Unpublished Disposition, 905 F.2d 1541 (9th Cir. 1988)

MEMORANDUM^* 

Richard Young began working full time for ABM Security Services (ABM) as a security officer in September 1984 and was terminated on December 7, 1985 for misconduct. While in the employ of ABM, Young worked at the Bank of America Plaza building which was managed by Tishman West Management Corporation ("Tishman"). ABM had contracted with Tishman to provide security services for the building. Jack Moshgat was the building manager for Tishman.

On November 19, 1985, Young informed Moshgat that he was interested in being promoted to the recently vacated position of "post captain". Young told Moshgat he should be promoted because he was the senior full-time employee.

ABM provided its security officers with a handbook in which Rule 5 stated as follows:

Communications--Do not discuss personal or company business with anyone within the company, except your immediate supervisor or company management. You are employed by ABM Security, and all employee/employer problems shall be brought to the attention of company officials ONLY.

Because Young contacted an employee of a client in regards to company business, a disciplinary charge was issued.

On November 22, 1985, Bradshaw, who was Young's ABM supervisor, presented Young with the disciplinary charge and asked Young to sign it. Young refused.

After refusing to sign the form, Young returned to the guard console station where Bradshaw was training a new security guard, Traci Brown. Young started to explain the method of logging keys in and out of the log book to Traci Brown. Bradshaw tried to get Young's attention, apparently to tell Young to stop trying to train Brown. Young simply acknowledged Bradshaw by telling him, "just a minute."

At this point, Bradshaw reached between Young and Brown and took the log book. Bradshaw allegedly "crashed" into Young, knocking Young out of the way. Bradshaw then requested that Young leave the premises. Young admits that he was moved at most 18 inches and that he was not physically harmed in any way. He alleges, however, that he has suffered depression as a result of the "battery."

As a result of this incident and the disciplinary charge, Young was suspended. On November 25, 1985, Young was contacted by Bradshaw and asked to return to work. Young refused, saying that any communication would have to be in writing. Young then sent a letter to ABM dated November 30, 1985. The purpose of the letter was to schedule a meeting at which Young's return to work would be discussed. In the letter Young listed various conditions about which he stated " [t]here is small point in having a meeting unless agreement is possible on the following." On December 7, 1985, Young was terminated because he was not "able to work with ABM Supervisors and under ABM policies and procedures ..." and was instructed to return his uniform to the ABM office.

The position of post captain that Young believes he was wrongfully denied promotion to was filled by Neal Vance. Vance was 53 years old and had been working for ABM for a period of less than one month before the promotion. There is no evidence in the record of Vance's overall experience in the security guard industry.

Young filed this suit in state court in November of 1986, alleging age discrimination, battery, conspiracy, violation of good faith and fair dealing and violation of Cal.Labor Code Secs. 204 and 207. The case was removed to federal court in December. Young filed a first amended complaint on July 21, 1987. The complaint was not timely served on the defendants. The defendants stipulated to accept service and were granted leave to file a response to the first amended complaint until August 19, 1988. On October 17, 1988, defendants moved for summary judgment.¹  On October 26, the parties stipulated that Young had an extension of time to file his opposition and no discovery was to be conducted while the motion was pending. The district court granted defendants' motion for summary judgment. Young appeals.

Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The party moving for summary judgment bears the initial burden of establishing that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323. Once that burden is met, the opponent must answer with factual allegations showing a genuine dispute of fact. Id. If the opponent fails to "make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial," then the entry of summary judgment is appropriate. Id.

Fed. R. Civ. P. 56(f) permits a party to request that a district court postpone deciding a summary judgment motion while further discovery is conducted. Under Rule 56(f), if central facts necessary to support an opposition to a summary judgment motion are unavailable at the time of the application for judgment, the court may refuse to issue the judgment or may order a continuance to allow further discovery. Where a party fails to invoke Rule 56(f), summary judgment may be entered without further discovery. Thi-Hawaii v. First Commerce Financial Corp. Inc., 627 F.2d 991, 994 (9th Cir. 1980) (approving a grant of summary judgment before any discovery was conducted). Young never invoked Rule 56(f). Therefore, the district court did not err in entering summary judgment when it did.

Further, the judge did not abuse his discretion in ordering no discovery was to occur during the pendency of the summary judgment motion. Young stipulated that there would be no discovery during the pendency of the motion, apparently in exchange for an extension of time to file his opposition. Because Young agreed to the limitation on discovery, he cannot challenge it now.

Young argues that ABM violated the Age Discrimination in Employment Act, 29 U.S.C.A. Secs. 621-634 ("ADEA") by denying him a promotion to post captain on the basis of his age. In order to establish a prima facie case of age discrimination under the ADEA, Young must show that he "(1) was a member of the protected class [age 40-70], (2) was performing his job in a satisfactory manner, (3) was discharged, and (4) was replaced by a substantially younger employee with equal or inferior qualifications." Samarzia v. Clark County, 859 F.2d 88, 91 (9th Cir. 1988) (citations omitted). If the replacement employee is only slightly younger than the plaintiff, it is less likely that an inference of discrimination will be drawn and the plaintiff must produce other evidence to support an inference of discrimination. Douglas v. Anderson, 656 F.2d 528, 533 (9th Cir. 1981).

Young has shown that he is within the protected class of individuals over 40 years of age as he was 56 at the time of his discharge and that he was discharged. However, Young has failed to establish that he was performing his job satisfactorily and that his replacement had equal or inferior qualifications.

ABM concluded that Young's job performance was not satisfactory. Young admits to having met with Moshgat, an employee of Tishman, to discuss the post captain opening, in violation of ABM's personnel rule 5 which clearly prohibits an employee from discussing company business with non-ABM personnel. Young also admits to having difficulty working with his supervisor, Bradshaw. Further, when ABM offered to put Young back to work, he refused unless stated conditions were met, including his having limited contact with Bradshaw. This record does not establish that Young was performing his job satisfactorily.

Additionally, Young failed to offer any proof that his replacement, Neal Vance, had equal or inferior qualifications. Young admits that he does not know what Vance's overall qualifications were. Young submitted an affidavit stating that he spoke to Vance and setting out facts Vance would testify to. However, the affidavit does not indicate what Vance's qualifications are. Therefore, Young has failed to establish this element of the prima facie case.² 

Young has failed to show two elements necessary for an age discrimination claim. Because he has failed to prove the existence of several elements of his case, summary judgment on this ground was appropriate.

The district court found that Young's battery claim was not preempted by the ADEA. The ADEA does not preempt the award of tort damages for pendent state claims. Cancellier v. Federated Department Stores, 672 F.2d 1312 (9th Cir.), cert. denied, 459 U.S. 859 (1982). Arguably, the ADEA would preempt Young's battery claim if it was completely grounded in age discrimination. See Real v. Continental Group, Inc., 627 F. Supp. 434, 445 (N.D. Cal. 1986). Young is claiming that Bradshaw is an unstable individual who lost control and battered him, a claim involving actions independent of the alleged age discrimination. Therefore, the battery claim is not preempted by the ADEA.

However, the battery claim is barred by California's Worker's Compensation Act. Cal.Labor Code Sec. 3600(a) states that liability for workers' compensation awards shall exist against an employer for any injury sustained by his employee arising out of and in the course of employment when the conditions of compensation are met. Section 3602(a) provides that where the conditions of compensation set out in Sec. 3600 occur, the right to recover compensation under the Act is the exclusive remedy of the employee, except as specifically provided in Sec. 3706 and 4588. There is no dispute that the conditions of coverage set out in Sec. 3600 are met here.

Young argues that his battery is not covered by the worker's compensation laws because it resulted in emotional damage to him. However, the cases he relies on, including Renteria v. County of Orange, 82 Cal. App. 3d 833, 147 Cal. Rptr. 447 (1978), involved employees suing for intentional infliction of emotional distress. Young did not claim a cause of action for intentional distress. He claims emotional damages resulting from the battery. Therefore, the Renteria line of cases recognizing an exception for causes of action for intentional infliction of emotional distress are inapplicable.

Young's battery is not excluded from the worker's compensation scheme because it was an intentional wrong. The California Supreme Court has said that a tort action based on intentional misconduct of the employer is allowed if it involves:

conduct of an employer having a "questionable" relationship to the employment, an injury which did not occur while the employee was performing service incidental to the employment and which would not be viewed as a risk of the employment, or conduct where the employer or insurer stepped out of their proper roles.

Cole v. Fair Oaks Fire Protection Dist., 43 Cal. 3d 148, 161, 233 Cal. Rptr. 308, 316, 729 P.2d 743, 751 (Cal.1987). Young's battery action does not fall within any of the exceptions outlined in Cole. He alleges Bradshaw bumped into him, moving his torso 18 inches, in order to retrieve the log book for keys. This action by Bradshaw occurred within the course of Bradshaw's employment as a supervisor and is exclusively within the worker's compensation laws.

Additionally, Young's battery is not actionable under Cal.Labor Code Sec. 3601(a) (1), which allows an employee to sue another employee when his injury is caused by the wilful and unprovoked physical act of aggression of the other employee. Under Sec. 3601, the employer is immune from liability for the employee's willful misconduct. Cal.Labor Code Sec. 3601(b). The California courts have developed common-law exceptions to this immunity when the employer ratifies the employee's actions. Young v. Libbey-Owens Ford Co., 168 Cal. App. 3d 1037, 1041, 214 Cal. Rptr. 400, 402 (5th Dist.1985).

However, ABM did not ratify Bradshaw's "willful and unprovoked physical act." Young admits he complained to no one about Bradshaw's conduct. Young's claimed evidence of ratification is a memo to the file from Cloniger, ABM's manager, which lists the reasons for terminating Young and states that Bradshaw "had to take a log book from Mr. Young's hands." ABM's knowledge of these facts, by itself, does not ratify any alleged misconduct by Bradshaw. See Meyer v. Graphic Arts Int'l Union, 88 Cal. App. 3d 176, 151 Cal. Rptr. 597 (1979) (employer ratified misconduct where employee reported misconduct and employer refused to discipline assailant).³ 

Young's claim that the defendants conspired to trump up a false discipline charge to cover-up their age discrimination that lead to his wrongful discharge is not barred by the workers' compensation scheme. If these allegations are true, ABM's conduct is that of an employer that has a questionable relationship to the employment. See Cole, 729 P.2d at 751, 43 Cal. 3d at 161, 233 Cal. Rptr. at 316.

However, Young has failed to state a cause of action for conspiracy. California law does not recognize a separate tort of civil conspiracy. The conspirators must agree to do some act which is classified as a "civil wrong." Youst v. Longo, 43 Cal. 3d 64, 79, 233 Cal. Rptr. 294, 304, 729 P.2d 728, 739 (Cal.1987), quoting Unruh v. Truck Insurance Exchange, 7 Cal. 3d 616, 631; 48 P.2d 1063, 1074 (1972). To state a cause of action for conspiracy, Young must prove 1) the formation and operation of a conspiracy; 2) the wrongful acts done pursuant to the conspiracy, and 3) that damage resulted. Unruh, 498 P.2d at 1074.

The civil wrong alleged by Young is the age discrimination practised by defendants and its cover-up through a sham disciplinary procedure. As discussed earlier, Young did not establish a prima facie case of age discrimination. Without the existence of a civil wrong, "a conspiracy, in and of itself, however atrocious, does not give rise to a cause of action ..." Olivet v. Frischling, 104 Cal. App. 3d 831, 837, 164 Cal. Rptr. 87, 89 (1980).

Young cannot sue for ABM's alleged violation of Cal.Labor Code Sec. 204. Section 204 requires employers to pay wages twice monthly on designated pay days. Cal.Labor Code Sec. 210 authorizes the Labor Commissioner to fine employers who violate Sec. 204 and deposit the money in the state treasury. The statute does not grant employees a private right of action against employers who violate section 204.

Further, Young presents no triable issue of fact regarding ABM's alleged violation of Sec. 207, assuming arguendo that a private cause of action exists. Section 207 requires employers to post notice of pay days and time and place of payment. In his complaint, Young stated that "defendants had designated the 6th of each month as payday and had published such fact to the employees."

The California Supreme Court has held that the covenant of good faith and fair dealing is implied into every employment contract and contractual remedies are the sole available relief for a breach of that covenant. Foley v. Interactive Data Corp., 765 P.2d 373, 398 (Cal.1988). The California Supreme Court has ruled that Foley is to be retroactively applied. Newman v. Emerson Radio Corp., 48 Cal. 3d 973, 993, 258 Cal. Rptr. 592, 605, 772 P.2d 1059, 1072 (Cal.1989).

In order to recover for an employer's breach of the covenant, the employee must show that the employer engaged in a bad faith act extraneous to the employment relationship that was intended to frustrate contractual rights. Shapiro v. Wells Fargo Realty Advisors, 152 Cal. App. 3d 467, 479 (1984). Young alleges several bad faith acts but fails to allege specific facts proving there was an employment contract between the parties. Without an employment contract, there obviously can be no breach. Young's failure to allege specific facts showing there was an employment contract justifies the grant of summary judgment on this claim. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986) (party opposing summary judgment must set forth specific facts showing there is a genuine issue for trial).

Even assuming there was a contract, Young fails to establish a cause of action for breach of this covenant. Young alleges this contract was breached by his wrongful discharge, the battery, the conspiracy, the age discrimination and the violations of Cal.Labor Code Secs. 204 and 207. However, Young failed to present evidence sufficient to raise a material question of fact regarding age discrimination, battery, conspiracy and the Labor Code violations. Therefore, because he has not established that the defendants committed any of these acts, they cannot operate as the basis for ABM's breach.

Young's remaining allegation is that the defendants breached the contract by wrongfully discharging him. Under California law, employees are presumed to be "at will" unless a contract limiting the employer's right to discharge the employee is entered into. Foley, 765 P.2d at 376. Absent a contract, the employee can be fired with or without cause. Id. A contract limiting the employer's right to discharge an employee can be express or implied.

Young offers no evidence of an express contract. Young also fails to establish an implied-in-fact contract. Young has presented no evidence of ABM's personnel policies, no proof that ABM assured him continued employment and no evidence of industry practices. His employment was only for one year and three months. This is insufficient to establish an implied-in-fact contract. See Pugh v. See's Candies, Inc., 116 Cal. App. 3d 311, 327, 171 Cal. Rptr. 917, 925-26 (1981) (court considers following factors when determining whether there was an implied-in-fact contract: the employer's practices, the employee's length of service, the employer's actions reflecting assurances of continued employment and the practices of the industry the employee is in). Young failed to allege specific facts showing that there was a contract limiting ABM's right to fire him with or without cause. Absent such a contract, Young cannot assert a claim for breach of the covenant of good faith and fair dealing based on his discharge.

In his appellate brief, Young argues for the first time that ABM wrongfully discharged him in violation of the public policy established by Labor Code Sec. 204 and Sec. 207. The California Supreme Court recognizes tortious discharge in contravention of public policy as a cause of action. See Foley, 765 P.2d at 376. In his reply brief, Young does not dispute that he did not raise this claim below.

Generally, this court will not consider issues raised for the first time on appeal. In re Wind Power Systems, Inc., 841 F.2d 288, 290 n. 1 (9th Cir. 1988). However, this court can use its discretion to hear issues not raised below when 1) review is necessary to prevent a miscarriage of justice or to preserve the integrity of the judicial process, 2) when a change in law raises a new issue while the appeal is pending, and 3) when the issue is purely one of law. Jovanovich v. United States, 813 F.2d 1035, 1037 (9th Cir. 1987).

The only exception arguably applicable to this case is the second one identified above. Young appears to argue that Foley v. Interactive Data Corp., 765 P.2d 373 (Cal.1988), presents a change in the law that raises the new issue of tortious discharge based on public policy. However, as defendants point out, wrongful discharge in contravention of public policy has been an actionable tort in California for several years. See Koehrer v. Superior Court, 181 Cal. App. 3d 1155, 1165, 226 Cal. Rptr. 820, 825 (1986) (summarizing authority relating to public policy wrongful discharge). Therefore, Foley does not represent a change in the law that raises a new issue. It simply represents a clarification of the law regarding tortious discharge. Foley, 765 P.2d at 1069. Consequently, we do not reach Young's wrongful discharge claim.

Young has failed to establish the existence of a material issue of fact in regards to any of his claims. The district court's grant of summary judgment is affirmed.⁴ 

AFFIRMED.