Martinez v. Rite Aid

Martinez v


Martinez v. Rite Aid









Filed 4/23/13 Martinez v. Rite Aid CA2/7






NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.




IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN


MARIA MARTINEZ,

Plaintiff and Appellant,

v.

RITE AID CORPORATION et al.,

Defendants and Appellants.

B228621

(Los Angeles County
Super. Ct. No. BC401746)


APPEAL from a judgment of the Superior Court of Los Angeles County. Susan Bryant-Deason, Judge. Reversed and remanded with directions.
Shegerian & Associates, Carney R. Shegerian; Urbanic & Associates and James Urbanic for Plaintiff and Appellant.
Morgan, Lewis & Bockius, Thomas M. Peterson, Michelle Park Chiu and Kathryn T. McGuigan for Defendants and Appellants.


_

This appeal arises out of an employment discrimination case brought by plaintiff Maria Martinez against her former employer, defendant Rite Aid Corporation, and her former supervisor, defendant Kien Chau. Martinez alleged that, during her employment with Rite Aid, she was subjected to unlawful discrimination, harassment, and retaliation based on her disability, age, medical leave of absence, and complaint about sexual harassment. Following a lengthy trial, the jury found in favor of Martinez on her claims for wrongful termination in violation of public policy, intentional infliction of emotional distress, and invasion of privacy, and awarded Martinez $3.4 million in compensatory damages and $4.8 million in punitive damages. In their appeal, Rite Aid and Chau assert numerous legal errors, including challenges to the sufficiency of the evidence supporting the jury’s special verdicts as to both liability and damages. In her cross-appeal, Martinez argues the trial court abused its discretion in denying her motion for leave to further amend her complaint to add statutory claims for violations of the California Fair Employment and Housing Act (FEHA).
We conclude that the evidence was sufficient to support the verdicts in favor of Martinez on her causes of action for wrongful termination in violation of public policy and intentional infliction of emotional distress, but not on her cause of action for invasion of privacy. We further conclude that the verdicts awarding compensatory damages to Martinez must be reversed because they were impermissibly ambiguous, and the verdict awarding punitive damages to Martinez must be reversed because the evidence was insufficient to support the imposition of punitive damages liability against Rite Aid for the acts of its employees. Finally, we conclude that the trial court did not abuse its discretion in denying Martinez leave to file a third amended complaint. We accordingly reverse and remand the matter for a new trial on the issue of compensatory damages as to Martinez’s causes of action for wrongful termination in violation of public policy and intentional infliction of emotional distress.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

I. Evidence at Trial

A. Rite Aid’s Structure and Policies


Rite Aid is a large retail drugstore chain with approximately 4,700 stores. Each Rite Aid store is divided into two business units: (1) the front store; and (2) the pharmacy. The front store is managed by a store manager who reports to a store district manager. The pharmacy is managed by a pharmacy manager or a pharmacist-in-charge who reports to a pharmacy district manager. The pharmacy typically is staffed with at least one pharmacist, pharmacy technician, and pharmacy cashier. Both pharmacists and pharmacy technicians must be licensed by the state of California.
Rite Aid’s employee handbook includes policies prohibiting discrimination, harassment, and retaliation in the workplace. The employee handbook specifically provides that all complaints of discrimination will be investigated and remedial action taken where necessary. The employee handbook also includes an associate complaint resolution procedure that allows employees to report any complaints to their direct supervisor, their human resources manager, or a toll-free call center where they may choose to remain anonymous.

B. Martinez’s Job Responsibilities at Rite Aid


Martinez began her employment with Rite Aid on November 14, 1983 at the age of 18. After starting as an ice cream scooper, Martinez was soon promoted to a front-end cashier and then a pharmacy clerk. In 1985, she became a pharmacy technician, and remained in that position until the termination of her employment in 2007. In her first 20 years of employment at Rite Aid, Martinez was named “Employee of the Month” approximately 20 times and “Employee of the Year” two times in recognition of her excellent customer service. During that time, she generally got along well with her supervisors and received positive feedback from Rite Aid about her work performance. Rite Aid never received any customer complaints about Martinez at any time during her employment.
As a pharmacy technician, Martinez was responsible for inputting the information in a customer’s prescription into Rite Aid’s computer system and then preparing a prescription label that included such information as the customer’s name, the prescribing physician’s name, the type of medication, the dosage, the number of available refills, and the directions for use. After printing the label, Martinez was responsible for pulling the medication from the shelf and placing the medication, prescription, and label in a tray for the pharmacist to review. Martinez’s job duties also included contacting physicians to verify prescriptions, assisting customers in dropping off and picking up prescriptions, operating the cash register at the pharmacy counter, and keeping the pharmacy area clean. As a technician, Martinez was not allowed to counsel customers about medications nor could she change a medication without the approval of the pharmacist and the prescribing physician.
Pharmacy technicians prepared an average of 50 to 100 prescription labels per day. Due to the large volume of prescriptions, it was common for technicians to occasionally make typographical errors on the labels that they prepared. Prescription labeling errors occurred on a daily basis in the pharmacy, although Martinez estimated that she only made such errors once per month. When labeling errors occurred, they typically were corrected by either the pharmacist or the technician prior to dispensing the medication to the customer. If a labeling error was made on a medication that was dispensed to the customer, the pharmacist was required to document the error in a quality assurance report. Rite Aid never received any quality assurance reports for a labeling error made by Martinez at any time during her employment.
At all relevant times, the terms and conditions of Martinez’s employment, including her wages and eligibility for wage increases, were governed by a collective bargaining agreement between Rite Aid and Martinez’s union. The collective bargaining agreement provided that non-probationary employees, such as Martinez, could not be discharged except for good cause, and that a discharge based on incompetency or failure to perform work required two prior warnings for related conduct within a 12-month period preceding the discharge.

C. February 2004 Medical Leave of Absence from the Pasadena Store


As of 2003, Martinez had been working at Rite Aid’s Pasadena store for 15 years. The pharmacy manager was Sonal Desai and the store manager was Esmeralda Miranda. In late 2003, Martinez’s work environment at the Pasadena store became increasingly stressful. Desai was pressuring the pharmacy staff to process more prescriptions and was having an ongoing conflict with Miranda about proper store procedures. In January 2004, Martinez requested a transfer to a Rite Aid store closer to her home. On February 9, 2004, during an argument between Desai and Miranda about Martinez’s cash handling duties, Martinez suffered an anxiety attack and was taken from the store by ambulance to the hospital. Martinez was thereafter diagnosed with depression, prescribed Prozac and Xanax, and placed on a five-month medical leave of absence. Prior to that time, Martinez had never been treated for a psychiatric condition.
On February 13, 2004, Martinez sent a letter to the pharmacy district manager, John Acosta, and the store district manager, Bradley Lohman, following up on her prior request for a transfer from the Pasadena store. In her letter, Martinez stated that, due to her current health status, she was requesting a transfer with full accommodations to a different district. Martinez also stated that, during her 20-year employment with Rite Aid, she had never experienced the stress that she had been placed under by the store manager and the pharmacy manager, and that she found it unhealthy to return to that work environment.
On February 23, 2004, a registered nurse at Martinez’s health care provider received a message that a person named “Sonal” had called seeking information about Martinez and had indicated in the call that Martinez’s condition was not work-related. When the nurse returned the call, “Sonal” asked about Martinez’s diagnosis, but was advised that a patient’s diagnosis was confidential. At trial, Desai did not recall whether she contacted Martinez’s health care provider, but denied that she ever told any other Rite Aid employees about Martinez’s anxiety attack or leave of absence.
During her medical leave of absence, Martinez was informed by Rite Aid that her employment had been terminated. Rite Aid’s computer system showed that Martinez was discharged on February 26, 2004 for failing to report to work and that she was ineligible for rehire at that time. When Martinez inquired into the reason for her discharge, she was informed that she had failed to submit the required leave of absence forms. Martinez completed the necessary forms in June 2004 and was reinstated the following month.

D. August 2004 Transfer to the Azusa Store


Martinez returned to work from her medical leave of absence in July 2004. She initially was transferred to the Altadena store where her pharmacy manager was Richard Chang. Although Martinez had a positive relationship with Chang and he never raised any concerns about her performance, she wanted to work at a store closer to her home. In August 2004, Martinez was transferred to the Azusa store near her home where her pharmacy manager was Ifon Chen.
Martinez never disclosed her medical condition or leave of absence to anyone at the Azusa store. However, Chen and two of Martinez’s coworkers, Gabriela Gwecke and Helen Labosiere, made comments that Martinez believed were directed at her disability. Chen twice told Martinez in an angry manner that she was “mentally off.” On one occasion, Chen called a customer service meeting with the pharmacy staff solely to tell Martinez that they did not like her. On another occasion, Chen falsely accused Martinez of submitting an insurance form for a customer with the incorrect date. When Martinez’s coworkers would process prescriptions for anti-depressant medications, they would loudly announce the name of the medication and pointedly ask Martinez if she knew what it was for. In July 2005, while she was working at the Azusa store, Martinez was issued a written warning for acting outside the scope of her duties when she improperly counseled a customer about a medication.

E. July 2005 Transfer to the Arcadia Store


In July 2005, Martinez was transferred to the Arcadia store where she worked until the termination of her employment. Chau was the pharmacist-in-charge and Janice Tam was the pharmacy district manager. Martinez never told Chau anything about her medical history, and Chau denied any knowledge of Martinez’s prior medical condition or leave of absence. However, in December 2005, Chau began making derogatory comments about Martinez’s mental health and age. Chau told Martinez several times that “she needed to see [her] psychiatrist. Chau also told Martinez on multiple occasions that she was “crazy,” “bipolar,” and “psycho.” In the presence of Martinez’s younger coworkers, Chau said that Martinez was “too old,” “over the hill,” and “old enough to be [the coworkers’] mother.” In addition to these comments, Chau made sudden changes to Martinez’s work schedule and falsely told her that Tam wanted Martinez to work at night. On another occasion, Chau falsely accused Martinez of giving a medication to a customer for free.

F. December 2006 Incident of Inappropriate Touching by Lohman


On December 6 or 9, 2006, Martinez saw Lohman, her former store district manager, at a bank. Lohman approached Martinez from behind and touched her shoulder and waist with both of his hands. As Lohman was touching Martinez, he said it was nice to see her. Martinez was shocked and uncomfortable by the touching and told Lohman, “I wish I could say the same thing.” Lohman then let go of Martinez and left the bank. At the time of this incident, Lohman did not have any supervisory authority over Martinez.

G. December 2006 Written Warning and Grievance


On December 8, 2006, prior to opening the pharmacy, Martinez asked Chau if she could have Tylenol for a headache. Although Chau instructed Martinez to get the Tylenol herself, Martinez was not comfortable taking any medication at work that was not dispensed directly by the pharmacist. When Martinez insisted that Chau hand the Tylenol to her, Chau slammed the medicine bottle on the counter and told Martinez, “I told you to get it yourself.” A customer standing on the other side of the closed pharmacy window overheard the argument, and after he left, Chau told Martinez that she should not have asked for medication in front of a customer. During this incident, Martinez was not discourteous to either Chau or the customer.
On December 10, 2006, Chau sent an email to Tam, the pharmacy district manager, complaining for the first time about inappropriate conduct by Martinez. In his email, Chau stated that Martinez had slammed a medicine bottle on the counter after he had counseled her to not request medication for herself in front of a customer. Chau also stated that Martinez had made sexually harassing comments about a coworker in the presence of a customer and pharmacy staff. Chau requested that Martinez be terminated or transferred from the store and suggested a replacement pharmacy technician to fill her position. In addition, Chau noted that Martinez’s coworkers would be providing written statements about her conduct shortly. On December 15, 2006, Chau prepared a written warning regarding Martinez’s alleged conduct in slamming the medicine bottle on the counter, but Martinez refused to sign the warning at that time.
Frank Granillo was the human resources manager for the district where Martinez worked and handled the internal investigations involving Martinez. Granillo first became aware of Martinez in December 2006 when he was forwarded a copy of Chau’s December 10, 2006 email. Prior to that date, Granillo had not received any complaints about Martinez from anyone at Rite Aid. In mid-December 2006, Chau provided Granillo with written statements from two of Martinez’s coworkers, Genevieve Pasco and Becky Ngu, to support his complaints. In her statement, Pasco reported that, when a former male coworker came to visit the store, Martinez commented in the presence of a customer and other store employees that he was only visiting because he liked Pasco and wanted “‘to jump her bones.’” Pasco described Martinez’s comment as a form of sexual harassment and stated that she did not want Martinez to continue working at the store. In her statement, Ngu reported that she had difficulty working with Martinez because Martinez spoke to others in a condescending tone and whispered insults about coworkers and customers under her breath, including calling one customer a “‘bitch.’” Ngu also stated that Martinez would fail to inform other staff members about pending prescription orders at the end of her shift.
On December 26, 2006, Martinez filed a grievance with her union in which she checked the box on harassment or discrimination and specifically alleged she had been unjustly disciplined. Martinez had never previously made a complaint of harassment or discrimination during her employment with Rite Aid. On December 27, 2006, prior to receiving notice of the grievance, Granillo met with Martinez for the first time to discuss her refusal to sign the written warning issued by Chau. Martinez denied Chau’s allegation that she had slammed a medicine bottle on the counter and Ngu’s allegation that she had called a customer a derogatory name under her breath. Martinez was not asked about Pasco’s sexual harassment allegation because Granillo was awaiting an additional witness statement about that incident. At the conclusion of the meeting, Martinez agreed to sign the written warning. Martinez did not raise any complaints about discrimination or harassment during the meeting.

H. January 2007 Written Warnings and Grievance


On January 3, 2007, Granillo received notice of Martinez’s grievance, but did not consider it to be a complaint of discrimination or harassment and did not take any action to investigate it. On that date, Martinez filed a second grievance with her union in which she specifically alleged that she was being discriminated against and harassed by Chau. The following week, Granillo met with the coworkers who had provided written statements to Chau about Martinez’s conduct and found those statements to be credible. In addition, Granillo obtained a written statement from a third coworker, Roya Rahmanian, who reportedly had witnessed Martinez’s sexually harassing conduct. In her statement, which Granillo also found to be credible, Rahmanian confirmed that Martinez had asked a former coworker in the presence of a customer and store employees whether he still wanted to “‘jump [Pasco’s] bones.’” She further reported that, on one occasion, Martinez promised a customer that she would fill a prescription, but then took her break without doing so.
On January 20, 2007, Chau sent an email to Granillo and Tam complaining about other instances of inappropriate conduct by Martinez. In this email, Chau stated that Martinez consistently made prescription labeling errors, refused to follow her supervisor’s directions, and told customers that understaffing at the pharmacy was the reason for delays with their prescriptions. Chau also stated that, when Martinez took two days of sick leave that month, she provided a medical note that failed to specify the name of her doctor or the reason for her illness. The January 20, 2007 email from Chau was the first time that Granillo received any complaints about prescription labeling errors by Martinez. However, Granillo did not conduct any follow up investigation with Chau about these particular complaints.
On January 23, 2007, Granillo met with Martinez to issue her two written warnings. The first warning stated that Martinez made an inappropriate sexual comment about Pasco in the presence of a customer and other store employees and that such conduct violated the company’s anti-harassment policy. The second warning stated Martinez frequently made prescription labeling errors, failed to alert other staff members about outstanding prescription issues at the end of her shift, and openly criticized her coworkers and complained about the working conditions at Rite Aid. In deciding to issue the two warnings, Granillo relied on the information reported to him directly by Chau, on the written statements that Chau had obtained from Martinez’s coworkers, and on Granillo’s meetings with the coworkers about those statements. At that time, Granillo was aware that Martinez had not previously been issued a written warning for a poor work attitude or prescription labeling errors at any time in her employment with Rite Aid.
During the January 23, 2007 meeting, Martinez denied that she had engaged in any inappropriate conduct. She admitted that she occasionally made prescription labeling errors, but explained that it was a common occurrence among pharmacy staff. She also admitted that she had discussed her concerns about understaffing in the pharmacy with her supervisors, but denied that she openly complained to coworkers or customers about staffing issues. Granillo insisted that Martinez had to be guilty of something and that she needed to admit one of the allegations in the warnings. At the conclusion of the meeting, Martinez signed both warnings and added a statement that she would try her best to eliminate errors in the pharmacy. Around that time, Martinez complained to Granillo that Chau had called her “psycho” and that she believed there was a conspiracy to push her out of the store. Apart from reporting Chau’s comment, which Granillo did not consider to be harassing, Martinez did not raise any complaints about discrimination or harassment in her January 2007 meetings with Granillo.

I. Withdrawal of December 2006 Written Warning


Shortly after Martinez was issued the two January 2007 written warnings, Granillo was notified in writing by two of Martinez’s coworkers that Chau had asked them for assistance in getting Martinez fired. In her statement, Melonnie Atianzar reported that Chau had asked her to lie to upper management about work schedule issues involving Martinez so that Martinez would “‘pay for what she has done and . . . be punished for her actions.’” In her statement, Lydia Garcia reported that Chau had promised her an internship in the pharmacy if she helped him get Martinez fired.
On January 30, 2007, Granillo had a follow up meeting with Pasco who denied that she had ever been asked to lie about Martinez. During the meeting, Pasco described Martinez as careless in her work and lacking in focus, and she recounted one prescription labeling error that Martinez had made. Pasco also reported that Martinez would tell customers that the pharmacy was understaffed when their prescriptions were not ready. That same day, Chau sent another email to Granillo and Tam complaining that Martinez had accused him of being prejudiced when he attempted to change her work schedule.
On February 2, 2007, Granillo met with Chau about his alleged misconduct. Chau denied that he asked any subordinate employees for assistance in getting Martinez fired. However, based on the statements provided by Atianzar and Garcia, Granillo concluded that Chau violated Rite Aid’s code of ethics policy and standards of conduct by soliciting employees to lie about Martinez. Granillo placed Chau on a nine-day suspension, demoted him to the position of staff pharmacist with an accompanying reduction in pay, and issued him a final written warning. Granillo also transferred Chau to another Rite Aid store so that he would have no further contact with Martinez.
On February 5, 2007, Granillo withdrew the December 2006 written warning that Chau had issued to Martinez for slamming a medicine bottle on the counter because that allegation was based solely on information provided by Chau. Granillo did not withdraw the January 2007 written warnings that he had issued to Martinez for sexual harassment and poor work performance because he believed those allegations had been substantiated by Martinez’s coworkers. However, Granillo admitted that, when he issued the January 2007 warnings, no one other than Chau had complained about multiple labeling errors by Martinez.

J. March 2007 Written Warning and Grievance


Following Chau’s transfer, Chen Chen Hwang temporarily filled in as a pharmacist at the Arcadia store. In February 2007, at the request of a customer, Martinez asked Hwang if a prescribed medication had a generic equivalent that could be provided to the customer at a lower cost. Hwang instructed Martinez to prepare a prescription label for a similar generic drug and indicated that Hwang would contact the prescribing physician for approval. However, on February 22, 2007, Hwang sent an email to Tam complaining that Martinez had acted outside the scope of her duties when she changed a customer’s medication without prior authorization from the pharmacist or prescribing physician. On March 14, 2007, Tam issued a written warning to Martinez based on the incident reported by Hwang. Although Granillo received copies of Hwang’s email and Martinez’s warning, he did not follow up with Hwang or Tam about the circumstances surrounding that warning. Martinez thereafter filed a third grievance with her union in which she alleged that the March 2007 warning was unjust, but did not specifically complain about discrimination or harassment by Hwang.

K. March 2007 Threat of Retaliation by Lohman


In March 2007, Lohman became the store district manager and Acosta became the pharmacy district manager for the Arcadia store. During a March 7, 2007 visit to the store, Lohman asked Martinez if she was the same girl that he saw at the bank. When Martinez answered that she was, Lohman told her that he knew she was a problem and he was going to take care of her. Martinez felt threatened by Lohman’s comment and feared she would be fired, but she did not immediately report it to anyone at Rite Aid. However, shortly after this incident, Lohman himself told both Granillo and Acosta about his comment to Martinez. Although Granillo believed the comment was inappropriate, he considered it to be an “empty threat” because Lohman did not have direct supervisory authority over Martinez. Granillo orally counseled Lohman about his comment and instructed him to stay away from Martinez, but did not take any other disciplinary action against him. Lohman did not have any further contact with Martinez.

L. March to May 2007 Requests for Time Off for Doctor’s Appointments


In March 2007, Angelene Chan was hired as the pharmacy manager for the Arcadia store. Prior to joining the Arcadia store, Chan was trained for two weeks at the Pasadena store by Desai, Martinez’s former pharmacy manager who had witnessed her anxiety attack in February 2004. During her training, Chan asked Desai about the Arcadia store staff. Desai mentioned that Martinez previously had worked for her as a pharmacy technician. Both Desai and Chan denied that they discussed Martinez’s medical condition or the circumstances under which she left the Pasadena store.
In mid-March 2007, Dr. Jack Boghosian, a psychologist at Kaiser, diagnosed Martinez as having an adjustment disorder with an anxious and depressed mood. Dr. Boghosian began treating Martinez with individual and group psychotherapy. In May 2007, Martinez also sought treatment with Dr. Jim Chomchai, a psychiatrist at Kaiser, who diagnosed Martinez with major depression and prescribed Prozac and Ativan. At that time, Dr. Chomchai recommended that Martinez take a disability leave because the depression was affecting her ability to work, but Martinez declined. Instead, she continued taking her prescribed medications and attending regular appointments with both Dr. Boghosian and Dr. Chomchai.
During the first few months that Martinez reported to Chan, Martinez would notify Chan when she needed time off from work for a doctor’s appointment. Prior to May 2007, Chan allowed Martinez to attend each of her scheduled doctor’s appointments and did not raise any concerns with Martinez about her performance or requests for time off from work. At some point, Martinez disclosed to Chan that her appointment was with a psychiatrist or psychologist. Following that disclosure, Chan began making comments about Martinez’s mental health when Martinez asked for time off to attend an appointment. Chan would respond to Martinez’s requests in a mocking tone, asking her “what’s the matter, are you feeling sick, do you need to see your psych.” On other occasions, Chan told Martinez she was “mentally a problem” and should “go see [her] psychiatrist.” In addition to these comments by Chan, Granillo told Martinez at some point that she was “unbalanced” and Acosta said that she was “mentally off.”

M. May 2007 Filing of EEOC Charge


On May 11, 2007, Martinez filed an administrative charge with the Equal Employment Opportunity Commission (EEOC) in which she alleged retaliation and discrimination on the basis of her sex, age, and national origin, but not on the basis of her disability. In her EEOC charge, Martinez specifically complained about Lohman’s act of inappropriate touching and his subsequent threat of retaliation. She also complained about the March 2007 written warning issued by Tam and Hwang for allegedly changing a customer’s medication without approval. Prior to filing the EEOC charge, Martinez called Rite Aid’s toll-free telephone number for employee complaints and left a message, but she never received any response.

N. May 2007 Oral Counseling


On May 14, 2007, Chan sent an email to Acosta complaining that Martinez was failing to follow instructions and taking two-hour breaks without her approval. In a subsequent meeting with Granillo and Acosta, Chan explained that Martinez was taking two-hour lunch breaks every other week to attend doctor’s appointments and was not giving sufficient notice of her need for time off. Chan also reported that Martinez was refusing to perform certain tasks, such as restocking unclaimed prescriptions and working the cash register. Chan did not raise any concerns about prescription labeling errors at that time.
On May 22, 2007, Martinez was scheduled to attend a doctor’s appointment. Chan told Martinez that she had to find her own coverage or she could not attend the appointment. That same day, Granillo and Acosta met with Martinez about Chan’s complaints. Martinez told Granillo that she needed time off from work to see her doctor and had been notifying Chan of her scheduled appointments. Martinez further explained that, in February 2004, she had become sick and had to be taken from the Pasadena store by ambulance. She expressed concern that Desai was telling other employees, including Chan, about her prior illness. She did not, however, disclose the nature of her illness in the meeting. Martinez also reported that Chan was treating her rudely, but she did not specifically allege that Chan was harassing or discriminating against her. Near the end of the meeting, Martinez complained for the first time about Lohman. She told Granillo about Lohman’s December 2006 act of unwanted touching as well as his March 2007 comment about Martinez being a problem that he would take care of. In addition, Martinez informed Granillo that she recently had filed an administrative charge with the EEOC.
During the May 22, 2007 meeting, Granillo orally counseled Martinez that she was responding inappropriately to the instructions given by Chan. Granillo did not investigate Martinez’s complaint of inappropriate touching by Lohman because he did not consider the touching to be sexual harassment despite Martinez’s statement that it was unwanted and made her uncomfortable. Granillo also did not investigate Martinez’s complaint that Desai was sharing information about her prior illness with other employees because he did not believe a manager would engage in such conduct two years later. Shortly after the meeting, Granillo received notice of Martinez’s EEOC charge, which he discussed with Bradley Sapp, the director of human resources for Rite Aid’s western division.

O. July 2007 Written Warning and Grievance


At some point after the May 22, 2007 meeting, Chan informed Martinez that she did not want her taking any more time off from work to attend doctor’s appointments. Chan also refused Martinez’s request to take two vacation days in June 2007, including one day to attend her son’s graduation. In response to Martinez’s request for vacation time, Chan wrote on the scheduling calendar that Martinez had to find her own coverage or her request was not approved.
On June 13, 2007, Chan sent a second email to Acosta in which she complained that Martinez was treating her rudely and still refusing to perform certain tasks, but did not raise any concerns about prescription labeling errors. The following day, Chan sent an unauthorized memo to all pharmacy staff members stating that two-hour lunches were not allowed unless medically necessary and that requests for time off had to be submitted two weeks in advance and approved by the pharmacy manager. The memo also stated that the failure to report to work as scheduled would result in disciplinary action, including termination.
Martinez had a doctor’s appointment scheduled for June 27, 2007, which required her to start her shift one-half hour late. Prior to attending that appointment, Martinez provided Chan with a copy of an appointment card from her health care provider showing that she was scheduled to see Dr. Chomchai in the psychiatry department. On June 26, 2007, Chan sent a third email to Acosta complaining about Martinez. In this email, Chan reported that Martinez made multiple prescription labeling errors, refused to take responsibility for her mistakes, and openly criticized the mistakes of others. Chan also stated that Martinez repeatedly failed to follow her orders to perform assigned tasks, including working the cash register, and that she responded to Chan’s instructions in a negative and aggressive manner. Chan’s June 26, 2007 email was the first time she complained about prescription labeling errors by Martinez.
On July 3, 2007, Granillo and Acosta met with Martinez to issue her a final written warning. The warning stated that Martinez continued to make prescription labeling errors, repeatedly ignored or responded negatively to her supervisor’s directions, disrupted service levels by refusing to cashier when necessary, and openly complained about her coworkers’ performance. In deciding to issue the final warning, Granillo relied in part on the information reported by Chan in her June 26, 2007 email. Granillo also relied in part on the prior information reported by Chau about Martinez’s labeling errors to substantiate Chan’s similar complaint. During the meeting, Martinez denied each of the allegations in the warning, but did not specifically complain about any discriminatory or harassing conduct by Chan. After Granillo told Martinez that she could not leave the meeting without signing the warning, Martinez complied and signed it. On July 6, 2007, Martinez filed a fourth grievance with her union in which she alleged that the final warning was unjust and that Chan was harassing her.
On July 17, 2007, Martinez sent a letter to Granillo requesting a copy of her complete personnel file. Although Rite Aid was required by law to maintain personnel files for its employees, Granillo was unable to provide Martinez with the requested copy because any records from her personnel file prior to 2004 had been lost. Granillo never informed Martinez that Rite Aid had lost her personnel file or otherwise responded to her request.

P. July 2007 Suspension and Subsequent Termination


On July 25, 2007, Chan reported to Granillo that she had documented eight prescription labeling errors recently made by Martinez over a period of three days. Chan also provided Granillo with copies of the prescriptions and the corresponding labels. The labels identified Martinez as the technician who was logged onto the pharmacy’s computer system when the labels were prepared.
On July 31, 2007, Granillo and Acosta met with Martinez about the prescription labeling errors. Martinez acknowledged that she had made one of the errors alleged, but stated that she believed Chan had fabricated the other errors by changing the labels while Martinez was away from the computer but still logged onto the system. In response to Granillo’s stated concern that Martinez was not getting along with Chan or following her directions, Martinez reported that Chan often asked her to perform multiple tasks at the same time and that Martinez did her best to comply with all of Chan’s orders. During the meeting, Martinez provided Granillo with a copy of a July 27, 2007 letter that she had sent to Rite Aid’s chief executive officer complaining about a hostile work environment. When Granillo asked Martinez for specifics about her grievance complaint that Chan was harassing her, Martinez described concerns that she had with Chan’s tone and demeanor, but did not complain that Chan had been making any inappropriate comments to her. At the conclusion of the meeting, Granillo placed Martinez on suspension and planned to terminate her employment at that time. Martinez never received a response from anyone at Rite Aid to her July 27, 2007 letter.
On August 8, 2007, following a final grievance meeting with Martinez, Granillo and Sapp decided to terminate her employment. In making the termination decision, Sapp relied solely on the information provided by Granillo. Granillo relied, in part, on the information provided by Acosta about the complaints he had received from Chan about Martinez. Granillo also relied, in part, on the prior written warnings that were issued to Martinez in January and July 2007, and on the information provided by both Chan and Chau to support those warnings. On August 16, 2007, Martinez was notified in writing that her employment with Rite Aid had been terminated. At the time of the termination, Martinez had been employed by Rite Aid for over 23 years.

Q. Martinez’s Evidence of Economic Damages


Dr. Tamorah Hunt, Martinez’s forensic economist, testified about her economic damages. At the termination of her employment, Martinez’s average past annual income was $33,581. Dr. Hunt calculated Martinez’s past economic loss based on her projected lost earnings and lost employer benefit contributions from the termination of her employment in August 2007 to the start of the trial in August 2010. Based on Dr. Hunt’s calculations, Martinez’s past economic loss was $57,489. Dr. Hunt also calculated Martinez’s future economic loss for three alternative time periods from the termination of her employment assuming that Martinez remained unemployed for the duration of that period. Based on Dr. Hunt’s calculations, Martinez’s total economic damages, including both past and future economic loss, would be $278,446 at 6 years, $446,621 at 8 years, and $634,055 at 10 years from the date of her discharge from Rite Aid.

R. Martinez’s Evidence of Non-Economic Damages


Dr. Boghosian was Martinez’s treating psychologist between March and December 2007. In March 2007, Martinez presented with symptoms of anxiety and depression caused by job-related stress, and specifically complained that she was being subjected to harassing and retaliatory conduct at work. She credibly denied that there were any other stressors in her life causing her symptoms. Over the next few months, Martinez regularly attended individual and group therapy sessions with Dr. Boghosian where she continued to complain about job-related stress. In August 2007, shortly after her discharge, Martinez appeared very discouraged and distraught, and was diagnosed by Dr. Boghosian with major depression. As of her last session in December 2007, Martinez was still struggling with the emotional impact of losing her job because she had invested much of her identity in her employment at Rite Aid.
Dr. Chomchai was Martinez’s treating psychiatrist from May 2007 through February 2008. In May 2007, Dr. Chomchai diagnosed Martinez with major depression, which was recurrent and moderate. At that time, Martinez complained of job-related stress; her symptoms included depressed mood, insomnia, fatigue, change in appetite, and feelings of hopelessness. Dr. Chomchai ruled out any stressors other than Martinez’s job and psychiatric condition as the cause of her symptoms. At her last appointment with Dr. Chomchai in February 2008, Martinez’s diagnosis remained major depression, but she was in partial remission with minimal anxiety and no depressed mood. Although Dr. Chomchai considered Martinez’s prognosis to be good, he believed that she needed to continue anti-depressant medication and treatment with a mental health care provider.
Dr. Craig Snyder, a clinical psychologist who was retained by Martinez’s attorney, conducted a forensic evaluation of Martinez in March 2009 and March 2010. It was Dr. Snyder’s opinion that, prior to 2003, Martinez was not suffering from any psychiatric impairment. However, after returning from a medical leave of absence in 2004, Martinez began experiencing clinical symptoms of anxiety and depression, and by early 2007, she met the criteria for a depressive disorder and anxiety disorder. Martinez’s depression and anxiety became significantly worse upon her termination of employment in August 2007, at which time she met the criteria for a major depressive disorder. Dr. Snyder opined that the cause of Martinez’s depression and anxiety was the treatment by her supervisors at Rite Aid. As of March 2010, Martinez’s symptoms had improved and were more mild to moderate in nature. Martinez’s prognosis was slightly better than fair at that time, although she remained susceptible to relapse if she were to experience another major stressful event.

II. Jury Verdicts and Damages Awards


Following a four-week trial, the jury returned a special verdict in favor of Martinez on her causes of action for wrongful termination in violation of public policy, intentional infliction of emotional distress, and invasion of privacy. The jury awarded Martinez $3.35 million in compensatory damages against Rite Aid consisting of $1,116,666 for wrongful termination in violation of public policy, $1,116,666 for intentional infliction of emotional distress, and $1,116,668 for invasion of privacy. The jury also awarded Martinez $50,000 in compensatory damages against Chau for intentional infliction of emotional distress.
On the wrongful termination claim alleged against Rite Aid, the jury found that Martinez had a mental disability that was known to the decision-makers or other supervisory personnel who contributed to the decision to terminate her employment, that Martinez took a medical leave of absence for a serious health condition in 2004, and that Martinez complained about sexual harassment to the EEOC or Rite Aid. The jury further found that Martinez’s mental disability, medical leave of absence, and complaint of sexual harassment were a motivating reason for Rite Aid’s termination decision.[1] The jury’s award of $1,116,666 against Rite Aid on this claim consisted of $20,000 in past economic loss, $150,000 in future economic loss, $813,333 in past non-economic loss, and $133,333 in future non-economic loss.
On the intentional infliction of emotional distress claims alleged against both Rite Aid and Chau, the jury found that Rite Aid’s employees or managers, including Chau, engaged in outrageous conduct toward Martinez between December 2006 and August 2007 while acting in the course and scope of their employment. The jury also found that Rite Aid and Chau intended to cause Martinez emotional distress or acted in reckless disregard of the possibility she would suffer emotional distress, and that such conduct was a substantial factor in causing her to suffer severe emotional distress. The jury’s award of $1,116,666 against Rite Aid on this claim consisted of $20,000 in past economic loss, $150,000 in future economic loss, $813,333 in past non-economic loss, and $133,333 in future non-economic loss. The jury’s award of $50,000 against Chau consisted of $12,500 on each category of past economic loss, future economic loss, past non-economic loss, and future non-economic loss.
On the invasion of privacy claim alleged against Rite Aid, the jury found that a Rite Aid employee publicized private information about Martinez’s mental disability which a reasonable person in Martinez’s position would consider highly offensive. The jury further found that Rite Aid either knew or acted with reckless disregard of the fact that a reasonable person in Martinez’s position would consider the disclosure highly offensive, and that the conduct was a substantial factor in causing Martinez harm. The jury’s award of $1,116,668 against Rite Aid on this claim consisted of $20,000 in past economic loss, $150,000 in future economic loss, $813,334 in past non-economic loss, and $133,334 in future non-economic loss.
In the special verdict, the jury also found that Martinez had proved by clear and convincing evidence that one or more officers, directors, or managing agents of Rite Aid acted with malice, oppression, or fraud, and either authorized such conduct or knew of such conduct and approved it after it occurred. Based on the jury’s findings, the trial moved to a punitive damages phase where the jury returned a special verdict awarding Martinez $4.8 million in punitive damages against Rite Aid.

III. Post-Trial Motions and Appeals


On November 1, 2010, the trial court entered judgment in favor of Martinez on the special verdicts. On November 15 and 16, 2010, Rite Aid and Chau jointly filed a motion for a new trial and a motion for judgment notwithstanding the verdict. However, neither motion was heard or ruled upon by the trial court within the applicable 60-day statutory period. Rite Aid and Chau jointly filed timely notices of appeal from the judgment on the special verdicts and from the denial, by operation of law, of their post-trial motions. Martinez filed a timely notice of cross-appeal from a pre-trial order denying her motion for leave to file a third amended complaint.

DISCUSSION

I. Jury Verdicts on Liability


On appeal, Rite Aid and Chau challenge the sufficiency of the evidence supporting the jury verdicts in favor of Martinez on her claims for wrongful termination in violation of public policy, intentional infliction of emotional distress, and invasion of privacy. “When a party contends insufficient evidence supports a jury verdict, we apply the substantial evidence standard of review. [Citation.]” (Wilson v. County of Orange (2009) 169 Cal.App.4th 1185, 1188.) “We must ‘view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor. . . .’ [Citation.]” (Ibid.) “‘[N]either conflicts in the evidence nor “‘testimony which is subject to justifiable suspicion . . . justif[ies] the reversal of a judgment, for it is the exclusive province of the [trier of fact] to determine the credibility of a witness and the truth or falsity of the facts upon which a determination depends.’” [Citations.]’ [Citation.]” (Lenk v. Total-Western, Inc. (2001) 89 Cal.App.4th 959, 968.) Accordingly, “‘when a [verdict] is attacked as being unsupported, the power of the appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the [verdict]. When two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the [trier of fact].’” (Western State Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 571.)

A. Wrongful Termination in Violation of Public Policy


In its special verdict, the jury found in favor of Martinez on her cause of action for wrongful termination in violation of public policy under three alternative theories: (1) discrimination based on a mental disability; (2) retaliation for taking a medical leave of absence, and (3) retaliation for complaining about sexual harassment. Rite Aid contends that Martinez’s wrongful termination claim fails as a matter of law under each of the three theories. We conclude, however, that there was substantial evidence to support the jury’s finding that Rite Aid terminated Martinez’s employment because of her sexual harassment complaint, and that the jury’s verdict on the wrongful termination claim must be affirmed.[2]
To prevail on a claim for wrongful termination in violation of public policy, a plaintiff must show that (1) he or she was employed by the defendant; (2) the plaintiff’s employment was terminated; (3) the termination violated public policy; and (4) the termination caused the plaintiff damages. (Haney v. Aramark Uniform Services, Inc. (2004) 121 Cal.App.4th 623, 641; Holmes v. General Dynamics Corp. (1993) 17 Cal.App.4th 1418, 1426, fn. 8.) In addition, the public policy allegedly violated must be substantial and fundamental, articulated at the time of termination, and embodied in either a constitutional or statutory provision. (Stevenson v. Superior Court (1997) 16 Cal.4th 880, 889-890; Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1090-1091, overruled on other grounds in Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 80, fn. 6.) FEHA’s policies prohibiting discrimination and retaliation in employment are sufficiently substantial and fundamental to support a common law claim for wrongful termination in violation of public policy. (City of Moorpark v. Superior Court (1998) 18 Cal.4th 1143, 1159-1161; Stevenson v. Superior Court, supra, at pp. 895-897; Gantt v. Sentry Insurance, supra, at pp. 1096-1097.)[3]
FEHA specifically provides that it is an unlawful employment practice for “any employer … or person to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part or because the person has filed a complaint, testified, or assisted in any proceeding under this part.” (Gov. Code, § 12940, subd. (h).) When a plaintiff alleges a retaliatory termination either as a statutory claim under the FEHA or as a common law claim for wrongful termination in violation of public policy, California courts apply the three-step burden-shifting analysis of McDonnell Douglas Corp. v Green (1973) 411 U.S. 792 to evaluate the claim. (Loggins v. Kaiser Permanente International (2007) 151 Cal.App.4th 1102, 1108-1109.) “[T]o establish a prima facie case of retaliation under the FEHA, a plaintiff must show (1) he or she engaged in a ‘protected activity,’ (2) the employer subjected the employee to an adverse employment action, and (3) a causal link existed between the protected activity and the employer’s action. [Citations.] Once an employee establishes a prima facie case, the employer is required to offer a legitimate, nonretaliatory reason for the adverse employment action. [Citation.] If the employer produces a legitimate reason for the adverse employment action, the presumption of retaliation ‘“‘drops out of the picture,’”’ and the burden shifts back to the employee to prove intentional retaliation. [Citation.]” (Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1042.)
“‘The retaliatory motive is “proved by showing that plaintiff engaged in protected activities, that his employer was aware of the protected activities, and that the adverse action followed within a relatively short time thereafter.” [Citation.] “The causal link may be established by an inference derived from circumstantial evidence, ‘such as the employer’s knowledge that the [employee] engaged in protected activities and the proximity in time between the protected action and allegedly retaliatory employment decision.’” [Citation.]’ [Citation.]” (Morgan v. Regents of University of California (2000) 88 Cal.App.4th 52, 69-70.) Proof of intentional discrimination or retaliation often depends on circumstantial evidence because it consists of “subjective matters only the employer can directly know, i.e., his attitude toward the plaintiff and his reasons for taking a particular adverse action.” (Mamou v. Trendwest Resorts, Inc. (2008) 165 Cal.App.4th 686, 713.) Nevertheless, “[t]he central issue is and should remain whether the evidence as a whole supports a reasoned inference that the challenged action was the product of discriminatory or retaliatory animus.” (Id. at p. 715.)
Rite Aid argues that Martinez failed to show that she engaged in protected activity when she complained about sexual harassment by Lohman because Lohman’s isolated act of unwanted touching outside the workplace did not constitute actionable sexual harassment as a matter of law. However, “an employee’s conduct may constitute protected activity for purposes of the antiretaliation provision of the FEHA not only when the employee opposes conduct that ultimately is determined to be unlawfully discriminatory under the FEHA, but also when the employee opposes conduct that the employee reasonably and in good faith believes to be discriminatory, whether or not the challenged conduct is ultimately found to violate the FEHA.” (Yanowitz v. L’Oreal USA, Inc., supra, 36 Cal.4th at p. 1043.) As our Supreme Court has explained, “[e]mployees often are legally unsophisticated and will not be in a position to make an informed judgment as to whether a particular practice or conduct actually violates the governing antidiscrimination statute. A rule that permits an employer to retaliate against an employee with impunity whenever the employee’s reasonable belief turns out to be incorrect would significantly deter employees from opposing conduct they believe to be discriminatory. [Citations.]” (Ibid.) Thus, “‘it is good faith and reasonableness, not the fact of discrimination, that is the critical inquiry in a retaliation case.’” (Id. at p. 1043, fn. 4, italics omitted; see also Miller v. Department of Corrections (2005) 36 Cal.4th 446, 474 [“[a]n employee is protected against retaliation if the employee reasonably and in good faith believed that what he or she was opposing constituted unlawful employer conduct such as sexual harassment or sexual discrimination”].)
In this case, the jury reasonably could have found that Martinez had a good faith belief that she was complaining about unlawful conduct by Lohman. Martinez testified that, when she saw Lohman at a bank, he touched her shoulder and waist in a manner that was inappropriate and made her feel uncomfortable. A few months later, after Lohman became the store district manager for the Arcadia store where Martinez worked, he approached Martinez, asked if she was the same “girl” from the bank, and then told her that he knew she was a problem and he was going to take care of her. Martinez reasonably, even if mistakenly, could have believed that Lohman was threatening to terminate her employment at that time for rebuffing his prior sexual advance, and that his comment when considered in conjunction with his earlier act of unwanted touching was a form of either quid pro quo sexual harassment or retaliation. Even assuming such conduct did not actually rise to the level of actionable harassment or retaliation, there was sufficient evidence to support a finding that Martinez engaged in protected activity when she made a good faith complaint about sexual harassment to both Granillo and the EEOC.
Rite Aid further contends that the two and a half month time gap between Martinez’s May 2007 complaint and her August 2007 discharge is insufficient to demonstrate the requisite causal connection for her wrongful termination claim, particularly where Martinez made her sexual harassment complaint only after she had been counseled on performance-related issues. Rite Aid also claims that it provided legitimate, non-retaliatory reasons for discharging Martinez based on deficiencies in her performance and attitude, and that Martinez’s personal belief that the stated reasons were untrue is insufficient to show pretext. However, a thorough review of the record reflects that Martinez presented substantial evidence beyond a mere temporal proximity and subjective belief about her job performance to support a finding that Rite Aid acted with a retaliatory animus in the discharge decision.
Granillo testified that he terminated Martinez’s employment for two specific reasons: (1) her continued prescription labeling errors, and (2) her poor work attitude. However, the jury heard testimony from multiple Rite Aid pharmacists and pharmacy technicians apart from Martinez that prescription labeling errors occurred on a daily basis in the pharmacy and that such errors typically were corrected by either the pharmacist or the technician before the medication was dispensed to the customer. The jury also heard testimony that none of the prescription labeling errors made by Martinez during her 23-year employment at Rite Aid ever resulted in a medication being dispensed to a customer with incorrect information on the prescription label. From this evidence, the jury reasonably could have inferred that Rite Aid generally did not regard prescription labeling errors as a performance issue that warranted discharge, but Granillo decided to treat Martinez differently.
Granillo also testified that, in making the discharge decision, he relied on information provided by both Chan and Chau about Martinez’s performance-related issues. However, at that point, Granillo knew Chau had engaged in serious misconduct by soliciting employees to provide false statements about Martinez for the purpose of getting her fired. While Granillo took prompt disciplinary action against Chau for his misconduct, he did not withdraw the January 2007 written warning that had been issued to Martinez for making prescription labeling errors, even though Chau was the only person who had ever complained about multiple labeling errors by Martinez at that time. Instead, Granillo chose to rely on that prior written warning, and the potentially flawed information provided by Chau to support the warning, when he decided to discharge Martinez for continuing to make such errors. Granillo also chose to rely on the information provided by Chan, even though Chan did not raise any concerns about prescription labeling errors until after Martinez complained that Chan was not allowing her to take time off from work to attend doctor’s appointments. Given Martinez’s long history of employment with Rite Aid and the lack of any significant performance problems prior to 2007, the jury reasonably could have inferred that Granillo did not have a good faith belief that the performance-related issues reported by Chau and Chan in 2007 warranted Martinez’s discharge.
Contrary to Rite Aid’s contention, Martinez also presented evidence that the company failed to take appropriate corrective action in response to her sexual harassment complaint. Martinez first complained to Rite Aid about Lohman’s unwanted touching and retaliatory threat during the May 2007 meeting with Granillo. After that meeting, Granillo never spoke with Lohman about Martinez’s allegation that he had touched her inappropriately because Granillo did not consider the touching to be sexual harassment. Granillo also did not speak with Lohman about his threat of retaliation because Lohman had already told Granillo about his comment and Granillo had counseled Lohman at that time to not have further contact with Martinez. However, when Granillo orally counseled Lohman about his comment in March 2007, he had no knowledge that Lohman’s threat to Martinez was made after she had rebuffed his sexual advance. Lohman merely told Granillo that he had made the comment in response to rude behavior by Martinez. Once Martinez complained about sexual harassment, Granillo was on notice that Lohman’s comment may have been made in a different context than previously disclosed which, at a minimum, warranted further investigation. Moreover, although Granillo had issued a written warning to Martinez for violating Rite Aid’s sexual harassment policy based on her single inappropriate comment about a coworker, he did not take any disciplinary action against Lohman for his inappropriate touching and retaliatory threat toward a subordinate beyond mere oral counseling.
Based on the totality of the evidence, the jury reasonably could have concluded that Granillo acted with a retaliatory motive when he failed to take appropriate corrective action in response to Martinez’s sexual harassment complaint and then terminated her employment less than three months later based on unreliable reports of performance issues. The jury’s verdict in favor of Martinez on her claim for wrongful termination in violation of public policy was therefore supported by substantial evidence.

B. Intentional Infliction of Emotional Distress

    Home | Contacts | Submit New Article | Site Leaders | Search
    © 2005 Fearnotlaw.com