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Denise Steffens v. Regus Group

February 16, 2011


The opinion of the court was delivered by: Honorablelarryalanburns United States District Judge


Denise Steffens alleges that her former employer, Regus Management Group, fired her on account of her age and because of her complaints that it was violating California labor laws. Her complaint advances three causes of action: (1) retaliation for whistleblowing in violation of California Labor Code § 1102.5; (2) age discrimination in violation of California's Fair Employment and Housing Act, California Government Code § 12940; and (3) wrongful termination in violation of public policy. Now before the Court is Regus's motion for summary judgment.

I. Background

Regus leases office space - "furnished, equipped and staffed" - to companies without space of their own. (Br. at 3.) One of its centers occupies two floors of the Emerald Plaza hotel building in downtown San Diego. Until her termination that is the subject of this case, Steffens was the General Manager of the Emerald Plaza center. She previously worked for HQ Global Workplaces, a Regus competitor that Regus acquired in August 2004. (JSUF ¶¶ 2--3.) As General Manager, Steffens reported to Area Director Shannon Jones and Regional Vice President Sande Golgart. (JSUF ¶¶ 10, 12.)

Steffens alleges that in 2004, Regus took the official position that its hourly employees were not entitled to meal and rest breaks, or overtime pay, and that she voiced opposition and was ignored. (FAC ¶¶ 20--21.) Specifically, she alleges that in October 2006, in a meeting with Jones and Golgart, she insisted Regus's policy was illegal, but that they "remained quiet and did not respond to the issues raised by Ms. Steffens." (FAC ¶ 22.) Then, on April 11, 2007, Steffens was placed on a performance improvement plan giving her 60 days to improve her performance. (JSUF ¶ 7.) According to Steffens, this plan not only imposed unrealistic goals, but was unjustified given her past performance and was also inconsistent with Regus's own protocol for disciplining employees. Worst of all, it was "nothing more than a clumsy attempt by Defendants to provide a paper trail for Regus should Ms. Steffens pursue litigation in the future." (FAC ¶ 41.) Regus fired Steffens on July 5, 2007. (JSUF ¶ 8.)

II. Legal Standard

Summary judgment is appropriate where "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). As the moving party, it is Regus's burden to show there is no factual issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To meet this burden, Regus must show that Steffens lacks evidence to support her case. Id. at 325. If it makes that showing, Steffens must go beyond the pleadings and set forth "specific facts" to show a genuine issue for trial. Id. at 324.

The Court considers the record as a whole and draws all reasonable inferences in the light most favorable to Steffens. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir. 2000). The Court may not make credibility determinations or weigh conflicting evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Rather, the Court determines whether the record "presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251--52. Not all alleged factual disputes will serve to forestall summary judgment; they must be both material and genuine. Id. at 247--49. "If conflicting inference may be drawn from the facts, the case must go to the jury." LaLonde v. County of Riverside, 204 F.3d 947, 959 (9th Cir. 2000) (citations omitted).

III. Discussion

The Court will consider each of Steffens's three claims in the order they are presented in her complaint.

A. Whistleblowing Claim

Steffens alleges that Regus retaliated against her for whistleblowing in violation of California Labor Code § 1102.5(b). That section provides:

An employer may not retaliate against an employee for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation.

Generally speaking, this section "concerns employees who report to public agencies" and does not protect employees who relay concerns directly to their employer. Green v. Ralee Engineering Co., 19 Cal.4th 66, 77 (1988); see also Bursese v. PayPal, Inc., 2007 WL 485984 at *9 (N.D. Cal. 2007). Steffens concedes she didn't report Regus to a public agency, but argues that under Lujan v. Minagar, 124 Cal.App. 4th 1040 (2004), an employer is prohibited from retaliating against an employee out of fear that he or she will report unlawful activity. The Court reserved on this very question when it denied Regus's motion to dismiss. (See Doc. No. 13, p. 11.)

The plaintiff in Lujan was a salon employee who, by the employer's own admission, was fired for fear that she would report workplace safety violations to the government. Lujan, 124 Cal.App.4th at 1043. The statute at issue in Lujan was not section 1102.5(b), but an analogous Labor Code section - section 6310 - under California's Occupational Safety and Health Act. It provides:

(a) No person shall discharge or in any manner discriminate against any employee because the employee has done any of the following: (1) Made any oral or written complaint to the division, other governmental agencies having statutory responsibility for or assisting the division with reference to employee safety or health, his or her employer, or his or her representative; (2) Instituted or caused to be instituted any proceeding under or relating to his or her rights or has testified or is about to testify in the proceeding or because of the exercise by the employee on behalf of himself, herself, or others of any rights afforded him or her.

Notwithstanding Steffens's argument that an expansive reading of section 1102.5(b) is in the public interest, the Court is hesitant to extend the analysis in Lujan to this case and read a prohibition on preemptive retaliation into section 1102.5(b). By its own terms, section 1102.5(b) is concerned only with disclosures "to a government or law enforcement agency" that may provoke an employer to retaliate against an employee. Section 6310 isn't so limited; like section 1102.5(b), it protects employee complaints to government agencies, but it also protects complaints to employers, and to representatives. Steffens points to Steele v. Youthful Offender Parole Bd., 162 Cal. App. 4th 1241, 1255 (2008), in which the court extended the Lujan analysis to an anti-retaliation provision of California's Fair Employment and Housing Act, California Government Code § 12940, observing, "[e]mployer retaliation against employees who are believed to be prospective complainants or witnesses for complainants undermines th[e] legislative purpose just as effectively as retaliation after the filing of a complaint." But like Labor Code section 6310, section 12940 is not limited in its terms to complaints to government agencies, and actually covers complaints directly to employers. The section makes it unlawful

[f]or any employer, labor organization, employment agency, or person to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part or because the person has filed a complaint, testified, or assisted in any proceeding under this part.

Steffens asserts that the differences between sections 1102.5(b) and 6310 are minor, but the Court disagrees. The fact is that section 1102.5(b) doesn't stack neatly onto sections 6310 or 12940, and to the extent this reflects a varied legislative purpose, it is reason enough for the Court to decline to extend the holding of Lujan to claims brought under section 1102.5(b). This is not to say that a California court, presented with the opportunity, wouldn't find that section 1102.5(b) prohibits preemptive retaliation, but in the absence of such a holding the Court declines Steffens's invitation to break new ground.*fn1

Ultimately, though, the Court's unwillingness to extend Lujan doesn't prejudice Steffens, because the Court doesn't believe she can prevail on her whistleblowing claim even if she needed only to show that Regus was afraid she'd report her concerns to the government. Steffens repeatedly asserts in her complaint that Regus terminated her out of fear that she would take her complaints to "the appropriate outside enforcement agencies." (See FAC ¶ 14, 24, 30, 40, 48.) But the evidence of this is extremely thin. There's no doubt that Steffens alleged, in her October 2006 meeting with Jones and Golgart, that Regus's refusal to provide meal and rest breaks violated California law. (See Steffens Dep. 94:6--10, 108:14--18.) But Steffens admitted in her deposition that she did nothing following the meeting to let on that she might report Regus to the government:

Q: Did you write anything down memorializing what happened?

A: No.

Q: Did you call anybody to tell them what happened?

A: No.

Q: Did you tell Mr. Jones and Mr. Golgart that you were going to call somebody and report on what ...

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