Jefferson v. Kellogg USA, Inc et al, No. 3:2008cv04132 - Document 23 (N.D. Cal. 2008)

Court Description: ORDER DENYING DEFENDANT'S MOTION TO DISMISS. Defendant's Answer to the complaint is due no later than 11/21/08. Signed by Judge Susan Illston. (SI, COURT STAFF) (Filed on 11/11/2008)
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Jefferson v. Kellogg USA, Inc et al Doc. 23 1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 LATOSHA JEFFERSON, 9 United States District Court For the Northern District of California 10 11 No. C 08-04132 SI Plaintiff, ORDER DENYING DEFENDANT’S MOTION TO DISMISS v. KELLOGG SALES COMPANY, 12 Defendant. / 13 14 Defendant Kellogg Sales Company1 has filed a motion to dismiss plaintiff’s first amended 15 complaint. The motion is scheduled for hearing on November 14, 2008. Pursuant to Civil Local Rule 16 7-1(b), the Court finds this matter appropriate for resolution without oral argument, and hereby 17 VACATES the hearing. Having considered the papers submitted, and for good cause shown, the Court 18 hereby DENIES defendant’s motion to dismiss. 19 BACKGROUND2 20 21 Plaintiff Latosha Jefferson, an African American, is a former employee of defendant Kellogg 22 Sales Company. Plaintiff was hired on or about March 7, 2001 as a territory service representative. 23 Complaint ¶ 16. In March, 2005, she was promoted to territory manager and held that position until she 24 was terminated on October 30, 2007. Id. 25 26 27 28 1 On October 29, 2008, the Court approved the parties’ stipulation for dismissal and substitution of defendants, which left defendant Kellogg Sales Company as the sole remaining defendant in the action. 2 All facts are taken from plaintiff’s first amended complaint. United States District Court For the Northern District of California 1 Plaintiff claims that employees at defendant company often made racially discriminatory 2 comments in her presence, and that plaintiff’s manager knew about these comments but took no action 3 to stop them. Id. ¶ 17. The workplace had no known or enforced anti-discrimination policies and 4 procedures. Id. 5 Plaintiff alleges several specific instances of racially discriminatory behavior. In one incident, 6 an employee at a diversity training presented a film that repeated the word “nigger.” Id. ¶ 18. Plaintiff, 7 the only black employee present at the training, was asked to share her view of the film. Id. When she 8 stated that she disapproved of the film’s use of the word “nigger,” the employee responded, “The film 9 is effective and we are not going to stop showing it.” Id. 10 In another incident, the territory manager for Oakland stated in a product placement meeting that 11 he planned to order defendant’s product on the first and fifteenth of the month and to advertise it near 12 a display for malt liquor. Id. ¶ 19. Plaintiff understood the remark as implying that residents of 13 Oakland, a “well known African-American community,” would be inclined to purchase malt liquor each 14 month when they received their paychecks. Id. 15 At other meetings, the same territory manager made “countless degrading comments” about the 16 crime rate in Oakland. Id. Plaintiff understood the remarks to insinuate that “African-Americans in the 17 community were criminals.” Id. 18 Plaintiff was terminated after a store receiving clerk requested that plaintiff no longer service 19 his store. Id., ¶ 25. Plaintiff alleges that in several other instances, non-black employees were not 20 terminated under similar circumstances. Id., ¶ 24. 21 Plaintiff filed a complaint in Alameda County Superior Court on July 15, 2008. In her first 22 amended complaint, she brought claims for racial discrimination, failure to investigate and prevent 23 discrimination and retaliation, and failure to take remedial action, all in violation of the California Fair 24 Employment and Housing Act (“FEHA”). See Cal. Gov. Code § 12940. Plaintiff also alleged common- 25 law claims for wrongful termination, negligent supervision, intentional infliction of emotional distress, 26 and defamation. 27 Defendant invoked diversity jurisdiction, see 28 U.S.C. § 1332, and removed to this Court 28 pursuant to 28 U.S.C. § 1441(a). Now before the Court is defendant’s motion to dismiss plaintiff’s 2 1 claims for negligent supervision, intentional infliction of emotional distress, defamation, and for 2 punitive damages. 3 United States District Court For the Northern District of California 4 LEGAL STANDARD 5 Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it 6 fails to state a claim upon which relief can be granted. The question presented by a motion to dismiss 7 is not whether the plaintiff will prevail in the action, but whether the plaintiff is entitled to offer 8 evidence in support of the claim. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other 9 grounds by Davis v. Scherer, 468 U.S. 183 (1984). 10 In answering this question, the Court must assume that the plaintiff’s allegations are true and 11 must draw all reasonable inferences in the plaintiff’s favor. See Usher v. City of Los Angeles, 828 F.2d 12 556, 561 (9th Cir. 1987). Even if the face of the pleadings suggests that the chance of recovery is 13 remote, the Court must allow the plaintiff to develop the case at this stage of the proceedings. See 14 United States v. City of Redwood City, 640 F.2d 963, 966 (9th Cir. 1981). Dismissing a complaint for 15 failure to state a claim is proper only “if it appears beyond doubt” that the plaintiff “can prove no set 16 of facts which would entitle him to relief.” Vazquez v. L.A. County, 487 F.3d 1246, 1249 (9th Cir. 2007) 17 (internal quotation marks omitted). 18 If the Court dismisses the complaint, it must then decide whether to grant leave to amend. The 19 Ninth Circuit has “repeatedly held that a district court should grant leave to amend even if no request 20 to amend the pleading was made, unless it determines that the pleading could not possibly be cured by 21 the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir.2000) (citations and internal 22 quotation marks omitted). 23 24 25 26 27 28 DISCUSSION 1. Plaintiff’s negligent supervision and intentional infliction of emotional distress claims are not barred by the exclusivity provisions of the Workers’ Compensation Act Defendant argues that plaintiff’s causes of action for negligent supervision and intentional infliction of emotional distress are barred by the Workers’ Compensation Act (“WCA”). In California, 3 United States District Court For the Northern District of California 1 when an employee sustains a personal physical injury during and arising out of the course of his 2 employment, the employee’s “sole and exclusive” remedy is under the WCA. Cal. Labor Code §§ 3600, 3 3602; see also Cole v. Fair Oaks Fire Protection Dist., 43 Cal. 3d 148, 160 (1987). 4 Certain types of injurious employer misconduct, however, are not covered by the exclusivity 5 provisions of the WCA. See Huffman v. Interstate Brands Companies, 121 Cal. App. 4th 679, 694 (2d 6 Dist. 2004). When employers step out of their proper role or engage in conduct of questionable 7 relationship to the employment, they may not then hide behind the shield of workers’ compensation. 8 See Fermino v. Fedco, Inc., 7 Cal. 4th 701, 708-15 (1994) (sexual or racial discrimination not included 9 in the compensation bargain). The proper inquiry is “whether the employer’s conduct violated public 10 policy and therefore fell outside the compensation bargain.” Id. at 715; see Maynard v. City of San Jose, 11 37 F.3d 1396, 1405 (9th Cir. 1994) (intentional and negligent infliction of emotional distress claims 12 based on alleged racially discriminatory retaliation not preempted by WCA); Hart v. Nat’l Mortgage 13 & Land Co., 189 Cal. App. 3d 1420, 1432 (4th Dist. 1987) (employer’s campaign of sexual harassment 14 fell outside the reasonably anticipated conditions of work). 15 16 A. 17 In this case, plaintiff’s negligent supervision claim is based on her allegations that she was forced 18 to watch a film that repeated the word “nigger”; that she was targeted by being asked to comment 19 publicly on the film; and that when she voiced her concerns, an employee at defendant company told 20 her that the film would continue to be used in trainings. Plaintiff also alleges that defendant’s 21 employees frequently made racially discriminatory comments at company meetings. These contentions 22 are sufficient to establish that defendant employer’s alleged conduct constituted racially discriminatory 23 acts. Such acts are contrary to public policy and therefore fall outside the exclusivity provisions of the 24 WCA. Negligent supervision 25 The authorities relied on by defendant do not require a contrary conclusion. In Stiefel v. Bechtel 26 Corp., 497 F. Supp. 2d 1138, 1152-53 (S.D. Cal. 2007), the court dismissed the plaintiff’s claim for 27 negligent supervision because he sought to recover for an industrial personal injury sustained in the 28 course of his employment, not for disability discrimination. Arendell v. Auto Parts Club, Inc., 29 Cal. 4 1 App. 4th 1261 (1st Dist. 1994) concerned plaintiffs’ claim that their employer failed to provide adequate 2 security despite a known crime risk. 3 4 5 district distinguished Coit as follows: 11 [Coit] is an anomaly for two reasons: first, the corporate entity in Coit would not functionally have disciplined or supervised the perpetrator of the sexual harassment because he was the president, chairman of the board, and majority shareholder of the corporation; second, the appellate court’s dicta in Coit misstates the reasoning of the California Supreme Court in Cole, which held that when the misconduct attributed to an employer includes actions which are a normal part of the employment relationship (such as demotions, promotions, criticism of work practices, and frictions in negotiations as to grievances), an employee suffering emotional distress causing disability may not avoid the exclusive remedy provisions of the Labor Code by characterizing the employer’s decisions as manifestly unfair, outrageous, harassment, or intended to cause emotional disturbance resulting in disability. In the instant case, defendants’ alleged conduct cannot be viewed as a risk of the employment expected to occur with substantial frequency in the working environment. Cole, 43 Cal.3d at 161. 12 See Greenfield v. America West Airlines, Inc., No. 03-5183, 2004 WL 2600135, at *7 (N.D. Cal. Nov. 13 16, 2004) (Patel, J.). 6 7 8 9 10 United States District Court For the Northern District of California Defendant also relies on Coit, 14 Cal. App.4th at 1606 (1st Dist. 1993). A district court in this 14 This Court finds Greenfield persuasive. Defendant’s attempt to distinguish Greenfield by 15 arguing plaintiff has alleged racial discrimination instead of sexual harassment is a distinction without 16 a difference. Contrary to defendant’s assertion, plaintiff’s claim for negligent supervision is based on 17 a purported pattern of discriminatory behavior, not solely on plaintiff’s termination. 18 Accordingly, defendant’s motion to dismiss plaintiff’s negligent supervision claim is DENIED. 19 20 B. 21 Causes of action for emotional and psychological damage are not barred by the WCA if the 22 distress was “engendered by an employer’s illegal discriminatory practices.” See Accardi v. Superior 23 Court, 17 Cal. App. 4th 341, 352 (2d Dist. 1993), disapproved of on other grounds by Richards v. 24 CH2M Hill, Inc., 26 Cal. 4th 798 (2001). According to plaintiff, defendant was motivated by racial 25 animus when it enforced the employment policies that led to plaintiff’s termination, which in turn 26 caused plaintiff to experience emotional distress. Plaintiff also claims to have suffered emotional 27 distress as a result of defendant’s discriminatory acts throughout her employment. Plaintiff’s claims do 28 not fall within the exclusionary provisions of the WCA because being targeted by racial discrimination Intentional infliction of emotional distress 5 United States District Court For the Northern District of California 1 is not included in the “compensation bargain,” see Maynard, 37 F.3d at 1405. 2 Defendant contends that plaintiff cannot state a claim because she alleges that defendant’s 3 employees were acting within the scope of their employment. This allegation does not defeat plaintiff’s 4 claim. The inquiry is whether the conduct violated public policy and therefore fell outside the 5 compensation bargain, not whether the defendant’s employees were acting in the scope of their 6 employment. Defendant’s reliance on Shoemaker v. Myers, 52 Cal. 3d 1 (1990) is misplaced. In 7 Shoemaker, the California Supreme Court expressly held that the exclusive remedy provisions apply 8 only in cases of such industrial personal injury or death. Id. at 16 (emphasis in original). Plaintiff 9 alleges that her injury was due to her racially-motivated discharge. This is injury “not seen as 10 reasonably coming within the compensation bargain.” Id. at 20. The other authorities cited by 11 defendant are inapposite. See Miklosy v. Regents of Univ. of California, 44 Cal.4th 876 (2008) (no racial 12 animus or other discrimination alleged); Up-Right, Inc. v. Van Erickson, 5 Cal. App. 4th 579, 583 (5th 13 Dist. 1992) (same); Vuillemainroy v. American Rock & Asphalt, Inc., 70 Cal. App. 4th 1280, 1285-86 14 (1st Dist. 1999) (same). 15 16 Accordingly, defendant’s motion to dismiss plaintiff’s intentional infliction of emotional distress claim is DENIED. 17 18 2. Plaintiff’s defamation claim is adequately pled 19 Defendant argues that plaintiff has not adequately pled defamation. In California, defamation 20 is an invasion of the interest in reputation. The tort involves the intentional publication of a statement 21 of fact that is false, unprivileged, and has a natural tendency to injure or that causes special damage. 22 See Cal. Civil Code §§ 45, 46. 23 Here, plaintiff claims that defendant’s employees made false statements about plaintiff’s poor 24 performance in her trade or profession and intentionally published the defamatory statements to third 25 parties. See Complaint ¶¶ 81, 82. Defendant argues that these allegations are insufficient because a 26 plaintiff is required to specifically identify the words that give rise to a defamation claim. The 27 authorities defendant cites for the proposition that the precise words must be pled are inapposite because 28 they state the standard for resisting a motion to strike pursuant to California Code of Civil Procedure 6 1 § 425.16 (anti-SLAPP actions). See, e.g., Gilbert v. Sykes, 147 Cal. App.4th 13, 31 (3d Dist. 2007) 2 (special motions to strike pursuant to § 425.16 operate “like a demurrer or motion for summary 3 judgment in reverse”). Defendant cites no authority establishing that the exact words making up the 4 allegedly defamatory statement must be pled in the employment context. United States District Court For the Northern District of California 5 Defendant also claims that plaintiff’s complaint is insufficient because it does not establish that 6 the statements were unprivileged.3 7 employment are conditionally privileged from a defamation claim. See Cal. Civ. Code § 47(c); see also 8 Noel v. River Hills Wilsons, Inc., 113 Cal. App. 4th 1363, 1368-69 (1st Dist. 2003). Where the 9 complaint shows that the statement is within a class qualifiedly privileged, it is necessary for the 10 plaintiff to go further and plead and prove that the privilege is not available as a defense in the particular 11 case, e.g., because of malice. See Kapellas v. Kofman, 1 Cal.3d 20, 29 (1969) (cited in Witkin, Summary 12 of California Law, Torts § 600, p. 883); see also Lundquist v. Reusser, 7 Cal. 4th 1193 (1994). Malice 13 can be established by “a showing that the defendant lacked reasonable grounds for belief in the truth of 14 the publication and therefore acted in reckless disregard of the plaintiff’s rights.” Lundquist, 7 Cal. 4th 15 at 1213. Communications made “without malice” in the context of 16 Here, plaintiff claims that defendant’s employees had no grounds for believing that the 17 derogatory statements about plaintiff’s poor performance at her job were true. Under Lundquist, his 18 allegation is sufficient to establish malice at this stage in the proceeding. 19 20 Accordingly, plaintiff’s defamation claim is adequately pled and defendant’s motion to dismiss this claim is DENIED. 21 22 3. Plaintiff has stated sufficient facts to allege punitive damage liability 23 California Civil Code § 3294 provides that a plaintiff may seek exemplary damages in a non- 24 contractual claim “where it is proven by clear and convincing evidence that the defendant has been 25 guilty of oppression, fraud, or malice . . .” The circumstances under which an employer may be held 26 27 28 3 Defendant appears to have abandoned its claim that plaintiff’s defamation cause of action is barred by the manager’s privilege, presumably because this privilege protects individual managers from independent liability and all the individual defendants have been dropped from the lawsuit. 7 United States District Court For the Northern District of California 1 liable for punitive damages based upon acts of an employee include: “the employer’s (1) advance 2 knowledge of the employee’s unfitness; (2) authorization or ratification of the wrongful conduct; and 3 (3) personal culpability. Moreover, a corporate employer may be liable only if the knowledge, 4 authorization, ratification or act was on the part of an officer, director or managing agent of the 5 corporation.” Grieves v. Superior Court, 157 Cal. App. 3d 159, 167 (4th Dist. 1984); see also Cal. Civ. 6 Code § 3294(b). 7 Here, plaintiff has stated sufficient facts to allege punitive damage liability. Plaintiff alleges that 8 Jim Hess and Tim Rodriguez are managing agents of defendant company. See Complaint ¶¶ 5, 6. 9 Plaintiff alleges that Hess made discriminatory remarks in company meetings, see Complaint ¶ 20, and 10 that Rodriguez treated plaintiff differently from white employees when he terminated her due to a 11 customer complaint, see Complaint ¶¶ 23, 24. These acts by managing agents Hess and Rodriguez are 12 sufficient to constitute “oppression, fraud, or malice.” See Monge v. Superior Court, 176 Cal. App. 3d 13 503, 511 (2d Dist. 1986) (“Under any formulation of the pleading standard, the . . . complaint, read as 14 a whole, sufficiently allege[s] a deliberate intent on the part of defendants to sexually harass and then 15 to retaliate against plaintiffs”). 16 17 Accordingly, defendant’s motion to strike plaintiff’s claims for punitive damages is DENIED. Defendant’s answer to the complaint is due no later than November 21, 2008. 18 19 IT IS SO ORDERED. 20 21 Dated: November 11, 20008 SUSAN ILLSTON United States District Judge 22 23 24 25 26 27 28 8