COUNTY OF SAN DIEGO EVENT TIME: 09:00:00 AM DEPT.: C-73. CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 08/15/2014

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1 SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO HALL OF JUSTICE - October 28, 2014 EVENT DATE: 10/31/2014 JUDICIAL OFFICER:Joel R. Wohlfeil EVENT TIME: 09:00:00 AM DEPT.: C-73 CASE NO.: CU-WT-CTL CASE TITLE: SAMUEL WALLACE VS BAE INC [IMAGED] CASE CATEGORY: Civil - Unlimited CASE TYPE: Wrongful Termination EVENT TYPE: Summary Judgment I Summary Adjudication (Civil) CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 08/15/2014 The Motion of Defendant BAE Systems San Diego Ship Repair, Inc. ("BAE" or "Defendant")), pursuant to California Code of Civil Procedure, Section 437e, for an Order granting for summary judgment or, in the alternative, summary adjudication as to the causes of action in the Complaint of Plaintiff Samuel Wallace ("Plaintiff') on the grounds that no triable issue as to any material fact exists and BAE is entitled to judgment as a matter of law, is granted in part and denied in part. BAE's Motion for summary judgment is denied. BAE's alternative Motion for summary adjudication is denied as to the first through fifth, eighth, ninth and eleventh causes of action, and the claim for punitive damages. BAE's alternative Motion is granted as to the sixth, seventh and tenth causes of action. Regarding the first cause of action, the FEHA makes it "an unlawful employment practice" for an employer to terminate an employee based on that employee's race, color, national origin or ancestry (among other characteristics). Government Code 12940(a). "Disparate treatment" discrimination (as opposed to "disparate impact" discrimination) is intentional discrimination against one or more persons on prohibited grounds. Guz v. Bechtel National. Inc. (2000) 24 Cal. 4th 317, 354, fn. 20. California has adopted the three-stage burden shifting test established by the United States Supreme Court for trying claims of disparate treatment discrimination. k:l. at 354 (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). Plaintiff has the initial burden of establishing a prima facie case of discrimination. kl. Generally, Plaintiff must provide evidence that (1) he was a member of a protected class, (2) he was qualified for the position sought or was performing competently in the position he held, (3) he suffered an adverse employment action, such as termination, demotion, or denial of an available job, and (4) some other circumstance suggests discriminatory motive. kl The burden then shifts to the employer to rebut the presumption by producing. admissible evidence that its action was taken for a legitimate, nondiscriminatory reason. kl. at The ultimate issue is simply whether the employer acted with a motive to discriminate illegally. kl. at 358. The employer's true reasons need not necessarily have been wise or correct. kl. If the employer sustains its burden, the presumption of discrimination disappears. Guz v. Bechtel National. Inc., supra at 356. Plaintiff then has the opportunity to attack the employer's proffered reasons as pretexts for discrimination, or to offer any other evidence of discriminatory motive. kl. In an appropriate case, evidence of dishonest reasons, considered together with the elements of the prima facie case, may permit a finding of prohibited bias. kl. Proof of discriminatory intent often depends on inferences rather than direct evidence. Nazir v. United Airlines. Inc. (2009) 178 Cal.App.4th 243, 283. As a result, very little evidence of such intent is necessary to defeat summary judgment. kl An inadequate or biased investigation "can itself be evidence of pretext." ld. at 277. Page: 1

2 Regarding Plaintiff's prima facie case, he is a member of a protected class (African-American minority). It is undisputed that Plaintiff performed his job competently. Plaintiff suffered an adverse employment action when his temporary assignment at BAE was terminated. Even if not separately considered adverse employment actions, the manner in which Plaintiff's assault complaint was addressed and the reassignment evidence the discrimination (see below) that ultimately resulted in termination. Disputed material facts exist demonstrating the existence of other circumstances suggesting a discriminatory motive. First, Plaintiff presents evidence tending to support the theory that BAE's initial investigation into the assault and the subsequent review by the "Ethics Department" were substandard and discounted Plaintiffs rendition of events. It appears that these investigations may not have adhered to Defendant's own standards and policies, and also may have discounted or ignored evidence supporting Plaintiff's position that he was not the aggressor. Second, there is evidence that "Craft Manager" Paul Vance used discriminatory language or imagery when he compared Plaintiff (and Richey) to a monkey. Defendant denies that Vance was involved in the decision to terminate Plaintiff. However, he was a higher level supervisor and he admitted that he "recommended" termination. Both of these facts make it reasonable to infer that he played some part in the termination decision. Third, there is evidence that Plaintiff was reassigned into a less desirable position shortly after lodging this complaint. It appears that he was the only member of his crew that was reassigned. Given the timing, it can be reasonably inferred that the reassignment was done in retaliation for complaining about the assault. Further, given the surrounding circumstances, it can be inferred that this retaliation would not have been forthcoming but for Plaintiffs race. Fourth, the overall timing of the termination demonstrates that it is related to the assault complaint. Although Defendant maintains that the termination resulted from Plaintiff's belligerent behavior after he reported the assault, one could reasonably infer that the initial complaint also factored in. Again, given the surrounding circumstances, it can be inferred.that this retaliation would not have been forthcoming but for Plaintiffs race. Fifth, there is evidence that within months after the reported altercation, Noah Richey was promoted into a "journeyman" position. This promotion occurred despite the fact that witness statements exist appearing to substantiate that Richey was the aggressor. This promotion appears to support a conclusion that Plaintiff was treated unfairly. Sixth, Plaintiff presents evidence demonstrating the existence of a history of racial tensions and complaints about discrimination at this shipyard. Seventh, Defendant appears to argue that Plaintiff did not reference racial discrimination when making his complaints to H.R. and the Ethics Department. However, Judy Glicker, an H.R. supervisor, admits that she asked Jennifer Norris about Plaintiff's race. Glicker testified that she asked about his race because: "We had a lot of different ethnic groups working within the shipyard, and discrimination complaints were usually with regard to ethnicity And being human resources people we want to know as much about the situation as possible." (emphasis added) Contrary to Defendant's argument, its own employee appears to acknowledge a "situation" in which Plaintiff did complain about discrimination, or at least where discrimination could be inferred from his complaints. The apparent contradiction as between Defendant's argument and the evidence suggests a dispute regarding a discriminatory motive. Given the evidence cited above, Plaintiff has satisfied his initial burden, and the burden shifts to Defendant to rebut the presumption by producing evidence that the termination was based on a legitimate, nondiscriminatory reason. As already discussed above, Defendant satisfies this burden. There is evidence that the termination was premised on three things: Plaintiff's false claim that he had retained legal counsel; his belligerence during interviews with H.R./Ethics; and his threat to physically harm Mr. Richey. Page:2

3 As Defendant/employer has satisfied its burden, the presumption of discrimination disappears. Plaintiff must challenge the employer's proffered reasons as pretexts for discrimination, or may offer other evidence of a discriminatory motive. The evidence cited above demonstrates potential dishonesty and prohibited bias. Thus, this evidence is also sufficient to challenge the purported legitimate grounds for termination. Summary adjudication of the first cause of action is denied. Regarding the second cause of action, Government Code section 12940(k) makes it unlawful for "an employer... to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring." The employer's duty to prevent harassment and discrimination is affirmative and mandatory. Northrop Grumman Corp. v. Workers' Comp. Appeals Bd. (2002) 103 Cal. App. 4th 1021, Prompt investigation is a necessary step by which an employer meets its obligation. kl. As discussed above, a claim for discrimination has been stated such that this cause of action also survives. Although BAE may maintain written policies and procedures prohibiting discrimination and retaliation, disputed facts exist suggesting that such policies were not enforced. There is evidence that discrimination may have occurred. This evidence also suggests that Defendant did not recognize the discriminatory motive, or sufficiently investigate the potential occurrence of discrimination. This is evidence that Defendant did not have in place an adequate procedure for preventing discrimination. Regarding the third and fourth causes of action, an employer who terminates an employee in retaliation for protesting unsafe working conditions violates fundamental public policy embodied within Labor Code section 6310, and the discharged employee may bring a tort action for wrongful discharge in violation of public policy. Cabesuela v. Browning-Ferris Industries of California. Inc. (1998) 68 Cal.App.4th 101, 107. Also, Labor Code section 98.6 prohibits adverse employment action, including discharge, in retaliation for complaints relating to employee rights under the Labor Code. The evidence cited and discussed above supports these causes of action. Importantly, the timing of the reassignment and termination evidences a connection to the assault complaints. Also, it is disputed whether the investigation of the assault complaints was cursory or abbreviated, and this supports pretext. Statements purportedly made by Plaintiff's supervisor (Vance) evidence that Defendant discounted Plaintiffs complaint. These statements suggest that Mr. Vance was angered by the complaint, and that he had the ability to influence the termination decision. Regarding the fifth cause of action, an employer's right to discharge an at-will employee is subject to limits that fundamental public policy imposes. Green v. Ralee Eng'g Co. (1998) 19 Cal. 4th 66, 71. At-will employees may recover tort damages from their employers if they can show they were discharged in contravention of fundamental public policy. kl A discharge in violation of the FEHA may give rise to a common law claim for wrongful discharge. See Stevenson v. Superior Court (1997) 16 Cal. 4th 880 (claim based on age discrimination). As disputed facts exist supporting claims for discrimination in violation of the FEHA and retaliation in violation of the Labor Code, this cause of action also survives. Regarding the sixth and seventh causes of action, "at-will" provisions in personnel handbooks, manuals or memoranda do not bar, or necessarily overcome, other evidence of the employer's contrary intent. Stillwell v. Salvation Army (2008) 167 Cal.App.4th 360, 380 (quoting Guz v. Bechtel National.. Inc., supra). On the other hand, such statements may not be ignored in determining whether the parties' conduct was intended, and reasonably understood, to create binding limits on an employer's. statutory right to terminate the relationship at-will. kl at Most cases applying California law have held that an at-will provision in an express written agreement, signed by the employee, cannot be overcome by proof of an implied contrary understanding. kl at 381. A reasonable fact finder could find that an employer has restricted its right to terminate its employees where it adopts personnel policies that describe detailed rules and procedures for the termination of employees under particular circumstances. kl It is undisputed that Plaintiff was an at-will employee of Aerotek. Defendant's Exhibit 1A is an acknowledgement signed by Plaintiff stating that his employment with Aerotek was "at will," and that the emplo}'.'.ee handbook "is neither a contract of employment nor a legal document." Separate Statement at Page:3

4 no. 74. In response to Separate Statement number 75 Plaintiff states: "Based on his work performance and duration of employment, Wallace had a reasonable expectation of continued employment... ~... BAE's policies, as set forth iri its employee handbook, limited its grounds for termination of Wallace's employment. BAE admits these policies applied to Wallace and governed the parties' relationship." Plaintiffs opposition to the Separate Statement refers to a BAE policy statement that retaliation for reporting workplace violence or discrimination will not be tolerated. However, such blanket policy statements are not sufficiently definite or specific and do not overcome the express acknowledgement of "at will" employment. This is not a situation where policies and procedures set forth levels of progressive discipline suggesting that an employee may not be terminated except under specified circumstances. The very nature of employment through a temporary staffing agency demonstrates that the employment was intended to be transient and "at will." Thus, summary adjudication of these causes of action is proper. Regarding the eighth and ninth causes of action, where reasonable persons may differ, it is for the jury to determine whether the conduct alleged is sufficiently extreme and outrageous to result in liability. Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 499. "Employment discrimination may, of course, result in injury entitling an employee to damages in a civil action under the [FEHA]... The same conduct, however, may also simultaneously cause additional injury outside the ambit of statutory protection. For example, as alleged in this case, an employer's discriminatory actions may constitute assault and battery or outrageous conduct redressable under a theory of intentional infliction of emotional distress." Rojo v. Kliger (1990) 52 Cal.3d 65, 81 (internal citation omitted). A claim for lled arising out of employment is not barred by Workers' Compensation exclusivity where the distress is engendered by an employer's illegal discrimination practices. Nazir v. United Airlines. Inc. (2009) 178 Cal.App.4th 243, 288. Neither discrimination nor harassment is a normal incident of employment. ld... As discussed above, disputed material facts exist suggesting that illegal discrimination and retaliation occurred. As a result, it is disputed whether conduct giving rise to these emotional distress claims also exists. Further, such conduct falls outside of the normal scope of employment. Regarding the tenth cause of action, Civil Code section 51.7(a) provides that persons within this state "have the right to be free from any violence, or intimidation by threat of violence, committed against" them because of political affiliation, or physical characteristics such as race. This statute essentially provides a civil remedy for hate crimes. Ramirez v. Wong (2010) 188 Cal.App.4th 1480, However, an employer will not be held vicariously liable for an employee's malicious or tortious conduct if the employee substantially deviates from the employment duties for personal purposes. Farmers Ins. Group v. County of Santa Clara (1995) 11 Cal.4th 992, Defendant cites evidence demonstrating the lack of evidence that the alleged altercation was racially motivated. Plaintiff speculates regarding this motivation, but the H.R. notes regarding the incident do not record any racial motivation. Plaintiff cites the deposition testimony of Judy Glicker, Defendant's H.R. representative. She notes that there is tension between racial groups at the facility, and that this has resulted in past discrimination complaints. Human Resources tracks the race of employees who are parties to complaints so they can determine if there are any trends with regard to racial tensions. Thus, the only admissible evidence proffered by Plaintiff is the admission that racial tension generally exists among employees at the shipyard. However, it is pure speculation to assume that this same racial tension motivated Noah Richey with respect to the altercation in question. An employer may be liable for an employee's act where the employer either authorized the tortious act or subsequently ratified an originally unauthorized tort. Ventura v. ABM Industries Incorporated (2012) 212 Cal.App.4th 258, 272. The failure to discharge an employee who has committed misconduct may be evidence of ratification. ld... The theory of ratification is generally applied where an employer fails to investigate or respond to charges that an employee committed an intentional tort, such as assault or battery. ld... Whether an employer has ratified an employee's conduct is generally a factual question. ld... Defendant could not have ratified Richey's "hate crime" because this would have required some amount of knowledge regarding Richey's motivation for initiating the altercation. There is no evidence that Defendant's representatives learned of any such motivation, but chose to ignore this motivating factor.. Page:4

5 CASE TITLE: SAMUEL WALLACE VS BAE CASE' NUMBER: CU-WT-CTL Retaining Richey as an employee does not demonstrate ratification of a racial motivation when Defendant was unaware of such a motivation. Thus, summary adjudication of this cause of action is proper. Defendant's memorandum does not separately address the eleventh cause of action. Essentially, this cause of action is premised on the same wrongful conduct such that it also survives. Regarding Defendant's "after acquired evidence" argument, it presents evidence tending to establish two things. First, Plaintiff smoked marijuana on June 27, Second, on October 21, 2013, Plaintiff punched Richey while directly outside the premises of the shipyard. Defendant argues that either of these incidents would have led to termination of Plaintiff's assignment in any event such that this entire action fails. Defendant cites Camp v. Jeffer, Mangels. Butler & Marmara (1995) 35 Cal.App.4th 620 in support of this argument. However, this case is factually distinguishable such that this action is not barred as a matter of law. Whether the after acquired evidence doctrine may bar a claim or remedy is a disputed issue of material fact. Plaintiff presents evidence suggesting that his use of marijuana would not necessarily have resulted in his termination. He acquired the marijuana via a medical prescription. He did not smoke the drug during work hours. It is disputed whether he would haye actually failed a company drug test. And even if he did fail such a drug test, the deposition of Defendant's representative suggests that such employees are routinely rehired. The purported second altercation with Noah Richey occurred after Plaintiffs employment ended. It is nonsensical to argue that conduct occurring after the employment ended would have resulted in the employment ending. In fact, it is speculation as to whether this second altercation would have occurred if Plaintiff had not been terminated. Finally, even if both incidents would have resulted in termination, this is not conduct that goes "to the heart of" the employment relationship. As a result, "the purpose and effect of the antidiscrimination statutes" would be "unacceptably undermined" by allowing a fact that played no part in the firing decision to bar any recovery. Thus, public policy mitigates against Defendant's argument. See Camp v. Jeffer. Mangels. Butler & Marmara, fil!..pia at Defendant argues that punitive damages are not appropriate as a matter of law because the reassignment and termination were routine business activities arising in the ordinary course of the employment relationship. As discussed above, disputed material facts exist demonstrating that the reassignment and termination were motivated by discrimination and retaliation. As a result, punitive damages may be appropriate and summary adjudication of this claim for damages is improper. Plaintiffs request for judicial notice is denied and the Court declines to take judicial notice of Exhibit "1" attqched to Plaintiffs opposing papers. Plaintiffs evidentiary objections are overruled, except for Nos. 5-11, 14, 15, 17-19, 22, 23, which are sustained., BAE's evidentiary objections are overruled. Page: 5