Howe v. Target Corp.
| Decision Date | 19 September 2020 |
| Docket Number | Case No. 20-cv-252-MMA (DEB) |
| Court | U.S. District Court — Southern District of California |
| Parties | EMILY HOWE, Plaintiff, v. TARGET CORPORATION, Defendant. |
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS; AND DENYING DEFENDANT'S MOTION TO STRIKE
In her Second Amended Complaint ("SAC"), Emily Howe ("Plaintiff") alleges seven causes of action: (1) breach of implied contract; (2) breach of implied covenant of good faith and fair dealing; (3) wrongful termination in violation of public policy; (4) wrongful termination in bad faith; (5) negligent supervision; (6) intentional infliction of emotional distress; and (7) negligent infliction of emotional distress. See Doc. No. 14 ("SAC").1 Target Corporation ("Defendant") moves to dismiss each cause of action pursuant to Federal Rule of Civil Procedure 12(b)(6) and to strike Plaintiff's prayer forattorneys' fees from the SAC pursuant to Federal Rule of Civil Procedure 12(f). See Doc. No. 16. Plaintiff filed an opposition to Defendant's motion, and Defendant replied. See Doc. Nos. 18, 20, 22. The Court found the matter suitable for determination on the papers and without oral argument pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7.1.d.1. See Doc. No. 23. For the reasons set forth below, the Court GRANTS in part and DENIES in part Defendant's motion to dismiss and DENIES Defendant's motion to strike.
Plaintiff's action arises from "Plaintiff's wrongful termination by Defendant due to her relationship with another of Defendant's former employees, Ryan Murphy ['Murphy']." SAC ¶ 1.
In March 2010, Plaintiff began her employment with Defendant as a Store Team Lead in a Chula Vista, California Target store. Id. ¶ 13. During Plaintiff's nine-year employment, she was given positive performance reviews and never a negative review. Id. ¶ 14. Defendant provided Plaintiff with several salary increases, which were more than those given to similar employees. Id. ¶¶ 15-16. In March 2013, Defendant promoted Plaintiff to Store Director. Id. ¶ 17. Moreover, Defendant used Plaintiff to improve underperforming store locations. Id. ¶ 18. In 2017, Defendant transferred Plaintiff to an Oceanside, California Target store to help it improve. Id. ¶¶ 19-20. During her two years at the Oceanside store, Plaintiff earned two "substantial bonuses." Id. ¶ 21.
Some of a Store Director's job duties involves team leadership and motivation. Id. ¶ 22. For example, Store Directors use recognition to reward employees for positive performance, such as "birthday gifts/celebrations, baby showers, wedding gifts, etc." Id.¶ 26. To meet this end, Defendant entrusts Store Directors with "corporate expense credit cards and the 'Purchasing Card Program'" ("PCard"). Id. ¶ 23. The PCard is a corporate expense card provided to supervisory employees to use for various team activities, purchases, or meals. Id. ¶ 27. Store Directors' recognition spending per person is capped. Id. ¶ 28; see also id. ¶ 29. PCard usage is guided by the "Purchasing Card Program Policy and Procedure Manual" and several other documents. Id. ¶ 24. Defendant also "had an informal policy regarding team member recognition expenditures" ("Recognition Policies"). Id. ¶ 25. Defendant did not provide Plaintiff with formal training on the Recognition Policies, written recognition policy, or PCards. Id. ¶¶ 30-31. Additionally, Defendant's Employee Handbook does not provide details on the Recognition Policies. Id. ¶ 31.
Superiors instructed Store Directors "to engage in certain expense practices in a manner inconsistent with the guidelines set forth in the PCard Policies and alleged Recognition Polices." Id. ¶ 32. For example, District Team Leads provided Store Directors with "limited informal instructions . . . on how to use PCards and requisition gift cards sold by Target for reimbursement." Id. ¶ 33. These included instructions to exceed the cap on recognition expenses. Id. Store directors covered excess recognition expenditures through using their own funds and subsequently reimbursed themselves through "requisitioning gift cards at Target stores." Id. ¶¶ 36-37. "The requisition of gift cards involves activation of a gift card . . . using Target funds." Id. ¶ 34. Store Directors could requisition gift cards for various recognition purchases. See id. ¶ 38. Requisitioned gift cards served as reimbursement: when employees used personal funds to cover recognition expenses that exceeded the cap, the employee would use the gift card as personal funds. See id. ¶¶ 39-40. Defendant instructed Plaintiff and other employees to use this practice ("Reimbursement Practice") and approved PCard use that "were inapposite to the guidelines set forth in Defendant's PCard policies and alleged Recognition Polices." Id. ¶¶ 41- 42.
Plaintiff claims that the disjuncture between written policy and practice "set Store Directors up for failure." Id. ¶ 43. Plaintiff witnessed Store Directors use the Reimbursement Practice, which did not impact their employment status. Id. ¶ 45. In the past, "the administrative assistant of the Senior Director who served as Plaintiff's superior" approved excess recognition expenses. Id. ¶ 48. Before Plaintiff's termination, "Defendant did not confront, reprimand, or address Plaintiff's use of the Reimbursement Practice for [r]ecognition expenses." Id. ¶ 54.
In December 2018 and seven months before her termination, Plaintiff decided to plan a recognition event for her team, which included go-carts and dinner. Id. ¶¶ 56, 57, 59. The event's cost "exceeded the limit associated with Target's PCard and Recognition Policies, by a total of approximately $600.00." Id. ¶ 58. In accordance with previous instructions from her superior, Plaintiff used personal funds to cover the balance and used a gift card to reimburse herself. Id. ¶ 59.
On March 28, 2019, Defendant conducted Plaintiff's 2018 annual performance review, and "gave Plaintiff a rating of 'Delivered Important Outcomes' and provided no negative comments regarding Plaintiff's performance of her job duties." Id. ¶¶ 63, 65. The performance review did not mention "Plaintiff's use of Defendant's PCard, use of Recognition expenses, or reimbursement requests." Id. ¶ 66.
In May 2019, Plaintiff's superiors informed Plaintiff that her conduct regarding the event violated Defendant's written recognition policies. Id. ¶ 62. Defendant told Plaintiff that she was terminated "because she violated the expense policy in December of 2018" but did not direct Plaintiff to a specific provision in Defendant's policies. Id. ¶¶ 68-69. Plaintiff claims she did not receive "a fair investigative process" or "a fair chance to be heard." Id. ¶ 75. Plaintiff further avers that Defendant has "a practice of not terminating its employees except for cause." Id. ¶ 79.
In addition to terminating Plaintiff, Defendant terminated one other employee for the same conduct: "Murphy, who was and is Plaintiff's significant other." Id. ¶ 76. Plaintiff and Murphy were terminated on the same day. Id. ¶ 77. Plaintiff alleges that"she is unaware of any other similarly situated Target employee in the 'Group 296 Southern California Market,' aside from her boyfriend, who was reprimanded or terminated for engaging in the Reimbursement Practices described above, and which Plaintiff's superiors informally instructed to Plaintiff to follow." Id. ¶ 78. Plaintiff claims that "the reasons given to Plaintiff to explain her termination were pretextual in nature, and not the true reason for Plaintiff's termination" and "[t]he true reason Defendant terminated Plaintiff was due to her relationship to Mr. Murphy, who was terminated for similar conduct." Id. ¶¶ 83-84. Defendant terminated Plaintiff without severance, and Plaintiff was denied unemployment benefits. Id. ¶¶ 85, 101.
Based on these allegations, Plaintiff brings seven causes of action against Defendant. See Compl. ¶¶ 102-214. Defendant moves to dismiss each cause of action pursuant to Federal Rule of Civil Procedure 12(b)(6) and strike Plaintiff's prayer for attorneys' fees pursuant to Federal Rule of Civil Procedure 12(f). See Doc. No. 16.
A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). However, plaintiffs must also plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Fed. R. Civ. P. 12(b)(6). The plausibility standard demands more than a "formulaic recitation of the elements of a cause of action," or "'naked assertions' devoid of 'further factual enhancement.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555, 557). Instead, the complaint "must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
In reviewing a motion to dismiss under Rule 12(b)(6), courts must assume the truth of all factual allegations and must construe them in the light most favorable to thenonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996) (citing Nat'l Wildlife Fed'n v. Espy, 45 F.3d 1337, 1340 (9th Cir. 1995)). The court need not take legal conclusions as true merely because they are cast in the form of factual allegations. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987) (quoting W. Min. Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Similarly, "conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss." Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998).
In determining the propriety of a Rule 12(b)(6) dismissal, ...
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