Unpublished Disposition, 867 F.2d 613 (9th Cir. 1989)

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U.S. Court of Appeals for the Ninth Circuit - 867 F.2d 613 (9th Cir. 1989)

Louis Sam JONES, Plaintiff-Appellant,v.BECHTEL POWER CORPORATION and Does 1 Through 50, Defendants-Appellees.

No. 87-2862.

United States Court of Appeals, Ninth Circuit.

Jan. 25, 1989.

Before CHOY, CANBY, and WILLIAM A. NORRIS, Circuit Judges.


Louis Sam Jones ("Jones") appeals from the district court's judgment in favor of defendant Bechtel Power Corporation ("Bechtel"). Jones asserted a number of claims arising out of his employment with and layoff by Bechtel. Following a two-day court trial, the district court entered judgment for Bechtel, finding that Jones had failed to prove a prima facie cause of action for any of his claims. We have jurisdiction pursuant to 28 U.S.C. § 1291 and we affirm.


Jones is a black male who was employed by Bechtel, an engineering and construction firm, from 1972 until he was laid off in 1982. Jones had no written employment contract with Bechtel. Between 1972 and 1975, Jones held various positions within the company. In 1975, he began working as a systems analyst in the Controller's Office, a position he held until 1978.

The Controller's Office was reorganized in 1978 and Jones was scheduled for layoff. Jones claims that his position remained unchanged by the reorganization and that he was replaced by a white man solely because his position required dealing with upper management and clients.

After spending a year working for a different department, Jones returned to the Controller's Office. After his return, Jones claims that he resumed the work of a systems analyst but that he did not receive the title or salary of a systems analyst. He also complains that during this period he was required to perform menial clerical duties, which he feels were given to him only to demean him.

In addition, Jones claims that he was given inferior office space and that his office furniture was arranged in such a way as to place him on display and subject him to ridicule. Because he was dissatisfied with the arrangement of his office furniture, Jones came in early one day to rearrange his furniture. He suffered a rectal hernia. This injury required medical treatment and caused Jones to take time off work. Jones did not file a workers' compensation claim for this injury.

In 1981, Jones applied for a transfer to Bechtel's office in Jubail, Saudi Arabia. Jones's name was submitted for three positions but he was rejected each time. One of the three positions was filled by an employee who was in Jubail and available for a lower salary. The other two positions were eliminated without being filled.

In December 1981, Jones was assigned to Bechtel's Accounting Department. In March 1982, the department was told to prepare for layoffs. The head of the department prepared a list ranking the employees according to job performance. Jones ranked 39 of 40. The three lowest ranking employees were scheduled for layoff. Their names were circulated to other departments in an attempt to find them other positions within Bechtel. However, no other position was found for Jones and he was laid off in July 1982.

In 1983, Jones filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"), alleging that Bechtel discriminated against him in failing to transfer him to Jubail and in discharging him. After the EEOC notified Jones that he had the right to sue under the California Fair Employment and Housing Act, Jones filed suit in a California superior court.

In his complaint, Jones alleged breach of the employment contract, breach of the covenant of good faith and fair dealing, negligent misrepresentation, racial discrimination, age discrimination, and wrongful interference with his pension rights. Bechtel removed the case to federal district court, claiming that the pension rights claim presented a federal question governed by ERISA. Jones did not challenge removal.

The pension rights and age discrimination claims were dismissed by stipulation a month prior to trial. Jones moved to have the remaining causes remanded to state court but the motion was denied. The case proceeded to trial without a jury. At trial, Jones offered testimony regarding the four remaining causes of action. At the close of testimony, the district court determined that Jones had failed to present a prima facie cause of action for any of his claims. The court entered judgment for the defendant on each cause of action.

At trial, Jones also offered testimony about the rectal hernia he suffered while he was moving his office furniture. The district court allowed Jones to testify about this occurrence, even though Jones had not included any allegations regarding this injury in his complaint. However, the district court held that it did not have jurisdiction over the claim because Jone's only remedy for this injury would be under the California Workers' Compensation and Insurance Act.


Removal was proper in this case since Jones's complaint stated a claim for wrongful termination of pension rights which would be governed exclusively by ERISA. Sorowsky v. Burroughs, 826 F.2d 794 (9th Cir. 1987). Therefore, we review the district court's decision to retain the state claims after the pension rights claim was dismissed under an abuse of discretion standard. Bale v. General Telephone Co. of California, 795 F.2d 775, 776 (9th Cir. 1986).

The district court did not abuse its discretion in deciding to retain Jones's state claims after the pension rights claim was dismissed. The court articulated several valid reasons for retaining the case. The case had been filed more than three years earlier. It had been removed to federal court eleven months earlier. The activities underlying Jones's claims occurred between 1978 and 1982, five to nine years prior to trial. In addition, the federal claim was dismissed just one month before the scheduled trial date, which had been set six months earlier. The motion to remand was made just four days prior to the start of trial. Discovery had been completed. The state and federal claims had overlapping witnesses and documentary evidence. The decision not to remand avoided any further delay, inconvenience or expense to the parties. Thus, the district court had ample valid reasons to support its decision and we find no abuse of discretion.

II. Jurisdiction over the personal injury claim

In 1979, Jones rearranged his office furniture and suffered a rectal hernia. Jones never filed a workers' compensation claim for this injury. The district court allowed the testimony about this injury but ultimately concluded that it lacked jurisdiction over the claim because Jones's exclusive remedy for this injury was under the California Workers' Compensation and Insurance Act. Cal.Labor Code Secs. 3200 et seq.

The California Workers' Compensation and Insurance Act covers most injuries arising out of employment and provides the exclusive remedy for injuries covered by the Act. Cal.Labor Code Sec. 3600, Sec. 3601; Shoemaker v. Myers, 237 Cal. Rptr. 686 (Cal.App.1987). The Act creates a few narrowly drawn exceptions to its exclusive remedy provision, including an exception for injuries caused by intentional acts of physical aggression by the employer or fellow employees. Cal.Labor Code Sec. 3601. In these situations the injured employee can choose to sue for damages rather than accept a workers' compensation award. Magliulo v. Superior Court, 121 Cal. Rptr. 621 (Cal.App.1975).

Jones claims that his injury was caused by Bechtel's discriminatory conduct. He contends that he was given an inferior office because of his race. Jones testified that he was placed in an empty office when furnished offices were available. Two of his supervisors helped him move furniture into the office. He claims that the way the furniture was arranged caused him great emotional harm because his desk was placed next to the door and he felt like a spectacle. Jones testified that other employees walked by his office and laughed at him.

Jones argues that because his injuries were caused by deliberate acts of misconduct, he should be able to sue for damages. However, Jones has failed to show that his injury was caused by any physical aggression perpetrated by Bechtel or Bechtel employees. Jones appears to be attempting to state a claim for intentional infliction of emotional distress. However, even assuming that Jones proved an emotional distress claim, which he did not, California courts have not expanded the Act's limited exception for injuries caused by intentional torts to include physical injuries caused by an employer's infliction of emotional distress upon an employee. Cole v. Fair Oaks Fire Protection Dist., 233 Cal. Rptr. 308 (Cal.1987). Thus, Jones's exclusive remedy under California law would be workers' compensation. The district court was correct in determining that it had no jurisdiction over the claim.

III. The breach of contract and breach of covenant claims

There was no written contract between Bechtel and Jones. The district court found that the oral agreement between Jones and Bechtel created a relationship which was terminable at will. The district court then determined that Bechtel did not breach any implied covenant of good faith and fair dealing because Jones was treated fairly and equitably at all times.

The only evidence presented at trial regarding the nature of the employment relationship between Bechtel and Jones was Jones's testimony. Jones testified that his employment was characterized as "permanent full time." He stated that as he understood Bechtel's ordinary practice, the company would not terminate someone if his performance was satisfactory and there were jobs available. Jones admitted that he knew that because of the nature of Bechtel's business, there were frequent layoffs.

Jones contends that Bechtel must show good cause for discharging him, because a requirement of good cause is an implied-in-fact term of his employment contract. See Foley v. Interactive Data Corp., --- Cal.3d ----, ---- Cal.Rptr. (1988); Pugh v. See's Candy, Inc., 171 Cal. Rptr. 917 (Cal.App.1981). We need not decide whether Jones has established such an implied-in-fact agreement, however, because the district court made an adequate finding that Bechtel did show good cause for discharging Jones. The court found that Bechtel terminated Jones because of a reduction in Bechtel's work force and because of management's bona fide rating of his job performance. A reduction in work force is good cause for termination under California law. Clutterman v. Coachman Indus., Inc., 215 Cal. Rptr. 795 (Cal.App.1985).

The finding that Bechtel discharged Jones because of a reduction in work force has ample support in the record. Bechtel's work force had been steadily declining since 1982; the staff had been reduced from 44,000 employees to 18,000 employees during this period. In March 1982, Bechtel told its department heads that due to budget reductions, they should prepare for layoffs. William Booth, the head of Central Accounting, the department in which Jones was then employed, testified that he followed all of Bechtel's standard layoff procedures. Booth ranked his employees according to job performance, and then scheduled the three lowest ranked employees, including Jones, for layoff. During 1982, nineteen employees were laid off from Booth's department. Thus, the district court's finding that Jones was terminated because of a reduction in Bechtel's work force can not be said to be clearly erroneous.

B. Bechtel's failure to promote or transfer Jones

On appeal, Jones claims that even if the discharge was facially proper, Bechtel should still be held liable because Jones was placed in a position where he was vulnerable to layoffs by Bechtel's prior breaches of the covenant of good faith and fair dealing. Jones claims that he was only subject to layoff because Bechtel had wrongfully refused to promote or transfer him.

Jones testified that his employment agreement with Bechtel contained a promise by Bechtel that he would be eligible for transfer to positions for which he was qualified. Bechtel offered no evidence that this representation was not made. However, even assuming that the employment agreement contained a promise by Bechtel that Jones would be allowed to transfer, it does not necessarily follow that Bechtel assumed a duty to affirmatively seek transfer opportunities for Jones. We have been unable to find any case which extends an employer's implied promise of good faith and fair dealing that far. Bechtel's personnel manager testified that the ordinary method by which positions at Jones's level were filled was through Bechtel's job bulletin board. All positions which were available in permanent Bechtel offices were posted. Applications were available on the same bulletin board. Any employee could apply for any of these positions without his current supervisor knowing about the application.

Jones offered no evidence that he attempted to obtain a position by this method, or indeed by any method other than by his continued expressions of interest in obtaining a position in Jubail. Jones therefore failed to prove that Bechtel breached any promise it may have made to Jones that he would be allowed to seek transfer opportunities, since he failed to show that he sought transfer opportunities through the ordinary channels available to him.

Jones claims Ray Little, the Jubail recruiter in San Francisco, told Jones that he had a position in Jubail subject only to the "routine procedure" of getting the client to approve a work visa. Jones testified that Little told him to prepare to move. Jones relied on these statements and incurred expenses in arranging alternative living arrangements for his son and in storing his belongings, even though he admits that he was told that his application was rejected less than a week later.

Little testified that he never offered Jones a job. Instead, he told Jones that his application would be reviewed by Bechtel personnel at the Jubail job site. Little also testified that he told Jones the client, the Royal Commission, had final approval over all applications.

The district court found that no job offer was made and no conditional offer was made. The only evidence offered at trial regarding this issue was the conflicting testimony of Jones and Little. A district court's finding virtually never will be clear error when based on the trial judge's decision to credit the testimony of one witness over that of another, as long as each person's testimony is plausible and not contradicted by extrinsic evidence. Anderson v. Bessamer City, 470 U.S. 564 at 575 (1985); Gibbs v. Pierce County Law Enforcement Support, 785 F.2d 1396, 1402 (9th Cir. 1986). Thus, the district court's decision to credit Little's testimony over Jones's cannot be said to be clearly erroneous.

Jones's final contention on appeal is that he proved two charges of racial discrimination. First, he claims he proved that he was discriminated against when he lost his systems analyst job in 1978. Second, he contends that he proved Bechtel discriminated against him by not nominating him for positions between 1978 and 1982.

Jones's claims of racial discrimination are based on the California Fair Employment and Housing Act ("CFEHA"). Cal.Gov't Code Secs. 12901, et seq. A plaintiff's burden of proof for this cause of action is the same as that for a claim under CFEHA's federal counterpart, Title VII of the Civil Rights Act of 1964. 42 U.S.C. §§ 2000e, et seq. The plaintiff bears the initial burden of making a prima facie showing of discriminatory treatment. If the plaintiff makes such a showing, the burden shifts to the defendant to articulate a legitimate nondiscriminatory motive for its actions. The plaintiff must then demonstrate that the proffered reason was pretextual.

A. Jones's failure to locate a position between 1978 and 1982

To prove that Bechtel discriminated against him in filling available positions, Jones was required to prove: "(1) that he belongs to a racial minority; (2) that he applied and was qualified for a job for which the employer was seeking applicants; (3) that, despite his qualifications he was rejected; and (4) that, after his rejection the position remained open and the employer continued to seek applicants from persons of complainant's qualifications." McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973). Jones proved none of these elements at trial except that he belongs to a racial minority. Jones offered no evidence that he applied for any jobs during this time other than the positions in Jubail. The evidence showed that Bechtel did not continue to seek applications from applicants similar to Jones for the positions in Jubail after Jones was rejected. On the contrary, one position was filled by an applicant who was already at the job site and who was available for a lower salary while the other two positions were eliminated.

In addition, Jones never even proved he was qualified for the positions for which his application was submitted. He offered evidence that Ray Little thought Jones was qualified. However, Little testified that there were many occasions when he made an initial determination that an applicant was qualified but the personnel at the job site decided that the applicant did not meet the job requirements. Little sent Jones's resume to Jubail. The Jubail personnel were more qualified than Little or Jones to decide whether he could adequately perform the job. The personnel at Jubail were never informed of Jones's race. Therefore, their decision not to hire Jones could not have been based on racial bias. Thus, the district court correctly found that Jones failed to state a claim for racial discrimination by Bechtel's failure to transfer him to Jubail.

B. Jones's layoff from his systems analyst position in 1978

The McDonnell test has been adapted to address wrongful discharge cases. E.E.O.C. v. Hall Motor Transit Co., 609 F. Supp. 852, 859 (D.C.Pa.1985). To state a prima facie case of discriminatory discharge, a plaintiff must show that he was qualified for the job he was performing, was meeting the normal requirements of the job, and was treated adversely because of race. Id.

Jones testified that he was performing his systems analyst job adequately at the time he was removed from the position. However, the evidence showed that Jones was removed from the position during a reorganization of the department which resulted in a reduction in staff. Jones testified that his position remained unchanged by the reorganization. However, he also testified that he was told that the new position required someone with an accounting background. Jones admitted that the man that replaced him had an accounting background, while Jones did not.

In addition, the only evidence presented to support Jones's contention that this job action was racially motivated was Jones's testimony about a conversation which he said occurred approximately a year prior to the layoff. Jones claims that he was told that his race was a detriment to the entire project he was working on. The district court specifically found that Jones's testimony regarding this alleged conversation lacked credibility because Jones did not identify when the conversation occurred or who was present when it occurred. The district court determined that this testimony warranted little weight. A determination of the weight to be given to evidence is within the province of the district court and should not be overturned unless clearly erroneous. United States v. Hicks, 752 F.2d 379, 383 (9th Cir. 1985) (citing United States v. McConney, 728 F.2d 1195, 1200 (9th Cir. 1984) (en banc)). Given Jones's complete lack of detail regarding the conversation, the district court's decision to give his testimony about the alleged conversation very little weight is not clearly erroneous. Since Jones offered no other evidence that Bechtel's decision to remove him from this position was racially motivated, the district court's finding that Jones failed to prove that his layoff from this position was discriminatory is not clearly erroneous.


This case was properly removed to the district court based on Jones's ERISA claim. The district court did not abuse its discretion by retaining the case when the motion to remand was made just four days before trial.

The evidence at trial showed that Jones was laid off because of a reduction in Bechtel's work force. Jones failed to prove that Bechtel offered him a position in Jubail and then breached that promise or that any of Bechtel's actions were racially motivated. Thus, Jones failed to prove any of his claims. The district court's decision to enter judgment for Bechtel was proper.

We affirm.


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3