Bierbower v. FHP, Inc.

• Decision Date: 19 February 1999
• Docket Number: No. G018307,G018307
• Citation: 82 Cal.Rptr.2d 393,70 Cal.App.4th 1
• Court: California Court of Appeals Court of Appeals
• Parties: , 79 Fair Empl.Prac.Cas. (BNA) 69, 14 IER Cases 1494, 99 Cal. Daily Op. Serv. 1326, 1999 Daily Journal D.A.R. 1631 Sharon BIERBOWER, Plaintiff and Appellant, v. FHP, INC., Defendant and Respondent.

Page 393

82 Cal.Rptr.2d 393

70 Cal.App.4th 1, 79 Fair Empl.Prac.Cas. (BNA) 69,

14 IER Cases 1494, 99 Cal. Daily Op. Serv. 1326,

1999 Daily Journal D.A.R. 1631

Sharon BIERBOWER, Plaintiff and Appellant, v. FHP, INC., Defendant and Respondent.

No. G018307.

Court of Appeal, Fourth District, Division 3, California.

Feb. 19, 1999.

Review Denied May 12, 1999.

Chandler and Vatave, Linda Hart Chandler and Sunil Lewis Vatave, Newport Beach, for Plaintiff and Appellant.

Jones, Day, Reavis & Pogue, Deborah C. Saxe, Miwon Yi and David B. Fischer, Los Angeles, for Defendant and Respondent.

O P I N I O N

SILLS, P. J.

You cannot make a mountain out of a typo. Nor can you, at least in this case, make a defamation suit. Today we hold that a discrepancy in an office memo concerning the date on which an alleged incident of sexual harassment took place is insufficient evidence of malice for purposes of whether a company investigation of the alleged harassment is protected by the "common interest" privilege against defamatory communications. (See Civ.Code, § 47, subd. (c).)

I

Civil Code section 47, subdivision (c) extends a conditional privilege against defamation to communications made without malice on subjects of mutual interest. (Civ.Code, § 47, subd. (c) [" A privileged publication ... is one made: [p] (c) In a communication, without malice, to a person interested therein, (1) by one who is also interested...."].)

A number of cases have now established that this "mutual interest" privilege covers investigations of sexual harassment complaints by private employers when made without malice. (See Cruey v. Gannett Co. (1998) 64 Cal.App.4th 356, 369, 76 Cal.Rptr.2d 670 ["The conditional privilege set out in subdivision (c) of section 47 potentially applies in the present case because Lacy's letter of complaint to Gannett pertains to a subject of mutual interest to Gannett and its employees, an accusation of workplace harassment and discrimination."]; Garziano v. E.I. Du Pont De Nemours & Co. (5th Cir.1987) 818 F.2d 380, 387 [intracompany memo protected by qualified common interest privilege under Mississippi law]; Stockley v. AT & T Information Systems, Inc. (E.D.N.Y.1988) 687 F.Supp. 764, 768 [applying common interest privilege under New York law to investigation into sexual harassment allegations]; Lawson v. Boeing Co. (Wash.App.1990) 58 Wash.App. 261, 792 P.2d 545, 549 [citing Stockley ]; see also Vackar v. Package Mach. Co. (N.D.Cal.1993) 841 F.Supp. 310, 313-314 [assuming privilege applied where argument was over whether malice provision applied].)

There is no reason to doubt the validity of these courts' conclusions. As indicated by the groundbreaking case on the point, Garziano v. E.I. Du Pont De Nemours & Co., supra, 818 F.2d 380, employers and employees both have a common interest in preventing and correcting sexual harassment. To that we would add--to put the matter in practical terms--that because any given interaction between any two people at the same workplace carries at least the danger of a sexual harassment lawsuit, the matter is necessarily of "mutual interest" under section 47, subdivision (c). Any other conclusion would fly in the face of workplace reality as it has been shaped by sexual harassment law.

The usual battleground in cases where an employee sues an employer claiming that he or she was falsely accused of sexual harassment is--as it is in the present appeal--whether the employer's communications were made with malice so as to deprive the employer of the conditional privilege. (E.g., Stockley, supra, 687 F.Supp. at p. 770 ["Plaintiff essentially concedes the existence of a qualified privilege, but argues that allegedly defamatory statements were made outside the scope of the privilege and with actual malice."].)

The present case involves a defamation action by Sharon Bierbower, a sales representative, against her former employer, FHP, a health care provider, arising out of a complaint made against her by a receptionist, Pauline Ayala. It is undisputed that on a day in late August, 1992 (the exact date is disputed, as will soon be shown), Ayala complained about several incidents of alleged sexual harassment, including one incident that happened that very day. ¹ She went to Bruce Huyghue, a senior plan manager at FHP. It is also undisputed that on that day she was upset (she testified she was crying, Huyghue testified she was upset but couldn't remember if she was crying), and related one of the incidents, which allegedly happened in the reception area. She also stated that she just wanted to make Bierbower "go away" and would file a formal complaint if Bierbower ever "approached her again in a suggestive manner."

Huyghue was familiar with FHP's anti-sexual harassment policy. As he understood company policy, he was required to "document" incidents of sexual harassment and report them to the company's personnel department even if the complainant did not want any action taken.

Huyghue typed up a memo concerning what Ayala had said to him within five minutes. The memo recited that he spoke with Ayala on August 26, but was dated August 27, and related the three incidents we have mentioned above. It also related the fact that Ayala wanted to file a "formal complaint" if Bierbower ever approached her in a "suggestive manner" again. ²

Later that same day Huyghue spoke with Connie Walters, Bierbower's supervisor, about it. Walters told Huyghue that Bierbower was on vacation.

Now here is where the discrepancy in the dates becomes important in this appeal. Huyghue's memo was dated August 27, 1992, but the first paragraph recites that "I spoke with Pauline on August 26." But it is also undisputed that on August 26 Bierbower was in Las Vegas, on her vacation. According to Bierbower, because the conversation between Huyghue and Ayala took place on a date on which Huyghue knew Bierbower was on vacation, yet concerned an incident which took place on that very date, Huyghue necessarily must have known that Ayala's accusations were false (cf. Lawson, supra, 792 P.2d at p. 549 ["If their allegations were false, they were unquestionably knowingly false."] ). For Bierbower, the fact Huyghue later circulated the memo to the personnel department necessarily demonstrates that he acted with malice because the memo contained what he knew was a false accusation.

For his part, Huyghue testified that he wrote the memo on August 27, because the date was automatically supplied by his computer, and the recitation that he spoke with Ayala on August 26 was simply a mistake. Ayala, on the other hand, testified that she could not remember "the exact date," and said it was either the 26th or the 27th, but in any event it was the day she went to Huyghue. She did, however, admit that at her deposition she testified that the date was the 26th.

Despite the discrepancy over the date of Ayala's talk with Huyghue, the trial court judge granted a motion for nonsuit after Bierbower had rested her case when her defamation suit against FHP came to trial in May 1995. The judge concluded that Bierbower had failed to present any substantial evidence of malice on the part of FHP. From the ensuing judgment Bierbower has brought this appeal.

II

Naturally, given the procedural posture of the appeal, Bierbower reminds us that the standard of review of a judgment based on a motion for nonsuit runs in her favor. She is entitled to the benefit of any conflict in the evidence and any reasonable inference that might be drawn from it. Even so, we cannot say the trial court erred. A number of reasons based on the undisputed facts require this conclusion:

First, Huyghue's marching orders when faced with sexual harassment allegations were to document and report, not to evaluate. His testimony was unequivocal that his job was to document and report, not investigate. The question of whether Bierbower might have been falsely accused was not for him to decide. In that regard, we can hardly say that an employer acts maliciously in requiring supervisorial employees who may have no formal training in factual investigation to document and report sexual harassment claims without first having to ascertain the validity of those complaints. FHP's policy is easily justified as a matter of reasonable employer prudence. (See Cotran v. Rollins Hudig Hall Internat., Inc. (1998) 17 Cal.4th 93, 106-107, 69 Cal.Rptr.2d 900, 948 P.2d 412.) As our Supreme Court has recently observed, sexual harassment investigations may implicate "intractable factual uncertainties." (Id. at p. 106, 69 Cal.Rptr.2d 900, 948 P.2d 412.) ³ Given the difficulty faced by the employer in the face of a sexual harassment allegation, an employer certainly acts reasonably by having a mechanism for forwarding complaints on for an investigation even where there is something suspicious about the complaint. To hold an employer liable for defamation because one employee must pass on a defamatory allegation of sexual harassment to another for investigation flies in the face of all sexual harassment law. The idea that the formal investigation should be conducted by a firm's human relations or personnel departments rather than the supervisor who first receives the complaint is an eminently reasonable one, if only because it promotes neutrality in any investigation. (See Lederman, Investigating Sexual Harassment (Nov.1998) Cal. Law. at pp. 73, 75 [recommending that investigation be conducted by employer's human relations department, or other neutral entity]; cf. Casenas v. Fujisawa USA, Inc. (1997) 58 Cal.App.4th 101, 67 Cal.Rptr.2d 827 [memo to regional sales manager containing sexual harassment complaint prompted timely investigation by both regional sales manager and company personnel manager; firm's response described by court as "exemplary"].) ⁴

Two, the allegedly defamatory memo set forth three complaints from Ayala, not just the one that happened on the date Ayala spoke with Huyghue....