Free Uncategorized - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ) ) ) Plaintiff, ) ) vs. ) ) CHARLES SCHWAB CORPORATION,) ) ) Defendant. ) ) MARCELA JOHNSON, No. CV 04-0790-PHX-EHC ORDER IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

Pending before the Court are Defendant's Motions for Summary Judgment (Dkts. 132, 134) and Plaintiff's Motion to Strike New Evidence. (Dkt. 164). The Motions are fully briefed. BACKGROUND In 1999, Plaintiff began working for Defendant in its "Build-A-Broker" program. (Dkt. 135 at ¶ 1). In 2001, Plaintiff took a position as an Operations Specialist, reviewing checks and clearing debit cards. (Dkt. 135 at ¶ 2). On October 15, 2003, Jeff Hanson ("Hanson"), the director of the Electronic Order Review Department ("EOR"), complained to Cheri Melle ("Melle"), Plaintiff's supervisor, that Plaintiff spoke loudly and told his department to be quiet during a short awards ceremony. (Dkt. 135, ex. B at ¶ 17). Melle followed up on Hanson's complaint and asked Plaintiff if she had a problem with EOR. (Johnson's Separate Statement of Facts ("SSF") at ¶ 8). During the meeting, Plaintiff told Melle that there was an issue that could be an "HR issue." (SSF ¶ 9). Melle asked Plaintiff to tell her what the "HR issue" was. (Dkt. 135, ex.
Document 173 Filed 03/29/2007 Page 1 of 19

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

B at ¶ 9). Plaintiff told Melle that Ed Steinert ("Steinert"), an employee in EOR had "rubbed up against her." (Dkt. 135, ex. B at ¶ 9). Melle told Plaintiff that her allegation was serious and that she had to tell Human Resources ("HR"). (SSF ¶ at 10). Melle reported the allegation to Tammy Kornegay-Hodges ("Hodges"), the Senior Manager of HR. (Dkt. 135, ex. B at ¶ 9). Hodges scheduled a meeting for October 30, 2003, so that she could meet with Melle and Plaintiff to discuss Plaintiff's allegation. (SSF at ¶ 20). After the meeting was scheduled, Plaintiff went to Melle crying and told her that she did not want to go through with the meeting. (SSF at ¶ 23). She said that she did not want to get anyone in trouble and that she was ill. (SSF at ¶ 23). She also explained that one of her aunts had recently died and that another had just been diagnosed with cancer. (SSF at ¶ 23). Melle sent Hodges an e-mail about what Plaintiff had said. (Dkt. 151, ex. 17). Hodges responded stating that she had spoken to Plaintiff and that she was clear that they were going to meet. (Dkt. 151, ex. 17). Prior to the meeting, Plaintiff saw John Creelman ("Creelman"), another employee from EOR, on a smoke break and asked him to confirm that he saw Steinert massage Barbara Cazaubon's ("Cazaubon") shoulders and that he commented that it was "disgusting." (SSF at ¶ 27). Plaintiff said that she was going to meet with HR about the incident. (SSF ¶ at 28; Dkt. 135, ex. D at ¶ 6). He told her that someone would get fired. (SSF ¶ 29). Immediately after he returned from his smoke break, Creelman reported his conversation with Plaintiff to Jeff Bosio ("Bosio"), his Team Manager. (SSF at ¶ 30). Bosio informed Hodges of what Creelman had reported. (SSF at ¶ 30). At the meeting with Hodges and Melle, Plaintiff was crying and told Hodges and Melle that she did not want to talk about the issue and asked if they could "just forget the whole thing." (SSF at ¶ 32). Hodges told Plaintiff that she had a legal obligation to follow up on any allegation of inappropriate conduct. (SSF at ¶ 32). Plaintiff then related that on one occasion Steinert walked behind her chair while she was seated and massaged her shoulders and whispered "you look sexy today." (Dkt. 135, ex. C at ¶ 9).

-2Case 2:04-cv-00790-EHC Document 173 Filed 03/29/2007 Page 2 of 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Hodges asked Plaintiff if she had witnessed Steinert engaging in any other inappropriate behavior. (Dkt. 135, ex. C at ¶ 11). Plaintiff reported that she had witnessed Steinert massaging Cazaubon's shoulders and that Creelman would confirm that he believed that the behavior was disgusting. (SSF at ¶ 33). Hodges asked Plaintiff whether she approached Creelman before meeting with her, and she said no. (Dkt. 135, ex. C at ¶ 11). Hodges asked her the question a second time and Plaintiff said Creelman approached her and wanted to know what was wrong, but she did not relay the specifics concerning Steinert. (Dkt. 135, ex. C at ¶ 11). Plaintiff then reported that Steinert told Vanessa Ortiz ("Ortiz") that she looked "good enough to eat." (SSF at ¶ 34). Plaintiff said that Teresa McClung ("McClung"), was present when the statement was made. (SSF at ¶ 34). At the conclusion of the meeting, Plaintiff indicated that she did not want to report Steinert's behavior, that she did not want to get anyone fired, and that she had stopped talking to Steinert. (SSF at ¶ 35). Hodges told Plaintiff that she had a duty to investigate the matter. (Dkt. 135, ex. C at ¶ 12). Hodges began interviewing other employees. (Dkt. 135, ex. C at ¶ 13). Hodges met with Steinert on October 31, 2003. (Dkt. 135, ex. C at ¶ 13). Steinert did not recall that he ever massaged Plaintiff's shoulders, but indicated that it was possible. (Dkt. 135, ex. C at ¶ 14; Dkt. 151, ex. 2 at pp. 129-30). Steinert denied telling Plaintiff that she "looked sexy today." (Dkt. 135, ex. C at ¶ 14). Steinert acknowledged that he may have told her that she looked "nice" or was "wearing a nice outfit." (Dkt. 135, ex. C at ¶ 14). Steinert also admitted that he had discussed Plaintiff's weight loss and that her breasts were smaller. (Dkt. 135, ex. C at ¶ 14). Steinert was instructed not to massage any employee in the workplace. (Dkt. 135, ex. C at ¶ 15). On November 3, 2003, Hodges met with Creelman. (Dkt. 135, ex. C at ¶ 16). Creelman said that Plaintiff approached him on his break and told him she had a meeting with HR later that morning and was going to allege that Steinert sexually harassed her. (Dkt. 135, ex. C at ¶ 16). Creelman confirmed that he had seen Steinert massaging Cazaubon's shoulders. (Dkt. 135, ex. C at ¶ 16). Creelman said that he reported what Plaintiff was saying

-3Case 2:04-cv-00790-EHC Document 173 Filed 03/29/2007 Page 3 of 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

to his Team Leader, Bosio, because Plaintiff was whispering and he thought that she was trying to get him to corroborate her allegations against Steinert. (Dkt. 135, ex. C at ¶ 16). On November 4, 2003, Hodges again spoke with Plaintiff. (Dkt. 135, ex. C at ¶ 17). During their conversation, Plaintiff acknowledged that she had approached Creelman and that she denied approaching him only because she did not want him to get in trouble. (Dkt. 135, ex. A at p. 176). On the same day, Hodges met with McClung. (Dkt. 135, ex. C at ¶ 19). McClung said that Steinert could be annoying by playing his music loud. (Dkt. 151, ex. 18 at p. 209). McClung also stated that Steinert was "touchy, feely" and that when he would greet individuals he would "rub" or "pat" them on the back. (Dkt. 151, ex. 18 at pp. 213-14). She denied having any knowledge of Steinert telling Oritz that she "looked good enough to eat." (Dkt. 135, ex. C at ¶ 19). Later that day, Hodges also met with Ortiz. (Dkt. 135, ex. C at ¶ 20). Ortiz denied that Steinert had told her that she "looked good enough to eat" or anything she construed as inappropriate. (Dkt. 135, ex. F at ¶¶ 9, 10). Hodges again met with Creelman to confirm what he understood Plaintiff's intention to be on October 20, 2003. (Dkt. 135, ex. C at ¶ 21). Creelman stated that Plaintiff was trying to get him to "buy into" her allegations against Steinert. (Dkt. 135, ex. C at ¶ 21). After Hodges' investigation, she concluded that Plaintiff had been dishonest in violation of company policy and recommended that she be terminated. (Dkt. 135, ex. C at ¶ 24). Melle and Lisa Gee, the Director of Client Services Department, agreed. (Dkt. 135, ex. C at ¶ 24). On November 5, 2003, Plaintiff was orally informed that she was being terminated for her dishonesty during the investigation. (Dkt. 135, ex. M at p. 9). Plaintiff filed a claim with the Equal Employment Opportunity Commission on November 10, 2003, alleging that her termination was the result of discrimination based on sex. (Dkt. 135, ex. A, pp. 204-05). Plaintiff amended her EEOC complaint on December 5, 2003, to include a claim asserting that the termination was based on her national origin. (Dkt. 135, ex. A, pp. 204-05). The EEOC issued a right-to-sue letter on January 26, 2004. (Dkt. -4Document 173 Filed 03/29/2007 Page 4 of 19

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

135, ex. L). On June 30, 2004, Plaintiff filed a complaint with the National Labor Relations Board ("NLRB") alleging that she had been retaliated against in connection with her sexual harassment claim. (Dkt. 135, ex. M). The NLRB dismissed her complaint. (Dkt. 135, ex. M). Plaintiff filed this case on April 22, 2004.1 (Dkt. 1). She filed her First Amended Complaint on July 16, 2004, alleging that she was sexually harassed, discriminated against based on her sex and national origin, and that Defendant retaliated against her for her complaint of sexual harassment. (Dkt. 2). On August 31, 2004, Defendant filed an Answer claiming that Plaintiff was fired because she made false allegations of sexual harassment and lied during the investigation of her sexual harassment claim. (Dkt. 5). On March 31, 2006, Defendant filed a Motion for Summary Judgment re: Liability and a Motion for Summary Judgment re: Damages. Plaintiff responded (Dkts. 152, 153) and Defendant replied. (Dkts. 161, 162). On June 26, 2006, Plaintiff filed a Motion to Strike New Evidence introduced in Defendant's Replies to its Motions for Summary Judgment. (Dkt. 164). Defendant responded (Dkt. 168) and Plaintiff replied. (Dkt. 169). STANDARD OF REVIEW Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment shall be entered if the pleadings, depositions, affidavits, answers to interrogatories, and admissions on file show that there is no genuine dispute regarding the material facts of the case and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c) (2005). The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in their favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Evidence submitted in support of a motion for summary judgment must be admissible under the Federal Rules of Evidence. See Fed. R. Civ. P. 56(e); Beyene v. Coleman Sec. Services, Inc., 854 F.2d 1179, 1181 (9th Cir. 1988) ("It is well settled that only admissible evidence may be considered by the trial court in ruling on a motion for summary judgment.").

Plaintiff has been represented by her counsel of record throughout these proceedings. She was likewise represented throughout the proceedings held before the NLRB. -5Document 173 Filed 03/29/2007 Page 5 of 19

1

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Additionally, courts generally decline to consider arguments raised for the first time in a reply brief. See, e.g., United States v. Bohn, 956 F.2d 208, 209 (9th Cir.1992) (noting that courts generally do not consider arguments raised for the first time in a reply brief). DISCUSSION I. Plaintiff's Motion to Strike New Evidence in Defendant's Replies. Plaintiff has filed a Motion requesting that the Court strike portions of the Replies that Defendant filed in support of its Motions for Summary Judgment. Plaintiff argues that Defendant has improperly attached evidence to its Replies that is hearsay or new evidence. Plaintiff argues that the Court cannot consider such evidence and should accordingly strike the objectionable portions of Defendant's Replies. A. Objections to Exhibit A of the Motion for Summary Judgment re: Liability Plaintiff asks the Court to strike Exhibit A and its accompanying factual allegations arguing that the evidence is hearsay. Plaintiff further argues that Exhibit A presents inadmissible "new evidence" because it was not included in Defendant's Statement of Facts. Exhibit A is composed of the deposition testimony of Hodges in which she testifies about interviews she had with Steinert and McClung. Plaintiff argues that Exhibit A is hearsay because it contains the statements of Steinert and McClung and offers them for their truth. Defendant uses Exhibit A to support its argument rebutting Plaintiff's assertion that Steinert made "unwelcomed" comments to female employees. (Dkt. 152, pp. 6, 10). In Exhibit A, Hodges explains why she wrote and circled "unwelcomed" in her notes from an interview with McClung. The Court finds that Hodges is competent to testify as to what "unwelcomed" in her interview notes meant and therefore will not strike Exhibit A in its entirety as hearsay. However, to the extent Exhibit A is used to present the statements of Steinert and McClung for their truth, the Court will not consider the evidence or the associated factual allegations. Plaintiff further argues that Exhibit A and its accompanying factual allegations are inadmissible new evidence because they were not included in Defendant's Statement of Facts.

-6Case 2:04-cv-00790-EHC Document 173 Filed 03/29/2007 Page 6 of 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

As Plaintiff attached the same deposition in support of the factual assertions she made in her Response, the Court will not strike Exhibit A in its entirety as "new evidence." B. Objections to Exhibit B of the Motion for Summary Judgment re: Liability Plaintiff also asks the Court to strike Exhibit B and its accompanying factual allegations. Plaintiff claims that Exhibit B is hearsay and contains inadmissible "new evidence" because it was not included in Defendant's Statement of Facts. Exhibit B is composed of pages of Joel Price's ("Price") deposition testimony regarding an e-mail he sent to Steinert. In the e-mail, Price wrote that he and Melle would "work to preserve [Steinert's] intent and represent [his] integrity" and that they were "doing [their] best to correctly handle" the situation. (SSF at ¶ 17). Because this e-mail was sent before Plaintiff met with Hodges about Steinert's conduct, Plaintiff argues that the e-mail shows that Defendant's investigation into Plaintiff's complaint was prejudiced from the onset.2 During a deposition (Exhibit B), Price stated that the e-mail was written about "a CD." (Dkt. 157, ex B at p. 18). He further testified that he did not know about Plaintiff's complaint or that she had been terminated until after she was gone. (Dkt. 157, ex B at p. 18). Plaintiff argues that this evidence is hearsay because it contains statements that Steinert made to Price and that those statements have been offered for the truth of the matter asserted. The Court disagrees. Price wrote the e-mail. Price had firsthand knowledge of the reason he wrote the e-mail and what he discussed with Steinert. Further, Defendant's Reply uses Exhibit B to establish that the e-mail was not written about Plaintiff's complaint or the investigation that would follow. As Price's statement can be used for that purpose, the Court will deny Plaintiff's hearsay objection for the purposes of the pending motions. Plaintiff further argues that Exhibit B and its accompanying factual allegations are inadmissible new evidence because they were not included in Defendant's Statement of Facts. Plaintiff discusses the e-mail in her Response to Defendant's Motion for Summary Judgment

2

It cannot be determined from the text of the e-mail what prompted Price to write this -7-

e-mail.
Document 173 Filed 03/29/2007 Page 7 of 19

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

re: Liability. (Dkt. 152, p. 14). Plaintiff argues that the e-mail was written to Steinert regarding Plaintiff's complaint. In reply, Defendant attached Exhibit B to support its argument rebutting Plaintiff's assertion that the e-mail was written about Plaintiff's complaint regarding Steinert. The Court finds that Defendant may attach to its Reply evidence not included in its Statement of Fact in order to rebut factual assertions made by Plaintiff in her Response.3 Thus, the Court will not strike Exhibit B.4 II. Defendant's Motion for Summary Judgment re: Liability A. Count I - Title VII Sexual Harassment In Count I, Plaintiff alleges that Defendant is liable for sexual harassment under Title VII.5 In order to prevail on a sexual harassment claim under Title VII, a plaintiff must

Plaintiff cites Green v. Baca, 306 F.Supp.2d 903 (C.D.Cal. 2004), and United States ex rel. v. Los Angeles County, 2005 WL 2089216 (E.D.Cal., August 30, 2005), arguing that Defendant cannot make new factual assertions in its Reply. In Green v. Baca, it was found that the defendant could not rebut an argument raised in plaintiff's response with evidence that was never disclosed to plaintiff during discovery. 306 F.Supp.2d at 914. In United States v. Los Angeles County, the Court struck evidence associated with new arguments that were raised for the first time in the defendant's reply. 2005 WL 2089216 *6. Defendant's Reply does not use evidence that was not disclosed during discovery nor does it use the evidence in conjunction with new legal arguments. The Court finds these cases unpersuasive. Plaintiff also objects to this evidence as attached to Defendant's Motion for Summary Judgment re: Damages as Exhibit D. For the reasons stated above, the Court will deny Plaintiff's Motion as to Exhibit D. The remaining objections raised in Plaintiff's Motion include: (1) a reference to Plaintiff's affair with Brad Allen; (2) an affidavit of Valerie Allaire regarding Plaintiff's termination from Eye Care Plus; and (3) a letter from Alex Optical regarding Plaintiff's employment. The Court need not consider these objections because a determination as to the admissibility of that evidence would not affect the Court's ruling on the Motions for Summary Judgment. "Sexual harassment falls into two major categories: hostile work environment and quid pro quo...A hostile work environment claim involves a workplace atmosphere so discriminatory and abusive that it unreasonably interferes with the job performance of those harassed. A quid pro quo claim, as the name implies, occurs when a supervisor demands sexual favors in return for a job benefit. See generally Barbara Lindemann & David D. Kadue, Sexual Harassment in Employment Law (1992)." Brooks v. San Mateo, 229 F.3d 917, 923 (9th Cir. 2000). Plaintiff's claim is a hostile work environment claim. -8Document 173 Filed 03/29/2007 Page 8 of 19
5 4

3

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

demonstrate that: "(1) she was subjected to verbal or physical conduct of a sexual nature; (2) the conduct was unwelcome; and (3) the conduct was sufficiently severe or pervasive to alter the conditions of her employment and create an abusive work environment." Porter v. California Dept. of Corrections, 419 F.3d 885, 892 (9th Cir. 2005). Further, when a coworker is responsible for the allegedly harassing conduct, the plaintiff must show that her employer failed "to remedy or prevent a hostile or offensive work environment of which management-level employees knew, or in the exercise of reasonable care should have known." McGinest v. GTE Service Corp., 360 F.3d 1103, 1119-20 (9th Cir. 2004). First, Plaintiff has presented evidence that she was subjected to verbal and physical conduct of a sexual nature. Plaintiff alleges that Steinert massaged her shoulders on several occasions and that he told her that she looked sexy. (Dkt. 151, ex. 1 at p. 209). Plaintiff further claims that Steinert made comments on a daily basis about the way she looked and smelled, about her tan and about her hair and legs. (Dkt. 151, ex. 1 at p. 42). Steinert acknowledged that he may have told her that she looked nice and wore nice clothing. (Dkt. 135, ex. C at ¶ 14). Steinert also admits that he had talked with Plaintiff about her breasts. (Dkt. 135, ex. C at ¶ 14). Second, Plaintiff has indicated that she felt that Steinert's conduct was inappropriate and unwelcome.6 Plaintiff alleges that his comments made her

uncomfortable at work, caused her to change the way she dressed, and sometimes made her nauseous. (Dkt. 151, ex. 1 at pp. 43-44, 50). Third, a reasonable woman would find Steinert's alleged conduct severe or pervasive so as to alter the conditions of her employment. See Brooks v. City of San Mateo, 229 F.3d 917, 924 (9th Cir. 2000) (citing Ellison v. Brady, 924 F.2d 872, 879 (9th Cir. 1991) ("[A] female plaintiff states a prima facie case of hostile environment sexual harassment when she alleges conduct which a reasonable woman would consider sufficiently severe or pervasive to alter the conditions of employment and create an abusive working environment."). Finally, there is evidence in the record that Bosio, a

Plaintiff indicates that she did not tell Steinert to stop because she felt that his position with Defendant was superior to hers. -9Document 173 Filed 03/29/2007 Page 9 of 19

6

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

management-level employee, was aware that Steinert had massaged the shoulders of another employee and did not do anything about it. (Dkt. 151, ex. 18 at p. 71). Accordingly, the Court finds that Plaintiff has provided sufficient evidence to establish a prima facie case and will deny Defendant's Motion for Summary Judgment as to Count I. B. Counts II and III - Discrimination Based on National Origin and Gender. Counts II and III allege that Plaintiff was discriminated against because she was a Hispanic female. Plaintiff argues that she was treated differently than Creelman and Steinert who are both white males. To establish a prima facie case of Title VII discrimination, the plaintiff must show that: (1) she was a member of a protected class; (2) she performed her job satisfactorily; (3) she received some adverse employment action; and (4) other similarly situated employees, not of the plaintiff's protected class, were treated differently. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973). If the plaintiff satisfies her burden in establishing a prima facie case of discrimination, the defendant must articulate some "legitimate, nondiscriminatory reason" for the plaintiff's discipline or termination. Id. The plaintiff then must show that the defendant's stated reason is just a pretext for a discriminatory reason. Id. at 804. Plaintiff argues that she was treated differently from Creelman because Defendant did not consider "corroborating statements from other employees" as to her testimony, but contrarily, "credited Creelman's beliefs of what Plaintiff's intentions were despite contradictory facts." (Dkt. 152, p. 15). Plaintiff has not supported her allegation. Plaintiff has not explained or pointed to evidence establishing contradictory facts that would discredit Creelman's testimony. Further, there is no evidence that the corroborating statements of the other employees were not considered by Defendant. Plaintiff also argues that Defendant favored Steinert, a white male. Plaintiff alleges that Steinert was contacted and made certain reassurances about his integrity and intent after Plaintiff had reported her possible "HR issue." In contrast, Plaintiff argues that she was treated with an "utter lack of sympathy" and was compelled to attend the meeting with Hodges and Melle even though she was ill and emotionally upset. Steinert was told in an e- 10 Document 173 Filed 03/29/2007 Page 10 of 19

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

mail that Price and Melle would "work to preserve [Steinert's] intent and represent [his] integrity" and that they were "doing [their] best to correctly handle" the situation. (SSF at ¶ 17). It cannot be determined from the text of the e-mail to what situation Price was referring. Plaintiff argues that the e-mail refers to Plaintiff's allegations against Steinert. Defendant argues that the e-mail was about an unrelated dispute.7 Viewing the facts in the light most favorable to Plaintiff, the Court finds that Plaintiff has established a prima facie case. The Ninth Circuit has held that "any indication of discriminatory motive...may suffice to raise a question that can only be resolved by a fact finder. Once a prima facie case is established...summary judgment for the defendant will ordinarily not be appropriate on any ground relating to the merits because the crux of a Title VII dispute is the elusive factual question of intentional discrimination." Warren v. City of Carlsbad, 58 F.3d 439, 443 (9th Cir. 1995) (citation omitted). In light of the dispute between the Parties as to the "situation" referred to in the e-mail and the temporal relationship between Plaintiff's informal complaint and the e-mail, the Court finds that Plaintiff has provided sufficient evidence to defeat summary judgment on her discrimination claims. The Court will therefore deny Defendant's Motion for Summary Judgment as to Counts II and III. C. Counts IV and V - Retaliation Counts IV and V allege that Defendant terminated Plaintiff in retaliation for Plaintiff's sexual harassment complaint.8 A prima facie case of retaliation is established by showing

Defendant has presented evidence that Price wrote the e-mail about a dispute over a CD and that Price did not know about Plaintiff's allegations until after she was gone. The Court will not accept Defendant's evidence as conclusive. The temporal relationship between the e-mail and Plaintiff's informal complaint allows for the inference that the e-mail was written about Plaintiff's complaint. Further, Plaintiff has not had an opportunity to respond to Defendant's evidence because it was presented for the first time in Defendant's Reply. The Court therefore finds a genuine issue of material fact as to what the e-mail was written about Plaintiff's complaint or an unrelated dispute. Count IV has been brought pursuant to the Civil Right Act of 1866, 42 U.S.C. § 1981. (Dkt. 2). "Section 1981 provides an independent but overlapping federal remedy for intentional racial discrimination in employment. Because facts sufficient to give rise to a - 11 Document 173 Filed 03/29/2007 Page 11 of 19
8

7

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

that: (1) the employee engaged in a protected activity; (2) the employee suffered an adverse employment action; and (3) there is a causal link between the protected activity and the adverse action. Ray v. Henderson, 217 F.3d 1234, 1240 (9th Cir. 2000). If the plaintiff makes out a prima facie case, the burden shifts to the defendant to articulate a legitimate nondiscriminatory reason for its decision. Id. If the defendant articulates such a reason, the burden shifts back to the plaintiff to demonstrate that the reason was merely a pretext for a discriminatory motive. Id. 1. Protected Activity In order to prove that she engaged in a protected activity, Plaintiff must show that she had a "reasonable belief" that the employment practice she complained of was prohibited under Title VII. Trent v. Valley Elec. Ass'n Inc., 41 F.3d 524, 526 (9th Cir. 1994).9 The Ninth Circuit has held an informal complaint about the conduct of co-workers sufficient to constitute protected activity for purposes of a retaliation claim. See Passantino v. Johnson & Johnson Consumer Products, 212 F.3d 493, 503 (9th Cir. 2000). Plaintiff made an informal complaint that she may have an "HR issue." (SSF ¶ 9). At a meeting with Hodges and Melle, Plaintiff related that, on one occasion, Steinert walked behind her chair while she was seated, massaged her shoulders and whispered "you look sexy today." (Dkt. 135, ex. C at ¶ 9). Plaintiff stated that she thought that the conduct was inappropriate. Reviewing the facts in the light most favorable to Plaintiff, the Court finds that Plaintiff has sufficiently established that she engaged in a protected activity.

Title VII claim may also support a Section 1981 claim, an employee may seek relief for a retaliatory discharge under both provisions." Thus, the Court's analysis of Plaintiff retaliation claim under Title VII will also apply to Plaintiff's § 1981 claim. Defendant cites Silver v. KCA, Inc., 586 F.2d 138 (9th Cir. 1978), arguing that Plaintiff must show that she engaged in "statutorily protected conduct," which requires a showing that Steinert's conduct can be attributed to Defendant. The Ninth Circuit has held that a plaintiff only needs to prove that he/she had a "reasonable belief" that the employment practice was prohibited under Title VII. Trent, 41 F.3d at 526. Thus, Plaintiff need only show that she had a reasonable belief that Steinert's conduct violated Title VII. - 12 Document 173 Filed 03/29/2007 Page 12 of 19
9

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

2. Adverse Employment Action Plaintiff was terminated on November 6, 2003. There is no dispute that Plaintiff's termination is sufficient to demonstrate an adverse employment action. 3. Casual Connection A casual connection may be established where an adverse employment action is taken within a short period of time after a plaintiff engaged in a protected activity. Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054 (9th Cir. 2002); Passantino, 212 F.3d at 507; Miller v. Fairchild Indus., 885 F.2d 498, 505 (9th Cir.1989); Yartzoff v. Thomas, 809 F.2d 1371, 1376 (9th Cir. 1987). Plaintiff was terminated on November 6, 2003. This was less than one month after she made her initial complaint to Melle on October 15, 2003. The Court finds that Plaintiff has established a casual connection. 4. Legitimate Nondiscriminatory Reason Having found that Plaintiff has provided evidence sufficient to make out a prima facie case of retaliation, the Court must consider the nondiscriminatory reasons Defendant has articulated for terminating Plaintiff. Ray, 217 F.3d at 1240. Defendant alleges that Plaintiff was fired for fabricating a claim of sexual harassment, lying during an investigation into that claim, and attempting to coerce a witness. The Court finds that the reasons articulated by Defendant are legitimate nondiscriminatory reasons for terminating Plaintiff's employment. 5. Pretext To show pretext, Plaintiff must introduce evidence from which a reasonable jury could infer that Defendant fired Plaintiff not for the reasons stated above, but for reporting Steinert's alleged sexual harassment. See Hernandez v. Spacelabs Medical Inc., 343 F.3d 1107, 1115 (9th Cir. 2003). Plaintiff may show that Defendant's stated reasons are pretextual either directly by persuading the Court that the retaliatory reason is more likely than Defendant's stated reason or indirectly by showing that Defendant's stated reason is not credible. Id. (citation omitted). Plaintiff argues that a reasonable jury could infer that Defendant terminated her for her claim of sexual harassment. First, Plaintiff argues that many of her allegations were - 13 Document 173 Filed 03/29/2007 Page 13 of 19

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

supported by findings from the investigation (e.g, that Steinert admittedly may have massaged her shoulders). Second, Plaintiff argues that Defendant has taken inconsistent positions with respect to the facts. Plaintiff alleges that, before the EEOC, Defendant stated that there was no evidence supporting Plaintiff's allegation of sexual harassment and that Plaintiff asked Creelman to lie. Plaintiff alleges that Defendant took a similar position before the NLRB. Plaintiff argues that this is inconsistent with Defendant's current position that at least some of Plaintiff's allegations were correct and that Plaintiff never asked Creelman to lie. Third, Plaintiff argues that Defendant failed to follow company policy in making its decision to terminate Plaintiff. Plaintiff argues that Defendant relied on Creelman's subjective opinion­that Plaintiff was trying to get him to support her allegations against Steinert­instead of only objective facts. Fourth, Plaintiff argues that Defendant's reasons for firing Plaintiff contradict the RCIT. Finally, Plaintiff points to evidence that Defendant collected negative e-mails from various people about Plaintiff after she was terminated. Having considered Plaintiff's arguments, the Court finds that there is sufficient evidence from which a reasonable jury could infer pretext. Accordingly, the Court will deny Defendant's Motion for Summary Judgment as to Counts IV and V. III. Defendant's Motion for Summary Judgment re: Damages Plaintiff is seeking back pay, compensatory damages and punitive damages. Defendant argues that there is no genuine issue of material fact with respect to Plaintiff's claim for damages and that it is entitled to judgment in its favor of a matter of law. A. Back Pay Defendant argues that there is no dispute as to Plaintiff's wages after she was terminated. Defendant argues that Plaintiff has earned more than she was making working for Defendant at every job she has had since she was terminated. Defendant further argues that any time she was not working can be attributed to her lack of reasonable diligence to mitigate her damages. An award of back pay under Title VII is intended to make the victim of discrimination whole by restoring them to the position in which they would have been had there been no discrimination. See Albermarle Paper Co. v. Moody, 422 U.S. 405, 420-21 - 14 Document 173 Filed 03/29/2007 Page 14 of 19

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

(1975). "There is a presumption in favor of back pay awards." Caudle v. Bristow Optical Co., Inc., 224 F.3d 1014, 1020 (9th Cir. 2000). However, plaintiffs must mitigate their damages. 42 U.S.C. § 2000e-5(g). Any "[i]nterim earnings or amounts earnable with reasonable diligence" should be deducted from a back pay award. Id. Defendant argues that Plaintiff did not exercise reasonable diligence in seeking employment after she was terminated on November 6, 2003, until January 31, 2004. Defendant's argument relies on two e-mails that Plaintiff wrote. In an e-mail to Nelson Javier, Plaintiff wrote that she "decided to not look that hard for a job." (Dkt. 135, ex. A at pp. 254-55). Further, in an e-mail to Brad Allen, Plaintiff wrote, "I know that eventually I will find a job but maybe my time is to spend it with the boys right now." (Dkt. 135, ex. A at p. 256). In response, however, Plaintiff argues that she made a reasonable effort to obtain new employment after she was terminated. She claims that she began looking for a job almost immediately. (SSF at ¶ 88). Plaintiff further claims that she contacted several banks and brokerage firms for positions comparable to the one she lost. (SSF at ¶ 88). She also claims that she applied for at least twelve positions in her former field of optometry. (SSF at ¶ 88). Defendant also argues that Plaintiff is not entitled to back pay because she voluntarily quit her employment with two subsequent employers, Optical Holdings and Alex Optical and was terminated from Eye Care Plus for cause. Plaintiff claims, despite her termination, that she made diligent efforts to maintain her employment. Plaintiff further argues that she voluntarily quit her employment with Optical Holdings and Alex Optical in order to transfer to a more suitable position with other employers. Viewing the facts in the light most favorable to Plaintiff, the Court finds that there is a genuine issue of material fact as to whether Plaintiff exercised reasonable diligence in mitigating her damages during periods of unemployment following her termination. Thus, a jury will be better suited to determine whether Plaintiff exercised reasonable diligence in

- 15 Case 2:04-cv-00790-EHC Document 173 Filed 03/29/2007 Page 15 of 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

securing and maintaining alternative employment. Accordingly, the Court will deny Defendant's Motion for Summary Judgment as to back pay.10 B. Pain and Suffering Plaintiff seeks damages for emotional pain and suffering. Plaintiff claims that she has suffered from headaches, stomach pains, lack of sleep, acne, and stress. Defendant alleges that Plaintiff's ailments are caused solely by the stress associated with litigation and are therefore not recoverable. See Flowers v. First Hawaiian Bank, 295 F.Supp.2d 1130, 1140 (D. Haw. 2003) (holding that litigation stress is not recoverable as damages); Knussman v. Maryland, 272 F.3d 625, 641 (4th Cir. 2001) ("In general, litigation-induced emotional distress is never a compensable element of damages."); Stoleson v. U.S., 708 F.2d 1217, 1223 (7th Cir. 1983) (holding stress induced by litigation is not recoverable). Defendant points to Plaintiff's deposition testimony where she states that she had trouble sleeping just after she was terminated, during the proceedings before the NLRB and during this case. (Dkt. 151, ex. 1 at pp. 24-25). However, Plaintiff also stated in deposition that she has been suffering from headaches, stomach aches and acne from the day Defendant terminated her employment. (Dkt. 151, ex. 1 at pp. 19-20). The Court finds that Plaintiff's claims are arguably not solely related to litigation and will deny Defendant's Motion for Summary Judgment as to her claims for pain and suffering. C. Lost Medical Benefits Defendant argues that Plaintiff is not entitled to receive any recovery for the value of her lost medical benefits. An employee who is wrongfully terminated may collect damages for the loss of health insurance benefits. EEOC v. Farmer Bros. Co., 31 F.3d 891, 902 (9th Cir. 1994). The measure of such damages is the amount of any actual expenses incurred by

Plaintiff argues that her back pay award should also include medical insurance benefits, credit earned for not selecting medical insurance, dental insurance, vision insurance, life insurance, disability insurance and 401K benefits. (Dkt. 153, p.4). The Court notes that Plaintiff has not submitted any evidence with respect to the value of these benefits. The Court will address Plaintiff's claim for lost medical benefits below. - 16 Document 173 Filed 03/29/2007 Page 16 of 19

10

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

the employee. Id. However, "'[L]ost insurance coverage, unless replaced or unless actual expenses are incurred, is simply not a monetary benefit owing to the plaintiff.'" Farmer Bros. Co., 31 F.3d at 902 (citing Galindo v. Stoody Co., 793 F.2d 1502, 1516 (9th Cir. 1986). The record indicates that Plaintiff received medical benefits under her husband's policy through September 2005. (Dkt. 135, ex. A at p. 286). Further, Plaintiff admits that she never obtained any medical coverage after that. (Dkt. 135, ex. A at pp. 286, 289). As Plaintiff has not put forth any evidence of actual medical expenses, the Court will grant Defendant's Motion for Summary Judgment as to Plaintiff's claim for the value of lost medical benefits. D. Punitive Damages Defendant argues that Plaintiff is not entitled to punitive damages because she has not shown that Defendant violated any law and that it acted with malice or reckless indifference to any of her federally protected rights. In order for a jury to consider a request for punitive damages, a plaintiff must put forth evidence showing that her employer acted with malice or with reckless indifference to her federally protected rights. Kolstad v. American Dental Ass'n, 527 U.S. 526, 535 (1999). To accomplish this, a plaintiff must first show that her employer acted "in the face of a perceived risk that its actions [would] violate federal law." Id. at 536. Then, the plaintiff must show that liability can be imputed to her employer. Id. at 539.11 Plaintiff has put forth sufficient evidence to show that Hodges, Melle, Gee and Price acted in the face of a perceived risk that their actions would violate federal law. Evidence showing that the relevant individuals knew of or were familiar with the provisions of Title VII is sufficient to show that they had knowledge of a perceived risk. Hemmings v. Tidyman's Inc., 285 F.3d 1174, 1198-99 (9th Cir. 2002). Under this standard, the Ninth Circuit has noted that "in general, intentional discrimination is enough to establish punitive damages liability." Passantino, 212 F.3d at 515. As noted above, Plaintiff has provided A defendant employer may raise an affirmative defense that it has made good faith efforts to comply with Title VII and the acts of discrimination were contrary to its good faith efforts. Kolstad, 527 U.S. at 545-46. Defendant has not asserted this affirmative defense. - 17 Document 173 Filed 03/29/2007 Page 17 of 19
11

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

sufficient evidence from which a reasonable juror could conclude that Plaintiff was subjected to intentional discrimination. Additionally, a reasonable juror could conclude that Hodges, Melle, Gee and Price were aware of anti-discrimination laws by virtue of their managerial positions and Defendant's policies for implementing anti-discrimination laws. Plaintiff can also impute the allegedly discriminatory actions to Defendant. The Supreme Court has held that punitive damages can be awarded against an employer if the intentional discrimination can be attributed to an employee who was employed in a managerial capacity and was acting within the scope of employment. Kolstad, 527 U.S. at 542. Hodges, Melle, Gee and Price were all employed in a managerial capacity with Defendant at the time of Plaintiff's complaint and termination.12 The Court will therefore deny Defendant's Motion for Summary Judgment as to Plaintiff's claim for punitive damages. Accordingly, IT IS ORDERED the Plaintiff's Motion to Strike New Evidence is GRANTED in part and DENIED in part as follows (Dkt. 164): 1) the Court will deny the Motion as to Exhibit A of Defendant's Reply In Support of Its Motion for Summary Judgment re: Liability, except to the extent the Exhibits are used to present the statements of Steinert and McClung for their truth; and 2) the Court will deny the Motion as to Exhibit B of Defendant's Reply In Support of Its Motion for Summary Judgment re: Liability and Exhibit D of Defendant's Reply In Support of Its Motion for Summary Judgment re: Damages.

Defendant argues that Hodges was not employed in a managerial capacity because she was the Senior Manager of HR and not a direct supervisor. The Supreme Court noted that it was unable to find a "good definition of what constitutes a managerial capacity." Kolstad, 527 U.S. at 543. It did, however, advise lower courts to consider "the type of authority that the employer has given the employee, the amount of discretion that the employee has in what is done and how it is accomplished." Id. Hodges was given the authority to conduct an investigation into Plaintiff's complaint and to recommend that Plaintiff be terminated. Accordingly, the Court finds that Hodges was employed in a managerial capacity for purposes of imputing punitive damages liability to Defendant. - 18 Document 173 Filed 03/29/2007 Page 18 of 19

12

Case 2:04-cv-00790-EHC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

IT IS FURTHER ORDERED that Defendant's Motion for Summary Judgment re: Liability is DENIED. (Dkt. 134). IT IS FURTHER ORDERED that Defendant's Motion for Summary Judgment re: Damages is GRANTED in part and DENIED in part as follows (Dkt. 132): 1) the Court will grant Defendant's Motion as to Plaintiff's claim for the value of lost medical benefits; 2) the Motion is otherwise DENIED. DATED this 28th day of March, 2007.

- 19 Case 2:04-cv-00790-EHC Document 173 Filed 03/29/2007 Page 19 of 19