Lavelle v. BankAmerica Corp.

• Citation: 66 Cal.App.4th 1368,78 Cal.Rptr.2d 609
• Decision Date: 29 September 1998
• Docket Number: No. A076936,A076936
• Court: California Court of Appeals
• Parties: Previously published at 66 Cal.App.4th 1368 66 Cal.App.4th 1368, 78 Fair Empl.Prac.Cas. (BNA) 647, 98 Cal. Daily Op. Serv. 7495, 98 Daily Journal D.A.R. 10,428 Nancy LAVELLE, Plaintiff and Appellant, v. BANKAMERICA CORPORATION et al., Defendants and Respondents.

Page 609

78 Cal.Rptr.2d 609

Previously published at 66 Cal.App.4th 1368

66 Cal.App.4th 1368, 78 Fair Empl.Prac.Cas. (BNA) 647,

98 Cal. Daily Op. Serv. 7495,

98 Daily Journal D.A.R. 10,428

Nancy LAVELLE, Plaintiff and Appellant, v. BANKAMERICA CORPORATION et al., Defendants and Respondents.

No. A076936.

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

Sept. 29, 1998.

Certified for Partial Publication. ^*

Review Granted Jan. 20, 1999.

David C. Anton, Margaret E. Roeckl, Anton & Roeckl, Berkeley, for Plaintiff and Appellant.

Patricia K. Gillette, Cynthia J. Griffith, Heller, Ehrman, White & McAuliffe, San Francisco, Kenneth D. Hoffman, Kathleen Deibert, Bank of America NT & SA, for Defendants and Respondents.

PARRILLI, Associate Justice.

Plaintiff Nancy Lavelle sued BankAmerica Corporation (BAC), Bank of America National Trust and Savings Association (Bank of America), and her supervisor, Keith Wirtz, (collectively defendants) for employment discrimination. Plaintiff alleged three causes of action: (1) age and sex discrimination in violation of California's Fair Employment and Housing Act (FEHA) (Gov.Code, § 12900 et seq.); (2) breach of the implied covenant of good faith and fair dealing in her employment contract; and (3) tortious "refusal to return Plaintiff to work following her leave of absence" in violation of public policy.

Plaintiff challenges two separate trial court rulings granting summary judgment to the two corporate defendants. The first ruling granted summary judgment to Bank of America, which is a national banking association, on the ground the National Bank Act (Bank Act) (12 U.S.C. § 21 et seq.) preempts all of plaintiff's state law claims. The trial court concluded the Bank Act specifically permits a national banking association to dismiss its officers at pleasure, thereby preempting any and all state causes of action arising out of the termination of its officers. The second ruling granted summary judgment to BAC--a bank holding company--on the ground it has no liability to plaintiff because: (1) it was not her employer; and (2) it did not incur any liability to plaintiff as a result of its relationship with its wholly owned subsidiary (and plaintiff's true employer) Bank of America. After the trial court entered separate judgments in favor of We partially reverse the judgment in favor of Bank America because we conclude the Bank Act does not preempt plaintiff's statutory cause of action for employment discrimination under the FEHA to the extent federal law also prohibits such discrimination (Marques v. Bank of America (1997) 59 Cal.App.4th 356, 69 Cal.Rptr.2d 154). However, we agree the Bank Act preempts plaintiff's non-FEHA contract and tort claims against Bank of America. We also agree with the trial court that, as a matter of law, plaintiff was not an employee of BAC, and BAC is not derivatively liable to plaintiff. Consequently, we permit plaintiff to proceed with her FEHA claim against Bank of America only, but otherwise affirm the summary judgments.

BAC and Bank of America, plaintiff filed this timely appeal. ¹

I FACTS

Plaintiff was hired by Security Pacific National Bank (Security Pacific) in 1980. She worked there as an Investment Officer.

In April 1992, Security Pacific merged with Bank of America. At that point Security Pacific ceased to exist and all employees of Security Pacific, including plaintiff, became employees of Bank of America.

Both before and after the merger, plaintiff was a Senior Portfolio Manager or Section Manager in the Financial Management & Trust Services Department (Trust Services Department) for Security Pacific and then later Bank of America. Her primary duties were to manage the investment portfolios of numerous trust accounts, and to supervise other portfolio managers. During her entire tenure with Bank of America, Bank of America (not BAC) was responsible for paying plaintiff's salary, deducting federal, state and social security taxes from her wages, paying unemployment taxes on her behalf, and providing plaintiff with workers' compensation insurance.

On May 21, 1992, the board of directors made plaintiff a vice-president of Bank of America. At that time, plaintiff was a senior portfolio manager in Bank of America's Trust Services Department. Plaintiff held this position until September 9, 1992, when she announced her intention to begin an extended leave of absence the next day due to job related stress, allegedly as a result of sex and age discrimination.

When plaintiff returned to work on October 27, 1993, she was told that another employee had filled her former position. Although plaintiff believed there were open positions that were the same or similar to those she had held, her supervisor, Keith Wirtz, refused to place her in any of those positions. Plaintiff was informed she was free to look for another position with the Bank, but if she failed to find another position, her employment would be terminated. On February 4, 1994, plaintiff was formally placed in the Employee Transition Program for a 60-day period during which Bank of America paid her full salary while she looked for another position and considered whether to accept an enhanced severance package. Plaintiff did not find another position and her employment with Bank of America terminated on April 5, 1994, at the end of the 60-day transition period. Bank of America's board of directors formally ratified plaintiff's termination at its regularly scheduled meeting on May 2, 1994.

After she was terminated, plaintiff filed a complaint for employment discrimination alleging three causes of action. The first cause of action alleged a violation of the FEHA (Gov.Code, § 12900 et seq.) in that plaintiff "has been subjected to a continuous pattern of [employment] discrimination based on her sex and age." Among other things, plaintiff, who is over forty years of age, alleged she received less pay than male employees with comparable experience, did not receive other privileges of employment granted to male and younger female workers, and was subject to a sexually hostile working environment. In addition, plaintiff alleged that as part of the continuing pattern Plaintiff's second cause of action was for breach of the covenant of good faith and fair dealing in her employment contract. Here she alleged that, in addition to the facts specified above, defendants had a contractual duty to take all steps reasonably necessary to find a new position for plaintiff, but defendants failed to take reasonable steps to preserve her position or to return her to another comparable position.

of sex and age discrimination against her, in the Spring of 1992 her supervisor, Wirtz, devised a scheme to demote her and to install a favored male employee in her position as manager. She became despondent over the continuing discriminatory treatment and took a stress leave of absence in September of 1992. Although the defendants had taken steps to preserve the positions of male employees who were on medical leave of absence, they made no such efforts on her behalf. When plaintiff returned to work on October 27, 1993, defendants refused to appoint her to any positions, although openings existed for which she was qualified. Plaintiff alleged "the failure and refusal of Defendants to return Plaintiff to work was due in material part to her sex, age, and her opposition to being discriminated against...."

Finally, in her third cause of action, plaintiff alleged defendants had tortiously refused to find her a new position "in violation of public policy." The gist of this cause of action is that plaintiff had complained to management that the Bank was imposing excess fees on trust accounts. When management did not act on these complaints, plaintiff communicated these allegations to a reporter with the San Francisco Chronicle who wrote a series of articles challenging the fees Bank of America charged its trust customers. Plaintiff alleged "[o]ne of the motivating factors in Defendants' refusal to return Plaintiff to work after her leave of absence, despite her years of experience, the openings and needs of Defendants, and the policies of Defendants, was that Defendants believed that Plaintiff had or was potentially a source of information" to the San Francisco Chronicle reporter. ²

Bank of America and BAC filed separate motions for summary judgment against plaintiff. Neither motion challenged the substance of plaintiff's allegations. Instead, Bank of America argued the dismissal-at-pleasure provision of the Bank Act preempted all state law causes of action arising from the termination of a bank officer. BAC, on the other hand, argued plaintiff was never its employee and that it had no liability to plaintiff as a result of its relationship with its wholly owned subsidiary--and plaintiff's true employer--Bank of America. The trial court granted both motions on the grounds stated in the motions.

II DISCUSSION

A "motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Code Civ. Proc., § 437c, subd. (c).) A defendant "has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action ... cannot be established, or that there is a complete defense to that cause of action. Once the defendant ... has met that burden, the burden shifts to the plaintiff ... to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto...." (Id. subd. (o)(2).) In reviewing an order granting summary judgment, we examine the facts presented to the trial court and independently determine their effect as a matter of law. (Parsons v. Crown Disposal Co. (1997) 15 Cal.4th 456, 464, 63 Cal.Rptr.2d 291, 936 P.2d 70.)

A. The Action Against Bank of America

We...