isenberg v. Calif. Emp. Stabilization Comm'n, 30 Cal. 2d 34 (1947)) ...............................................................................................................16 Johnson v. City of Loma Linda, 24 Cal. 4th 61 (2000) ...............................................................................................................11 Kasprzak v. Amer. Gen. Life & Acc. Ins. Co., 914 F. Supp. 144 (E.D. Tex. 1996) .........................................................................................21 Kramer Motors, Inc. v. British Leyland, Ltd., 628 F.2d 1175 (9th Cir. 1980) ..................................................................................................20 Laird v. Capital Cities/ABC, Inc., 68 Cal. App. 4th 727 (1998) ................................................................................... 15, 16, 17, 18 Las Palmas Assocs. v. Las Palmas Ctr. Assocs., 235 Cal. App. 3d 1220 (1991) ..................................................................................................18 Lockard v. Pizza Hut, Inc., 162 F.3d 1062 (10th Cir. 1998) ................................................................................................18 M/V American Queen v. San Diego Marine Constr. Corp., 708 F.2d 1483 (9th Cir. 1983) ..................................................................................................20 Mason v. Burkett, 756 F.Supp. 679 (D. Conn. 1991).............................................................................................21 Mathieu v. Norrell Corp., 115 Cal. App. 4th 1174 (2004) ...................................................................................................8 Mayfield v. Sara Lee Corp., 2005 U.S. Dist. LEXIS 42458, at *7 (N.D. Cal. Jan. 13, 2005).................................................18 Mesler v. Bragg Mgmt. Co., 39 Cal.3d 290 (1985)) ..............................................................................................................18 Mid-Century Ins. Co. v. Gardner, 9 Cal. App. 4th 1205 (1992) .....................................................................................................18 Pruitt v. City of Chicago, Illinois, 472 F.3d 925 (7th Cir. 2006) ....................................................................................................13 Richards v. CH2M Hill, Inc., 26 Cal.4th 798 (2001) ..............................................................................................................10 Roman Catholic Archbishop v. Super. Ct., 15 Cal. App. 3d 405 (1971) ................................................................................................19, 20

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TABLE OF AUTHORITIES (CONTINUED) PAGE Salgado v. Atlantic Richfield Co., 823 F.2d 1322 (9th Cir. 1987) ....................................................................................................8 Say & Say, Inc. v. Ebershof, 20 Cal. App. 4th 1759 (1993) ...................................................................................................18 Singh v. 7-Eleven, Inc., 2007 WL 715488, at *7 (N.D. Cal. Mar. 8, 2007).....................................................................16 Sonora Diamond Corp. v. Super. Ct., 83 Cal. App. 4th 523 (2000) .....................................................................................................19 Tomaselli v. Transamerica Ins. Co., 25 Cal. App. 4th 1269 (1994) .............................................................................................19, 20 Tran v. Farmers Group, Inc., 104 Cal. App. 4th 1202 (2002) .................................................................................................19 United States v. Bestfoods, 524 U.S. 51 (1998)...................................................................................................................21 Von Grabe v. Sprint PCS, 312 F. Supp. 2d 1285 (S.D. Cal. 2003) .....................................................................................21 Walker v. Signal Cos., Inc., 84 Cal. App. 3d 982 (1978) ......................................................................................................20 Wickham v. Southland Corp., 168 Cal. App. 3d 49 (1985) ......................................................................................................16 Yanowitz v. L'Oreal USA, Inc., 36 Cal. 4th 1028 (2005)............................................................................................................10 STATUTES 29 C.F.R § 791.2(b) .......................................................................................................................16 42 U.S.C. § 2000e-5(f)(1) ............................................................................................................4, 9 Cal. Code Regs., tit. 8 § 11040(2)(H) .............................................................................................16 Cal. Gov't Code § 12965 ...................................................................................................... 3, 7, 8, 9

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I.

INTRODUCTION Charging Party Janet Stege's ("Stege") motion is untimely. She seeks to intervene in

this action more than three years (37 months) after she received a right-to-sue letter from the Department of Fair Employment and Housing ("DFEH") and more than two-and-a-half years (31 months) after the EEOC completed its investigation, determination, and conciliation efforts and notified both Stege and Georgia-Pacific Corporation of the same. The EEOC, for its part, waited more than two years (26 months) after the close of conciliation to file its complaint. Stege's state law claims ("FEHA claims") are now barred by the applicable SOL. That the EEOC filed an untimely complaint does not resurrect Stege's state cause of action. Stege's FEHA claims were tolled only during the pendency of the EEOC's investigation, determination, and conciliation, all of which had officially ended by June 9, 2005, when the EEOC declared such efforts "futile". As discussed below, Stege had, at most, until June 9, 2006 to file her own action alleging FEHA claims, but failed to do so. The EEOC's claim is barred by the doctrine of laches. By filing her Motion to Intervene and Complaint in Intervention (together, "Motion") not until the eve of her own deposition, Stege compounds unreasonable delay upon unreasonable delay. Thus, Stege's Motion is, a fortiori, barred by laches. Moreover, Stege's Motion names as a defendant an entity that is not (and never has been) Stege's employer. Georgia-Pacific Corrugated, LLC ("Corrugated") is Stege's employer and is the only proper defendant in this action (assuming, arguendo, that the Motion were not barred by laches and the SOL). Georgia-Pacific Holdings, LLC ("Holdings"), the indirect parent of

Corrugated, has never been Stege's employer. Stege cannot show that Holdings ever had any connection with her employment or engaged in any conduct toward her. Thus, Holdings can have no direct liability on any of the Stege's employment-related claims. Further, in order for a parent corporation to have derivative liability for the conduct of a subsidiary, it must be established that the parent is the "alter ego" of the subsidiary. Here, Stege cannot establish, nor has she alleged, that Holdings is an alter ego of Corrugated. Thus, Holdings can have no derivative liability on any of Stege's claims.
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For all of the foregoing reasons, this Court should deny Stege's Motion. II. STATEMENT OF FACTS A. Stege's Work History At Georgia-Pacific Stege was hired at Georgia-Pacific's ("GP") South San Francisco corrugated box plant almost 20 years ago. (See Complaint in Intervention ¶¶ 9-10). At the South San Francisco plant, Stege worked as a Stacker Operator, a Taper Operator, a General Floor Worker, an Equalok Assistant Operator, and a Press-Flexo Assistant Operator, often also serving as a "Rover" because of her knowledge of a variety of positions. (Declaration of Curtis Kimbro ("Kimbro Decl") ¶ 2.) From approximately April 2001 until the closure of the South San Francisco plant in April 2004, Stege worked as a janitor. (Id.) Stege asserts that, at her request, she was accommodated with a 40-hour per week work restriction during the last several years of her employment at the South San Francisco plant. (Id.; see also Declaration of Margaret Hart Edwards ("Edwards Decl."), Exh. A (Stege's EEOC charge)). The janitor position Stege held from 2001 to 2004 was part of the accommodation GP provided to Stege: unlike production line positions, the janitor position did not require mandatory overtime, pursuant to the collective bargaining agreement ("CBA") in place at the time between GP and the Graphic Communications International Union. (Kimbro Decl. ¶ 2). B. In April 2004, Georgia-Pacific Gave Stege The Option Of Continuing Employment At The New San Leandro Plant, With The Understanding That She Would, On Occasion, Be Required To Work Mandatory Overtime. Stege and the EEOC allege that, in early April 2004, South San Francisco plant manager Joe McGovern told Janet Stege that she would not be granted a strict 40-hour per week schedule when she began working at the new San Leandro plant. (Edwards Decl. Exhs. A, B; see also Complaint In Intervention at ¶ 12; Joint Case Management Statement at p. 2, "According to the EEOC"). Stege and the EEOC further allege that, on April 12, 2004, McGovern and HR manager Aaron Ybarrondo gave Stege the option of accepting continued employment at the new San Leandro plant, with the understanding that Stege would be required, on occasion, like all other unionrepresented employees, to work overtime. (Id.) Stege chose to accept employment at the new San Leandro plant without a 40-hour per week work restriction and, on April 14, 2004, obtained a note

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from her physician, releasing her 40-hour per week work restriction.1 (Id.; Exh. B). Starting in April 2004 and continuing to the present, Stege has been required, on occasion, to work overtime pursuant to the CBA. (Kimbro Decl. ¶ 3). She has continued to be given a swing shift, per her request. (Id.) C. In November 2004, Stege Timely Filed An EEOC/DFEH Charge Based On The Events Of April 2004. Seven months later, on November 24, 2004, Stege filed a charge with the EEOC (and the DFEH, pursuant to a work-sharing agreement), alleging that GP had discriminated against Stege because GP had revoked or discontinued Stege's 40-hour restriction in April 2004. (Edwards Decl., Exh. A). The DFEH issued Stege a right-to-sue letter on December 1, 2004, informing Stege that the EEOC would be investigating the charge and that Stege had one year to file her own civil action alleging FEHA claims. (Id., Exh. C). The letter emphasized: "This Right-To-Sue Notice allows you to file a private lawsuit in State court." (Id.) Citing Government Code section 12965, the letter informed Stege this one-year period would be tolled "during the pendency of the EEOC's investigation." (Id.) Finally, the letter cautioned that the "DFEH does not retain case records beyond three years after a complaint is filed." (Id.) D. The EEOC Investigated Stege's Charge Until March 2005 And Attempted To Conciliate With Georgia-Pacific Until June 2005. GP filed its position statement with the EEOC on January 12, 2005. (Edwards Decl., Exh. D). The EEOC conducted its investigation in early 2005, interviewing several witnesses, including: former Plant Manager and Shift Superintendent Joe McGovern (March 7, 2005); former Shift Superintendent Mike Belmessieri (January 25, 2005); former union steward Ron Orr (February 14, 2005); and former employee Albert Conrad (February 14, 2005). (Id. ¶ 3). On March 24, 2005, after the investigation had concluded, the EEOC issued its Letter of Determination, informing GP "there is reasonable cause to believe that your organization has discriminated against" Stege and inviting GP to "participate in the conciliation process." ("McDonald Decl."), Exh. A). On June 9, 2005, the EEOC issued a letter informing GP that the conciliation process
1

(Declaration of Amy McDonald

Stege's physician's note referred to the conversations of early April 2004 as constituting an "ultimatum".

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had been "unsuccessful" and that "further conciliation efforts would be futile[.]" (Id., Exh. B). Having concluded its investigation, determination, and conciliation efforts, the EEOC stated that the matter was being forwarded to Regional Attorney William Tamayo for "litigation review." (Id.) The EEOC was required also to provide such notification2 to Stege, pursuant to 42 U.S.C. § 2000e-5(f)(1), which provides, in relevant part: "if within one hundred and eighty days from the filing of such charge ... the Commission has not filed a civil action under this section or ... has not entered into a conciliation agreement to which the person aggrieved is a party, the Commission ... shall so notify the person aggrieved and within ninety days after the giving of such notice a civil action may be brought against the respondent named in the charge ... by the person claiming to be aggrieved[.]" (emphasis supplied). E. After Many Of The Individuals Involved In The Events Of April 2004 Had Left The Company, Stege Requested And Received A Reasonable Accommodation In February 2006. Both Joe McGovern and Ron Huff, the former Plant Manager and General Manager, respectively, left GP more than two years ago. (Kimbro Decl. ¶ 4). The same is true for Ron Orr, former union steward, and Cheryle Webb-Nelson, former HR Manager. (Id.) Aaron Ybarrondo, the HR Manager who was involved in the so-called April 2004 "ultimatum," moved from the area more than two years ago and now works for GP in Georgia. (Id.) One of Stege's former supervisors, former Shift Superintendent Mike Belmessieri, has been on extended medical leave and has not worked regularly at Corrugated since serving as a juror in the Scott Peterson trial in summer 2004. (Id.) The current superintendent for Corrugated's San Leandro plant is Alex Reyes. (Kimbro Decl. ¶ 5). The current HR Manager for the San Leandro plant is Curtis Kimbro.3 (Id.) Neither Kimbro, Yeager, nor Reyes were directly involved in the events of April 2004, when Stege says that she was told unequivocally that, in order to work at the San Leandro plant, she would be
Defendant does not have a copy of the letter by which the EEOC informed Stege of the close of conciliation. On January 14, 2008, immediately after being served with Stege's motion to intervene (January 12 and 13 were weekend days), Defendant served a supplemental Request for Production of Documents on the EEOC, specifically requesting a copy of this letter. (Edwards Decl. ¶ 5). 3 Bill Yeager is an Area HR Manager, who provides services to the San Leandro plant and other Northern California facilities. (Declaration of Bill Yeager ("Yeager Decl.") ¶ 1).
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required, on occasion, like all other employees, to work overtime pursuant to the CBA. (Id.) Reyes and Yeager do, however, have first-hand knowledge of Stege's February 2006 request for reasonable accommodation and Corrugated's response. (See Yeager Decl. ¶¶ 2-4). F. Stege's February 2006 Reasonable Accommodation On February 9, 2006, while employed as a Strapper Operator, Stege gave Reyes a handwritten note indicating that her job was "exasperating" her medical condition. (Yeager Decl. ¶ 2, Exh. A). In this letter, Stege requested, as a "reasonable accommodation," either: (1) that

Corrugated fix the equipment on which Stege was working; or (2) that Corrugated transfer Stege to another machine. (Id.) In response, Corrugated and Stege discussed possible options for a reasonable accommodation for Stege. (Id.) On February 17, 2006, Stege and Corrugated signed a letter agreement (also signed by chief union steward Raymond Murray) memorializing that Stege had expressed a desire to move to the Cascader Department and that Corrugated and Stege agreed that Stege could perform all the essential functions of that job without adversely affecting her medical condition. (Id. ¶ 3, Exh. B). Stege chose the Assistant Operator position over the Rover position. (Id.) The letter memorialized the fact that Stege "requested the transfer during an interactive conversation about [her] request for a reasonable accommodation, and that [Stege] agree[d] to the terms of the transfer." Stege was invited to contact her supervisor if she had any difficulties in the Cascader Department. (Id.) Neither Stege's February 9, 2006 request for reasonable accommodation nor GP's February 17, 2006 response addresses mandatory overtime or 40-hour per week restrictions. (Id.) Stege, Corrugated, and the Union understood that that the mandatory overtime question had been settled, for better or worse, in April 2004. (Id. ¶ 4) /// /// /// /// ///
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G.

Stege Has Taken More Than Seven Months Of Leave Since December 1, 2004, When She Received The Right-To-Sue Letter. As her only source of potential back pay liability, Stege alleges that she lost income

because Corrugated's mandatory overtime policy aggravated her medical condition to the point that she was forced to take medical leaves of absence -- notwithstanding the fact that Stege has received at least $600.00 per week (roughly $15.00 per hour) while on leave. (See Complaint In Intervention at ¶ 13, Prayer at ¶ 1; Kimbro Decl. ¶ 6). Since December 1, 2004, when she received the right-tosue letter, Stege has taken more than seven months of leave. (Kimbro Decl. ¶ 6). Since the end of the conciliation process on June 9, 2005, Stege has taken more than four months of leave. (Id.) H. Twenty-Six Months After The End Of Conciliation, The EEOC Filed The Instant Lawsuit In August 2007. The EEOC filed the instant lawsuit in August 1, 2007. In its complaint, the EEOC offered no justification for -- nor any discussion of -- the 26-month chasm separating the end of conciliation and the filing of the complaint. In its Answer, filed October 1, 2007, GP asserted, in relevant part, that the EEOC's claims were barred because of: (1) laches; (2) unclean hands; (3) waiver; (4) estoppel; and (5) no current threat of irreparable harm. Further, GP expressly and repeatedly indicated that that the EEOC had sued an entity other than Stege's employer (Corrugated). I. Forty-Five Months After The "Ultimatum," 38 Months After She Filed Her EEOC Charge, 37 Months After She Received Her Right-To-Sue Letter, And 31 Months After She Was Informed That Conciliation Had Been Unsuccessful, Stege Filed The Instant Motion To Intervene. Stege filed the instant motion to intervene on January 10, 2008. Like the EEOC, Stege offered no justification for the 31-month gap between the end of conciliation and the filing of her Motion.4 In fact, Stege did not even meet with attorney Kathryn Dickson until December 28, 2007. (Declaration of Kathryn Dickson ¶ 3).
4

Significantly -- and particularly surprising, given the

Stege correctly asserts that the SOL for her FEHA claims was tolled during the EEOC's investigation and conciliation efforts (which had ended by June 9, 2005). (Complaint In Intervention ¶ 17). Stege then makes a 26-month leap to the conclusion that her FEHA claims were also tolled during the pendency of the EEOC's "timely" filed action. (See id.) In her Memorandum of Points and Authorities, Stege also fails to justify -- or even mention -- these 26 months.
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failure-to-reasonably-accommodate claims at issue -- there is no mention in the Motion of the fact that Stege requested and received a reasonable accommodation in February 2006. J. Corrugated Is Stege's Employer; Holdings Is Not. Only Corrugated has the power to hire and fire employees at the San Leandro plant, including Stege. (Yeager Decl. ¶ 5). Likewise, only Corrugated has the power to determine Stege's work schedule and compensation. (Id.) All day-to-day operations at Corrugated's San Leandro plant are controlled by managers at the Corrugated facility. (Id.) None of the managers at the San Leandro plant are employees of Holdings. (Id.) Corrugated maintains Stege's employment records. Holdings plays no role in any of these actions. (Id.) Holdings is the indirect sole equity holder of Corrugated and other subsidiaries. (Declaration of Stefanie Box ("Box Decl.") ¶ ¶ 3). Corrugated and Holdings each keep separate corporate minutes and records. (Id.) Each entity has its own business licenses and respective taxpayer identification numbers. (Id.) Further, Corrugated and Holdings were incorporated at different times. (Id.) Other than activities associated with it being a holding company for a

consolidated group, Holdings does not engage in any business or other activity. (Id.) Holdings has no employees. (Id.) Corrugated is adequately capitalized and has sufficient liquid assets to satisfy a judgment of the magnitude sought by Stege. (Id. at ¶ 4) The EEOC and Corrugated have entered into a stipulation that Corrugated, as Stege's only employer, is the only proper defendant in this action and have agreed that the EEOC's Complaint may be amended to include Georgia-Pacific Corrugated, LLC and to dismiss GeorgiaPacific, LLC. (Edwards Decl. ¶ 4). III. LEGAL ARGUMENT A. Stege's Motion Is Barred By The Applicable Statute Of Limitations. 1. Stege's FEHA Claims Were Equitably Tolled During The Pendency Of The EEOC's Investigation, Determination And Conciliation Process, Which Ended On Or Before June 9, 2005.

Government Code section 12965 provides that the SOL for Stege's FEHA claims is one year from the issuance of a right-to-sue notice (December 1, 2004, in this case). Section 12965
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further provides that the SOL for FEHA claims arising from a charge filed jointly with the EEOC and the DFEH, which charge is investigated solely by the EEOC, is tolled during the pendency of the EEOC investigation.5 The SOL "expires when the federal right-to-sue period to commence a civil action expires, or one year from the date of the right-to-sue notice by the Department of Fair Employment and Housing, whichever is later." Section 12965 expressly provides that it is intended to codify the holding of Downs v. Department of Water & Power, 58 Cal. App. 4th 1093, 1102-03 (1997), which provides, in relevant part (emphasis supplied): If the one-year statute were not tolled, a plaintiff would often be compelled to pursue a state law action before the EEOC had completed its investigation. If the EEOC issued an accusation or achieved conciliation, the state law action would become redundant or moot. Tolling the one-year statute for bringing the FEHA action until the EEOC completes its determination provides a defendant with notice of the charges, but relieves a plaintiff from pursuing duplicative actions simultaneously on the same set of facts. Moreover, disposition of a case by the EEOC may render a state court action unnecessary or easier and less expensive to resolve. (citing Salgado v. Atlantic Richfield Co., 823 F.2d 1322, 1325-26 (9th Cir. 1987) (plaintiff's FEHA claims may be tolled during "the EEOC's processing of his claims" in order to allow the EEOC "to give notice to employers charged with a violation and to undertake efforts at conciliation"). The EEOC's investigative "process" ends when the EEOC abandons conciliation efforts. See EEOC v. Firestone Tire and Rubber Co., 626 F.Supp. 90, 94 (M.D.Ga., 1985). In the present matter, the facts demonstrate that the EEOC had "completed its investigation" by March 2005. By March 24, 2005, the EEOC had "complete[d] its determination" that there was reasonable cause to pursue Stege's charge. This gave GP notice that it was "charged with a violation" and allowed the EEOC "to undertake efforts at conciliation," a process which had proved "futile" by June 9, 2005. Thus, the tolling of the FEHA SOL ended on of June 9, 2005. The EEOC may argue that equitable tolling continued for the next 26 months because
By contrast, a plaintiff's common law employment claims are not tolled during an EEOC investigation. Mathieu v. Norrell Corp., 115 Cal. App. 4th 1174, 1189 (2004) (citations omitted); see also Heath v. AT & T Corp., 2005 WL 2206498, *7 (N.D. Cal., 2005) (same).
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it was still "processing" Stege's claim. Such argument is unavailing, in light of the case law which expressly includes investigation, determination, and conciliation -- but not years-long, postconciliation rumination6 -- within the EEOC's "processing" of claims. Defendant does not dispute that the EEOC, with its limited resources, is entitled to move deliberately when deciding whether to investigate a charge. Likewise, once the EEOC has commenced an investigation, there is no doubt that Congress intended that the EEOC be able to move deliberately before deciding whether to issue a determination of reasonable cause. Lastly, in furtherance of the public policy favoring out-of-court dispute resolution, the EEOC may proceed deliberately when attempting to conciliate a charge. There is nothing, however, to suggest that, once the investigation, determination, and conciliation of a charge have been completed, the EEOC may engage in perpetual "processing" of the charge and thereby forever toll the SOL for both itself and for the charging party. 2. Stege Has A Right To Intervene In This Action But No Right To Bring Claims Otherwise Barred By The SOL.

It is undisputed that a charging party may intervene in an EEOC action. See, e.g., General Tel. Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318, 326 (1980). But Stege may not bring FEHA claims, which are barred by the applicable SOL. The statutory provision cited by Stege in support of her assertion that she may intervene as a matter of right, 42 U.S.C. 2000e-5(f)(1), also provides as follows: [I]f within one hundred and eighty days from the filing of [a] charge ... the Commission has not filed a civil action under this section or ... has not entered into a conciliation agreement to which the person aggrieved is a party, the Commission ... shall so notify the person aggrieved and within ninety days after the giving of such notice a civil action may be brought against the respondent named in the charge ... by the person claiming to be aggrieved[.]" As of June 9, 2005, approximately 180 days from the filing of the charge, the EEOC determined that it had failed to reach a conciliation agreement with GP. Accordingly, under section 2000e-5(f)(1), Stege had 90 days (until September 8, 2005) to bring her own claim. California Government Code section 12965 provides that a charging party's SOL for FEHA claims "expires when the federal
This use of this term assumes, arguendo, that some intra-agency deliberation actually occurred during these 26 months. Neither the EEOC nor Stege has put forth evidence of any such alleged "processing."
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right-to-sue period to commence a civil action expires, or one year from the date of the right-to-sue notice by the Department of Fair Employment and Housing, whichever is later." Under this

provision, therefore, Stege had until December 1, 2005 to bring her own FEHA claims based on the "ultimatum" of April 2004. 3. Stege's FEHA Claims May Not Be Tolled Under A "Continuing Violation" Theory.

An employee may not unreasonably delay the filing of a lawsuit based on the employer's alleged failure to reasonably accommodate her disability because such delay "would be contrary to the FEHA's statute of limitations and potentially prejudicial to the employer." Richards v. CH2M Hill, Inc., 26 Cal.4th 798, 822 (2001). When an employer makes clear that it will not grant an employee's request for accommodation, "justification for delay in taking formal legal action no longer exists." Id. At that point, "the employee is on notice that litigation, not informal conciliation, is the only alternative for the vindication of his or her rights" and "the statute of limitations for the violation begins to run. Id. The continuing violation doctrine is inapplicable when the employee is "on notice that further conciliatory efforts would be futile." See Yanowitz v. L'Oreal USA, Inc., 36 Cal.4th 1028,1059 (2005) (citing Richards, 26 Cal.4th at 823). In the instant matter, the accommodation sought by Stege (and denied in April 2004) which formed the sole basis for her November 2004 charge of discrimination, was the ability to work only 40 hours per week. Stege alleges that GP unequivocally informed her in April 2004 that she would be required, like all other employees, periodically to work overtime pursuant to the CBA. On April 12, 2004, Stege was given the choice of accepting a severance package or agreeing to work mandatory overtime. On April 15, 2004, Stege went to her physician and had her 40-hour per week restriction lifted. Since April 2004, Stege has been required to work periodic overtime, consistent with the fact that she no longer has a 40-hour restriction. Stege filed a charge with the EEOC, which investigated the matter and attempted to conciliate on Stege's behalf. Stege has been on notice since June 9, 2005 that "further conciliation efforts would be futile." (See McDonald Decl., Exh. B ("further conciliation efforts would be futile" as of June 9, 2005)).
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To be sure, Stege has continued to seek -- and to receive -- other reasonable accommodations, as described in the February 2006 letter agreement. However, this letter says nothing about mandatory overtime or Stege's pre-April 2004 40-hour work schedule. That matter was settled in April 2004, when GP made a decision that it could not allow Stege a strict 40-hour per week schedule and informed Stege of the same. GP has not wavered from the position it took in April 2004. Thus, assuming, arguendo, that the continuing violation doctrine was applicable at any time, it would have applied only until June 9, 2005, when "further conciliation efforts would [have been] futile," after which point the FEHA statute of limitations began to run. The very latest Stege could have filed her FEHA claims was June 9, 2006 -- the instant Motion is 17 months late. B. Stege's Motion Is Barred By The Doctrine Of Laches. Laches is an equitable limitation which bars an action where a party's unexcused or unreasonable delay has prejudiced its adversary. Boone v. Mechanical Specialties Co., 609 F.2d 956, 958 (1979) (citing International T. & T. Corp. v. General T. & E. Corp., 518 F.2d 913, 926 (9th Cir. 1975)); Johnson v. City of Loma Linda, 24 Cal.4th 61, 68 (2000) (same); cf. Downs, 58 Cal. App. 4th at 1100 (equitable tolling may apply to allow second action where: (1) the first action is timely filed; (2) no prejudice to defendants in gathering evidence to defend against the second claim; and (3) good faith and reasonable conduct by plaintiffs in filing the second claim). The "bare fact of delay creates a rebuttable presumption of prejudice." Boone, 609 F.2d at 958. Laches may apply either when the delay in bringing suit was caused by a private plaintiff or when the delay is the fault of an administrative agency. Brown-Mitchell v. Kansas City Power & Light Co., 267 F.3d 825, 828 (8th Cir. 2001). The EEOC's action is barred by the doctrine of laches because the EEOC filed this lawsuit after unreasonable delay which prejudiced Defendant. Stege's motion to intervene with FEHA claims would compound both the unreasonable delay and the prejudice and is, a fortiori, barred by laches. /// ///
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1.

The EEOC Filed Its Complaint After An Unreasonable Delay Of More Than 26 Months After The Close Of Conciliation; Stege Delayed For 31 Months.

In EEOC v. Alioto Fish Company, Ltd., after noting that "[l]ess extreme delays may also be unreasonable," the Ninth Circuit found unreasonable delay where the EEOC filed suit 20 months after the end of the conciliation process.7 623 F.2d 86, 88-89 (9th Cir. 1980) (citing EEOC v. Liberty Loan Corp., 584 F.2d 853, 857-58 (8th Cir. 1978)). In finding this delay unreasonable, the Alioto court specifically rejected the EEOC's workload as an excuse for unreasonable delay. Id. (citing EEOC v. Bell Helicopter, 426 F.Supp. 785, 793 (N.D.Tex. 1976)). The court focused on the delay "after the conciliation proceedings ended" as the keystone measure of the magnitude of delay which would be found to be unreasonable. Id. at fn. 2. In Firestone, the court held that plaintiff-intervenor's claims were barred by the doctrine of laches where plaintiff-intervenor did not file suit until 28 months after the EEOC ended its conciliation efforts and nine months after the EEOC filed suit. 626 F.Supp. at 94. The court held that plaintiff-intervenor's delay was unreasonable and that "the equities strongly favor dismissal of [the] case on grounds of laches[.]" Id. In the instant matter, the EEOC filed suit 26 months after the end of the conciliation process, six months longer than the delay held unreasonable in Alioto. Plaintiff-Intervenor Stege filed suit 31 months after the end of the conciliation process, three months longer than the delay held unreasonable in Firestone. Critically, neither Stege nor the EEOC has offered any excuse or

justification for the delay. Under Alioto, as a matter of law, a high workload does not excuse the EEOC's unreasonable delay after the end of the conciliation proceedings. Likewise, neither the EEOC nor Stege can plausibly claim that there was any kind of ongoing "investigation" -- the EEOC concluded its investigation in March 2005, regarding a final decision that had been unequivocally communicated to Stege in April 2004. For her part, Stege herself had clearly moved on -- she requested, received, and acknowledged that she received a reasonable accommodation in February 2006 which did not even mention mandatory overtime or a 40-hour work restriction.

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In Alioto, the EEOC issued its reasonable cause determination 19 months after the charge was filed and commenced conciliation proceedings ten months after that. Id.

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C.

Georgia-Pacific Suffered Prejudice As A Result Of The EEOC's And Stege's Unreasonable Delay. Courts have recognized two chief forms of prejudice in the laches context:

evidentiary and expectations-based. Danjaq LLC v. Sony Corp. 263 F.3d 942, 955 (9th Cir. 2001). Evidentiary prejudice includes: (1) lost, stale, or degraded evidence; and (2) witnesses whose memories have faded or who have died. Id. (internal citations omitted). A defendant may

demonstrate expectations-based prejudice by showing either that it took actions or suffered consequences that it would not have, had the plaintiff brought suit promptly. Id. To show prejudice, an employer does not need to show detrimental reliance on plaintiff's delay -- for example, that it destroyed records as a result of a belief that plaintiff would not sue. Pruitt v. City of Chicago, Illinois, 472 F.3d 925, 928-29 (7th Cir. 2006). Courts have found prejudice sufficient to apply the doctrine of laches where: · Plaintiff's delay "greatly enlarged [employer's] potential back pay liability" (Alioto, 623 F.2d at 88-89); · The employer's employment practices had changed significantly since the original charge was filed (Id.); · Managers who hired or supervised the charging party, and/or the charging party's union steward, were retired, elderly, or ill (Id.; Pruitt, 472 F.3d at 928-29); · Plaintiff's delay "dimmed the memories" of available witnesses (Alioto, 623 F.2d at 88-89; Pruitt, 472 F.3d at 928-29; Boone, 609 F.2d at 957-58); and · The manager alleged to have discriminated against charging party had moved outside of the district court's subpoena power (Pruitt, 472 F.2d at 928-29). Here, as in Alioto, the EEOC's and Stege's delay accounts for the lion's share of the potential back pay liability. See Section II(F), above. Stege seeks back pay for work she alleges she missed because being required to work overtime exacerbated her medical condition and forced her to take additional time off work. However, seven months of potential back pay liability occurred after Stege received the right-to-sue letter from the DFEH. Moreover, four months of potential back pay liability arose after the EEOC had completed its investigation, determination, and conciliation
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processes. Further, as in Alioto, Corrugated made significant changes in its employment practices with respect to Stege since the April 2004 decision to require Stege, on occasion, to work mandatory overtime pursuant to the CBA. Managers Reyes, Kimbro and Yeager have made

continuing efforts to accommodate Stege by allowing her to work in less stressful positions. See Section II(D), above. Corrugated granted Stege's request for a reasonable accommodation in

February 2006 and memorialized its agreement with Stege in a letter -- this was 14 months after Stege received her right-to-sue letter and seven months after the EEOC had completed its investigation, determination and conciliation. If Corrugated had known that the EEOC and Stege would subsequently file lawsuits -- 16 months and 21 months later, respectively -- or even that there was a possible lawsuit pending, Corrugated certainly would have taken that into account in February 2006. (See Yeager Decl. ¶¶ 2-4, Exhs. A, B). During Corrugated's meetings with Stege in February 2006, Stege gave absolutely no indication that she intended to file a lawsuit. (Id.)

Corrugated believed that it had negotiated a reasonable accommodation that was acceptable to both Stege and the Union -- a belief that was amply justified by the signatures on the letter agreement. (Id.) If Corrugated had known that Stege still claimed that the only reasonable accommodation was one which allowed her a strict 40-hour per week schedule, there would have been a different accommodation discussion. (Id.) In fact, there was no suit or investigation "pending": neither Stege nor the EEOC would file anything with this Court for the 26-month period following the end of conciliation. In other words, Corrugated took different actions because of the EEOC's and Stege's unreasonable delay in filing suit. See Danjaq, 263 F.3d at 955. Moreover, former union steward Ron Orr has left GP, as have former General Manager Ron Huff and former HR Manager Cheryle Webb-Nelson. Former Plant Manager Joe McGovern has moved to Iowa and is now beyond this Court's subpoena power. Former Shift Superintendent Mike Belmessieri is on extended medical leave and has not regularly worked at Corrugated since 2005. These individuals were interviewed by the EEOC in its investigation which concluded three years ago -- surely their memories have dimmed about the events of April 2004. Further, these individuals know nothing about Stege's February 2006 reasonable accommodation or
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the 17 months of Stege's employment since that time. In light of all of the foregoing reasons, neither Stege nor the EEOC can rebut the presumption of prejudice created by their unreasonable delay. See Boone, 609 F.2d at 958 D. Stege's Motion To Intervene Against Defendant Georgia-Pacific Holdings, LLC Should Be Denied Because Georgia-Pacific Holdings, LLC Has Never Been Stege's Employer. As the EEOC recognized when it submitted its First Amended Complaint on January 25, 2008, Corrugated is the only proper defendant in this action because Corrugated -- not Holdings -- employs Stege. The mere fact that Holdings is the indirect sole equity holder of Corrugated is in no way sufficient in and of itself to impose any liability on Holdings for any acts or omissions by Corrugated or any of Corrugated's employees. In the lead California case of Laird v. Capital Cities/ABC, Inc., 68 Cal. App. 4th 727 (1998), the plaintiff had been terminated from her position with a subsidiary company, and sued the parent corporation, Capital Cities/ABC, Inc. ("Cap Cities"), for various employment related claims. Affirming a grant of summary judgment in favor of the parent, Cap Cities, on the ground it was not the plaintiff's employer and, therefore, not liable on the plaintiff's claims, the Laird Court reiterated the well-established policy and law that the corporate form is entitled to great deference: An employee who seeks to hold a parent corporation liable for the acts or omissions of its subsidiary on the theory that the two corporate entities constitute a single employer has a heavy burden to meet under both California and federal law. Corporate entities are presumed to have separate existences, and the corporate form will be disregarded only when the ends of justice require this result. In particular, there is a strong presumption that a parent company is not the employer of its subsidiary's employees. Id. at 737 (emphasis added) (omitted citations include Frank v. U.S. West, Inc., 3 F.3d 1357, 1362 (10th Cir. 1993) ("The doctrine of limited liability creates a strong presumption that a parent company is not the employer of its subsidiary's employees, and the courts have found otherwise only in extraordinary circumstances") (emphasis added)). 1. Corrugated Is Stege's Employer Under The Economic Reality Test.

Courts have adopted the "economic reality" test to determine whether a joint employer relationship exists between two corporate entities, and consider whether the alleged
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employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records. Bonnette v. California Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1983). "[J]oint employment will generally be considered to exist when 1) the employers are not `completely disassociated' with respect to the employment of the individuals and 2) where one employer is controlled by another or the employers are under common control." Chao v. A-One Medical Servs., Inc., 346 F.3d 908, 918 (9th Cir. 2003) (citing 29 C.F.R § 791.2(b)). The element of control is also central to the determination of whether an entity is an employer in the context of California's wage and hour laws. IWC Wage Order 4-2001 defines "employer" as any person "who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours or working conditions of any person." Cal. Code Regs., tit. 8 § 11040(2)(H) (emphasis added). California courts have consistently recognized that the principal test for determining employment relationships is the right of control over the manner or means of accomplishing the results desired. Singh v. 7-Eleven, Inc., 2007 WL 715488, at *7 (N.D. Cal. Mar. 8, 2007) (citing Isenberg v. Calif. Emp. Stabilization Comm'n, 30 Cal.2d 34 (1947)); Wickham v. Southland Corp., 168 Cal. App. 3d 49, 54 (1985). With regard to the first three factors of the "economic reality" test, only Corrugated has the power to hire and fire Stege, to supervise Stege and to determine Stege's work schedule and compensation. All of the facts of Stege's employment show that Corrugated controlled the terms of Stege's employment. Stege has no evidence that Holdings plays a role in any of these actions. With regard to the final factor of the economic reality test, the maintenance of employment records, Corrugated maintains Stege's employment records. Holdings itself maintains no employment records pertaining to Stege or any other employees at the San Leandro plant. In sum, Stege alleges no facts to support a finding that Holdings is a joint employer of Stege. 2. Corrugated Is Stege's Employer Under The Single Employer Test.

The "single employer" test is used to determined whether a parent company is the putative employer of a plaintiff. That test has four factors: (1) interrelation of operations; (2)

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common management; (3) centralized control of labor relations; and (4) common ownership or financial control. Laird, 68 Cal. App 4th at 737. As the Laird court emphasized, by far, the most important factor is the third ­ centralized control of labor relations. It is the sine qua non. Under this factor, a plaintiff must prove that the parent exercises day-to-day control of routine employment matters within the subsidiary: The critical question is, `[w]hat entity made the final decisions regarding employment matters related to the person claiming discrimination?' A parent's broad general policy statements regarding employment matters are not enough to satisfy this prong. To satisfy the control prong, a parent must control the day-to-day employment decisions of the subsidiary. Id. at 738 (emphasis added) (quoting Frank, supra, 3 F.3d at 1363). The Laird court held that where a plaintiff fails to meet this critical prong, that failure is fatal to the employee's attempt to establish a joint employer ("integrated enterprise") interrelationship. The basis for the Court's decision in Laird is not new. Indeed, the Laird court heavily relied on federal authorities, including, as noted, the leading federal case of Frank, supra, 3 F.3d 1357. The Frank plaintiff was discharged from Northwestern Bell, a wholly owned subsidiary of U.S. West. Reiterating that there is no joint employment relationship unless the parent company exercises day-to-day control over the employment decisions of the subsidiary, the Court found that the parent corporation did not participate in "routine personnel decisions such as hiring, transferring, promoting, discharging, and disciplining" the subsidiary corporation's employees. Id. at 1360. The Frank court recognized that some level of control is inherent in a parentsubsidiary relationship. Accordingly, it held that the mere fact that the management chain of command ultimately led to the parent corporation's president was insufficient to create a triable issue as "this exercise of control is not to a degree that exceeds the control normally exercised by a parent corporation." Id. at 1362. Similarly, it was of no consequence that the parent's broad, general guidelines and equal employment policies were applicable to the subsidiary's employees, as this was "in no way evidence [of] an attempt by [the parent] to exercise day-to-day control over employment decisions" of its subsidiary. Id. The fact that the parent corporation maintained pension plans and other benefits for the subsidiary's employees also did not show excessive interrelatedness "[b]ecause
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it is not beyond the normal parent-subsidiary relationship for the parent to serve as ERISA Plan Administrator for the subsidiary." Id. For similar federal rulings, see also, e.g., Lockard v. Pizza Hut, Inc., 162 F.3d 1062 (10th Cir. 1998); Cellini v. Harcourt Brace & Co., 51 F. Supp 2d 1028 (S.D. Cal. 1999). The undisputed facts show that the corporate entity which controlled Plaintiff's dayto-day employment was Corrugated, not Holdings. Stege has no facts that Holdings was controlling any aspect of her employment. Corrugated's day-to-day operations at the San Leandro plant,

including employment decisions, are controlled by Corrugated managers who are not employed by Holdings. E. Stege Has No Facts To Show That Holdings Is The Alter Ego Of Corrugated. As Stege was not an employee of Holdings under the "joint employer" or "single employer" tests, the only way that Holdings could be held liable for the purported acts of Corrugated is if the Court were to find that Holdings was the "alter ego" of its subsidiary, Corrugated. Again, Stege neither alleges in her complaint, nor does she have any evidence to support, any "alter ego" theory of liability against Holdings. As a matter of law, the California courts have repeatedly held that "`the corporate form will be disregarded only in narrowly defined circumstances and only when the ends of justice so require.'" Laird, supra, 68 Cal. App. 4th at 737; Say & Say, Inc. v. Ebershof, 20 Cal. App. 4th 1759, 1768 (1993) (quoting Mesler v. Bragg Mgmt. Co., 39 Cal.3d 290, 301 (1985)). In addition, "there is a strong presumption that a parent company is not the employer of its sub