Swanson v. Equilon Enters. LLC

Full title: RONALD K. SWANSON, Plaintiff and Appellant, v. EQUILON ENTERPRISES, LLC…

Court: COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION FIVE

Date published: Jan 18, 2012

No. A129205 (Cal. Ct. App. Jan. 18, 2012)

Opinion

A129205

01-18-2012

RONALD K. SWANSON, Plaintiff and Appellant, v. EQUILON ENTERPRISES, LLC, Defendant and Respondent.

Jones

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Contra Costa County Super. Ct. No. C07-000463)

Plaintiff Ronald K. Swanson sued his former employer, Equilon Enterprises, LLC (Shell or the Company), for age discrimination in violation of the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900, et seq.), wrongful termination in violation of public policy, and breach of implied contract.¹ After plaintiff presented his case at trial, the trial court granted Shell's motion for nonsuit and dismissed the complaint.

1 Plaintiff dismissed the individual defendants and his claims for age harassment in violation of Government Code section 12940, subdivision (j), violation of the Unfair Competition Law (Bus. & Prof. Code, § 17200), and intentional infliction of emotional distress.

On appeal, plaintiff contends the court abused its discretion by excluding "relevant, admissible evidence." Plaintiff also argues the court erred by granting Shell's nonsuit motion. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Begins Working at Shell and is Promoted to Shift Team Leader

Plaintiff was born in 1954. In 1977 — when plaintiff was 22 — he began working as a laborer at the Shell refinery in Martinez (refinery). He later worked as an operator. In 1989, Shell promoted plaintiff to foreman, or shift team leader, a nonunion staff position. As shift team leader, Swanson supervised operators and served as "turnaround coordinator" approximately four or five times between 1989 and 2004.² Although Swanson technically remained a shift team leader from 1989 until December 2005, he accepted offers to temporarily serve in other positions — including as an Operations Maintenance Coordinator (OMC) — to "make [himself] a more valued employee for Shell." In late July 2002, plaintiff accepted a temporary position as an OMC. Plaintiff's Performance Evaluations

2 According to plaintiff, a "turnaround" occurs when a refinery is shut down so that pipes can be cleaned and inspected for damage. A turnaround typically takes between 30 and 40 days. Plaintiff received recognition, including cash bonuses, for his work as turnaround coordinator.

In the late 1990's, Swanson was nominated for the "President's Award," the "top award that the [Company] gives." From 1999 to the first half of 2003, Shell gave plaintiff numerous awards, including several "Super Awards" for superior performance and for being "proactive" on a "safety issue."

From 2001 to 2003, Shell rated employees on the following scale: P (premium), V+ (highly valued), V (valued), V- (moderately valued) and U (underperforming). Employees who received a U would be asked to leave the refinery. In 2001, then department manager Jerry Forstell completed plaintiff's performance assessment; Forstell gave plaintiff a "V" rating for valued. Forstell, however, identified areas where plaintiff needed to improve and noted he "did not believe a permanent OMC or TA coordinator position was appropriate for the department."

Plaintiff spent the first half of 2002 as turnaround coordinator and the remaining half as an OMC. Forstell rated plaintiff a "V" in 2002; he opined plaintiff "enjoyed one of his best years in DH in 2002" and noted plaintiff's role in a successful turnaround. Forstell also noted, however, that plaintiff had a lot to learn. Plaintiff understood that if he did not improve in 2003, he would get a rating below a V.

In mid-2003 — when plaintiff had been an OMC for about a year — the OMC job began to change in several ways to increase the reliability of the refinery's maintenance process. Instead of reporting to an operations specialist, plaintiff began reporting directly to his manager, who supervised all of the OMCs at the refinery. Plaintiff was required to take over "large projects" and was required to participate in weekly training sessions on a new computer software application system being implemented at the refinery. Shell was trying to align the OMCs throughout the refinery to make sure they were "all on the same page and doing exactly the same thing[.]"

As the OMC job was changing, Jeff Fletcher became plaintiff's manager. During one-on-one meetings with plaintiff, Fletcher advised plaintiff how he wanted him to do his job differently. Plaintiff responded by telling Fletcher the new procedures required him to take on more responsibilities, and to attend additional meetings, some of which he missed. In October 2003 — about two months before plaintiff's year-end evaluation — Fletcher told plaintiff his performance was not meeting expectations.

Fletcher completed plaintiff's 2003 performance evaluation and rated him a "V-", which plaintiff acknowledged was a "bad rating." Fletcher noted plaintiff was: (1) not very "open to influence by others;" (2) "not yet capable of delivering all of the services within [his] role;" and (3) not necessarily able to "visualize what is expected of the OMC [role] or where the OMC role is going." Fletcher also noted, however, that plaintiff was becoming "more engaged towards meeting the performance expectations of the role" and had a "good working knowledge of the area in which [he] work[s]." After plaintiff received the evaluation in February 2004, he reminded Fletcher the evaluation did not mention the three super awards he had received at the beginning of 2003.³ Fletcher told plaintiff it was "too late to change" the evaluation.

3 The self-assessment portion of the evaluation, completed by plaintiff, did indicate plaintiff had received two super awards in 2003.

In 2003, Shell began assigning each employee an "individual performance factor" rating (IPF) to determine eligibility for merit salary increases and bonuses. Shell ranked employees in each salary grade solely on their performance. At the end of 2003, Tony Paul — the production manager at the Martinez refinery — and others ranked plaintiff "at the bottom of the performance ranking of [his] salary grade." Paul had reservations about plaintiff's performance: he was concerned about the "requirements of [the OMC] role and [plaintiff's] analytical and organizational capabilities to do the role well." Paul concluded the OMC role was not a good fit for plaintiff. In February 2004, plaintiff received an IPF rating of .3.

In March 2004, Fletcher informed plaintiff that Dan Carr — who was about 10 years younger than plaintiff — would replace him in the OMC role. Plaintiff would be moved to the special projects coordinator role.⁴ Plaintiff objected; he explained to Fletcher the Company had promised to keep him in the OMC role until 2007. Plaintiff also talked to a representative from the Shell Human Resources Department about how Fletcher had been treating him. Shell's Workforce Reduction Plan

4 That same month, Fletcher gave plaintiff a super award for completing repairs under "tough time constraints."

In late 2002 or early 2003, the Company shut down a portion of a lubrication plant and moved between 50 and 60 employees from that plant to the Martinez refinery. The refinery then had a "higher staffing level than was necessary." On May 19, 2004, Rudy Goetzee notified senior department managers that Shell was implementing a workforce reduction plan at all United States refineries to reduce costs and improve profitability.

The memorandum outlining the procedures and timeline for the reduction included offering all nonunion employees voluntary "enhanced severance" packages and, if necessary, requiring "involuntary severances." Age was not a factor in determining who would be offered the severance packages: all nonunion members (or staff) were eligible. First, Shell would offer financial incentives for employees who volunteered to take the severance package. If not enough employees volunteered, the Company would identify the weakest performers in each pay grade based on overall performance in 2001, 2002, and 2003; those employees would be at risk of termination. Employees who were involuntarily severed would receive a maximum of 10 weeks of pay. Plaintiff was "with a group of people that had the lowest performance ratings" in 2001, 2002, and 2003; a chart ranking 56 refinery employees by IPF ratings from 2001 to 2004 placed plaintiff at the bottom, ranked 56th. In 2004, plaintiff "was probably the lowest performer" of all of the staff employees in the production department at the refinery in "terms of the performance evaluations[.]"

A few weeks later, on May 27, 2004, plaintiff learned about Shell's goal to reduce between 40 and 50 staff positions through the workforce reduction plan. He also learned that if not enough people volunteered to take the enhanced severance package, the "poor performers" over the previous three years would be identified and possibly terminated.⁵Plaintiff spoke to Paul about his removal from the OMC role and his concerns about his 2003 performance evaluation. Paul told plaintiff "he felt . . . Fletcher did not have all of the material to effectively give [plaintiff] a proper evaluation" but that it was too late to change the evaluation. Plaintiff also told Paul he was concerned about being laid off; in response, Paul said plaintiff was a "valued employee" and "guaranteed [plaintiff's] name was not on any list to be severed."

5 There were between 700 and 800 employees working at the Martinez refinery between 2003 and 2008.

In June 2004, Fletcher presented Swanson with the enhanced severance package and gave him a form to sign if he was interested in accepting. Fletcher approached plaintiff because he was among the group of lowest performers at the refinery. Swanson signed "no" on the form, indicating he was not interested in accepting the package.

Shell Offers Plaintiff the Enhanced Severance Package

On July 20, 2004, plaintiff met with Fletcher and Paul, who told him Shell was going to involuntarily terminate "poor performers" — including plaintiff — because not enough people had accepted the voluntary severance package. At that time, plaintiff knew his performance rating was lower than his coworkers'. Paul told plaintiff that if he accepted the severance package, he would receive $128,000 and could stay with the Company until June 2005. If he did not accept the package, he would leave the Company in September 2004 with 10 weeks of pay. Paul advised plaintiff that if he was interested in taking a union position, that he should notify Fletcher within 10 days. Paul cautioned that a union position might not be available and urged plaintiff to seek legal advice regarding the severance package.

The next day, plaintiff met with Fletcher and told him "that if Shell was truly downsizing . . . that [he] would be definitely interested in taking a demotion" to a union position. When Fletcher asked plaintiff whether he was interested in a position as a pipefitter, plaintiff said yes. A few days later, plaintiff sent Fletcher, Paul, and others an email expressing his interest in returning to shift team leader. Plaintiff wrote, "I need to know from you . . . in the next couple of days, if you [are] going to reconsider letting me go back [as] an . . . STL [shift team leader], or if I have a permanent position if I take the demotion." Plaintiff told Fletcher he would consult an attorney.

Plaintiff met with an attorney. Shortly thereafter, he met with Fletcher, who told plaintiff he could not have a pipefitter position because he had never been a pipefitter. According to plaintiff, Fletcher said, "not only could I not have any operating position in his department or the STL position, but there was no operations job . . . at the refinery. And [Fletcher's] words were, I had no job."⁶

6 Paul testified Shell did not offer plaintiff a position as a shift team leader because it "had concerns about his previous performance in the shift team leader role and his ability to lead the team."

A few days later, at the end of July 2004, plaintiff again spoke with Paul and Fletcher. Paul told plaintiff his coworkers considered him a valued employee and wanted him to continue working at the refinery. Paul also told plaintiff he and Fletcher would try to convince the CEO of the refinery to keep him employed and would meet with the CEO by August 16, 2004, to discuss whether plaintiff would be offered a job.⁷ The meeting never took place.

7 At his deposition, plaintiff testified Paul and Fletcher said they would talk to the refinery CEO about the possibility of finding a union job for him. He admitted he did not express interest in taking a union position.

At a meeting on August 19, 2004, Fletcher announced that 28-year-old Randy Brooks was being promoted to permanent shift team leader. Brooks had worked at the refinery for six years, most recently as a temporary shift team leader for approximately two and a half years. Although plaintiff felt Brooks "was not at that level yet to become a permanent STL [shift team leader]," Brooks had received numerous awards before the promotion, including the President's Award for premier performance at the refinery. In performance evaluations, Brooks had been rated as "highly effective" and "very effective."

Plaintiff's Leave of Absence

Following the August 19, 2004 meeting, Swanson went on medical leave.⁸ While plaintiff was on leave, Shell Human Resources Representative Lisha Lacy called plaintiff's home several times. On August 24, 2004, Lacy left a message for plaintiff informing him that he could have any union job at the refinery. In November 2004, plaintiff told Lacy he would wait to decide about the job until he was cleared to return to work.

8 The court precluded plaintiff from testifying about the reason for his medical leave of absence.

Plaintiff Returns from his Leave of Absence and is Terminated

In late October 2005, plaintiff told Lacy that he wanted to return to work. On October 31, 2005, plaintiff met with Paul, Lacy, Eric Beasley, and others. At the meeting, Paul offered plaintiff the enhanced severance package and the option of taking a union position at the refinery. Plaintiff rejected both offers. At the meeting, plaintiff said he wanted to return to work "in the position that [he] was in or something equivalent." He "refused to take the operator position. He said the only role that he wanted to take was the OMC role." After the meeting, plaintiff took two weeks of paid vacation. In November 2005, Shell sent plaintiff a letter describing the October 31, 2005 meeting and explaining that although plaintiff wanted to return to a staff position, the OMC position was no longer available and there were no other positions available for which plaintiff was qualified. The letter informed plaintiff he had 45 days to accept the enhanced severance package or be terminated. Plaintiff, however, testified he was not offered a position at the refinery during the meeting.⁹

9 At trial, Beasley testified no one at the October 31, 2005 meeting offered plaintiff a union job. Beasley was impeached, however, by his deposition testimony, where he admitted plaintiff was offered a union position at the meeting. Lacy testified she offered plaintiff a job as an operator in 2004. She also testified plaintiff was offered a union position at the October 2005 meeting and that he rejected that offer.

After receiving the letter, plaintiff called Lacy and told her he was prepared to return to work. He did not, however, tell her which job he wanted. Lacy told him if he did not accept the enhanced severance package, his last day of work would be December 31, 2005. Plaintiff did not accept the package and Shell terminated his employment on December 31, 2005. Plaintiff was 51 years old when his employment with Shell ended.

Following the presentation of plaintiff's case, Shell moved for nonsuit pursuant to Code of Civil Procedure section 581, subdivision (c). Following a lengthy explanation of its reasoning, the court granted the motion and dismissed plaintiff's complaint.

DISCUSSION

Plaintiff contends the court abused its discretion by excluding: (1) exhibit No. 95, a document produced by Shell during discovery listing employees targeted for severance under the workforce reduction plan; (2) the testimony of his expert, Dr. Matloff; and (3) a "stray remark" made by Laura Brown, one of his coworkers. Plaintiff also argues the court erred by granting Shell's nonsuit motion.

I.

The Court Did Not Abuse its Discretion

by Excluding Exhibit No. 95

During discovery, Shell produced the memorandum from Goetzee to refinery management describing the workforce reduction plan and the procedure used to select employees eligible for the plan. The memorandum described five categories of employees: (1) Excluded; (2) Critical, meaning eligible, but not encouraged to volunteer for the voluntary severance; (3) Voluntary, meaning eligible but not at risk for having employment involuntarily separated; (4) Vulnerable, meaning at risk for having employment involuntarily separated if not enough eligible people volunteered (approximately five percent of staff); and (5) Very Likely, meaning employees who should expect to have their employment involuntarily severed either due to performance or redundancy (the bottom five percent of staff).

Shell also produced a chart entitled "Operations Department/Pay Information Feb. 3rd, 2004." The chart listed plaintiff's name, his date of hire, his years of service, his individual performance factor rating and his pay grade. The chart also contained columns entitled "Action" and "Reasoning." Under the action column was vulnerable; under reasoning was "low ipf; wrong fit for job (OMC); has 80 points; does not want to retire; too young; has mentioned that he would 'fight it.'"

Shell produced a less-redacted version of the chart in response to the court's order directing further responses to plaintiff's discovery requests. This chart, exhibit No. 95, listed seven employees with names replaced by birthdate. Plaintiff was the second-oldest employee on the chart, but the only one categorized as vulnerable. One employee — younger than plaintiff — was categorized as likely. The reasoning column indicated the employee "has 80 points; is planning to retire in 2-3 years; would not backfill job; share duties with CP or [illegible]." Another employee, who was born in 1975, was categorized as critical. The reasoning column indicated "very good performance; too young; could backfill but it would not be desirable." The four remaining employees were categorized as voluntary for various reasons; the reasoning column for two of those employees indicated, "not likely; too young."

After receiving exhibit No. 95, plaintiff sent Shell interrogatory Nos. 72 and 73 asking for the action for each employee on exhibit No. 95 and the reasoning for each action. In its supplemental responses to these interrogatories, Shell stated it could not find any additional responsive documents. Rulon McKay — then human resources manager at the refinery — verified the supplemental responses and averred they were "prepared from information obtained from corporate records, employees, and/or agents. The matters contained in that document are not within my personal knowledge."

Shell moved to exclude exhibit No. 95, contending it was unauthenticated hearsay. Over plaintiff's objection, the court granted the motion and excluded the exhibit. The court, however, permitted McKay to testify on cross-examination about the exhibit. McKay testified he received a list of employees being considered for voluntary and involuntary separation in May or June 2004. When asked about exhibit No. 95 — which the court had excluded — McKay testified it was a record of a February 2004 meeting. McKay explained, "at some point . . . we created — or in other words, we did the work to make sure we had determined who should be labeled what label if you will. . . ." According to McKay, Shell used exhibit No. 95 as a template. McKay, however, did not fill in the template and did not know who did. Although he did not know who filled in the template, McKay testified there were employees at the refinery whose job it would have been to fill in such a template; he surmised "Lisha Lacy for the operations department would be the HR rep and then the different managers that reported to Tony Paul would have filled in such a document or [would have been] responsible for the discussion that went into the filling in of this document. . . ."¹⁰

10 McKay testified "[a]ge was not a factor that was considered" by Shell in deciding whether an employee should be put in the "voluntary, likely, vulnerable, or critical" categories. He explained management did not bring an employee's age "into the dialogue" when discussing the severance plan.

After McKay testified, plaintiff moved exhibit No. 95 into evidence. Shell objected, claiming it had not been authenticated and was "quadruple hearsay." Outside the presence of the jury, Linda Sloven, one of plaintiff's attorneys, testified Shell's counsel sent exhibit No. 95 to her in response to the court's order directing Shell to produce a less-redacted version of the chart. Sloven also testified Shell provided supplemental responses to interrogatory Nos. 72 and 73 indicating it could not find additional responsive documents. The court declined to admit exhibit No. 95 into evidence.

On appeal, plaintiff contends the court should have admitted exhibit No. 95 because it was properly authenticated. First, he claims Shell "acted upon exhibit No. 95 as authentic when it produced it as part of a verified document production." Next, he argues McKay authenticated exhibit No. 95 at trial. Finally, plaintiff claims Shell authenticated exhibit No. 95 by producing it pursuant to an order granting his motion to compel. We review the court's ruling — as well as its other evidentiary rulings — for abuse of discretion. (Winfred D. v. Michelin North America, Inc. (2008) 165 Cal.App.4th 1011, 1026.)

"A writing must be authenticated before the writing or secondary evidence of its content may be received in evidence." (Simons, Cal. Evidence Manual (2011) § 8:5, p. 558, citing Evid. Code, § 1401 (Simons).)¹¹ "To authenticate a writing, the proponent must establish by evidence or other means provided by law facts sufficient to sustain a finding that it is the writing the proponent claims it to be." (Ibid., citing § 1400.) "'[T]he objection that a document has not been authenticated does not go to the truth of the contents of the document, but rather to the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent claims it to be. [Citations.]'" (City of Vista v. Sutro & Co. (1997) 52 Cal.App.4th 401, 412, quoting Interinsurance Exchange v. Velji (1975) 44 Cal.App.3d 310, 318.)

11 Unless otherwise noted, all further statutory references are to the Evidence Code.

Plaintiff appears to argue Shell admitted the authenticity of exhibit No. 95 by producing it during discovery and acted on its authenticity by serving verified supplemental answers to interrogatory Nos. 72 and 73. Pursuant to section 1414, "[a] writing may be authenticated by evidence that: (a) The party against whom it is offered has at any time admitted its authenticity; or (b) The writing has been acted upon as authentic by the party against whom it is offered." Plaintiff seems to contend a party authenticates a document by producing it during discovery, but cites no authority to support this argument. That Shell produced a document during discovery simply means the document was in its possession and was responsive to plaintiff's discovery request, and nothing more. (See Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1229-1230, 1238.)

Nor did Shell act upon exhibit No. 95 as authentic by serving verified supplemental responses to interrogatory Nos. 72 and 73. In its supplemental responses, Shell stated it had no additional responsive documents; in his verification, McKay averred the supplemental responses were "prepared from information obtained from corporate records, employees, and/or agents. The matters contained in that document are not within my personal knowledge." Nothing in the supplemental responses or in McKay's verification demonstrates Shell was acting upon exhibit No. 95 as authentic.

McKay did not — as plaintiff contends — authenticate the document at trial. McKay testified exhibit No. 95 was a record of a February 2004 meeting.¹² McKay testified that "at some point . . . we created — or in other words, we did the work to make sure we had determined who should be labeled what label if you will" but then clarified exhibit No. 95 was a template used by Shell, that he did not fill in the template, and that he did not know who did.

12 Plaintiff did not offer exhibit No. 95 under the business records exception to the hearsay rule. (See § 1271.)

The proponent of evidence need not always identify the document's author to authenticate the document. (See, e.g., People v. Gibson (2001) 90 Cal.App.4th 371, 383.) However, given McKay's testimony that he did not fill in the template and did not know who did, we conclude the court acted within its discretion by determining exhibit No. 95 was not properly authenticated. (See Gould v. Samuels (1955) 132 Cal.App.2d 459, 470 [court properly excluded "undated, unsigned typed one-page paper" where "[t]here was no other evidence of its authenticity, of its execution, or that [the defendant] authorized it or knew about it" other than the parties' stipulation "that the document had been typed on a typewriter in [the defendant's] office"]; Cf. Landale-Cameron Court, Inc. v. Ahonen (2007) 155 Cal.App.4th 1401, 1409, 1412 [document properly authenticated; "[t]his is not a case, for example, where the record is silent as to the authorship of the letters"].)

Relying on Streetscenes v. ITC Entertainment Group, Inc. (2002) 103 Cal.App.4th 233, 244 (Streetscenes), plaintiff claims Shell authenticated exhibit No. 95 by producing it in response to the court's order granting plaintiff's motion to compel. In that case, the trial court ordered the defendant to produce evidence of its financial condition in anticipation of the punitive damages phase of trial. Counsel for the defendant "informed the court that his clients had the most recent consolidated report and would present it to the court immediately after the jury returned should a second phase be required." (Id. at p. 243.) Defense counsel produced the report but then claimed it was inadmissible because it had not been authenticated. The appellate court rejected this argument, explaining, "[the defendant] presented the information to the court after being ordered to do so and after informing the court it would present the information at the proper time. The documents were from [the defendant] and were presented to the court by [the defendant's] counsel as per the statement of two days before. This is all the authentication that is required." (Id. at p. 244.)

Streetscenes does not assist plaintiff. That case does not stand for the proposition that documents produced pursuant to a court order are automatically authenticated. In Streetscenes, defense counsel's comment that he would produce the report — and his personal delivery of that report to the court — verified the report was what it purported to be. Here, the court ordered Shell to produce a less-redacted version of the chart during discovery. Shell sent a less-redacted version of the chart to opposing counsel, not directly to the court. By removing the redactions and producing the chart during discovery, Shell did not identify that document exhibit No. 95 was what it purported to be.

The court properly excluded exhibit No. 95 for the additional reason that it was inadmissible hearsay, defined as "evidence of a statement that was made other than by a witness while testifying at the hearing and that is offered to prove the truth of the matter stated." (§ 1200.) At trial, plaintiff offered exhibit No. 95 to establish "age was considered both by defendant and by defendant's employees." As plaintiff explained, exhibit No. 95 was "virtually the only documentary evidence establishing that age was a factor in defendant's selection of employees for termination in connection with its RIF [reduction in force]."¹³

13 In his opening brief, however, plaintiff claims he offered exhibit No. 95 to demonstrate "Shell made statements about age on a template document it created in connection with the RIF [reduction in force] and to show that Shell did not assign 'messages' to every employee as required by the Goetzee memo." We are not persuaded by plaintiff's changing rationale for offering the exhibit.

We believe the court correctly determined plaintiff offered exhibit No. 95 for the truth of the matter asserted: to establish Shell impermissibly considered age when deciding who to terminate. Plaintiff's reliance on Jazayeri v. Mao (2009) 174 Cal.App.4th 301 (Jazayeri) does not alter our conclusion. In Jazayeri, appellant chicken suppliers sued a processer, Mao Foods, and its owners, including Susan Mao, for breach of contract and fraud. They claimed the defendants altered United States Department of Agriculture food safety inspectors' poultry condemnation certificates (PCCs) to increase the number of chickens deemed dead on arrival (DOA) to lower their payments for chicken deliveries. The trial court excluded "the bulk of appellants' documentary evidence on grounds of lack of authentication and hearsay" and entered judgment for the defendants. (Id. at pp. 305, 314.)

The appellate court reversed, concluding, among other things, that "[a]ppellants offered the altered PCC's given them by Susan Mao not for the truth of the matter asserted—that the inscribed number of chickens were DOA or condemned by the USDA inspectors—but as direct evidence of the fraudulent statements made to appellants by respondents." (Jazayeri, supra, 174 Cal.App.4th at p. 316.) The court explained, ""[T]his is a typical example of the nonhearsay use of an extrajudicial statement 'to prove, as relevant to a disputed fact in an action, that the . . . hearer . . . obtained certain information by hearing . . . the statement and, believing such information to be true, acted in conformity with such belief.' [Citation.]" [Citations.] Here, appellants accepted inadequate payment for the chickens sold to Mao Foods in reliance on the allegedly false representations of [the respondent]." (Id. at pp. 316-317.)

The Jazayeri court also concluded the altered PCCs were admissible as a party admission under section 1220, noting "[d]ocuments prepared by the opposing party are not subject to exclusion under the hearsay rule, because they are admissions. . . . [¶] Several witnesses . . . established that Susan Mao was responsible for preparing the calculation sheets. . . . The calculation sheets were authenticated by [the chicken supplier], who received them directly from Susan Mao." (Jazayeri, supra, 174 Cal.App.4th at p. 325, fn. omitted.)

Jazayeri is distinguishable. First, plaintiff did not offer exhibit No. 95 to show an operative fact, but rather to show Shell considered age when it decided to terminate plaintiff. Plaintiff argued at trial that exhibit No. 95 established Shell impermissibly considered the age of its employees in connection with the workforce reduction plan and it is the truth of these statements in exhibit No. 95 that proves this alleged unlawful practice. Second, and in contrast to Jazayeri, exhibit No. 95 was not an admission by Shell because there was no evidence anyone at Shell filled in the document and because plaintiff did not authenticate it. We conclude plaintiff has not established the court abused its discretion by excluding exhibit No. 95.

II.

The Court Did Not Abuse Its Discretion

by Excluding Dr. Matloff's Testimony

Plaintiff moved to admit statistical evidence through an expert, Norman Matloff, Ph.D., to demonstrate Shell's decision to terminate him was discriminatory. Shell moved to exclude Dr. Matloff's testimony on the grounds the testimony would not assist the trier of fact because: (1) it was not based on information considered reliable in the field of statistical analysis; (2) the sample size Dr. Matloff used was too small; and (3) he did not use "complex models" in performing his statistical analysis.

At the section 402 hearing on the admissibility of Dr. Matloff's testimony, Dr. Matloff testified he has Ph.D. in mathematics, with a specialty in statistics. He has published articles and textbooks on statistics and is a tenured professor at the University of California, Davis, where he has taught in the Computer Science Department for 35 years.

Dr. Matloff analyzed the individual performance factor (IPF) ratings for 56 employees at the refinery. He compared the IPF ratings for employees over 40 with the ratings given to employees under 40 and "performed a confidence interval . . . an interval meaning a range. Most of that range was indicative of the older workers fairing not as well as the younger workers." Dr. Matloff determined that between 2003 and 2004, the "average rating of the older workers went down, and the average rating of the younger worker went up[,]" which "would be consistent with a scenario [in] which the firm was trying to get rid of the older workers." With a 95 percent degree of confidence, Dr. Matloff determined the IPF ratings for workers over 40 dropped .06 rating points and the ratings for employees under 40 rose .03 rating points, which indicated "older workers were indeed fairing poorly." He conceded, however, this change was not "statistically significant at the five percent level" because it did not eliminate the possibility of chance. He also testified he could not remember whether he computed how many employees in the sample were over 40 and conceded one could not tell from his summary what percentage of the people in the sample were over age 40.

Next, Dr. Matloff analyzed the age of employees who left Shell from 2001 to 2006, specifically the number of employees over 40 who left the company. The data Dr. Matloff used consisted of all 700 Shell employees at the refinery, regardless of job title or union membership. He concluded there was "a general upward time trend, meaning as the years went on, more and more of those leaving were older except for one year, 2005[,]" the year plaintiff was terminated. Dr. Matloff, however, did not perform a specialized statistical analysis to reach this result; he simply calculated the percentages by looking at the age of employees who left the Company each year and "reported the data," which showed "striking" upward trend in the percentage of older employees leaving the company. Although Dr. Matloff determined this data was consistent with plaintiff's claim that there was a bias against older workers at Shell, he conceded he could not "ascribe" the employees' motivation for leaving.

Plaintiff's counsel argued Dr. Matloff's testimony supported an inference that Shell singled out older employees for separation between 2004 and 2005, specifically, that "there was a statistically significant difference based on confidence intervals between the changes in their evaluation scores. That those of younger employees went up slightly, and those of older employees went down at a greater level." Counsel argued Dr. Matloff's testimony would show plaintiff's 2003 evaluation and his low IPF rating was "consistent with a pattern of declining evaluation scores for employees over 40" which supported an inference that "age was a consideration in giving [plaintiff] a poor evaluation as was done to others in the age group."

The court excluded Dr. Matloff's testimony. It explained Dr. Matloff's "confidence interval approach" was not sufficiently established to have gained acceptance in the field and that in cases where courts admitted expert testimony on statistical evidence, the expert used the "statistical significance" approach to perform the statistical analysis, not the confidence interval method employed by Dr. Matloff. Additionally, the court noted that Dr. Matloff did not testify that his methodology had been tested, subjected to peer review, or whether it had a known error rate or had been generally accepted by the community. The court also pointed out that "[h]is data pool sample was too small, and the interval was wide and therefore he couldn't eliminate the possibility of chance in his analysis." Finally, the court determined Dr. Matloff's opinions "lack[ed] foundation based on incomplete data and . . . would serve to confuse and mislead" the jury under section 352.

On appeal, plaintiff claims the court abused its discretion by excluding Dr. Matloff's testimony. First, plaintiff contends the court erred by concluding Dr. Matloff's confidence interval methodology was "insufficiently established to have gained acceptance in the field of statistics." Second, plaintiff argues the court erred by concluding Dr. Matloff "could not eliminate the possibility of chance in his analysis" because the data pool he used "was too small and therefore the interval was rather wide. . . ." Then, without any explanation — or a citation to any authority — plaintiff claims he was prejudiced by the exclusion of Dr. Matloff's testimony, apparently because statistical evidence is "one of three recognized methods of proving that an employer's explanation for an adverse employment action is pretext for discrimination."¹⁴ We review the court's exclusion of Dr. Matloff's testimony under the deferential abuse of discretion standard. (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.)

14 In his reply brief, plaintiff claims the court erred by excluding Dr. Matloff's testimony regarding "his finding that over time there was an increase in the number of employees over age 40 leaving their employment with Shell." We decline to review this claim. (Smith v. Board of Medical Quality Assurance (1988) 202 Cal.App.3d 316, 329, fn. 5 [declining to address issue raised in reply brief because "it is unfair for an appellant to raise issues for the first time on appeal in a reply brief"]; Shimmon v. Franchise Tax Bd. (2010) 189 Cal.App.4th 688, 694, fn. 3 ["arguments raised for the first time in the reply brief will not be considered unless good cause is shown for failing to raise them earlier"].)

We agree with plaintiff that statistical evidence may be admitted to show pretext in employment discrimination cases. "A plaintiff is not limited to a direct attack on the employer's explanation. At least three types of evidence can be used to show pretext: (1) direct evidence of retaliation, such as statements or admissions, (2) comparative evidence, and (3) statistics. [Citation.]" (Iwekaogwu v. City of Los Angeles (1999) 75 Cal.App.4th 803, 816 (Iwekaogwu).) But statistical evidence is not necessarily admissible in every case alleging employment discrimination. The evidence must be "relevant." (§ 350.) The utility of statistical evidence to show a defendant's stated reason is pretextual "depends on all of the surrounding facts and circumstances." (Teamsters v. United States (1977) 431 U.S. 324, 340.) Additionally, statistical data is probative of discrimination only if the sample size is large enough to have predictive value. (Morita v. Southern Cal. Permanente Medical Group (9th Cir. 1976) 541 F.2d 217, 229 (Morita).) For example, the Ninth Circuit has rejected statistical evidence based on a sample size ranging from seven to fifteen, as well as data based on a sample size of 28. (Palmer v. United States (9th Cir. 1986) 794 F.2d 534, 539; Sengupta v. Morrison-Knudsen Co., Inc. (9th Cir. 1986) 804 F.2d 1072, 1076.) This is so because "'statistical evidence derived from an extremely small universe . . . has little predictive value and must be disregarded.'" (Morita, supra, 541 F.2d at p. 220, quoting Harper v. Trans World Airlines, Inc. (8th Cir. 1975) 525 F.2d 409, 412.)

Here, Dr. Matloff analyzed a sample of 56 employees of the 700 or 800 at the refinery and compared the IPF ratings of employees over 40 with the ratings assigned to employees under 40. Dr. Matloff, however, did not determine how many of the 56 employees in the sample were over 40. This sample containing an unknown number of employees over 40 cannot "provide reliable statistical results" and therefore "carries little or no probative force to show discrimination." (Fallis v. Kerr-McGee Corp. (10th Cir. 1991) 944 F.2d 743, 746 (Fallis) [9 geologists over 40 in a sample of 51 employees was too small and therefore "insufficient to raise a jury question on the ultimate question of age discrimination"]; see also Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 367 (Guz) [plaintiff's statistical evidence was insufficient to defeat summary judgment where sample size was small]; Aragon v. Republic Silver State Disposal, Inc. (9th Cir. 2002) 292 F.3d 654, 663 [same].)

The court properly excluded Dr. Matloff's testimony for the additional reason that his conclusion regarding the drop in IPF ratings of employees over 40 was not statistically significant. Conclusions based on statistical data must be supported by competent testimony establishing the results are statistically significant. (See Council 31, AFSCME v. Ward (7th Cir. 1992) 978 F.2d 373, 379, fn. 3.) "[P]laintiffs in a disparate treatment case frequently rely on statistical evidence to establish that there is a disparity between the predicted and actual treatment of employees who are members of a disadvantaged group, and to argue that such disparities exist because of an unlawful bias directed against those employees. Not all disparities, however, are probative of discrimination. Before a deviation from a predicted outcome can be considered probative, the deviation must be 'statistically significant.' [¶] Statistical significance is a measure of the probability that a disparity is simply due to chance, rather than any other identifiable factor. [Citations.] . . . As the disparity between predicted and actual results becomes greater, however, it becomes less likely that the deviation is a random fluctuation. When the probability that a disparity is due to chance sinks to a certain threshold level, statisticians can then infer from the statistical evidence, albeit indirectly, that the deviation is attributable to some other cause unrelated to mere chance. [Citations.]" (Ottaviani v. State U. of New York at New Paltz (2d Cir. 1989) 875 F.2d 365, 370-371 (Ottaviani).)

"When the results of a statistical analysis yield levels of statistical significance at or below the 0.05 level, chance explanations for a disparity become suspect, and most statisticians will begin to question the assumptions underlying their predictions." (Ottaviani, supra, 875 F.2d at p. 371.) "The existence of a 0.05 level of statistical significance indicates that it is fairly unlikely that an observed disparity is due to chance, and it can provide indirect support for the proposition that disparate results are intentional rather than random. . . ." (Id. at p. 372, fn. omitted.)

Here, Dr. Matloff testified the IPF ratings for workers over 40 dropped .06 rating points and the ratings for employees under 40 rose .03 rating points between 2003 and 2004. He conceded, however, that the results were "not statistically significant at the five percent level." Dr. Matloff's own testimony establishes the results are not statistically significant. (Rudebusch v. Hughes (9th Cir. 2002) 313 F.3d 506, 512-513, 515 (study concluding gender and racial disparities in pay "were not statistically significant enough (that is, large enough) to prove that the 'inequity [was] due to either gender or minority status'" was "no evidence of actual discrimination"].) Plaintiff's attempt to demonstrate otherwise in his reply brief is unavailing.

Based on the foregoing, we conclude the court properly concluded Dr. Matloff's sample size was too small and that the results of the confidence interval analysis were not statistically significant. Therefore, the court's exclusion of Dr. Matloff's testimony did not "'exceed[ ] the bounds of reason.'" (Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 972, quoting Tudor Ranches, Inc. v. State Comp. Ins. Fund (1998) 65 Cal.App.4th 1422, 1431.)

We also conclude the court properly excluded Dr. Matloff's testimony under section 352, which gives the court discretion to "exclude evidence if its probative value is substantially outweighed by the probability that its admission will . . . create substantial danger of . . . confusing the issues, or of misleading the jury." (§ 352.) Here, the court reasonably concluded Dr. Matloff's testimony would "confuse and mislead" the jury and should be excluded under section 352. Dr. Matloff's testimony had marginal probative value because it was based on incomplete data and could have "easily overwhelmed and confused the jury," obscuring the question of whether Shell discriminated against plaintiff based on his age. Plaintiff has not demonstrated the exercise of "the trial court's discretion to exclude . . . evidence because it may confuse the jury" was "a clear showing of abuse." (Wagner v. Benson (1980) 101 Cal.App.3d 27, 36.)¹⁵

15 Plaintiff's main argument is the court erred by concluding Dr. Matloff's confidence interval method was not sufficiently established to have gained acceptance in the field of statistics. Under the Kelly rule, formerly known as the Kelly-Frye rule, the "'admissibility of expert testimony based on 'a new scientific technique' requires proof of its reliability—i.e., that the technique is '"sufficiently established to have gained general acceptance in the particular field to which it belongs."'" (Mateel Environmental Justice Foundation v. Edmund A. Gray Co. (2003) 115 Cal.App.4th 8, 25, fn. 8, quoting People v. Venegas (1998) 18 Cal.4th 47, 76.) Having concluded the court did not abuse its discretion by excluding Dr. Matloff's testimony for the reasons discussed above, we need not decide whether confidence intervals are sufficiently established under Kelly.

III.

The Court Did Not Abuse its Discretion

by Excluding Laura Brown's "Stray Remark"

Before trial, Shell moved to preclude Swanson from testifying about "an alleged stray remark [made] by Laura Brown that Shell was going to get rid of some of the older employees and keep younger employees with fresher ideas and that her job might be in jeopardy because of her age." Shell argued the remark was inadmissible hearsay, more prejudicial than probative, and likely to confuse and mislead the jury. Shell also claimed the remark was an "improper conclusion" and failed to demonstrate bias regarding plaintiff's termination.

In opposition, plaintiff claimed Brown's remark was an admission against interest (§§ 1220, 1222) and a statement of her then-existing state of mind (§ 1250). The court granted the motion in limine and excluded Brown's remark, concluding it was "unreliable . . . hearsay by somebody who has no authority to speak. It's speculation from [plaintiff's] standpoint as to what she might have meant when she said whatever she said." At trial, plaintiff testified he learned about the workforce reduction plan in early 2004 from Brown, the reliability manager at the refinery.

On appeal, plaintiff claims the court abused its discretion by concluding Brown's remark "was inadmissible hearsay." Relying on Reid v. Google, Inc. (2010) 50 Cal.4th 512 (Reid), plaintiff contends Brown's remark was "admissible evidence of discrimination" as an authorized admission and as a statement describing her state of mind.¹⁶ As indicated above, we review the court's exclusion of Brown's remark for abuse of discretion.

16 Plaintiff also claims — for the first time on appeal and without citing any authority — that Brown's statement is admissible pursuant to the spontaneous declaration exception to the hearsay rule. Plaintiff has forfeited this claim for at least two reasons. First, plaintiff did not raise this argument in the trial court. To obtain reversal based on the erroneous admission of evidence, the record must show a timely objection making clear that specific ground. (§ 353; In re C.B. (2010) 190 Cal.App.4th 102, 132 [hearsay objections "waived by the failure to object below"].) Second, plaintiff has failed to support this argument with any authority. (Sullivan v. Centinela Valley Union High School Dist. (2011) 194 Cal.App.4th 69, 72-73, fn. 3 (Sullivan) [plaintiff forfeited claim by failing to "present[ ] any authority or argument to support [the] contention"].)

Before addressing plaintiff's contention that Brown's remark was admissible under an exception to the hearsay rule, we note plaintiff has misstated the holding in Reid. Contrary to plaintiff's claim, the Reid court did not hold that stray remarks are "admissible evidence of discrimination" in every case. In Reid, our high court held "[a]n age-based remark not made directly in the context of an employment decision or uttered by a nondecision maker may be relevant, circumstantial evidence of discrimination" on a motion for summary judgment. (Reid, supra, 50 Cal.4th at pp. 539, 541.) In doing so, the court declined to adopt Google's version of the stray remarks doctrine, which would have categorically excluded "evidence even if the evidence was relevant." (Id. at p. 539.) The Reid court held stray remarks could be relevant evidence of discrimination on a motion for summary judgment; the court however, did not hold that stray remarks — when the speaker does not testify at trial — are necessarily admissible.

Section 1222, which provides an exception to the hearsay rule for authorized admissions, states, "[e]vidence of a statement offered against a party is not made inadmissible by the hearsay rule if: (a) The statement was made by a person authorized by the party to make a statement or statements for him concerning the subject matter of the statement; and (b) The evidence is offered either after admission of evidence sufficient to sustain a finding of such authority or, in the court's discretion as to the order of proof, subject to the admission of such evidence."

Brown's statement was admissible as an authorized admission only if plaintiff showed, by admissible evidence, she was authorized to speak for Shell when she told plaintiff the Company was "trying to get rid of some of the older employees and retain younger employees with fresher ideas and she felt her own job was in jeopardy due to her age." (O'Mary v. Mitsubishi Electronics America, Inc. (1997) 59 Cal.App.4th 563, 570 (O'Mary).) Courts have applied this hearsay exception only "to high-ranking organizational agents who have actual authority to speak on behalf of the organization." (Snider v. Superior Court (2003) 113 Cal.App.4th 1187, 1203; O'Mary, supra, 59 Cal.App.4th at p. 572 ["[p]lace in an employer's hierarchy undoubtedly is important in determining authority to speak"].) Determining whether an employee has the authority to make a statement "requires an examination of the nature of the employee's usual and customary authority, the nature of the statement in relation to that authority, and the particular relevance or purpose of the statement." (O'Mary, supra, at p. 570.)

Here, the court properly concluded the authorized admission exception to the hearsay rule in section 1222 did not apply because plaintiff failed to establish Brown had the authority to speak on Shell's behalf. In his opposition to Shell's motion in limine, plaintiff alleged Brown's remark was admissible as an authorized admission because it was "[a] statement made by a party, (i.e. defendant's manager)." Before the court ruled on the motion, plaintiff's counsel stated Brown was a manager for Shell and was "one of the people involved in HR decision-making at Shell." Plaintiff, however, did not provide any admissible evidence to support this claim. Plaintiff offered no evidence — and made no offer of proof — regarding the nature of Brown's "usual and customary authority, the nature of the statement in relation to that authority, and the particular relevance or purpose of the statement." (O'Mary, supra, 59 Cal.App.4th at p. 570.) Without this foundational evidence, the court properly determined the authorized admission exception set forth in section 1222 did not apply.

On appeal, plaintiff notes Brown was a "high-level member of the Production Leadership Team who reported to the number two person at the refinery." The problem with this argument is evidence about Brown's position at Shell was not before the court when it ruled on Shell's motion to exclude her statement to plaintiff. (See O'Neill v. Novartis Consumer Health, Inc. (2007) 147 Cal.App.4th 1388, 1403 [plaintiffs presented no evidence of speaker's authority to speak on behalf of the company; relying on speaker's title was insufficient].) But even if such evidence were before the court at the motion in limine hearing, we cannot conclude it would have been sufficient to establish Brown was authorized to speak on Shell's behalf about the workforce reduction. Plaintiff offered no evidence that Brown, in her role as reliability manager, dealt with personnel issues or with the decision to terminate plaintiff. (Morgan v. Regents of University of California (2000) 88 Cal.App.4th 52, 70 [while speakers "were all employed by respondent, none of these individuals were involved in any way with the various departments' decisions not to hire appellant for the jobs for which he applied"].) That Brown reported to Paul, the "number two position" at the refinery, does not establish she was — as plaintiff contends — "actively engaged in HR matters" or that she had the "managerial authority" to speak to plaintiff on Shell's behalf about personnel matters.

This case is not, as plaintiff suggests, like O'Mary. In O'Mary, the plaintiff sued Mitsubishi Electronics of America (Mitsubishi) for age discrimination. (O'Mary, supra, 59 Cal.App.4th at p. 568.) At trial, the court admitted portions of Robert Jones's deposition testimony where Jones described a meeting called by Herb Craft, the "vice-president in charge of program development for Mitsubishi" (id. at p. 566) for "'his managers,'" including Jones, on the same day that Craft had attended a "president's meeting." At the deposition, Jones testified, "'Mr. Craft came back. He got hold of some of the managers to come into the conference room. It was very much on the spur of the moment. He told us he had been to the president's meeting.'" (Id. at p. 568.) The court, however, excluded Jones's deposition testimony that "'on the spur of the moment' after Craft came back from the president's meeting, he 'got hold of a few of the managers to come into the conference room,' where he told them that at the presidents meeting Ihara made a statement about 'getting rid of managers who were over 40 and replacing them with younger, more aggressive managers.' Further, Mr. Kawasaki—the president of Mitsubishi Electronics—'concurred.'" (Id. at p. 569.)

The O'Mary court reversed, concluding the trial court erred by excluding the evidence. The court determined Ihara — Mitsubishi's founder — and Kawasaki — its president — were authorized to speak on Mitsubishi's behalf. (O'Mary, supra, 59 Cal.App.4th at pp. 571-572.) The court also determined Craft was authorized to speak on behalf of Mitsubishi because, as vice-president, Craft "occupied a particularly high place in the employer's hierarchy" and because "[t]he nature of the statement and its particular relevance comes within what an ordinary person would expect to be the scope of Craft's authority." (Id. at p. 572.) O'Mary explained, "[i]t is beyond peradventure that the 'usual and customary authority' of a vice-president certainly includes authority to convey or relay company policy to subordinate managers. The role of a vice-president is to coordinate the activities of his or her middle managers to accomplish the goals of the president and board of the company. [¶] Moreover, the context of the meeting shows authorization. Craft was calling a meeting of 'his' managers—not just anybody he met in the hallway or by the water cooler—in a company conference room—not the parking lot or a local bar—on company time to explain what a founder of the company had expressed was policy and the current president of the company concurred in." (Id. at pp. 572-573.)

Here and in contrast to O'Mary, an "ordinary person" would not expect Brown to be authorized to discuss a reduction in workforce where there was no evidence she was involved in developing the workforce reduction plan or that she supervised plaintiff. (O'Mary, supra, 59 Cal.App.4th at p. 572.) And unlike the situation in O'Mary, the context in which Brown purportedly told plaintiff about the workforce reduction does not "show[ ] authorization." (Id. at p. 573.) Brown did not call a meeting — she ran into plaintiff in a hallway.

Next, plaintiff contends the court should have admitted Brown's statement under section 1250. Section 1250, subdivision (a) provides in part, "evidence of a statement of the declarant's then existing state of mind, emotion, or physical sensation (including a statement of intent, plan, motive, design, mental feeling, pain, or bodily health) is not made inadmissible by the hearsay rule when: (1) The evidence is offered to prove the declarant's state of mind, emotion, or physical sensation at that time or at any other time when it is itself an issue in the action; or (2) The evidence is offered to prove or explain acts or conduct of the declarant."

In one sentence in his opening brief, plaintiff claims Brown's statement was admissible under the "then-existing state of mind" exception to the hearsay rule because the statement concerned "a matter at issue in this litigation (i.e., she believed her job was in jeopardy because she had just learned Shell was going to get rid of some of its older employees). . . ." We reject this argument for several reasons. First, it is unsupported by any authority or cogent analysis. (Sullivan, supra, 194 Cal.App.4th at pp. 72-73, fn. 3.) Second Brown's fear about losing her own job is irrelevant, particularly where there is no information in the record about Brown's age. Third, plaintiff did not offer Brown's statement to show her state of mind — i.e., her fear of losing her job — but rather to establish Shell had a plan to get rid of older employees. (See, e.g., People v. Whitt (1990) 51 Cal.3d 620, 643, fn. omitted ["[d]efendant's statements on two topics—events and feelings experienced before the interview—do not fit this description, and are inadmissible to prove their truth" under section 1250].) The court, therefore, did not abuse its discretion by declining to admit Brown's statement under section 1250. Having reached this result, we need not address Shell's argument that admitting Brown's statement would have confused the jury under section 352.

IV.

The Court Did Not Err by Granting Shell's Nonsuit Motion

Plaintiff claims the court erred by granting Shell's motion for nonsuit because he presented sufficient evidence to support a jury verdict in his favor on his claims for age discrimination, wrongful termination in violation of public policy, and breach of implied contract. "We independently review the ruling on a motion for nonsuit, guided by the same rules that govern the trial court. [Citations.] 'We will not sustain the judgment . . . unless interpreting the evidence most favorably to plaintiff's case and most strongly against the defendant and resolving all presumptions, inferences and doubts in favor of the plaintiff a judgment for the defendant is required as a matter of law. . . .'" [Citation.] However, '[a] mere "scintilla of evidence," does not create a conflict for the jury's resolution; "there must be substantial evidence to create the necessary conflict." [Citation.]' [Citation.]" (Pinero v. Specialty Restaurants Corp. (2005) 130 Cal.App.4th 635, 639.)

A. Plaintiff Failed to Present Substantial Evidence of Age Discrimination "California has adopted the three-stage burden-shifting test established by the United States Supreme Court for trying claims of discrimination, including age discrimination, based on a theory of disparate treatment. [Citations.]" (Guz, supra, 24 Cal.4th at p. 354, citing McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792 (McDonnell Douglas).) "'Disparate treatment' is intentional discrimination against one or more persons on prohibited grounds. [Citations.] Prohibited discrimination may also be found on a theory of "disparate impact," i.e., that regardless of motive, a facially neutral employer practice or policy, bearing no manifest relationship to job requirements, in fact had a disproportionate adverse effect on members of the protected class. [Citations.]" (Id. at p. 354, fn. 20.) "This so-called McDonnell Douglas test reflects the principle that direct evidence of intentional discrimination is rare, and that such claims must usually be proved circumstantially. Thus, by successive steps of increasingly narrow focus, the test allows discrimination to be inferred from facts that create a reasonable likelihood of bias and are not satisfactorily explained." (Guz, supra, 24 Cal.4th at p. 354.)

"At trial, the McDonnell Douglas test places on the plaintiff the initial burden to establish a prima facie case of discrimination. This step is designed to eliminate at the outset the most patently meritless claims, as where the plaintiff is not a member of the protected class or was clearly unqualified, or where the job he sought was withdrawn and never filled. [Citations.] While the plaintiff's prima facie burden is 'not onerous' [citation], he must at least show '"actions taken by the employer from which one can infer, if such actions remain unexplained, that it is more likely than not that such actions were 'based on a [prohibited] discriminatory criterion . . . .' [Citations]."'" [¶] The specific elements of a prima facie case may vary depending on the particular facts. [Citations.] Generally, the plaintiff must provide evidence that (1) he was a member of a protected class, (2) he was qualified for the position he 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. [Citations.]" (Guz, supra, 24 Cal.4th at pp. 354-355, fn. omitted.)

The parties agree plaintiff was in a protected class and suffered an adverse employment action. Plaintiff concedes Shell's articulation of a nondiscriminatory reason for terminating him — the workforce reduction — shifted the burden back to him to establish the workforce reduction was "a pretext for discrimination." (See Guz, supra, 24 Cal.4th at pp. 357-358.) Plaintiff contends Shell's reason for terminating him was a pretext for discrimination because: (1) he was a good performer in 2001 and 2002 and his only negative evaluation was in 2003; (2) the chart ranking him as the lowest among 56 employees from 2001 to 2004 was "unreliable" and "created after the fact;" and (3) Beasley testified McKay told him plaintiff had been at the refinery "'too long.'"¹⁷

17 When Beasley was asked whether McKay said "anything . . . about the duration of Mr. Swanson's employment at the Shell Martinez refinery," Beasley responded, "He said he had been there too long."

We conclude this evidence does not satisfy plaintiff's burden to produce substantial evidence that the workforce reduction plan was a pretext for discrimination. First, Shell introduced credible evidence that it implemented the workforce reduction plan to reduce costs and improve profitability, in part because the refinery "had a higher staffing level than was necessary" after moving 50 to 60 employees from another Shell plant to the refinery. In addition, several witnesses, including Paul and McKay, testified age was not a factor used to decide who would be offered the enhanced severance packages. To the contrary, Paul testified plaintiff was offered the severance package because not enough employees volunteered to leave the Company and because plaintiff was among the lowest performers at the refinery. Of 56 refinery employees, plaintiff was ranked last based on IPF scores from 2001 to 2004; several employees who were older than plaintiff were ranked higher. Second, Shell gave plaintiff the option of remaining at the refinery in a union position, suggesting the workforce reduction plan was not a vehicle for age discrimination. Shell eventually terminated plaintiff's employment only after he failed to decide whether he would stay at the refinery in a union position or accept the enhanced severance package.

Moreover, it was undisputed plaintiff was "with a group of people that had the lowest performance ratings" in 2001, 2002, and 2003. At the end of 2003 — and before he or anyone else at the refinery knew about the impending workforce reduction plan — Paul and others ranked plaintiff "at the bottom of the performance ranking of [his] salary grade" because Paul and others had reservations about plaintiff's job performance and had determined the OMC role was not a good fit for plaintiff. The participants in that ranking session, however, did not discuss the age of the employees. In 2003, Fletcher noted plaintiff was not "capable of delivering all of the services within [his] role" and was not able to "visualize what is expected of the OMC [role] or where the OMC role is going." Plaintiff knew his 2003 rating was a "bad rating;" plaintiff's IPF rating of .3 in early 2004 was no better.

Plaintiff suggests the 2003 rating was a pretext for age discrimination because he received positive evaluations in 2001 and 2002 and several super awards in 2002 and 2003. There are two problems with this argument. The first problem is that in 2002, plaintiff knew he would receive a rating below "V" if he did not improve in the areas his then-manager had identified. The second problem with this argument is plaintiff's disagreement about Shell's assessment of his job performance does not necessarily permit a conclusion that Shell's evaluation was a pretext for age discrimination. (See Fallis, supra, 944 F.2d at p. 747.)

This is not a situation — as plaintiff contends — like the one in E.E.O.C. v. Boeing Co. (9th Cir. 2009) 577 F.3d 1044. In that case, the Ninth Circuit reversed the district court's grant of summary judgment in favor of the employer on the plaintiff's sex discrimination claim where the plaintiff's "coworkers and managers familiar with [her] work gave detailed testimony that [she] was a good employee, that her skills warranted higher scores than she received, and that she performed better than several male survivors of the October RIF [reduction in force]. Several managers even requested that Feuerstein transfer [the plaintiff] to their departments, but Feuerstein denied these requests. Furthermore, [the plaintiff's] own detailed testimony about why her low scores were not merely 'wrong or mistaken,' but were 'unworthy of credence,' is also evidence for the jury to consider. [Citation.] Finally, [the plaintiff], the only woman in her skill code, was laid off while every male employee identified for termination in all three RIFs ultimately remained at Boeing, sometimes due to the assistance of supervisors, assistance that was not made similarly available to [the plaintiff]. Feuerstein's failure to treat [the plaintiff] the same as male employees and 'the inexorable zero' female employees who remained in the department after the RIF are also probative of pretext. [Citations.]" (Id. at pp. 1052-1053.) The Ninth Circuit determined this evidence "could lead a jury to conclude that Boeing's asserted rationales were pretextual." (Id. at p. 1053.) Here, none of plaintiff's coworkers testified his evaluations were somehow inaccurate or that he was a good employee. To the contrary, the evidence suggests plaintiff was unable to keep up with the changing demands of the OMC position and was among the lowest performing employees at the refinery. Moreover, there was no evidence the refinery eliminated all employees in his age group, as in the case discussed above.

Plaintiff urges us to disregard the chart ranking plaintiff last among 56 employees based on IPF ratings from 2001 to 2004 because it was "created after the fact" and because "it assigns IPF ratings for 2001 and 2002, prior to when the refinery used the IPF rating system." We decline to do so. Plaintiff has offered no evidence indicating he was not among the lowest performers between 2001 and 2004. Finally, we are not persuaded by plaintiff's contention that Beasley's claim that McKay said plaintiff had been at the refinery "'too long,'" coupled with testimony that plaintiff was not offered a union job at the October 31, 2005 meeting, creates an inference that Shell terminated him because of his age. It is immaterial whether plaintiff was offered a union position at the October 31, 2005 meeting because plaintiff was offered a union position several times before he was terminated. Each time, he rejected the offer. Viewing, as we must, the evidence in the light most favorable to plaintiff, we cannot conclude plaintiff provided "[s]ubstantial evidence contradict[ing] Shell's claim that [plaintiff] was at the bottom of his classification."

We also reject plaintiff's claim that "Shell's actions suggest a discriminatory motive" for terminating him. As noted above, Beasley's testimony that McKay told him plaintiff had been at the refinery "'too long'" does not create an inference of age discrimination or demonstrate a bias against older employees for the following reasons: (1) McKay was not involved in the decision to identify employees for involuntary termination; (2) Beasley began working for Shell in May 2005, well after plaintiff had been offered the enhanced severance package; and (3) Beasley's recitation of McKay's statement lacked context — McKay could have meant plaintiff had been at the refinery too long with substandard performance or that he had been there too long without deciding whether to take the union position or the enhanced severance package.

We conclude plaintiff did not provide "' substantial evidence to create the necessary conflict'" in the evidence sufficient to withstand Shell's nonsuit motion on his age discrimination claim. (Nally v. Grace Community Church (1988) 47 Cal.3d 278, 291, citing 7 Witkin, Cal. Procedure (3d ed. 1985) Trial, § 410, p. 413.)

B. The Court Did Not Err by Granting Shell's Nonsuit Motion on Plaintiff's Wrongful Termination in Violation of Public Policy Claim

Because plaintiff failed to satisfy his burden to establish Shell discriminated against him based on his age, the court properly granted Shell's nonsuit motion on plaintiff's claim for wrongful termination in violation of public policy. (See Loggins v. Kaiser Permanente Internat. (2007) 151 Cal.App.4th 1102, 1108-1109.)

C. Plaintiff Failed to Present Substantial Evidence to Rebut the Presumption of At Will Employment

The court granted Shell's nonsuit motion on plaintiff's breach of implied contract claim, concluding "[p]laintiff‘s evidence as to the implied contract claim is . . . lacking . . . . As the Guz court noted, an employee's mere passage of time in the employer's service, even where marked with tangible indicia that the employer approves [the] employee's work does not bolster the claim that an at-will status is altered, and cannot form an implied in fact contract that the employ[ment] is no longer at will. [¶] Plaintiff presented no evidence that he and defendant entered into an implied contract, limiting [Shell's] right to terminate his employment. Defendant's policies do not fill in the gap for reasons set forth in Guz."

Plaintiff's final claim is the court erred by granting nonsuit on his claim for breach of implied contract. The presumption in California is employment is at will, absent an "express oral or written agreement specifying the length of employment or the grounds for termination." (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 677 (Foley); Lab. Code, § 2922.) "This presumption of at-will employment may be rebutted only by evidence of an express or implied agreement between the parties that the employment would be terminated only for cause. The existence of an implied promise to discharge an employee only for good cause is generally, but not always, a question of fact for the jury." (Eisenberg v. Alameda Newspapers, Inc. (1999) 74 Cal.App.4th 1359, 1386.)

"Evidence which may be considered in determining the existence of an implied in fact contract to terminate only for good cause includes: '"[T]he personnel policies or practices of the employer, the employee's longevity of service, actions or communications by the employer reflecting assurances of continued employment, and the practices of the industry in which the employee is engaged." [Citations.]' [Citation.]" (Haycock v. Hughes Aircraft Co. (1994) 22 Cal.App.4th 1473, 1488, quoting Foley, supra, 47 Cal.3d at p. 680.) "Where there is no express agreement, the issue is whether other evidence of the parties' conduct has a 'tendency in reason' [citation] to demonstrate the existence of an actual mutual understanding on particular terms and conditions of employment." (Guz, supra, 24 Cal.4th at p. 337.) The court must examine the totality of the circumstances "to determine whether the parties' conduct, considered in the context of surrounding circumstances, gave rise to an implied-in-fact contract limiting the employer's termination rights." (Ibid.)

Guz is instructive. There, Bechtel eliminated the plaintiff's work unit and he sued for, among other things, violation of implied contract to be terminated only for good cause. (Guz, supra, 24 Cal.4th at pp. 325-326.) The trial court granted summary judgment for Bechtel and the plaintiff appealed, claiming he had an agreement with Bechtel that he would be "employed so long as he was performing satisfactorily and would be discharged only for good cause." (Id. at p. 337.) The California Supreme Court rejected this argument. It noted the plaintiff "received no individual promises or representations that Bechtel would retain him except for good cause, or upon other specified circumstances." (Id. at p. 341.) The court also determined the plaintiff's length of service, "even where marked with tangible indicia that the employer approves the employee's work, cannot alone form an implied-in-fact contract that the employee is no longer at will." (Id. at pp. 341-342.) In addition, the Guz court noted that Bechtel's relevant personnel policy stated Bechtel employees "had no contracts guaranteeing their continuous employment and could be terminated at Bechtel's option." (Id. at p. 343.) Finally, the court observed that nothing in Bechtel's personnel documents "limited Bechtel's prerogative to eliminate an entire work unit, and thus its individual jobs, even if the decision was influenced by a belief that the unit's work would be better performed elsewhere within the company." (Id. at p. 348, fn. omitted.) As our high court explained, not every "vague combination of Foley factors, shaken together in a bag, necessarily allows a finding that the employee had a right to be discharged only for good cause. . . . [¶] On the contrary, 'courts seek to enforce the actual understanding' of the parties to an employment agreement." (Guz, supra, 24 Cal.4th at p. 337.)

Plaintiff contends: (1) Shell's policy manual; (2) his length of service; and (3) the fact that he had "been promised he would remain in the OMC position until mid-2007" demonstrate the existence of an implied in fact contract not to terminate him except for good cause. Plaintiff relies on three portions of the policy manual, which provide in relevant part: (1) "Shell recognizes that its experienced employees are its most vital asset;" (2) "[t]he Company has a major investment in its qualified and experienced personnel. Excessive turnover is costly to the Company;" and (3) "Where termination is because of substandard productivity . . . the employee is given appropriate warning(s), and the termination is necessary because either less than sufficient improvement has occurred, or the employee is not suitable for the work for which employed. In either situation, efforts should be made to see that the employee is apprised . . . in advance of termination."¹⁸ Here, the policy manual may have created an expectation of continued employment, but it does not constitute an agreement not to terminate except for cause. Moreover, plaintiff received warnings about his performance before he was terminated, suggesting Shell complied with the policy manual.

18 In addition, the policy manual provides that "[e]mployees in most states work on an at-will basis, and thus can be terminated at any time."

This is not a situation like the one in Stillwell v. The Salvation Army (2008) 167 Cal.App.4th 360, 380-381 (Stillwell). In Stillwell, the plaintiff "presented several of the types of evidence that the Guz court mentioned to demonstrate the existence of an implied agreement to terminate his employment only for cause," including "considerable evidence that TSA managers had made repeated "'assurances of continued employment'" during Stillwell's long tenure with the organization. [Citation.]" (Id. at p. 381.) The plaintiff testified "he was told that he 'would have a job with [TSA] as long as I chose to work for them'" and offered evidence that a TSA manager wrote to Stillwell, "'I am looking forward to our continued relationship and give you assurance that there is no thinking in the new plan that your relationship will change, but only that your responsibilities will increase.'" In addition, the plaintiff offered evidence that his supervisor wrote to him that TSA "'look[ed] forward to many years of working together'" and that another high level manager told the plaintiff he "'would work as long as [he] wanted to.'" (Id. at p. 382.)

The plaintiff also offered evidence that one of his supervisors told him that "'as far as he was concerned [the plaintiff would] always have employment. . . .'" (Stillwell, supra, 167 Cal.App.4th at p. 382.) In addition, the plaintiff "presented evidence of his long and distinguished career with TSA" and evidence that TSA's "customary practice was to terminate employee only for cause. [The plaintiff] testified that over his long career with TSA, he had supervised many employees and had observed TSA's practice with respect to its implementation of its termination policies." (Ibid., fn. omitted.) In addition, a divisional manager at TSA testified "'usual practice' of TSA was 'to provide warnings to employees before terminating their employment. . . .'" and "stated, 'I don't think [TSA] as a norm lets people go at will.'" (Ibid.)

Here, plaintiff's claim that he "was promised to stay in this role until mid-2007" by an unidentified speaker on an unspecified date, together with his length of service and the policy manual provisions, does constitute substantial evidence. As our high court explained, not every "vague combination of Foley factors, shaken together in a bag, necessarily allows a finding that the employee had a right to be discharged only for good cause. . . . [¶] On the contrary, 'courts seek to enforce the actual understanding' of the parties to an employment agreement." (Guz, supra, 24 Cal.4th at p. 337.)

DISPOSITION

The judgment is affirmed. Shell is entitled to costs on appeal.

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Jones, P.J.
We concur: _______
Needham, J.
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Bruiniers, J.