Opinion
D.C. No. CV-96-00433-LHM
Editorial Note:This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA9 Rule 36-3 regarding use of unpublished opinions)
Argued and Submitted May 3, 2000.
Appeal from the United States District Court for the Central District of California Linda H. McLaughlin, District Judge, Presiding.
Before BROWNING, NOONAN, and SILVERMAN, Circuit Judges.
This disposition is not appropriate for publication and may not be cited to or used by the courts of this circuit except as provided by Ninth Cir. R. 36-3.
I.
The district court did not err in granting summary judgment for Appellee Unisource Worldwide, Inc., et al., ("Unisource") with respect to Appellant James D. Tierney's ("Tierney") constructive wrongful termination and wrongful demotion claim. This cause of action is barred because under California law, evidence of an implied-in-fact agreement to terminate for cause only cannot overcome the at-will provision contained in Tierney's written, express employment contract.
California state law establishes a presumption of at-will employment. See Cal. Lab.Code § 2922 (1989). The California Supreme Court modified this rule to allow employees to overcome the statutory presumption that they are at-will employees "by evidence that despite the absence of a specified term, the parties agreed that the employer's power to terminate would be limited in some way." See Foley v. Interactive Data Corp., 47 Cal.3d 654, 677 (Cal.1988). However, the factors supporting an implied-in-fact contract are irrelevant if an express contract of employment exists stating the terms of employment. See Eisenberg v. Alameda Newspapers, Inc., 74 Cal.App.4th 1359, 1387 (Cal.App.1999); Halvorsen v. Aramark Uniform Services, Inc., 65 Cal.App.4th 1383, 1388 (Cal.App.1998); Tollefson v. Roman Catholic Bishop, 219 Cal.App.3d 843, 855 (Cal.App.1990).
Tierney's reliance on McLain v. Great Am. Ins. Cos., 208 Cal.App.3d 1476, 1485-87 (Cal.App.1989), is misplaced. In McLain, the employers claimed the employment application was a fully integrated agreement; there was no valid, express employment agreement. The agreement at issue here is the ultimate employment agreement.
McLain is distinguishable in other ways. In McLain, the employment application indicated the parties intended their relationship to remain subject to change in terms and conditions; hence the potential existence of a subsequent contract with amended terms was a relevant inquiry. Id. at 1485. Whereas in Tierney's case, the only written employment contract states that Tierney can be fired without cause--and leaves no suggestion that these terms will, might, or can be changed. Moreover, Tierney signed a form indicating he received the employee handbook, which stated, in part, that "no representative of The Unisource Corporation has any authority to enter into any agreement contrary to the foregoing, unless specifically approved in writing by the President of the Unisource Corporation."
Tierney offers no evidence overcoming the at-will relationship provided for in the employment contract and employment handbook. Tierney has not alleged that this was a written agreement with contrary terms. Rather, he relies on a few oral assurances of job security and termination-for-cause-only, which are insufficient under California law.
Because we conclude Tierney was an at-will employee, we need not address Tierney's remaining arguments with respect to Counts One and Two.
Tierney argues that this case should be remanded for rebriefing and further consideration, since the district court denied oral argument and refused to grant time extensions for briefing.
II.
The district court erred in granting Unisource's motion for summary judgment as to Tierney's age discrimination claim. Even though Tierney was an at-will employee, he cannot be fired or demoted as the result of unlawful discrimination. See, e.g., Scott v. Pacific Gas and Elec. Co., 11 Cal.4th 454, 464 (Cal.1995); Stephens v. Coldwell Banker Commercial Group Inc., 199 Cal.App.3d 1394, 1399-1401 (Cal.App.1988). Both federal and state law prohibits employers from discriminating against employees on the basis of age. See Fair Employment and Housing Act ("FEHA"), Cal. Gov.Code § 12941; Age Discrimination in Employment Act ("ADEA"), 42 U.S.C. § 2000e et seq; 29 U.S.C. § 621 et seq.
Although state and federal antidiscrimination laws "differ in some particulars, their objectives are identical, and California courts have relied upon federal law to interpret analogous provisions of the state statute." See Mixon v. Fair Employment & Housing Com., 192 Cal.App.3d 1306 (Cal.App.1987).
Tierney ultimately bears the burden of proving that the challenged employment action was based on his age. See Muzquiz v. City of Emeryville, 2000 WL 378226, at *5 (Cal.App. 1 Dist. April 14, 2000). Because direct evidence of such discrimination is rare, California adopts the burden-shifting framework established by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-05 (1973), and Nixon v. Fair Employment & Hous. Comm'n, 192 Cal.App.3d 1306 (1987). Thus, to establish a discrimination claim: (i) Tierney must show a prima facie case of discrimination; (ii) Unisource may then offer a legitimate reason for his actions; and (iii) Tierney can rebut by proving that the employer's legitimate reason is a pretext to mask an illegal motive.
Assuming Tierney's evidence sufficient, the district court determined that Unisource offered a legitimate reason for its actions: "the nation-wide change in salesperson compensation structure resulting from the creation of GSS and the company's defined goal of expanding its supermarket business." The district court then concluded that Tierney offered no evidence that Unisource's purported reason is a pretext to mask a motive to discriminate on the basis of age.
The district court apparently did not consider the following evidence:
§ Terri Heath's declaration stating that she "heard [Todd] Haven [a Unisource sales executive] tell [Eric] Berg [the GSS Regional Operations Manager] repeatedly not to worry about Tierney, that Tierney was getting old and that because of his age he was expendable, that as soon as the Hughes contract was signed Tierney would be "history," ... and that Tierney was going to be replaced by three of four younger guys, who were more energetic than Tierney, and who would be more flexible in their thinking, and who were young enough, that they would have children in their homes, so that they would be willing to do anything to protect their jobs."
§ The declaration of Dale Chamberlain, a former GSS division manager, stating that "GSS wanted to spread the high rate of compensation paid to Tierney among younger employees."
§ Tierney's declaration stating that Morrise Taormina, Unisource's human resources department manager, told him that "Unisource would be getting rid of me, and would be spreading the wealth among four younger guys."
§ Tierney's declaration stating that Jim Stone, his direct supervisor, told him that he was "getting too old to do that sort of work" and that he should look for work elsewhere.
§ Tierney's deposition testimony that Todd Haven [a Unisource executive] told him that Unisource "could hire six trainees, younger guys, to take [his] place."
Viewing the evidence in the light most favorable to Tierney, he established a prima facie case of age discrimination: he was a member of a protected class, suffered adverse employment actions, performed his job in a satisfactory manner at the time of the adverse actions, and was replaced with younger employees who were less or equally qualified. See Muzquiz, 2000 WL 378226, at *5.
There is no evidence that the younger employees were more qualified. Tierney argues that since he was considered Unisource's top salesman and he had more experience with the company, he was inherently more qualified. He also argues that since his duties were spread among existing employees, it is obvious that they were less qualified. Although this evidence that the younger employees were less qualified is thin, this court must still look at the evidence in the light most favorable to Tierney.
Moreover, Unisource's "legitimate reason" for its actions--the nation-wide change in salesperson compensation structure resulting from the creation of GSS and the company's defined goal of expanding its supermarket business--is hardly legitimate. Neither the new compensation structure nor the goal of expanding its business suggests any reason to remove employees, much less one of its top salespersons. In fact, the new compensation structure didn't even apply to Tierney: he was one of the two salespersons who were not transferred to the new salary/bonus regime.
Even if Unisource proffered legitimate reasons, Tierney demonstrated that Unisource's given reason was a pretext for age discrimination. Tierney presented competent evidence that Unisource took adverse action against Tierney because of his age. His allegations were corroborated by two nonparty witnesses.
We reverse the grant of summary judgment with respect to Count Three and remand for a trial.
III.
The district court did not err in granting summary judgment for Unisource with respect to Tierney's constructive retaliatory demotion in violation of public policy claim. Tierney failed to show, viewing the facts in the light most favorable to him, that Unisource demoted him in violation of a public policy that is (1) fundamental (i.e., firmly established, fundamental, and substantial), (2) beneficial for the public, and (3) embodied in a statute or constitutional provision. See Turner v. Anheuser-Busch, Inc., 7 Cal.4th 1238, 1256 & 1256 n. 9 & 10 (Cal.1994).
Tierney does not allege facts sufficient to constitute violations of Penal Code §§ 484, 487, 490a, and 532, or the public policy precluding employers from terminating employees for refusing to participate in criminal activities. Even if Unisource managers threatened him to "be quiet" about the fact that Unisource had no intention of installing an electronic billing system for several months, this does not, without more, constitute criminal activity under any of the penal code sections on which Tierney relies.
IV.
The district court did not err in granting summary judgment for Unisource with respect to Tierney's constructive fraud and deceit claim. As the district court correctly pointed out, the success of his fraud claim depends on his not being an at-will employee. Since we find that Tierney was an at-will employee, Tierney's fraud claim is without merit.
V.
Because the district court erred in granting summary judgment for Unisource on Tierney's age discrimination claim, the district court also erred by remanding to state court Tierney's cause of action for accounting and unpaid commissions and bonuses. Tierney's surviving claim of age discrimination alleges an amount in controversy sufficient to establish federal diversity jurisdiction, and we grant Tierney's request to consolidate these matters.
AFFIRMED in part, REVERSED in part. Fees and costs awarded to Appellant.