HARVEY, v. SYBASE, INC.,

Filed 4/18/08

CERTIFIED FOR PARTIAL PUBLICATION^*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

In this employment discrimination case, the same person who terminated plaintiff had previously hired and promoted her. Defendant, the employer, relies on several California and federal cases to argue that this same actor evidence compels a reversal of the trial courts denial of defendants motion for judgment notwithstanding the verdict (JNOV) on the issue of liability. We conclude such evidence is entitled to no special weight and does not modify the standard of review, which requires us to affirm if substantial evidence supports the jurys verdict.

Between 1995 and 2003, Nita White-Ivy supervised plaintiff Marietta Harvey in the human resources departments of two separate companies. White-Ivy hired and promoted Harvey at Pyramid Technology and at defendant Sybase, Inc. (Sybase). Following her termination from Sybase by White-Ivy in 2003, Harvey filed an action under the California Fair Employment and Housing Act (FEHA) (Gov. Code,  12900 et seq.) claiming that Sybase, acting through White-Ivy, violated the FEHA by terminating Harvey based on either her race or her gender. The jury agreed, returned a verdict in Harveys favor on that claim, and awarded both compensatory and punitive damages. Sybase unsuccessfully moved for JNOV, and, on appeal, challenges that ruling, arguing that the evidence of discriminatory intent Harvey presented was insufficient in light of White-Ivys long history of treating Harvey with extraordinary favor. Sybase also claims that the trial court committed prejudicial error in responding to a question posed by the jury during deliberations.

Harvey has filed a cross-appeal, contending the trial court erred in granting Sybase JNOV on the issue of punitive damages and nonsuit on Harveys claims of wrongful termination in violation of the public policies expressed in Labor Code sections 232 and 232.5. Harvey also contends that the trial court applied the wrong standards when it awarded her attorney fees as a prevailing party under the FEHA.

In the published portion of this opinion, we examine two of the issues raised by the parties in their respective appeals. First, we reject Sybases contention that same actor evidence should be accorded special weight in reviewing a trial courts decision to deny an employers motion for JNOV. Second, we analyze the use of Labor Code sections 232 and 232.5 as the bases for claims of wrongful termination in violation of public policy. We determine that the trial court correctly granted nonsuit as to each of these claims because Harvey failed to engage in the activity protected by Labor Code section 232 and because the policy set forth in Labor Code section 232.5 was not well established at the time of her discharge.

We address the other issues raised by the parties appeals in the unpublished portion of our decision. We reverse the trial courts grant of JNOV on the jurys award of punitive damages to Harvey, and we reverse, in part, the courts award of attorney fees. In all other respects, we affirm the judgment.

FACTUAL AND
PROCEDURAL BACKGROUND^[1]

In 1995, eight years prior to Harveys February 2003 termination from Sybase, she was hired as a human resources (HR) representative at Pyramid Technology by White-Ivy, who was then head of Pyramids HR department. Both Harvey and White-Ivy are Filipina. White-Ivy promoted Harvey to HR manager a year later. John Chen, who was then Pyramids president and chief executive officer (CEO), subsequently awarded Harvey a stock bonus.

Chen left Pyramid in 1997 and became president and chief operating officer at Sybase. Soon thereafter, White-Ivy followed Chen to Sybase, where she became a vice-president in charge of worldwide HR. In the spring of 1998, White-Ivy hired Harvey as an HR director at a salary of $100,000 per year. White-Ivy repeatedly promoted Harvey, first to senior HR director, then to group HR director in 2001. The latter position was one that White-Ivy created specifically for Harvey and which made her the second-highest ranking manager in Sybases HR department. In addition to the promotions, White-Ivy granted Harvey frequent, significant increases in salary and awarded her a number of bonuses and perks. And from the time of her hiring in 1998 until the fall of 2002, White-Ivy gave Harvey very high ratings for her job performance.

In early 2001, Sybase senior manager Steven Capelli remarked to Chen that he thought Sybases HR department looked like an airport. Chen interpreted Capellis comment to mean that the HR department had diversity problems.^[2] Chen then passed the comment on to White‑Ivy in early 2001. Following this, White-Ivy made a series of comments reflecting a preference for employing white males.

For example, in the spring of 2001, White-Ivy told HR employee Katie Flotten there were too many Asians in the HR department, there should be more white males, and the department was starting to look like an airport. Senior HR representative Linda Hartman recalled that at a recruiter meeting in approximately February 2002, White-Ivy expressed a preference for hiring white males. HR employee Kristin Straka was present at the meeting and recalled that White-Ivy had expressed a preference for hiring males (but not necessarily white males) and had said we need more men in this department, because there is too much gossip. Straka also recalled that during a department meeting held sometime after January 2002, White-Ivy said that Chen had commented that the HR department looked like an airport. Flotten recalled that at various meetings White-Ivy commented that we have too many women, because all these people are pregnant and going out on leave. Although Flotten could not remember precisely when White-Ivy made these comments, she testified that the last time she heard them was sometime after January 2002.

In 2002, White-Ivy disclosed certain performance concerns to Harvey. In late September 2002, White-Ivy informed Harvey that she was taking back Harveys responsibility for corporate staffing, [d]ue to the criticality of the staffing function and the fact that this is a corporate function. In mid-December, White-Ivy told Harvey that she was considering demoting Harvey from group HR director to senior director. White-Ivy stated she was troubled about a decline in Harveys performance and she believed that Harveys performance might improve if her responsibilities were reduced.^[3]

In mid-December 2002, directly after White-Ivy told Harvey about the possible demotion, Harvey spoke to Sybases chief financial officer (CFO), Pieter Van der Vorst, and told him White-Ivy was planning to demote her and cut her pay, but she did not understand why. Harvey did not ask Van der Vorst to speak with Chen about the matter, but Van der Vorst volunteered to do so. After her conversation with Van der Vorst, Harvey had a similar conversation with Sybase senior vice-president Raj Nathan. Harvey testified White-Ivy had not told her how much her pay would be cut and that she was just waiting for the [personnel action request].

That same month, Sybase executive vice-president Michael Bealmear spoke to Harvey at an office holiday party and told her he had heard she would no longer be supporting his group. Bealmear later asked White-Ivy why Harvey was in the penalty box, a term Bealmear had coined, not a term Harvey had used. White-Ivy told Bealmear she was disappointed with Harveys performance and was trying to reduce Harveys workload to help her.

In January 2003, White-Ivy told Harvey she would not be demoting her or reducing her pay. Harvey told both Van der Vorst and Nathan that she would not be demoted.

That same month, White-Ivy orally approved two new positions in the HR department, a senior generalist HR director and a senior director of staffing. Requisitions opening the positions were completed on February 5.^[4] During a discussion between HR employee Marilyn Seuss-Myers and White-Ivy about the staffing director position, White-Ivy told Seuss-Myers she would not give Seuss-Myers the position because she had concerns about Seuss-Myers performance. White-Ivy said further that Chen wanted her to hire two white males because he felt that the HR department looked like an airport. White-Ivy told Seuss-Myers that she was helped by the fact that she (Seuss-Myers) was white, but was disadvantaged by the fact that she was not male.

On February 13, 2003, Flotten met with Van der Vorst and told him that she was concerned that she might be terminated because she had gone out on stress leave and had filed a workers compensation claim. She also mentioned that she felt that the data in an HR department survey had been tampered with. On the same day, Kristin Straka spoke to Van der Vorst about the HR department survey and explained that she had been told that some of the results were changed to make them appear more favorable to the HR department.

After hearing from Harvey, Flotten, and Straka, Van der Vorst met with Chen and told him about the conversations. Chen gave Van der Vorst permission to discuss the matter with White-Ivy. On February 13 or 14, 2003, Van der Vorst met with White-Ivy and discussed with her some of the concerns that Harvey, Flotten, and Straka had voiced to him. After Van der Vorst met with White-Ivy alone, he met with her again in Chens presence to discuss the concerns of these three HR employees.

On February 18, 2003, White-Ivy went to Harveys office and accused Harvey of having spoken to Van der Vorst the previous Friday and to Bealmear about being put in the penalty box. Harvey denied having spoken to Van der Vorst the previous Friday and said she had not told Bealmear that White-Ivy had put her in the penalty box, adding that [t]hose are not my words. White‑Ivy instructed Harvey to come to her office at 2:00 p.m.

When Harvey arrived for the 2:00 p.m. meeting, White-Ivy said that the purpose of the meeting was to terminate Harveys employment at Sybase. White‑Ivy said Harvey had stabbed [White-Ivy] in the back by telling Bealmear that White-Ivy had put her in the penalty box. Harvey denied using the phrase penalty box in speaking to Bealmear. At the end of the meeting, White‑Ivy told Harvey she was eliminating Harveys group director position. In Sybases HR documentation, White-Ivy characterized the termination as an elimination of position rather than as one for cause. White-Ivy offered Harvey two and one-half months severance pay provided Harvey signed a release of claims against Sybase. Harvey did not sign the release and received no severance package.

White-Ivy later stated she terminated Harvey because Harvey had betrayed her trust by making derogatory comments about White-Ivy, by lying about speaking to Van der Vorst, and by telling Van der Vorst (untruthfully, in White-Ivys view) that she did not understand why White-Ivy proposed demoting her. The decisive factor, according to White-Ivy, was Harveys conversation with Van der Vorst; that completed [her] decision to terminate Harvey.

The next day, February 19, 2003, White-Ivy held a meeting for the entire HR department. During the meeting, White-Ivy discussed a restructuring of responsibilities within the HR department, and explained that there would be two new senior HR directors. About one week later, Harvey called Chen to express her interest in being considered for one of the positions. Chen told Harvey he would love for [Harvey] to come back to Sybase but she should talk to White-Ivy to work out their differences.

Harvey and White-Ivy then arranged an interview for Harvey on the evening of April 2, 2003. On that day, however, Harvey received a letter from White-Ivy stating she had chosen other candidates for the positions sought by Harvey. The two positions were ultimately filled by two white males.

On July 22, 2003, after receiving a right to sue letter from the FEHA, Harvey filed an action against Sybase in Alameda County Superior Court. Her complaint alleged Sybase had violated Government Code section 12940^[5]by terminating and not rehiring her due to her gender, race, or national origin. She also claimed wrongful termination in violation of the public policies expressed in Labor Code sections 232.5 and 923.^[6] The trial court later granted Harvey leave to amend her complaint to add a claim for wrongful termination in violation of the public policy expressed in Labor Code section 232. Sybase defended the action, claiming that discrimination had played no part in the companys decision to terminate Harvey, and White-Ivy had fired Harvey for lying and insubordination.

Trial in this action began in September 2004. After the close of plaintiffs case, the trial court granted Sybases motion for nonsuit on Harveys claims for wrongful termination in violation of public policy, but denied Sybases motion for nonsuit on Harveys discrimination claims.

The jury returned a verdict for Harvey. It found that Harveys race or gender was a motivating reason for her termination and further found that White‑Ivy would not have terminated Harvey without regard to her race or gender. The jury also found that Harveys race or gender was a motivating reason in the decision not to rehire her, but found that White-Ivy would not have rehired her in any event. Based on these findings, the jury awarded Harvey a total of $1,342,943 in compensatory damages. After a bifurcated punitive damages phase, the jury awarded Harvey $500,000 in punitive damages.

Sybase then moved for a new trial and for JNOV. It challenged the sufficiency of the evidence to support both liability and punitive damages, and argued that the trial court had prejudicially erred in responding to a question the jury had posed during the course of its deliberations.^[7] In an order filed December 6, 2004, the trial court granted JNOV on the punitive damages verdict and a conditional new trial on that component in the event its JNOV ruling was set aside on appeal; it denied the motions in all other respects. The trial court found as a matter of law that White-Ivys conduct did not amount to malice or oppression. It concluded that although White-Ivy obviously intended to fire Harvey, this was not the sort of intent to cause injury required to support an award of punitive damages.

The trial court then entered judgment for Harvey in the amount of $1,342,943, plus costs to be determined by the court. The trial court subsequently entered an order awarding Harvey $28,602.98 in costs.

Sybase filed an appeal from the judgment and the portion of the trial courts order denying its motion for JNOV or, in the alternative, for new trial. Harvey cross-appealed from the judgment and from the portion of the trial courts order granting JNOV to Sybase on the issue of punitive damages.

After briefing and argument, the trial court awarded Harvey approximately $620,000 in attorney fees for the fees incurred in prosecuting her case. In a separate order, the trial court granted Harvey $75,000 for fees-on-fees, or the fees incurred in pursuing her attorney fee claims against Sybase. Harvey appealed from both fee orders, and Sybase filed cross-appeals. We then consolidated the appeals for briefing and disposition.

DISCUSSION

I. SYBASES APPEAL

Sybase first challenges the trial courts denial of its motion for JNOV. It argues there was no substantial evidence from which the jury could find that Harvey was terminated for discriminatory reasons. It also contends the trial court erred in its response to a question the jury posed during deliberations concerning Sybases mixed-motive affirmative defense.

A. The Sufficiency of the Evidence

1. Standard of ReviewThe Substantial Evidence Test

Sybase challenges the superior courts denial of its motion for JNOV. An appeal from a denial of such a motion is a challenge to the sufficiency of the evidence supporting the jurys verdict and the trial courts decision. (Carter v. CB Richard Ellis, Inc. (2004) 122 Cal.App.4th 1313, 1320.) In ruling on a motion for JNOV,  the trial court may not weigh the evidence or judge the credibility of the witnesses, . . . but must accept the evidence tending to support the verdict as true, unless on its face it should be inherently incredible. Such order may be granted only when, disregarding conflicting evidence and indulging in every legitimate inference which may be drawn from plaintiffs evidence, the result is no evidence sufficiently substantial to support the verdict.  [Citation.] (Ibid.)

In reviewing the trial courts denial of a motion for JNOV, our task is to determine whether there is any substantial evidence, whether contradicted or uncontradicted, supporting the jurys conclusion; if such substantial evidence exists, we must uphold the trial courts denial of the motion. (Shapiro v. Prudential Property & Casualty Co. (1997) 52 Cal.App.4th 722, 730.)  Substantial evidence is evidence of ponderable legal significance, evidence that is reasonable, credible and of solid value. [Citations.] Substantial evidence . . . is not synonymous with any evidence. Instead, it is   substantial proof of the essentials which the law requires.  [Citations.] (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651.) The ultimate question before us is whether a reasonable trier of fact could have found for the respondent based on the whole record. (Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1633; accord, Reeves v. Sanderson Plumbing Products, Inc. (2000) 530 U.S. 133, 150.)^[8]

2. Proving Discriminatory IntentLegal Framework

The FEHA prohibits discrimination in employment on the basis of certain enumerated personal characteristics, including race, national origin, and gender. (Gov. Code,  12940, subd. (a).) In an action under the FEHA, a plaintiff must show that she suffered an adverse employment action because of a protected characteristic. (Chin et al., Cal. Practice Guide: Employment Litigation (The Rutter Group 2007)  7:345, p. 7-57) One way a plaintiff may do this is by proving disparate treatment, which is intentional discrimination against one or more persons on prohibited grounds. (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 354, fn. 20; Frank v. County of Los Angeles (2007) 149 Cal.App.4th 805, 822.)

In some cases, the evidence will establish that the employer had mixed motives for its employment decision. [Citation.] (Heard v. Lockeed Missiles & Space Co. (1996) 44 Cal.App.4th 1735, 1748.) In such a case, both legitimate and illegitimate factors contribute to the employment decision. (Ibid.) In a mixed-motive case, the plaintiffs initial burden is to prove that discrimination was a motivating factor in the adverse employment action, even though other factors may also have been involved. (Chin et al., Cal. Practice Guide: Employment Litigation, supra,  7:488, p. 7-82.) If the plaintiff meets this burden, then the burden shifts to the employer to demonstrate that it would have taken the same action even if it had not taken the prohibited characteristic into account. (Id.,  7:490, p. 7-83.)

Once the case is submitted to the jury, the jury is left to decide which evidence it finds more convincing, that of the employers discriminatory intent, or that of the employers [nondiscriminatory] reasons for the employment decision. (Caldwell v. Paramount Unified School Dist. (1995) 41 Cal.App.4th 189, 204.) As a consequence, in reviewing the denial of Sybases motion for JNOV, we consider only whether the trial court correctly concluded that . . . substantial evidence supported the jurys conclusion. (See Begnal v. Canfield & Associates, Inc. (2000) 78 Cal.App.4th 66, 73.)

3. Same Actor Evidence

In support of the verdict, Harvey points to a number of statements demonstrating a discriminatory animus. In particular, she relies on the airport remark made by Capelli to Chen in 2001, and relayed by Chen to White-Ivy. Chen testified that he understood Capellis remark to mean that the HR department had diversity problems because in his experience the airport, at the time, was very dominated by Asians. Harvey also argues that certain comments by White-Ivy, testified to by HR employees Flotten, Straka, Hartman and Seuss-Myers, provided substantial evidence that White-Ivy understood Chens remark to her as a directive to increase the proportion of white males in the HR department, and Harveys discharge was designed to help accomplish this goal. We agree. Though the pivotal issue in disparate treatment cases [is] whether a particular individual was discriminated against and why (Heard v. Lockeed Missiles & Space Co., supra, 44 Cal.App.4th at p. 1756), remarks by the decision maker reflecting a general intent to discriminate against members of the same protected group as the plaintiff provide substantial evidence of a discriminatory animus toward the plaintiff. (Cordova v. State Farm Ins. Co. (9th Cir. 1997) 124 F.3d 1145, 1149; see Chuang v. Univ. of California Davis (9th Cir. 2000) 225 F.3d 1115, 1128; Godwin v. Hunt Wesson, Inc. (9th Cir. 1998) 150 F.3d 1217, 1221.)

Relying on both federal and California case law, Sybase argues, however, that the jurys verdict was not supported by substantial evidence because the same actor rule raised a strong inference that White-Ivy did not discriminate in terminating Harvey, and Harvey failed to offer substantial evidence to overcome that inference.  [W]here the same actor is responsible for both the hiring and the firing of a discrimination plaintiff, and both actions occur within a short period of time, a strong inference arises that there was no discriminatory motive.  (Horn v. Cushman & Wakefield Western, Inc. (1999) 72 Cal.App.4th 798, 809, quoting Bradley v. Harcourt, Brace and Co. (9th Cir. 1996) 104 F.3d 267, 270-271; accord, West v. Bechtel Corp. (2002) 96 Cal.App.4th 966, 980; Slatkin v. University of Redlands (2001) 88 Cal.App.4th 1147, 1158.)

The rationale underlying this inference is that  [f]rom the standpoint of the putative discriminator, [i]t hardly makes sense to hire workers from a group one dislikes (thereby incurring the psychological costs of associating with them), only to fire them once they are on the job.   (Horn v. Cushman & Wakefield Western, Inc., supra, 72 Cal.App.4th at p. 809, quoting Proud v. Stone (4th Cir. 1991) 945 F.2d 796, 797.) The same actor inference has also been applied in cases in which the putative discriminator promoted the plaintiff before taking adverse action against him. (See Coghlan v. American Seafoods Co. LLC. (9th Cir. 2005) 413 F.3d 1090, 1098.)

Judicial analysis of the effect of same actor evidence has been clouded by imprecise language. California cases, for example, have stated that same actor evidence creates both an inference and a presumption, sometimes within the same sentence. (See Horn v. Cushman & Wakefield Western, Inc., supra, 72 Cal.App.4th at p. 809, fn. 7; see also West v. Bechtel Corp., supra, 96 Cal.App.4th at p. 981.) The Ninth Circuit has explained that [t]he same actor inference is neither a mandatory presumption (on the one hand) nor a mere possible conclusion for the jury to draw (on the other). Rather it is a strong inference that a court must take into account on a summary judgment motion. [Citation.]^[9] (Coghlan v. American Seafoods Co. LLC., supra, 413 F.3d at p. 1098.) [W]hen the allegedly discriminatory actor is someone who has previously selected the plaintiff for favorable treatment, that is very strong evidence that the actor holds no discriminatory animus, and the plaintiff must present correspondingly stronger evidence of bias in order to prevail. (Id. at p. 1096, fn. 10; see also Bradley v. Harcourt, Brace and Co., supra, 104 F.3d at p. 271 [strong inference].) Horn also adopted the strong inference language. (Horn, at p. 809.)

Sybases reference to a same actor rule is not rooted in any cited case. And presumptions and inferences, though similar, are distinct. Our Evidence Code defines a presumption as an assumption of fact that the law requires to be made from another fact or group of facts . . . established in the action (Evid. Code, 600, subd. (a), italics added), and presumptions may be created by case law as well as by statute (2 Jefferson, Cal. Evidence Benchbook (Cont.Ed.Bar 3d ed. 2008) Presumptions,  46.30, p. 1094). But, despite the apparent assumptions in Horn and West, no California case or statute has created a same actor presumption. An inference, on the other hand, is driven by logic, not law. It is a deduction of fact that may logically and reasonably be drawn from another fact or group of facts . . . established by the evidence. (Evid. Code, 600, subd. (b).) Clearly, same actor evidence will often generate an inference of nondiscrimination. But whether or not the inference so drawn is a strong inference should not be an a priori determination, divorced from its factual context. Among the factors that influence the strength of such an inference are: (1) the nature of the benefit(s) conferred and the adverse employment action taken by the actor; (2) the length of time between the positive and negative actions taken; and (3) the existence and nature of any motivating factors for the adverse action that arose after the benefit was conferred. The facts of our case well illustrate the mistake in positing that same actor evidence always creates a strong inference.

The existence of same actor evidence in an employment discrimination case should not change the standard for reviewing the denial of a motion for JNOV or alter the meaning of the term substantial evidence contained in that standard. The West case, relied upon by Sybase in its same actor argument, in fact supports our conclusion. The procedural posture of West was identical to our own. Plaintiff had prevailed on his age discrimination claim in the trial court, and Bechtels motion for JNOV had been denied. On appeal, Bechtel claimed the trial court erred in denying its motion. Following a two-step analysis, West agreed. First the same individual who fired West had hired him one month before, creating an inference of nondiscrimination. (West v. Bechtel Corp., supra, 96 Cal.App.4th at pp. 980-981.) Second, [n]o substantial evidence support[ed] any contrary implication. (Id. at p. 981.) West, in other words, recognized that in the appeal of a denial of a motion for JNOV, the same actor inference does not change the standard of review: if substantial evidence to support the plaintiffs verdict exists, we must affirm.

In its briefing, Sybase pays lip service to this principle. But Sybase consistently argues that the introduction of same actor evidence places a higher burden on a plaintiff in an employment discrimination case. Principally, Sybase contends that its same actor evidence requires Harvey to introduce specific evidence of White-Ivys animus towardHarvey. Sybase argues that evidence of an intent to discriminate against members of Harveys race and gender is insufficient.

We disagree. We would usurp the jurys function if we adopted the Sybase approach. Our case contains strong same actor evidence, but there is also substantial evidence that White-Ivy had formed the intent to make race- and gender-based personnel decisions in the HR department. It is not our job to determine, as a matter of law, the strength of the competing inferences. Instead, the jury must do so, and, on review we are limited to deciding if substantial evidence supports that determination. Evidence that the same actor conferred an employment benefit on an employee before discharging that employee is simply evidence and should be treated like any other piece of proof. (Waldron v. SL Industries, Inc. (3d Cir. 1995) 56 F.3d 491, 496, fn. 6; see Williams v. Vitro Services Corp. (11th Cir. 1998) 144 F.3d 1438, 1443.) Placing it in a special category as a rule or presumption or stating it creates a strong inference attaches undue influence to same actor evidence and threatens to undermine the right to a jury trial by improperly easing the burden on employers in summary judgment and postverdict motions. The trial court correctly rejected the argument that the jurys verdict lacked substantial evidence to support it.

B. Sybases Claim of Instructional Error^*

Sybase contends that the trial court prejudicially erred in responding to a question the jury posed to the court during its deliberations concerning the jury instruction on Sybases mixed-motive affirmative defense.

At trial, Harvey testified that when she decided to speak to Van der Vorst about her problems with White-Ivy, she did so in reliance on Sybases internal Open Communication/Feedback policy. This policy explained that when raising work-related questions, problems, or concerns with management, a Sybase employee is not required to follow the usual chain of communication/organizational chain and may raise concerns at any management level in the organization. The policy stated Sybase has a non-retaliation policy, which means that those raising any legitimate issues or concerns are protected from retaliation or reprisal. Harvey testified she believed that going to Van der Vorst would be protected activity under the policy.

White-Ivy testified she believed Harvey had been untruthful when she spoke with Van der Vorst, Bealmear, and others and had later lied when she described those conversations to White-Ivy. White-Ivy explained that it was Harveys conversation with Van der Vorst that completed White-Ivys decision to terminate her. Sybases counsel stated in closing argument that Harveys conversations with Bealmear and Van der Vorst had motivated White-Ivy to fire her second in command, and that White-Ivy had done so because Harvey had mischaracterized White-Ivys actions when speaking to others at the company and had then lied to White-Ivy when asked about those conversations.

At the close of the trial, the jury was instructed on Sybases mixed-motive affirmative defense. (See BAJI No. 12.26.) The instruction read to the jury stated: If you find that the employers action, which is the subject of plaintiffs claim, was actually motivated by both discriminatory and non-discriminatory reasons, the employer is not liable if it can establish by a preponderance of the evidence that its legitimate reason, standing alone, would have induced it to make the same decisions. [] An employer may not, however, prevail in a mixed motives case by offering a legitimate and sufficient reason for its decision if that reason did not motivate it at the time of the decision. Neither may an employer meet its burden by merely showing that at the time of the decision it was motivated only in part by a legitimate reason. The essential premise of this defense is that a legitimate reason was present, and standing alone, would have induced the employer to make the same decision.

During deliberations, the jury sent a note to the trial judge concerning the mixed-motive jury instruction. The note read: Page 24 line 7 of the jury instructions talks about a legitimate reason. Is retaliation a legitimate reason or is retaliation illegal, and, therefore, not a legitimate reason for termination? If the reason is against Sybases policy is it not legitimate?

After receiving the note, the trial court asked counsel for their views on how to respond. Harveys counsel argued that retaliation for exercising legal rights would be illegal, but stated the fact that [the reason] is against Sybases policy alone does not make it illegitimate. Sybases counsel responded that retaliation in the abstract is not illegal and the jury should be so instructed. Sybases counsel also stated there was nothing unlawful in and of itself in violating the company policy . . . unless its in violation of the law as to what your instruction says and asked the court to instruct the jury that a violation of company policy would not be illegal. After Sybases counsel requested that the court explain that the retaliation claim was no longer in the case, Harveys counsel noted one of the things we argued in closing argument . . . was that it was retaliation because of her race. That she was fired, unlike the two White workers because of her race, so . . . if we say retaliation is no longer an issue, that would be misleading, as well. Sybases counsel then responded that [i]ts not a retaliation case. Its a discrimination case as to her race. Sybases counsel then argued that because Harveys claims of wrongful termination in violation of public policy were no longer in the case, retaliation would be a legitimate reason for discharge because [the reason] has to be against the law, a violation of [Sybases] policy would not be a violation of the law, and, therefore, it would be a legitimate reason.

After hearing from counsel, the trial court summoned the jury back to the courtroom. The trial court attempted to answer the question as follows:

THE COURT: First of all, I will give you an additional jury instruction that could have been given earlier. [] The plaintiffs claim that her termination was contrary to public policy is no longer an issue in this case. Do not speculate as to why this claim is no longer involved in this case. You should not consider this during your deliberations. [] . . . [] There is a reference here to a legitimate reason and the question is: Is retaliation a legitimate reason or is retaliation illegal, and, therefore, not a legitimate reason for termination. [] The word retaliation is sort of a loaded word. I mean, when you hear retaliation, it seems to indicate from just stating it that its illegal, but in the abstract, retaliation is not illegal. Retaliation is illegal only if the reason for the retaliation is illegal. That may not help you much, but thats the way it works. [] When retaliation is illegal, again, it depends on whether the reason for the retaliation is illegal. The remaining claims in this case rest only on what we generally call discrimination. In other words, the claim as to the termination and the claim as to the potential new jobs, each must rest on discrimination due to gender or race or not. [] Part of this question says if the reason is against Sybases policy is it not legitimate? Ill answer it this way. The fact that a company does not follow its own policies does not make it illegal by itself. It doesnt become illegal just because the company doesnt follow its own policies. Thats about all I can tell you. I hope thats helpful. If you want something else, you can ask me. [] Youre welcome to try to ask the question now. I realize it puts you on the spot and you can send me out a written question, if you want.

THE JURY FOREPERSON: Okay. Does that answer it? (Comment directed to jury panel.)

THE COURT: If somebody retaliated because of a persons race, for example, that would be illegal retaliation. In another context somebody could be said to retaliate, but its not illegal unless there is an illegal reason for it. I guess Ill put it that way. I hope that is helpful.

JUROR NO. 7: I guess the question for us nonlegal people, we dont know if retaliation is illegal, and we are being asked to say if we think retaliation was legitimate, and we dont know how to do that since we dont know if its illegal. We dont know if . . .

THE COURT: Well, if I didnt give you the jury instruction that said a particular act was illegal, then you should not assume that it is illegal, and there are other instructions that might be helpful. There arent very many instructions that touch on the liability here, and you might look at all the instructions that deal with liability. There are only three, four or five that deal with liability. If you look at all those together, it might be helpful to you. Okay. Thank you.

When the proceedings began the next day, the trial court stated, When you asked a question yesterday Im not sure that I gave you a clear enough answer off the top of my head, so I will read the following to you and you will have it in writing. This instruction applies only if you first find that an employment decision was motivated, in part, by an employees race or gender. That is, if you answer to either question, question 1 or 5 on the verdict form, if the plaintiffs race or gender played a motivating role in the decision, the employer has the burden to prove by a preponderance of the evidence that it would have made the same decision even if it had not taken race or gender into account. . . . [T]hat covers the complicated instruction that you have.

Later that day, the jury returned a verdict for Harvey. By a vote of nine to three, the jury found (1) Harveys race or gender was a motivating reason for Harveys discharge and (2) White-Ivy would not have terminated Harvey without regard to her race or gender. On Harveys failure to rehire claim, the jury returned a verdict for Sybase, finding by a vote of nine to three that Harveys race or gender were motivating factors in the decision not to rehire her, but finding by a vote of 11 to one that White-Ivy would not have rehired her anyway.

1. Standard of Review

We engage in a two-step review. We first determine whether the trial courts response to the jury correctly stated the law, and if we conclude it did not, we then ask whether the erroneous instruction was prejudicial. (See, e.g., LeMons v. Regents of University of California (1978) 21 Cal.3d 869, 875 [examining whether instruction was properly given before proceeding to consider prejudice].) Whether an instruction misstates the law is a legal issue that we review de novo. (Costa v. Desert Palace, Inc. (9th Cir. 2002) 299 F.3d 838, 858 (en banc), affd. sub nom.Desert Palace, Inc. v. Costa (2003) 539 U.S. 90; accord, National Medical Transportation Network v. Deloitte & Touche (1998) 62 Cal.App.4th 412, 427.) We assess prejudice in the context of the entire trial record. (Norman v. Life Care Centers of America, Inc. (2003) 107 Cal.App.4th 1233, 1249.) When we do so,  we must assume that the jury might have believed the evidence upon which the instruction favorable to the losing party was predicated, and that if the correct instruction had been given upon that subject the jury might have rendered a verdict in favor of the losing party. [Citations.] (Henderson v. Harnischfeger Corp. (1974) 12 Cal.3d 663, 674.)

2. Legitimate Reasons for Adverse Employment Action

In Guz, an age discrimination case, the California Supreme Court explained what constitutes a legitimate reason for an adverse employment action. Because the ultimate issue in employment discrimination cases is simply whether the employer acted with a motive to discriminate illegally,  legitimate reasons [citation] in this context are reasons that are facially unrelated to prohibited bias, and which, if true, would thus preclude a finding of discrimination. [Citations.] (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 358, fn. omitted.) Such reasons, if nondiscriminatory, need not necessarily have been wise or correct. (Ibid.) Thus, an employers reason need not be laudable to qualify as legitimate for these purposes; indeed, the reason may even be reprehensible so long as it is nondiscriminatory.^[10] (See, e.g., Slatkin v. University of Redlands, supra, 88 Cal.App.4th at p. 1157 [personal grudge is a legitimate, nondiscriminatory reason for adverse employment action].) This is because the relevant statutes make it illegal only for employers to take action against employees on the basis of certain prohibited characteristics.^[11] (See, e.g., Gov. Code,  12940, subd. (a).) The statutes do not prohibit employers from taking adverse action against employees for reasons the average person might consider unfair or distasteful. (See Hersant v. Department of Social Services (1997) 57 Cal.App.4th 997, 1005.)

3. The Trial Court Adequately Answered the Jurys Question

Viewed in light of the record, we conclude that the trial courts response to the jurys inquiry was a correct statement of the law and adequately responded to the question posed. First, the trial court gave an answer that largely reflected what had been requested by Sybases counsel. Sybases counsel had argued that retaliation in the abstract is not illegal, and the trial judge told the jury specifically that in the abstract, retaliation is not illegal. Sybases counsel had also argued the court should instruct that a violation of company policy would not, by itself, constitute illegal conduct, and the court so instructed. (See Brewer v. Board of Trustees of University of Il (7th Cir. 2007) 479 F.3d 908, 922 [The Civil Rights Act of 1964 does not create liability for any decision that violates [an employers] policy, only for decisions that violate [the acts] policy against racism].) Second, the trial court correctly admonished the jury that Harveys remaining claims were based on alleged race or gender discrimination, explaining that the claim as to the termination and the claim as to the potential new jobs, each must rest on discrimination due to gender or race or not. (See Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 361 [liability for discriminatory employment action must be based on evidence of intentional discrimination on grounds prohibited by statute].) Finally, after giving his initial response to the jurys question, the trial judge invited the jury to ask further questions and told the jurors, you can send me out a written question, if you want. One juror did ask a follow-up question, to which the judge responded, but after that there were no further inquiries from the jury. We must therefore assume that the jury was satisfied with the judges response.

The trial judges response to the jury was a correct statement of the law. In any event, even if the trial courts response erroneously suggested to the jury that it could find that firing Harvey was illegitimate because it violated company policy, we would conclude that Sybase was not prejudiced by the remark. In its special verdict, the jury made no findings that the basis for firing Harvey was legitimate or illegitimate. Instead, the jury found race- or gender-based discrimination motivated the termination, and no termination would have occurred in the absence of this discrimination. Any confusion on the jurys part as to the scope of the term legitimate would not have influenced these findings.

Story Continue As Part II ..

Publication courtesy of California free legal advice.

Analysis and review provided by Carlsbad Property line attorney.

San Diego Case Information provided by www.fearnotlaw.com

^* Pursuant to California Rules of Court, rules 8.1105 and 8.1110, parts I.B., II.A. and II.C. of this opinion are not certified for publication.

^[1] In this appeal, Sybase challenges the denial of its motion for JNOV. In such a case, we state the facts in the light most favorable to Harvey, who was the prevailing party below. (Gibbs v. American Airlines, Inc. (1999) 74 Cal.App.4th 1, 4, fn. 1.) Here, we also recite the same actor evidence relied upon by Sybase in order to properly resolve its argument that such evidence impacts our review.

^[2] Capelli did not testify at the trial and we have no direct evidence of what message he intended to convey by his airport remark.

^[3] The parties presented conflicting evidence at trial concerning the alleged decline in Harveys performance. This evidentiary dispute has minimal relevance to these appeals because Sybase does not contend that it terminated Harvey for poor performance. (See Lowe v. J.B. Hunt Transport, Inc. (8th Cir. 1992) 963 F.2d 173, 175.)

^[4] To approve a new position at Sybase, the HR department completes a requisition, a written approval of the position. After the requisition has been completed, the job opening is published and recruitment occurs.

^[5] Government Code section 12940, subdivision (a), provides in pertinent part: It shall be an unlawful employment practice, unless based upon a bona fide occupational qualification, or, except where based upon applicable security regulations established by the United States or the State of California: [] (a) For an employer, because of the race, . . . , national origin, . . . , [or] sex, . . . of any person, to refuse to hire or employ the person or . . . to discharge the person from employment . . . , or to discriminate against the person in compensation or in terms, conditions, or privileges of employment.

^[6] On appeal, Harvey does not address her claim under Labor Code section 923, and we therefore treat it as abandoned.

^[7] During its deliberations, the jury had asked the court to explain the meaning of a portion of the jury instructions. The question concerned what constituted a legitimate reason for discharge and asked whether retaliation was a legitimate reason for termination. We set out the facts relevant to this issue in the discussion section of this opinion.

^[8] Because of the similarity between federal and state antidiscrimination laws, California courts look to pertinent federal precedent when applying the FEHA. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 354.)

^[9]Coghlan applied the same actor inference in the context of a summary judgment motion. (Coghlan v. American Seafoods Co. LLC., supra, 413 F.3d at p. 1098.) Appellate courts have also applied the inference in reviewing postverdict motions. (West v. Bechtel Corp., supra, 96 Cal.App.4th at pp. 980-981 [applying same actor inference in reversing denial of employers motion for JNOV]; see also Grossmann v. Dillard Department Stores, Inc. (8th Cir. 1997) 109 F.3d 457, 459 [considering same actor inference in reversing district courts denial of employers motion for judgment as a matter of law]; Jacques v. Clean-Up Group, Inc. (1st Cir. 1996) 96 F.3d 506, 512 [considering same actor inference in reviewing denial of plaintiffs motion for judgment as a matter of law after verdict for employer]; Birkbeck v. Marvel Lighting Corp. (4th Cir. 1994) 30 F.3d 507, 513 [applying same actor inference in affirming judgment as a matter of law for defendant employer]; cf. Lowe v. J.B. Hunt Transport, Inc., supra, 963 F.2d at pp. 174-175 [applying same actor inference in affirming directed verdict for employer].)

^* See footnote, ante, page 1.

^[10] Many reasons that might motivate an employer to take action against an employee are less than admirable but are not prohibited by antidiscrimination laws. Thus, in some cases, [t]he true reason for the action of which the plaintiff is complaining might be something embarrassing to the employer, such as nepotism, personal friendship, the plaintiffs being a perceived threat to his superior, a mistaken evaluation, the plaintiffs being a whistleblower, the employers antipathy to irrelevant but not statutorily protected personal characteristics, a superior officers desire to shift blame to a hapless subordinate . . . or even an invidious factor but not one outlawed by the statute under which the plaintiff is suing; or the true reason might be unknown to the employer; or there might be no reason. (Wallace v. SMC Pneumatics, Inc. (7th Cir. 1997) 103 F.3d 1394, 1399.)

^[11] The FEHA also prohibits certain forms of retaliation. For example, Government Code section 12940, subdivision (h) . . . , . . . forbids employers from retaliating against employees who have acted to protect the rights afforded by the [FEHA]. (Yanowitz v. LOreal USA, Inc. (2005) 36 Cal.4th 1028, 1035.) This form of retaliation is not at issue in this case, and it is apparent from the jurys note that it was not using the word retaliation in this sense.