Order Submitted MatterCal. Super. - 6th Dist.August 17, 2020KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA ANITA NARIANI SCHULZE, Case N0.: 20CV36961 1 Plaintiff, ORDER CONCERNING APPLE’S: A) DEMURRER TO PORTIONS OF VS. PLAINTIFF’S SECOND AMENDED COMPLAINT AND B) MOTION TO APPLE, INC., et a1., STRIKE PORTIONS OF PLAINTIFF’S SECOND AMENDED COMPLAINT Defendants. Plaintiff Anita Nariani Schulze brings employment discrimination and related claims against defendant Apple, Inc. in her individual capacity. She also brings putative class and representative claims for Violation 0f the Equal Pay Act (“EPA”) and related causes 0f action, 0n behalf 0f other female software engineers at Apple. In late March 2021, the Court sustained Apple’s demurrer t0 Ms. Schulze’s putative class and representative claims, as well as her individual claims for harassment and constructive wrongful termination, and granted its motion t0 strike her punitive damages allegations, all with leave t0 amend. Ms. Schulze filed a Second Amended Complaint (“SAC”) dropping her claims for harassment and punitive damages but re-alleging the other claims. Now, Apple again demurs t0 the class and representative claims and the individual claim for constructive wrongful termination, and also moves t0 strike the class and representative allegations. ORDER ON SUBMITTED MATTER Electronically Filed by Superior Court of CA, County of Santa Clara, on 8/17/2021 10:59 AM Reviewed By: R. Walker Case #20CV369611 Envelope: 7077081 KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO The Court held oral argument 0n Apple’s motions 0n August 12, 2021, and took the matters under submission. The Court now issues its final order, which: a) SUSTAINS the demurrer t0 the class and representative claims and OVERRULES it as t0 the claim for constructive wrongful termination; and b) deems the motion t0 strike MOOT. I. BACKGROUND A. Factual Allegations Apple hired Ms. Schulze as a technical engineer in 2008. (SAC, 1] 11.) Her senior manager was a Hindu Indian man and her direct manager was a Muslim Pakistani man (collectively, “Managers”). (Id., 1] 12.) Ms. Schulze is a Hindu Indian woman whose ancestry traces back t0 the Sindh region 0f modern-day Pakistan, one 0f numerous regions greatly impacted by the 1947 partition 0fwhat was then “British India” into what is now modern-day India and Pakistan. (Ibid) This partition created friction between the Hindu and Muslim communities in the Sindh region, often resulting in Violence, and spurred a mass migration 0f people both in and out 0f the region. (Ibid) Ms. Schulze’s Managers knew 0f and were familiar with her racial, national, and religious heritage. (Ibid) Their respective nationalities historically Viewed women as subservient, and they treated Ms. Schulze as subservient. (Id, 1] 13.) The fact that the Sindhi Hindu nationality is known for its technical acumen, encouraging men and women alike t0 pursue technical careers and women t0 rise above their historically subservient role, exacerbated the Managers’ discriminatory treatment. (Ibid) Ms. Schulze’s Managers consistently excluded her from team meetings but included her male counterparts. (SAC, 1] 14.) When Ms. Schulze discovered errors in the team’s work and notified her Managers, they would respond in a condescending manner and dismiss her discoveries. (Ibid.) If team projects involving Ms. Schulze were late, her Managers would exclusively blame her. (Ibid) The Managers would micromanage Ms. Schulze’s work by monitoring the speed at which she performed assignments, something that did not happen t0 male employees. (Ibid) Finally, Ms. Schulze’s Managers told her that she needed t0 be more involved in her employment and that the reason she was not more involved was because she had children. (Ibid) KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO Despite this treatment, Ms. Schulze received positive performance reviews. (SAC, 1] 15.) For example, in 2017, she directed her own “feature,” 0r project, for Apple. (Ibid) This made her a “Directly Responsible Individual” 0r “DRI,” a coveted role at Apple because 0f its typical association with substantial bonus packages. (Ibid) At completion 0f the feature directed by Ms. Schulze, Apple gave her a performance review that stated, “[Plaintiffl’s innovation and methodical approach led t0 her being a key contributor t0 the Zero Shutter Lag effort. [Plaintiffl’s drive t0 deliver a solution for this very complex feature really helped the team realize this Vision, it was one 0f our top-level camera features this year.” (Ibid) Despite these successes, Apple did not give Ms. Schulze a bonus. (Ibid) Beginning in 2016, Ms. Schulze worked 0n the ZSL project. (SAC, 1] 16.) Her duties included directing other engineers, who were male, working in Image Quality, Camera Frameworks, and Camera firmware t0 realize a new architecture. (Ibid) She handled all the system level design and algorithm validation for the proj ect and was praised for her performance. (Ibid) Nevertheless. the male engineers Ms. Schulze supervised received bonuses and restricted stock units (“RSUS”), while Ms. Schulze did not. (Ibid) “This discriminatory conduct continued in 20 1 8.” (Ibid) In November 2018, Ms. Schulze complained t0 Human Resources that she was not receiving promised compensation from Apple because she is a woman. (SAC, 1] 17.) In response, Apple began t0 retaliate against her. Ms. Schulze’s supervisors required her t0 attend daily meetings and circulated notes that did not accurately convey what happened at the meetings and portrayed Ms. Schulze in a negative light. (Ibid) Her supervisors also issued poor performance reviews, using these reviews as an excuse t0 implement a Performance Improvement Plan (“PIP”), and placing Ms. Schulze 0n an internal “D0 Not Hire List.” (Ibid) Apple’s stated reason for implementing the PIP was as a response t0 Ms. Schulze missing required meetings. (Ibid.) But Ms. Schulze only missed two meetings and her absences were due t0 illness and childcare. (Ibid) Ms. Schulze notified her supervisor that she disagreed with the underlying basis 0f the PIP and her supervisor verbally agreed with her. (Ibid.) But the supervisor told Ms. Schulze that she would still need t0 sign the PIP. (Ibid) KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO Unlike other employees, Ms. Schulze was not given an opportunity t0 100k for another position at Apple before the implementation 0f the PIP, and was given mere hours t0 decide whether t0 accept it-which she refused t0 d0. (SAC, 1] 18.) Ms. Schulze asked her supervisor and other managers if she could change teams, but was told she would not be allowed t0 move t0 any other team at Apple. (Ibid) Because Human Resources took n0 action t0 protect Ms. Schulze when she complained about discrimination and retaliation, because her supervisors retaliated against Ms. Schulze, and because she was not allowed t0 move t0 another team, Ms. Schulze s workplace became intolerable and she had n0 choice but t0 resign her employment. (Ibid) B. Claims in SAC Based 0n these allegations, Ms. Schulze brings the following individual claims: (1) discrimination 0n the basis 0f sex in Violation 0f Government Code section 12940, subdivision (a) (the Fair Employment & Housing Act or “FEHA”); (2) discrimination on the basis 0f race in Violation 0fFEHA; (3) discrimination on the basis of national origin in Violation 0fFEHA; (4) discrimination 0n the basis 0f religion in Violation 0fFEHA; (5) failure t0 take reasonable steps t0 prevent discrimination in Violation 0fFEHA (Government Code section 12940, subdivision (k)); (6) retaliation in Violation 0fFEHA (Government Code section 12940, subdivision (h)); and (7) constructive wrongful termination in Violation 0f public policy under Article I, Section 8 0f the California Constitution and FEHA. In addition, Ms. Schulze seeks t0 represent a putative class 0f “similarly situated female software engineers in product development who worked for Apple in California during the four years preceding the filing 0f this complaint.” (SAC, 1] 20.) She alleges that her claims are typical 0f the proposed class because Apple did not provide her “equal compensation for substantially similar work 0f that performed by male software engineers who worked in product development in the form 0f salary, bonuses, and stock options. . . .” (Id, 1] 21 .) Accordingly, Ms. Schulze also brings putative class claims for: (8) failure t0 pay all wages pursuant t0 Labor Code sections 201-204; (9) wage statement Violations under Labor Code section 226; (10) failure t0 pay equal compensation pursuant t0 Labor Code section 1197.5 KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO (the EPA); and (1 1) unlawful, unfair, and fraudulent business practices under Business & Professions Code section 17200, et seq. Finally, Ms. Schulze brings: (12) a representative claim under the Private Attorneys General Act (“PAGA”) derived from her putative class claims. II. DEMURRER Apple demurs t0 one 0f Ms. Schulze’s individual claims (her seventh claim for constructive wrongful termination), all 0f her class claims (her eighth through eleventh claims), and her PAGA claim (her twelfth claim) for failure t0 state a claim. (Code CiV. Proc., § 430. 10, subd. (6).) Ms. Schulze opposes the demurrer in all respects. A. Legal Standard A demurrer tests the legal sufficiency 0f the complaint. (Chen v. PayPal, Inc. (2021) 61 Cal.App.5th 559, 568.) Consequently, it “reaches only t0 the contents 0f the pleading and such matters as may be considered under the doctrine ofjudicial notice.” (Wei! v. Barthel (1955) 45 Cal.2d 835, 837; see also Code CiV. Proc., § 430.30, subd. (a).) “It is not the ordinary function 0f a demurrer t0 test the truth 0f the plaintiff” s allegations 0r the accuracy with which he describes the defendant’s conduct. Thus, the facts alleged in the pleading are deemed t0 be true, however improbable they may be.” (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958, internal citations and quotations omitted.) In ruling on a demurrer, the allegations 0f the complaint must be liberally construed, with a View t0 substantial justice between the parties. (Glennen v. Allergan, Inc. (2016) 247 Cal.App.4th 1, 6.) Nevertheless, while “[a] demurrer admits all facts properly pleaded, [it does] not [admit] contentions, deductions 0r conclusions 0f law 0r fact.” (George v. Automobile Club ofSouthem California (201 1) 201 Cal.App.4th 1112, 1120.) A demurrer will succeed where the allegations and matters subject t0 judicial notice clearly disclose a defense 0r bar t0 recovery. (Casterson v. Superior Court (2002) 101 Cal.App.4th 177, 183.) B. Constructive Wrongful Termination (7th Cause 0f Action) “In order t0 establish a constructive discharge, an employee must plead and prove that the employer either intentionally created 0r knowingly permitted working conditions that were so intolerable 0r aggravated at the time 0f the employee’s resignation that a reasonable employer KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO would realize that a reasonable person in the employee’s position would be compelled t0 resign.” (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1251 (Turner).) In order t0 amount t0 a constructive discharge, adverse working conditions must be unusually “aggravated” 0r amount t0 a “continuous pattern” before the situation will be deemed intolerable. In general, “[s]ingle, trivial, 0r isolated acts 0f [misconduct] are insufficient” t0 support a constructive discharge claim. Moreover, a poor performance rating 0r a demotion, even when accompanied by reduction in pay, does not by itself trigger a constructive discharge. (Turner, supra, 7 Cal.4th at p. 1247, citations omitted.) In addition, a “plaintiff’s subjective reaction t0 standard employer disciplinary actions” does not suffice t0 show constructive wrongful termination ”[u]nless those standard tools are employed in an unusually aggravated manner 0r involve a pattern 0f continuous mistreatment.” (Simers v. Los Angeles Times Communications LLC (2018) 18 Cal.App.5th 1248, 1270-1271 (Simers).) In its prior order, the Court found that Ms. Schulze did not allege constructive discharge based 0n allegations that she was put 0n a PIP and an internal do-not-hire list. (See Turner, supra, 7 Cal.4th at p. 1247 [“a poor performance rating 0r a demotion, even when accompanied by reduction in pay, does not by itself trigger a constructive discharge”].) In response, the SAC alleges more details about how Ms. Schulze was prevented from moving t0 another team at Apple. It also describes how her supervisors required her t0 attend daily meetings and circulated notes that did not accurately convey what happened at the meetings and portrayed Ms. Schulze in a “negative light.” (SAC, 1] 17.) Finally, she alleged numerous discriminatory acts that occurred before the 2018 PIP. (See, e.g., id.,W 15-16.) In the Court’s View, Ms. Schulze has alleged a continuous pattern 0f discrimination and mistreatment pre-dating the PIP. Such an alleged pattern carries this claim past a demurrer and into discovery. (See Valdez v. City OfLos Angeles (1991) 231 Cal.App.3d 1043, 1057 (Valdez) [a trier 0f fact could find constructive termination based 0n evidence 0f “a continuous pattern 0f discrimination includ[ing] discriminatory promotional examinations, deprivation 0f training KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO opportunities, having t0 meet a higher standard 0f performance than non-Hispanics, and denial of assignments which could have led t0 advancement opportunities.”].) Here, Ms. Schulze similarly alleges that she was long held t0 a higher standard than male employees and, after she complained 0f perceived discrimination, her supervisors escalated their unequal treatment by requiring her t0 respond t0 a baseless PIP in an unusually short time and forbidding her from seeking another internal position, as other employees could d0. (See SAC, 1] 18.) Construing these allegations liberally in Ms. Schulze’s favor as the Court must, Ms. Schulze alleges constructive wrongful termination under Valdez.1 The Court therefore OVERRULES Apple’s demurrer t0 this claim. C. The Class and Representative Claims As in its prior demurrer, Apple argues that there is n0 reasonable possibility that the requirements for class certification will be satisfied in this case, but does not even address the requirements for class certification. Rather, it argues only that the class and derivative representative claims fail t0 state a cause 0f action, even 0n an individual basis. The Court therefore will turn t0 that analysis. The elements 0f a prima facie case under the EPA are: (1) the employer paid a male employee more than a female employee (2) for equal (0r, since 2016, substantially similar) work considering the overall combination 0f skill, effort, and responsibility required, and (3) which is performed under similar working conditions. (Green v. Par Tools, Inc. (2003) 111 Cal.App.4th 620, 628, Citing Coming Glass Works v. Brennan (1974) 417 U.S. 188, 195; CACI N0. 2740 (2021).) To make this prima facie showing, a plaintiff must ultimately demonstrate that she is paid lower wages than an appropriate “male comparator” for equal work. (Hall v. County ofLos Angeles (2007) 148 Cal.App.4th 318, 324-325.) While n0 California case has addressed this 1 While Simers came t0 the opposite conclusion, that was not a demurrer case; rather, it involved a full factual record following a trial. In addition, the Simers court specifically held that the internal investigation prompting the criticism and discipline 0f the plaintiff in that case was “legitimate.” (Simers, supra, 18 Cal.App.5th at p. 1271.) At this juncture, the Court must accept Ms. Schulze’s allegations that the disciplinary actions taken against her were pretextual. KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO issue, some federal courts have held that a specific, appropriate comparator must be identified and described in some detail even at the pleading stage? But the Court maintains its View that such a “de facto heightened pleading” requirement would conflate the requirements 0f a prima facie case with the pleading standard, as discussed in more detail in its prior order. The Court previously found that [e]ven under this more forgiving standard, Ms. Schulze’s allegations supporting her EPA and derivative claims are not enough. She broadly and vaguely alleges that she was not provided with “equal compensation in line with male software engineers” (FAC, 1] 19) and, even more generally, that Defendant “failed t0 compensate Plaintiff and proposed class members in salaries, bonuses, stock options, and other employment benefits in a manner that was equal t0 male employees in similar positions” (id., w 77, 82, 99), “doing similar work, and performed under similar working conditions” (id., W 88, 93). While the EPA was broadened from covering “equal” work t0 covering “substantially similar” work, it is not so broad as t0 require that all employees working in the same general field 0f software engineering 0r all employees in positions that are merely “similar” in some manner be paid the same. Ms. Schulze’s allegations d0 not make it clear that she has a basis t0 allege an EPA Violation applying the appropriate standard. Ms. Schulze’s new allegations d0 not solve these problems. She alleges that male engineers she supervised received bonuses and RSUS, while Ms. Schulze did not. (SAC, 1] 16.) But even assuming Ms. Schulze and the male engineers at issue did “substantially similar” work, the SAC does not allege that that the male engineers’ overall compensation was higher. (See Morgan v. United States Soccer Fed ’n, Inc. (C.D.Cal. 2020) 445 F. Supp. 3d 635, 654 [considering bonuses “in isolation would run afoul 0f the EPA,” which defines wages t0 include 2 The parties each point t0 different federal cases t0 support their position that a stricter 0r more lenient pleading standard should be applied in this regard. On reply, Apple requests judicial notice 0f a complaint addressed by an unpublished federal decision upon which Ms. Schulze relies in her opposition. This request is GRANTED. (EVid. Code, § 452, subd. (d).) 8 KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO all forms 0f compensation].) At oral argument, Ms. Schulze asked the Court t0 infer that the male engineers had higher compensation than Ms. Schulze, but the SAC lacks sufficient context for the Court t0 make such an inference.3 In addition, Ms. Schulze narrows her focus from compensation paid t0 “software engineers” t0 compensation paid t0 software engineers in “product development” (id, 1] 20), but this remains an extremely broad category that does not necessarily suggest all engineers working in this area perform work requiring substantially similar skill, effort, and responsibility. The Court understands that Ms. Schulze hasn’t had discovery yet, but she still must allege a reasonably-bounded category from which t0 select comparators, and she has not done that. Ms. Schulze does not dispute that her remaining class and representative claims are derivative of her EPA claim, and therefore stand 0r fall with that claim. (See Medical Marijuana, Inc. v. ProjectCBD.com (2020) 46 Cal.App.5th 869, 896 [Citing Hawran v. Hixson (2012) 209 Cal.App.4th 256, 277 for the proposition that a derivative unfair competition claim stands 0r falls with the underlying claim]; Krantz v. BT Visual Images, LLC (2001) 89 Cal.App.4th 164, 178 [claims incidental t0 and dependent upon an antecedent substantive cause 0f action stand 0r fall with the antecedent claim].) The Court SUSTAINS Apple’s demurrer as t0 all 0f these claims. D. Conclusion For the reasons discussed above, the Court OVERRULES Apple’s demurrer t0 the seventh cause 0f action and SUSTAINS its demurrer t0 the eighth through twelfth causes 0f action. As for the latter claims, the Court will sustain the demurrer t0 the class and representative claims WITHOUT LEAVE TO AMEND, since: a) Ms. Schulze now has had two chances t0 plead Viable claims and has not been unable t0 d0 so either time; and b) it is Ms. Schulze’s burden t0 show a reasonable possibility that she can amend her complaint t0 address the defects identified by the court. (See Hernandez v. City ofPomona (2009) 46 Cal.4th 501, 520, fn. 16 [“plaintiffs must identify some legal theory 0r state 0f facts they wish t0 add by way 3 Similarly, Ms. Schulze alleges that she did not receive a bonus that is “typical” for “Directly Responsible Individuals” (SAC, 1] 15), but she does not allege that this caused male employees performing substantially similar work t0 be paid more. 9 KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO 0f amendment that would change the legal effect 0f their pleading”].) Ms. Schulze does not attempt t0 meet this burden in her opposition. Finally, Apple cites n0 authority supporting its request for costs associated with its demurrer. The Court therefore DENIES the request. IV. MOTION TO STRIKE In light of the Court’s ruling 0n Apple’s demurrer, Apple’s alternative motion t0 strike Ms. Schulze’s class and representative allegations is MOOT. Again, Apple cites n0 authority in support 0f its request for costs associated with this motion, so the Court DENIES that request. IT IS SO ORDERED. Date: The Honorable Sunil R. Kulkarni Judge 0f the Superior Court 10 August 17, 2021