ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT Doc. No. 14
This case was removed from the Fresno County Superior Court on the basis of diversity. Plaintiff Sami Mitri ("Mitri") alleges one cause of action against his former employer, Defendant Walgreen Company, Inc. ("Walgreens"). Mitri alleges a single California state law cause of action for wrongful termination in violation of public policy. Walgreens now moves for summary judgment. For the reasons that follow, Walgreens's motion will be denied.
Walgreens is a national retailer and pharmacy chain. DUMF 1. Walgreens employs pharmacists and other pharmacy employees who fill customer prescriptions. DUMF 2. Mitri began working for Walgreens as a pharmacist in 1996, and was later promoted to a pharmacy manager in the Fresno District. See DUMF 3. Throughout his employment, Mitri regularly worked as a pharmacist at a number of Walgreens's stores in and around the area of Fresno, California, i.e. "the Central Valley." See id.; PUMF 4. Mitri was employed by Walgreens as an at-will employee. See id. When Mitri was terminated on January 8, 2010, Mitri was the pharmacy manager at a Walgreens store in Fresno, California. See PUMF 3.
At the time of his termination, Mitri was employed as a "non-exempt" employee. DUMF 4. This meant that Mitri was compensated on an hourly basis, and was entitled to overtime pay for any hours worked in excess of eight hours per day, or forty hours per week. See id. Mitri's regular pay rate as a Pharmacy Manager was $64.75 per hour, and his overtime pay was $97.13 per hour. See DUMF 5.
In 2006, Mitri worked 1,118 hours of overtime in addition to his regular shifts. DUMF 6. In 2007, Mitri worked 1,014.5 hours of overtime in addition to his regular shifts. See id. However, much of this overtime was affirmatively scheduled and involved a new store where there were only 2 pharmacists who worked 10 hours shifts, and worked a 7 days on, 7 days off schedule. See Mitri Depo. 132:8-134:5; PUMF 127. In 2008, Mitri worked 500 hours of overtime due in large part to a change in work schedules. See Mitri Depo. 133:4-10.
Beginning in 2008, Walgreens in the Fresno District undertook an effort to reduce expenses, including the amount of overtime worked by all employees. DUMF 7. As part of this effort, Walgreens's managers were encouraged to monitor the overtime of all employees, and to ensure that employees did not work beyond their scheduled shifts. See id. At least as early as 2008, Walgreens Fresno District Manager Robert Guillen ("Guillen") spoke to Mitri on several occasions about the importance of Mitri adhering to Mitri's scheduled shifts. See DUMF 8. However, Adrian Olivares ("Olivares"), the Walgreens store manager at Mitri's last store, was never told to monitor Mitri's hours. PUMF 156. Prior to August 2010, Olivares "never did" and "never had to" monitor the pharmacists' hours. See Olivares Depo. 78:19-79:8; PUMF 157. Olivares's policy was to leave it to the pharmacists to decide what was required for customer service. See PUMF 158. Pharmacists stayed past their closing "occasionally," but Olivares didn't pay attention to it prior to receiving an e-mail in August 2010, and his practice had been not to tell the pharmacists to go home. See PUMF 159.
In early 2008, Mitri made a claim to Walgreens that he had worked "off the clock" for hours for which he had not been paid. DUMF 9. On February 8, 2008, Walgreens and Mitri entered into a "General Release Agreement" (the "Release") by which Walgreens paid Mitri a sum of money in return for a full release of any and all claims, known and unknown, existing as of February 8, including any claims for work "off the clock," i.e. without recording the time that Mitri worked/working while not clocked in. See DUMF 10; PUMF 117; PUMF 118. The Release stated in part:
Walgreens's policies prohibit an employee from working before he or she has 'clocked in' on his or her timecard. By signing this [Release], Mitri acknowledges that he understands this policy and agrees that in the future he will work at times when he has been scheduled to work and has clocked in. Mitri further understands and acknowledges that the failure to do so could result in discipline, up to and including termination. PUMF 118; DRPUMF 118. As part of the Release, Mitri also was told to record all of his hours. PUMF 119. Mitri asked Walgreens Senior Attorney Chris Murray ("Murray") if there were exceptions to this portion of the release. *fn2 See Mitri Depo. 91:12-19. Murray responded that "emergencies happen," and that sometime during the emergencies Mitri should get the permission or approval of the supervisor or someone over Mitri. See id. at 91:20-25.
In April 2009 (and at various times thereafter), Mitri raised complaints about what he believed to be improper or fraudulent billing practices by pharmacy employees that could constitute Medicare fraud. See DUMF 26; PUMF's 46, 47. Mitri was concerned about the use of "old fashioned IOU labels" (hereinafter "IOU labels"), which is a practice used to bill the full amount for partially filled prescriptions. *fn3 See PUMF 72; Warinner Depo. 34:25-35:23.
Specifically, a pharmacist partially fills a prescription, but bills for the entire prescription after creating a label that shows the amount that is "owed" to the customer. PUMF 71. Mitri reported his concerns to various officers of Walgreens, and was advised to contact either Loss Prevention, his store manager, or the Pharmacy Supervisor Chris Scalzitti. *fn4 See PUMF's 48-49. Based on what he was taught in a recent training program, and because he was concerned that Scalzitti was responsible for the type of improper billing at issue, Mitri contacted Loss Prevention. See PUMF 50. Mitri also reported the fraud to Walgreens Market Vice President Robert Hasty. *fn5 See PUMF 54. Mitri was placed in touch with Loss Prevention Supervisor Lisa Warinner. *fn6 See id. Mitri also made a complaint to the Department of Health and Human Services and to the California Department of Health Care at the end of April or first half of May 2009. PUMF 70. Scalzitti is unsure of the timeline, but he knew that Mitri had raised the issue of IOU labels in March, April, or May. See PUMF 56. However, Scalzitti testified that he would have known prior to May 11 that Mitri had come to Walgreens about the IOU labels. See Scalzitti Depo. 27:19-23.
On May 6, 2009, Mitri attended a conference call while on vacation. See Mitri Depo. 266:2-14; Mitri Depo. Ex. 12. Mitri did not identify himself on the call because he joined after the roll had been taken. PUMF 105. Mitri learned about the call from his pharmacy technician, and believed that his store manager, Viviana Lares, wanted him to participate. See PUMF's 104, 106. The notice for the conference call was for "all" pharmacy managers, and two weeks previously, Lares asked Mitri to attend a conference call on Mitri's day off. See PUMF 107. There was no written policy prohibiting off-duty pharmacists from attending such calls. PUMF 108. After the call, Mitri spoke to Lares and explained that he did not want to be paid, but that he wanted her to know that he was on the call so that he couldn't get in trouble for "working off the clock." PUMF's 109, 115. Mitri was concerned about "working off the clock" because of the Release, which prohibited him from working off the clock. PUMF 116. Lares told him to call on Saturday when she did payroll. PUMF 110. Lares did not recommend that any action be taken against Mitri for the call. PUMF 111. Lares was not aware that there were any issues with Mitri's clocking in, and she recognized that Mitri did his best to increase profits. PUMF 113.
On May 11, 2009, Mitri was given a final written warning (the "Final Written Warning"). See Mitri Depo. Ex. 12. Mitri, Scalzitti, and Guillen were present at the meeting where the Final Written Warning was given. See id. Under the "Basis for Discipline" section of the Final Written Warning, it reads "Violation of Company Policies & Procedures." See id. Under the "explanation of the reason for the discipline" section, it reads:
On May 6 th, [Mitri] attended a conference call while on vacation. When roll call was conducted, [Mitri] failed to identify himself as present on the call. After the call concluded, [Mitri] called his store manager asking to be paid.
In addition, you have previously received clear instruction from the District Manager and Pharmacy Supervisor that you are not to work beyond your scheduled shift. Despite the prior warning, you have continued to clock in before the start of your shift and continue working beyond your scheduled shift.
Your conduct in working off the clock and working beyond your scheduled shift goes against Walgreens policies and procedures and creates liability for the company. We realize that emergency situations sometimes will arise that require you to work beyond your scheduled shift; or to perform work for the benefit of Walgreens before you have checked in. In those or any other situations in which you believe that you need to take action that violates our policies and procedures you must get approval from the Pharmacy Supervisor, District Manager, or Store Manager. Any further unauthorized violations of Walgreens policies or procedures will result in your immediate termination.Id.
The Final Written Warning was signed by Scalzitti, Guillen, and Mitri. *fn7 See id. Under the "optional employee response to discipline" section, Mitri responded: "I was not on the conference call [until] after roll was taken. Mrs. Lares said that I should call her Saturday AM & she would figure it out then." Id. Neither Scalzitti nor Guillen explained any concerns over reducing overtime, rather, they only mentioned "liability." PUMF 121. Mitri asked at the meeting what the Final Written Warning meant by "come in early." See Mitri Depo. 125:22- 126:10. Scalzitti answered that Mitri could "come in approximately 10 to 15 minutes early to prepare for the opening of your shift as well as have your coffee." Id. Mitri also asked what to do if a customer came in 5 minutes prior to closing. See id. at 126:24-127:13. Scalzitti replied that Mitri was to e-mail him (Scalzitti), and that if Mitri did not hear back, then Mitri was not to stay. See id. So Mitri understood Scalzitti's response to mean that Mitri could not stay beyond the shift unless Scalzitti responded with approval to an e-mail. See id. Mitri also told Scalzitti that other pharmacists hadn't worked their scheduled shifts, but Scalzitti said that they were not there to discuss anyone other than Mitri and that he did not know about other pharmacists. See PUMF 144; Mitri Depo. 241:9-24.
Walgreens has a written "progressive discipline policy" for employees. See Scalzitti Depo. Ex. 51. The policy states that it is not a contract of employment between Walgreens and its employees. Id. Nevertheless, the policy states that rules and standards are to be communicated to employees. Id. The policy states that "Employees must be disciplined in a fair and consistent manner for similar violations of policy or rules." Id. The policy states that, in most instances, an employee should not be terminated for a single misdeed or failure to meet a standard, unless the employee engaged in "serious misconduct." *fn8 Id. The policy states that, in cases in which immediate termination is not called for, the following steps "should" be followed: counseling (verbal warning), written warning, final written warning or suspension, and discharge. Id. Finally, the policy indicates that the showing of favoritism or "the uneven application" of the various forms of discipline must be avoided. Id.
Scalzitti indicated that he was trained to document whatever disciplinary action is taken. See Scalzitti Depo. 40:20-25. However, Scalzitti did not see any written documentation that indicated that Mitri had been given any warning for working beyond his shift before issuing the Final Written Warning. See id. at 42:7-12. Scalzitti testified that he relied on what Murray and Guillen told him about Mitri prior to the Final Written Warning. See id. at 42:13-22. However, Mitri had never been warned prior to the Final Written Warning about working beyond his schedule. PUMF 101. *fn9
After the Final Written Warning, Mitri had concerns that Scalzitti may have been indicating that Mitri should work off the clock, and he made further inquiries with Walgreens. See Mitri Depo. 136:20-137:11. Murray responded to Mitri's concerns in a May 27, 2009, letter. See Mitri Depo. Ex. 16. Murray indicated in part that Walgreens supported the discipline issued, i.e. the issuance of the Final Written Warning. See id. Murray said that Mitri was permitted to remain 10 to 15 minutes after his shift if it was necessary to take care of customers, and so long as Mitri either e-mailed Scalzitti or let his store manager know that Mitri had worked past the shift. See PUMF 131. Similarly, in June 2009, Mitri met with Hasty and Pharmacy Director Robbie Jacobs. DUMF 16. During that meeting, it was discussed again what action Mitri should take if he was working with a customer at the end of his shift. Id. Mitri testified that Jacobs and Hasty told him to "go ahead and take care of the customer, and then e-mail [Scalzitti] or your store manager or the three people that were listed on the [Final Written Warning]." Id. When asked whether he needed to advise either the store manager, or Scalzitti, or Guillen if he had stayed 10 or 15 minutes after his shift to help a customer, Mitri responded, "And I always did, and in most cases, it was the manager on duty at the store as I was clocking out." *fn10 Mitri Depo. 147:3-9.
In June 2009, Warinner investigated the invoices that Mitri had supplied in connection with Mitri's complaints of billing/Medicare fraud through the use of IOU labels. See PUMF's 51-52. By June 2, 2009, Scalzitti knew that Mitri had produced IOU labels to Warinner. PUMF 60. Scalzitti then did a "sweep" for such labels. PUMF 61. Scalzitti also learned in the Summer of 2009 that Mitri had met with Hasty about Medicare fraud. PUMF 62.
Mitri's billing fraud claims were determined to be founded. See Warinner Depo. 34:22-24. Warinner's investigation initially found problems with 6 stores, but Warinner later learned that 12 out of the 30 stores that Warinner investigated had problems with IOU labels. See PUMF's 80-81. Walgreens instituted several remedies based on what it discovered as a result of Mitri's complaints. PUMF 82. Walgreens required new training for pharmacists regarding partially filling prescriptions and the impropriety of IOU labels, and ordered that payment be reversed for any prescription that had involved a "partially filled" order. See DUMF 28; PUMF 83; Malusa Depo. 14:20-15:3.
In the Fall of 2009, Mitri advised Warinner that he had found further examples of IOU labels in the Visalia store. See PUMF 63. In September 2009, Mitri showed Guillen evidence of the improper IOU labels, although Guillen did not understand that the labels constituted billing fraud. See PUMF 65. In October 2009, ...