McGrory v. Applied Signal Tech., Inc.

• Citation: 152 Cal.Rptr.3d 154,212 Cal.App.4th 1510
• Decision Date: 24 January 2013
• Docket Number: H036597
• Court: California Court of Appeals Court of Appeals
• Parties: John MCGRORY, Plaintiff and Appellant, v. APPLIED SIGNAL TECHNOLOGY, INC., Defendant and Respondent.

212 Cal.App.4th 1510

152 Cal.Rptr.3d 154

John MCGRORY, Plaintiff and Appellant,

v.APPLIED SIGNAL TECHNOLOGY, INC., Defendant and Respondent.

H036597

Court of Appeal,

Sixth District, California.

Filed January 24, 2013

Santa Clara County Superior Court; Kevin J. Murphy, Trial Judge (Santa Clara County Super. Ct. No. CV153441)

Kraw & Kraw Law Group, Michael J. Korda, Korda, Johnson & Wall, Michael J. Korda, Attorneys for Plaintiff and Appellant John McGrory.

John R. Shuman, Jr., Amy E. Beckstead, Attorneys for Defendant and Respondent Applied Signal Technology, Inc.

RUSHING, P.J.

I. Introduction

Defendant Applied Signal Technology, Inc. (Employer) terminated its four-year employment of plaintiff John McGrory (Employee) in June 2009 after an outside investigator retained by Employer concluded that, while Employee had not discriminated against a lesbian subordinate on the basis of her sex or sexual orientation, in other ways Employee had violated Employer's policies on sexual harassment and business and personal ethics and he had been uncooperative and deceptive during the investigation.

As an at-will employee, Employee was subject to termination by Employer for no reason or almost any reason (Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 335, 100 Cal.Rptr.2d 352, 8 P.3d 1089 ( Guz )), except for a reason that violates a fundamental public policy recognized in a constitutional or statutory provision. (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 170, 172–174, 164 Cal.Rptr. 839, 610 P.2d 1330; Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 79, 78 Cal.Rptr.2d 16, 960 P.2d 1046.) Public policy, expressed in part in California's Fair Employment and Housing Act (FEHA), prohibits employment discrimination on the basis of sex. (Gov.Code, § 12940¹; Rojo v. Kliger (1990) 52 Cal.3d 65, 91, 276 Cal.Rptr. 130, 801 P.2d 373; see Lyle v. Warner Bros. Television Productions (2006) 38 Cal.4th 264, 277, 42 Cal.Rptr.3d 2, 132 P.3d 211 ( Lyle ).)

In this case, Employee alleged that his termination violated four public policies. An employee cannot be terminated for (1) being male, (2) participating in an employer's internal investigation, or (3) trying to protect the confidentiality and privacy of coworkers. (4) A termination for misconduct must be preceded by notice and a hearing and honest findings of misconduct. As we will explain, he has abandoned these latter two claims on appeal. He further alleged that he was defamed when Employer's Vice–President of Human Resources told another employee why Employee was terminated.

Employer filed an alternative motion for summary judgment or summary adjudication (Code Civ. Proc., § 437c),² asserting that there was no evidence that Employee was terminated for an impermissible reason and that Employer could not be liable in defamation for privileged statements of opinion on a topic of mutual interest. Over Employee's opposition, the trial court granted summary judgment, concluding that Employer's motion had established “a legitimate, non-discriminatory reason for terminating” Employee, Employee had “failed to meet his burden of showing substantial evidence that [Employer's] stated reasons for the adverse action were untrue or pretextual, such that a reasonable trier of fact could conclude that [Employer] engaged in discrimination,” and Employer had established “that the allegedly slanderous statements are privileged.”

On appeal, Employee claims that he has presented triable issues of fact regarding Employer's true motivation for terminating him and that Employer's statements about him to coworkers were not conditionally privileged because they lacked reasonable grounds. For the reasons stated below, we will affirm the judgment after concluding that there is no evidence warranting a reasonable inference that Employee was actually terminated for being male, that being uncooperative or deceptive in an employer's internal investigation is not a protected activity under state or federal law, and that Employer's statements to its employees about Employee's termination were conditionally privileged.

II. The Complaint

The unverified first amended complaint filed on June 4, 2010 alleged the following facts. Employee worked for Employer from July 6, 2005 until his termination on June 23, 2009. He was hired as a section manager and promoted to department manager, reporting directly to Employer's Chief Financial Officer (CFO), James Doyle. In turn, a dozen employees reported directly to Employee.

What precipitated Employee's termination was a complaint against him lodged with Employer's Human Resources Department (HR) by Dana Thomas, a female who reported to him. As her supervisor, Employee, in consultation with HR, had given Thomas a documented verbal warning in late 2008 for poor work performance and a written Performance Improvement Plan (PIP) in 2009. In late May 2009, instead of signing the PIP, Thomas lodged her complaint accusing Employee of discriminating against her on the bases of gender and sexual orientation, but not sexual harassment.

This accusation led to an investigation of Employee by an outside female attorney, Sejal Mistry. Mistry interviewed Employee and many of his subordinates, including Curt Oliver. Oliver and Employee disliked Mistry's interview style and considered her to be biased and confrontational. She told Employee that “she was going to have problems with him because of his expressive face.” Employer refused to provide Employee before his interview with either Thomas's eight-page complaint or a summary of the charges against him.

Mistry's report to Employer, dated June 16, 2009, exonerated Employee of charges of discrimination based on gender and sexual orientation and found that Thomas had work performance problems. However, she found that both Employee and Oliver had been uncooperative and untruthful during her investigation. In fact, Oliver and Employee had told the truth, though Employee had refused to answer two questions—regarding how he ranked his subordinates and who had complained about Thomas—based on his concern for the privacy and confidentiality of coworkers.

As a result of this report, Employer terminated Employee on June 23, 2009, and disciplined Oliver one day later. Employee was terminated at a meeting with Employer's male CFO, Doyle, and Mike Forcht, male assistant vice-president of HR. When Employee asked why he was being terminated, Doyle said it “was not based on his conduct relating to Thomas, but rather because he had been uncooperative during the investigation and that he had made ‘factual denials' during the investigation.” When Employee asked for the details, Forcht refused to elaborate.

In response to the same question by one of Employee's coworkers, Forcht answered that Employee was terminated after several warnings for not cooperating with the investigation.

Thomas was allowed to continue working with Employer until she received a generous retirement package at the end of 2009.

The complaint predicated three causes of action on the above conduct. First, based on disparate treatment of male Employee and his male subordinate, Oliver, and his female subordinate, Thomas, plaintiff alleged that his termination resulted from gender discrimination by Employer. Second, his termination violated several public policies, namely policies protecting the privacy and confidentiality of coworkers, precluding retaliation for statements made during an internal investigation, and guaranteeing employees notice of adverse charges and an unbiased investigator. The complaint cited cases that purportedly establish these policies. Third, the reasons given by HR to third parties for Employee's termination were slanderous.

III. Material Facts

Employer's summary judgment motion asserted that there were 28 separate facts that were both undisputed and material. Employee's response conceded that 10 facts were undisputed, but asserted that six of these were immaterial. In setting out the facts we regard as material, we will note those that Employee has disputed.

A. The Complaint Against Employee

Employee accepted a written job offer from Employer dated June 28, 2005. The offer contained the following sentence. “I understand and agree that my employment with [Employer] is at-will, and that my employment is therefore for an unspecified period of time and may be terminated at any time, with or without good cause, and with or without advance notice, by [Employer] or by me.” ³

As manager of Employer's Contracts/Pricing Department, Employee supervised about a dozen subordinates, including a contract administrator named Dana Thomas. As her manager, he presented her with a PIP in late May 2009. Thomas's response to the PIP was to complain about Employee orally and in writing to Michael Forcht, Employer's Vice–President of HR. In short, she believed her work performance did not merit a PIP, and that his increasing “[m]icromanagement” and criticism of her work performance could only be explained by “sexual orientation and/or gender discrimination and harassment” of her as an openly gay female who had announced to her coworkers in an e-mail on November 10, 2008 that she had gotten married despite Proposition 8. In addition to Employee's criticism of her work and abilities, Thomas claimed she had witnessed Employee “telling off-color jokes in the presence of groups, that demonstrate his lack of good judgment and sensitivity to those of other cultures.” ⁴

B. The Investigator's Conclusions

Through outside counsel, Employer retained an employment attorney, Sejal Mistry, to investigate Thomas's complaint. Mistry interviewed Employee and a number of his subordinates and coworkers before issuing a 13–page report dated June 16, 2009. Among the subordinates were three female contracts administrators, including Thomas and Kathy Bosza, and two male contracts administrators, Curt Oliver, Sr., and Dennis Backens.

According to Employee's declaration, HR Vice–President...