Northrop Grumman v. Workers' Comp. App. Bd.

• Decision Date: 21 November 2002
• Docket Number: No. B157612.,B157612.
• Citation: 103 Cal.App.4th 1021,127 Cal.Rptr.2d 285
• Court: California Court of Appeals Court of Appeals
• Parties: NORTHROP GRUMMAN CORPORATION et al., Petitioners, v. WORKERS' COMPENSATION APPEALS BOARD and Robert C. Graves, Respondents.

127 Cal.Rptr.2d 285

103 Cal.App.4th 1021

NORTHROP GRUMMAN CORPORATION et al., Petitioners, v. WORKERS' COMPENSATION APPEALS BOARD and Robert C. Graves, Respondents.

No. B157612.

Court of Appeal, Second District, Division 5.

November 21, 2002.

Certified for Partial Publication.^*

Kegel, Tobin & Truce and E. Charles Maki, Ventura, for Petitioners.

No appearance on behalf of Respondents.

TURNER, P.J.

I. INTRODUCTION

Northrop Grumman Corporation (Northrop) and the Insurance Company of the State of Pennsylvania seek review of the findings and award and the order denying reconsideration in a case brought by Robert C. Graves before the Workers' Compensation Appeals Board (the board). We issued a writ of review. Upon review, based on the entire record, we conclude the workers' compensation judge's finding—that Mr. Graves sustained compensable industrial injury because of an investigation conducted in bad faith by Northrop into racial discrimination allegations—is not supported to by substantial evidence. (Labor Code ¹ § 3208.3, subdivision (h).) We remand the matter to the board for further consideration consistent with this opinion.

II. THE FACTS

A. Background

The current writ proceeding arises out of allegations Mr. Graves engaged in racial discrimination during training of Northrop employees and an ensuing investigation. Mr. Graves, a Caucasian man, was employed off and on as a tooling inspector for Northrop between 1981 and March 1999. In 1998, Mr. Graves was training employees at a Northrop facility. The employees were learning to take aircraft measurements with certain equipment. Mr. Graves and Pat McCrary evaluated the trainees for accuracy in accordance with company guidelines. Mr. Graves's duty was to ensure that a trainee's measurements were properly aligned and recorded within acceptable tolerances. Mr. Graves would then certify that the trainee's measurements were accurately reported. Northrop required that accurate records be kept regarding the training.

Leon Johnson, an African-American man, became Mr. Graves's supervisor in late 1997. Mr. Graves testified he had no problems on the job before March 1998. However, in April 1998, Mr. Graves was investigated following accusations he had discriminated against an African-American employee, Harold Lowe. It was further alleged Mr. Graves gave preferential treatment to a Caucasian employee, Mike Nooner.

B. The Investigation Report

Several of the documents that were in evidence used company and technical jargon to describe the events giving rise to Mr. Lowe's racial discrimination complaint and the ensuing investigation. We will avoid the use of such jargon except when quoting from Northrop documents. In an undated investigation report, Employee Relations Representative Tom Cushard recounted that Annette Schroeder had accused Mr. Graves of treating Mr. Lowe, an African-American man, "more harshly" than other employees. Ms. Schroeder, a Northrop employee, made the racial discrimination allegation in a March 22, 1998, written statement. Ms. Schroeder also said Mr. Graves spoke to Mr. Lowe "in a demeaning manner." A Northrop report related: "Ms. Schroeder said she had commented to Mr. Lowe that he didn't have to take that from anyone [.] ... Mr. Lowe told her, yes he did because he needed Mr. Graves to [approve] his work and he didn't want any trouble from him."

Two supervisors, Benny Heredia and Joe Wise, were notified of Ms. Schroeder's written allegation and spoke to Mr. Lowe. Mr. Lowe confirmed that he felt he was being treated more severely than his co-workers and believed it was racially motivated. Mr. Heredia and Mr. Wise then contacted Mr. Cushard in employee relations "for assistance." Mr. Lowe was then interviewed by an employee relations representative. A Northrop report related Mr. Lowe stated, "[H]e felt Mr. Graves had been treating him differently than the other [trainees] and that he believed it must be because of his race as he could not determine any other reason." Mr. Lowe raised the following concerns: Mr. Graves was giving favors to some trainees while making Mr. Lowe take measurements more accurately than others; in contrast to other trainees, Mr. Lowe was given no room for error; Mr. Graves would approve measurements made by other trainees without checking the 1 work; Mr. Graves delayed responding to Mr. Lowe's requests to approve measurements; this resulted in Mr. Lowe having fewer approved measurements; and the delay increased the probability that Mr. Lowe's equipment would be jarred, affecting the accuracy of his measurements. When the trainees achieved a particular level of accuracy in their measurements, they would receive a special job classification and a 50 cent per hour salary bonus.

Mr. Cushard then advised Mr. Johnson, Mr. Graves's supervisor, of the allegations of racially motivated disparate treatment of Mr. Lowe during the training and measurement approval process. Mr. Cushard and Mr. Johnson agreed to undertake a joint management-employee relations investigation. Mr. Johnson obtained and compared all of the trainees' certification sheets. Analysis of the certification sheets and computer data showed: Mr. Graves approved measurements by two employees, Leon Robinson and Mr. Nooner; Mr. Nooner's measurements had been copied from Mr. Robinson's data; Mr. Lowe was the only trainee with a particular negative notation; and Mr. Graves had disapproved of an inordinate number of Mr. Lowe's measurements.

As part of the racial discrimination investigation, interviews were also conducted with other trainees. These interviews revealed Mr. Graves allowed trainees to check each others' work. When the trainees checked each others' measurements, Mr. Graves would give his approval without verifying the accuracy of the work. Mr. Nooner was interviewed. Mr. Nooner admitting losing his certification list. Mr. Nooner recreated the certification list with Mr. Graves's agreement to approve it. Mr. Nooner believed Mr. Graves was "particularly hard on" Mr. Lowe. One trainee, Don Austin, confirmed that he had checked other trainees' work. Mr. Austin confirmed that Mr. Graves had then approved the trainees' work without personally checking its correctness.

Mr. Lowe, one of the two persons who initiated the racial discrimination complaint about Mr. Graves, was interviewed. A Northrop employee relations report stated, "Mr. Graves was `unavailable' during a long period of time on the weekends [and Mr. Lowe] believed that Mr. Graves would go to his car in the parking lot and sleep for an hour or two." A review of Mr. Graves's "badge scan" showed: "[Mr. Graves] failed to scan out on all but one occasion when he worked a weekend day. On the occasion he did scan out, there was a discrepancy of 2 [hours] and 25 [minutes] from the time he scanned out to the time he badged back in [on February 21, 1998]."

Mr. Cushard, the employee relations representative, then met with Mr. Graves regarding the foregoing allegations. Mr. Graves admitted: certifying as accurate Mr. Nooner's recreated certification sheet; Mr. Austin and Mr. Robinson were permitted to inspect the work of other trainees; and Mr. Graves approved those measurements without personally inspecting the work. Mr. Graves denied sleeping in his car on weekends although he could not account for the time off-site on February 21,1998. He also said he was unaware of the requirement that he scan out on weekends. Mr. Graves denied treating Mr. Lowe differently than other trainees. Finally, Mr. Graves denied not promptly responding to Mr. Lowe's telephone calls.

Mr. Cushard reviewed the results of the investigation with others. It was determined that Mr. Graves would be disciplined as follows: "Robert Graves was issued a Final Warning Notice and given a 3 day disciplinary suspension for gross negligence in the performance of his duties as well as for causing discord within the workplace by treating employees in a different manner and with different requirements. Mr. Graves was found to have used his [quality assurance] stamp in a manner inconsistent with stamp policy and procedures by stamping work that he did not inspect and assisting in the re-creation of a document that was inaccurate and would be to the employee's benefit. Additionally, he failed to uphold the special trust placed on a [quality assurance] inspector to ensure work is performed accurately and documented correctly. The concern about failing to scan out was mentioned as well." The investigation report closed with the following comment regarding the racial discrimination allegation: "Pauline Eisenberg was consulted throughout the investigation and findings due to the allegation of racial discrimination. It was determined and agreed that it could not be determined that Mr. Lowe's disparate treatment was the result of his race, but that the disparate treatment was apparent and that the company should take the appropriate action which would be the same, regardless of whether it was due to race, or some other basis."

C. The Final Warning Notice

A final warning notice was issued to Mr. Graves on April 22, 1998. It stated in part: "This FINAL WARNING NOTICE is being issued because of the grossly negligent manner in which you performed your duties as a Quality Inspector. Specifically, you stamped off work that you did not inspect and stamped off a `reconstructed' work document that was inaccurate. Additionally, you failed to perform your inspection duties in a consistent manner, causing discord, by being overly critical of one technician's work and failing to give the same `allowances' to him that you gave to others. This type of performance is unacceptable and in violation of [Northrop standards of conduct]. [¶] Another area of concern discovered the investigation was your failure to scan your badge through the outbound readers when you left the site on the weekend days that you work." The notice outlined a "corrective action plan" that...