United States District Court, N.D. California, San Francisco Division
For John Larkin, Plaintiff: Heather Michelle Conger, Jody Ilene LeWitter, LEAD ATTORNEYS, Jean Roche Krasilnikoff, Siegel LeWitter Malkani, Oakland, CA.
For The Home Depot, Inc., Defendant: Jill Vogt Cartwright, LEAD ATTORNEY, Ogletree, Deakins, Nash, Smoak & Stewart, San Francisco, CA; Kevin Durrell Reese, LEAD ATTORNEY, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., San Francisco, CA.
ORDER DENYING MOTION FOR SUMMARY JUDGMENT [ECF No. 45]
LAUREL BEELER, United States Magistrate Judge.
Plaintiff John Larkin, who is African American, was a store manager for defendant Home Depot and claims that he was disciplined, denied promotion, and eventually fired because of his race, in violation of California's Fair Employment and Housing Act (" FEHA"). (ECF No. 1 at 16, ¶ ¶ 26-32.) He also contends that he was disciplined and fired in retaliation for having complained of discrimination. (Id. ¶ ¶ 33-43.) Home Depot has moved for summary judgment on all claims. (ECF No. 45.)
This case is before this court on diversity jurisdiction. See 28 U.S.C. § 1332. Larkin filed suit in Alameda County Superior Court; Home Depot then removed the case to this court. (ECF No. 1.) Both parties have consented to the undersigned's jurisdiction. (ECF Nos. 8, 10.) For the reasons stated below, the court denies Home Depot's motion for summary judgment.
The salient facts of this case are mostly undisputed. The parties instead dispute the inferences that those facts support. The plaintiff tells of a worker who climbed the corporate ladder until hindered and ultimately fired by a new supervisor who discriminated against him based on his race. The defendant tells of a store manager whose performance failed and who in crucial respects was not managing his store.
I. MR. LARKIN'S JOB UP TO FEBRUARY 2011
The parties' accounts do not differ materially up to and including February 2011, when Gerard Cozy became Mr. Larkin's district manager and direct supervisor. At that time, Mr. Larkin was the manager of the Home Depot store in Pleasanton. (ECF No. 1 at 13, ¶ 9.) He started with Home Depot in 2000 as a part-time associate when he was a student at San Jose State, later became a full-time associate, was promoted to an assistant manager in 2004, and became a store manager in 2006, first at the San Leandro store and then, starting in April 2010, at the Pleasanton store. (Larkin Decl., ECF No. 54-5; Vela Decl, . ECF No. 45-5, ¶ 3.) As a store manager, he reported to the district manager. (Larkin Decl., ECF No. 54-5, ¶ 5.) To the best of Mr. Larkin's recollection, he had five district managers before Cozy. (ECF No. 54-5, ¶ 5.) Before he worked for Cozy, his regular written performance reviews never included a " below satisfactory" or " needs improvement" rating. (Id., ¶ 6.) For example, in his February 2010 evaluation for fiscal year 2009, his then manager Sumela Vela gave him a performance rating of " O -- Top Performer" and a merit-based pay increase of 6.75%. (Id. ¶ 7; Vela Decl, . ECF No. 45-5, ¶ 7.)
In April 2010, Vela transferred Mr. Larkin from his store in San Leandro to a store in Pleasanton because it was not performing as well as expected, it had many opportunities for improvement, and she sent him to " guide the store in meeting expectations." (Vela Decl., ECF No. 45-5, ¶ 6.) Mr. Larkin said that when Vela became his manager, she told him she was surprised that he had not yet been promoted to District Manager, sent him to the Pleasanton store to turn it around, and told him that if he were successful there, she would recommend him for a promotion. (Larkin Decl., ECF No. 54-5, ¶ 10.) Vela explains that she thought his management of the business in the San Leandro store was excellent but that he needed additional training, including leadership training, to become promotable. (ECF No. 45-5, ¶ 8.) She did not think that Mr. Larkin was ready for a promotion to district manager when she promoted him because he had managed only one store; she " thought he needed to be successful managing multiple stores before being ready for a promotion, " and she transferred Mr. " Larkin to Pleasanton to give him experience managing another store." (Id., ¶ ¶ 16-17.) The Pleasanton store was the closest store to the regional office and " was considered a high-profile store." (Id., ¶ 18.) When she was the district manager from June 2009 to February 2011, " visiting managers would visit the Pleasanton store if they were in the region on business." (Id.) She thought that transferring Mr. Larkin to the store would be an " opportunity for [him] to prove his merit as a store manager before a potential promotion to district manager, and beginning the training and additional steps to become a district manager." (Id.)
Vela says that as Mr. Larkin's district manager, she never recommended him for the Emerging Leaders Program, the Advanced Development Program, or the District Manager Assessment Program (DMAC). (Id. ¶ 12; see Teruya Dep., ECF No. 45-10 at 35-40 (describing promotion process for a district manager position as requiring completion of these three programs).) Her understanding and experience is that at minimum, a store manager needs to complete DMAC to be promoted to district manager, and after that, the store manager is considered a potential candidate for an open district-manager position. (Vela Decl., ¶ 13.) She explains that to be hired as a district manager, the store-manager candidate must interview for an open position and be selected by the Regional Vice President. (Id.)
In February 2011, Vela reviewed Mr. Larkin's performance for fiscal year 2010. (Larkin Decl., Ex. B, ECF No. 54-5 at 10.) She rated him a V2 (down from an O) for " valued associate and well positioned." (Vela Decl., ECF No. 45-5, ¶ 8.) Vela lowered Larkin's rating because she felt that he was not performing as well in Pleasanton as he did in San Leandro, and he did not turn the store around as quickly as she expected. (Id.) Mr. Larkin never complained to her about the review or said that it was unfair. (Id., ¶ ¶ 10-11.) In his deposition, Mr. Larkin did not attribute any discriminatory animus to Vela. (Larkin Dep. at 17-18.)
In February 2011, Gerald Cozy became Larkin's new district manager and immediate superior. (ECF No. 1, ¶ ¶ 15-16; ECF No. 45-9 at 20-21.) He attended the February 2011 review but had no input into Vela's assessment of Mr. Larkin. (Vela Decl., ECF No. 45-5, ¶ 9.) But over the next 15 months, Cozy repeatedly disciplined Mr. Larkin. ( See ECF No. 45-10 at 76-77 (email recounting disciplinary acts); ECF No. 1 at 14-15.) In May 2012, Cozy sought to fire Larkin on the grounds that he was disengaged from his store's price-reduction practices and was not implementing company policy on inventory loss. (ECF No. 45-10.) Cozy consulted with the district's human-resources manager, who then sought permission to fire Mr. Larkin from upper (regional) management. (Id. at 70-72, 75-79.) After two regional officers agreed that Mr. Larkin's performance justified ending his employment, Home Depot fired Mr. Larkin. (Id. at 75-79; ECF No. 45-11 at 3-5, 8-12.)
The next sections summarize the record about the disciplinary landscape that preceded Home Depot's firing Mr. Larkin.
II. THE 2011 DISCIPLINARY ACTIONS
The following are write-ups and reviews in 2011. (Cozy Dep. Exs. 30-32, 34, 36, ECF No. 54-2 at 93-97.)
o 3/3/11: verbal counseling
o 3/21/11: verbal counseling regarding controllables (hours and markdowns)
o 5/17/11: written counseling regarding continued inconsistency with markdowns and weekend staffing (notes improved weekend staffing but still missing the metric)
o 7/1/11: written counseling regarding lack of pro loader lot associate
o 8/9/11: written counseling regarding not meeting store controllables (markdowns, staffing, and customer service)
o 9/7/11 midyear review
o 9/29/11: written counseling regarding pack-downs, not setting the cart starter end cap for September, not starting the end fence lines for October, not executing the NLP tri-pod doors, and running over hours and [sales-adjusted hours] for the 2nd half.
Home Depot explains that Cozy was a manager who was focused on meeting metrics for his district that affected a store's operational profit. (Motion, ECF No. 45-1 at 11, summarizing employees' deposition testimony, including Mr. Larkin's.) Those metrics include sales-adjusted hours, markdowns, and shrink. " Sales Adjusted Hours" have to do with scheduling employee hours based on sales. (Cozy Decl., ECF No. 45-6, ¶ 23.) " Markdowns" are a reduction in price for an item. (ECF No. 45-9 at 7; ECF No. 45-11 at 72-73.) " Shrink" is lost inventory. (ECF No. 45-1 at 11 n.8.) The idea is that all these are " controllable, " meaning, a manager can do something about them and thus boost operational profit (as opposed to things that a manager cannot control, such as customer demand).
According to Mr. Larkin, these write-ups were pretextual to create a document trail, and Cozy picked on him in a way that he did not for other managers. (Motion, ECF No. 54 at 9.) He notes his actual performance in 2011, where he raised his store's sales by $1.7 million and the overall operational profits by more than $700, 000 compared to the previous year. (Larkin Decl., ECF No. 54-5, ¶ ¶ 16-19 & Ex. D.) He points to write-ups of the other store managers in the district to show that no other store manager in the district received as many write-ups. (Id., citing Conger Decl., Ex. O, ECF No. 54-4.) He contrasts the six write-ups Cozy gave him during Cozy's first seven months as district manager in 2011 with the zero write-ups from Vela for the previous 20 months. (Larkin Decl., ECF No. 54-5, ¶ 9.) He cites deposition testimony of other employees and store managers to support his account of being singled out. For example, Oliver Carter says that the Pleasanton store was stocked " the best" and that Cozy visited the store unannounced at least two to three times a week (with the implication that this was excessive). (Carter Dep., ECF No. 54-2 at 79.) By contrast, Christopher Nunez says that Cozy visited his store unannounced in San Jose every other week. (Nunez Dep., ECF No. 54-3 at 37-38.) Tyler Schaffer said the following:
We had walked John's store once; it was for a district walk. It was a garden walk. And the store looked absolutely phenomenal. Like you'd see in a Home Depot commercial. They had spent so much work. And his store looked like that every day. And we were close to the end of the walk and Jerry [Cozy] said, " What's this sign doing out of place" " And it was a very minute thing, like a customer wouldn't even know. And it was very stern, the way he said it. And he looked right at John and basically pointed him out to the rest of the team. . . .
(Schaffer Dep., ECF No. 54-2 at 55.) He acknowledged that Cozy was " nitpicky at other stores as well . . . but definitely not the same intensity that I had experienced when he was at John's store. It seemed like there was something between them that I didn't know about." (Id. at 56.)
Schaffer said that Cozy never wrote him up for anything (although they got into arguments) despite the fact that his store had plenty of " opportunities" (Home Depot's term for " problems") for write-ups. (Id. at 57.) For example, Cozy gave a written discipline to Mr. Larkin for not having a " pro-loader" ( see bullet point four, above) but for a similar problem he merely talked to Mr. Schaffer, who is white. (Schaffer Decl., ECF No. 54-2 at 75, ¶ 15.) (A pro-loader is an employee who staffs the dedicated area where contractors pick up materials and helps load them. (ECF No. 56 at 10.)) Similarly, Cozy gave a written discipline to Mr. Larkin in May 2011 for missing markdown goals three of six weeks and staffing two of six weeks ( see bullet point three, above) but (according to Mr. Larkin) Cozy did not discipline Mr. Echevarria (blond hair, blue eyes, and a Basque), who was promoted (after completing DMAC). (ECF No. 54-5, ¶ 26; Opposition, ECF No. 54 at 10.)
Cozy's explanation for why he treated managers differently is that Shaffer and Nunez were newer managers and thus he gave them leeway, while Mr. Larkin was an experienced hand who should have performed better. (ECF No. 56-2 at 3-4, 6, ¶ ¶ 11, 13-14, 26.)
Since Schaffer was new to the East San Jose store, I wanted to give him a reasonable amount of time to get to know his team . . . [and] ensure his ASMs knew his expectations. Ordinarily, my practice would not be to issue written disciplinary notice to a new store manager or a store manager new to a store in the district in the first 90 days of their arrival. In my view, issuing discipline to Schaffer would have been premature because he was brand new to his store and the district. However, I did manage him and verbally counsel Schaffer on performance deficiencies . . . at this store . . . .
. . . .
Nuñez was promoted to a store manager position in March 2011 . . . . I usually do not issue written discipline to brand new store managers . . . . I wanted to give Nuñez time to adjust to his new position, learn the business records in his store, and ensure his ASMs knew his expectations.
(Id. at 3-4, ¶ ¶ 11, 13.) By contrast, " Larkin had already been a store manager for five years in [this] District . . . and had been the Pleasanton Store Manager for approximately a year." (Id. at 4, ¶ 14.) Cozy " thought this was sufficient time for [Larkin] to have established processes and have his team trained to address deficiencies in [performance] metrics." (Id.) " The difference in time [that] Larkin had been the Store Manager in Pleasanton compared to" Schaffer and Nuñez in their stores " factored into my evaluation of their performance." (Id.)
III. MR. LARKIN COMPLAINS OF RACE DISCRIMINATION IN SEPTEMBER 2011
After his mid-year performance review in September 2011, which talked about markdowns, Mr. Larkin complained to Elena Matos, the district human-resources manager, that there were no African-American managers above the level of store manager in the entire region, that he felt he was not being promoted because of his race, and that there was no other reason because his numbers were good, the store was fantastic, he was training all the new store managers when they came in, and he had " done it all . . . was doing it all." (Larkin Dep., ECF No. 54-2 at 22-23; Larkin Decl., ECF No. 54-5, ¶ 12.) Matos said that she did not think that was the case. (Larkin Dep., ECF No. 54-2 at 22-23.) Mr. Larkin then told Cozy directly that he felt Cozy was discriminating against him based on his race. (Larkin Decl., ECF No. 54-5, ¶ 12.) Right after that, Cozy disciplined him for his pack-down reports. ( See bullet point seven, above.) Mr. Larkin says that this was discriminatory, retaliatory, and wrong because Mr. Larkin discovered (and brought to Cozy's attention) that a lower-level associate was manipulating the pack-down reports to make it look like she was bringing items down from the top shelves to the bottom when she was not. (Larkin Dep., ECF No. 54-2, at 30-31.) Mr. Larkin said that he uncovered and corrected the reports and told Cozy because it was an integrity issue. (Id.) Cozy got angry that he fixed it all at once (as opposed to " slowly" fixing the issue) because it made Cozy look bad, and he wrote him up (wrongfully, according to Mr. Larkin).
IV. EVENTS IN 2012 BEFORE MR. LARKIN'S TERMINATION
In the first few months of 2012, Mr. Larkin's store brought in net sales of $13 million, an increase of more than $420, 000 over the previous year. (Larkin Decl., ECF No. 54-5, ¶ 20 & Ex. F.) He continued to experience discipline actions: (A) in February for events surrounding his firing an employee; (B) in February for issues regarding shrink (or theft); and (C) in April for going markdown issues and going over hours on staffing.
A. Written Discipline in February 2012
In February 2012, Matos disciplined Mr. Larkin for allegedly terminating an employee without consulting her. Mr. Larkin says that it shows her racial animus because she initiated the termination decision and then lied about it to justify her disciplining him. (Opposition, ECF No. 54 at 12, 25.) Specifically,
At her deposition, [Matos] again swore that Larkin terminated the employee without consulting her. Yet, three separate emails between Matos and Larkin show that not only was Matos informed of the termination, she actually initiated the termination decision, telling Larkin that he either needed to remove the employee from ...