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Evenfe v. Esalen Institute

United States District Court, N.D. California, San Jose Division

July 24, 2016

HELEN EVENFE, Plaintiff,
ESALEN INSTITUTE, et al., Defendants.


          LUCY H. KOH United States District Judge.

         Plaintiff Helen Evenfe (“Plaintiff”) brings this action against the Esalen Institute; Scott Stillinger, the Esalen Institute’s Head of Human Resources and Education; the Esalen Institute’s Board of Trustees; and the individual members of Esalen Institute’s Board of Trustees (collectively, “Defendants”). Before the Court is Defendants’ motion to dismiss certain Defendants and causes of action in the First Amended Complaint. ECF No. 12 (“Mot.”); ECF No. 7 (“FAC”). The Court finds this matter suitable for decision without oral argument pursuant to Civil Local Rule 7-1(b) and thus VACATES the motion hearing set for July 28, 2016, at 1:30 p.m. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court GRANTS in part and DENIES in part Defendants’ motion to dismiss.

         I. BACKGROUND

         A. Factual Background

         The causes of action in this case arise from Plaintiff’s alleged employment at the Esalen Institute (“Esalen”) from 2008 to 2015. Plaintiff avers that, at some point in 2008, Esalen Security Gate Supervisor Carolin Phillips approached Plaintiff, a licensed nurse, to ask if Plaintiff would assist Esalen on a temporary, three-month basis to “help with the medical needs of the Esalen Community.” FAC ¶ 31. Plaintiff states that she was asked to carry a two-way radio with her at all times in order to ensure her availability to assist with medical emergencies. Id. In addition to providing medical services, Plaintiff also worked for ten hours a week at Esalen’s Gazebo Preschool in exchange for room and board. Id.

         In February 2009, Phillips offered Plaintiff a position in Esalen’s Work Scholar Program. This position was unpaid, but provided Plaintiff room and board. Id. ¶ 32. After completing the program, Plaintiff agreed to work as a security guard at Esalen for 32 hours a week. Plaintiff was paid $8 per hour for her work and provided room and board. Id. Plaintiff worked as a security guard for about a year and a half, from March 2009 through September 2010.

         Plaintiff alleges that, while working as a security guard, she was required to follow Esalen’s “Gate Manual.” According to Plaintiff, “[c]onspicuously absent from . . . the ‘Gate Manual’ are any scheduled ‘Meal and Rest’ Breaks, as required by law.” Id. ¶ 37. In addition, Plaintiff alleges that Esalen required her to work multiple consecutive shifts without legally mandated breaks. Id. ¶ 36. Moreover, while working as a security guard, Plaintiff alleges that she was required to carry a two-way radio at all times in order to continue to assist with medical emergencies. Id. Plaintiff was not paid for providing such assistance. Plaintiff further alleges that Esalen required Plaintiff “to produce her California RN [Registered Nurse] license, to obtain an up to date Advanced Cardiac Life Support (‘ACLSA’) Certification, Basic Life Support Certification (‘BLS’), and to obtain Medical Malpractice Insurance-all at her own expense.” Id. ¶ 39.

         In September 2010, after Plaintiff completed her work as a security guard, Esalen’s managing agents asked Plaintiff to stay on and continue to provide medical assistance. Id. ¶ 38. In exchange for Plaintiff’s medical assistance, Esalen “offered [Plaintiff] property privileges, including workshops, treatments at [Esalen at] staff rates, food, and a place to park and live.” Id. At some point in 2010, Bill James, a member of Esalen’s Board of Trustees, learned about Plaintiff’s circumstances and offered to pay for Plaintiff’s medical malpractice insurance. Id. ¶ 39.

         Outside of James’s assistance, however, Plaintiff alleges that she was not financially compensated for providing medical services, despite multiple requests by Plaintiff for payment. In particular, Plaintiff focuses on a 2012 letter prepared by Plaintiff’s colleague, medical doctor Gino Romano, which was sent to Esalen. In this letter, Romano states that “[c]urrently [Plaintiff] and I ‘volunteer’ our medical services 24 hours a day mostly seven days a week for an unofficial emergency on call service to Esalen. This service has resulted in several life-saving interventions.” Id. ¶ 42. After reviewing the various services that Plaintiff and Romano had provided since 2009, Romano concluded that “it would be prudent to formalize the program and ensure adequate compensation for [Plaintiff and Romano’s] services.” Id. (emphasis removed). Esalen denied Romano’s request.

         In December 2011, Plaintiff suffered a leg injury while walking “in front of [Esalen’s] main entrance.” Id. ¶ 44. Plaintiff filed a workers’ compensation claim, which she avers is “open and ongoing.” Id. ¶ 45. In February 2015, Plaintiff suffered another physical injury, which led to a second workers’ compensation claim. Id. ¶ 46. That claim was rejected. However, in the course of reporting her claim, Plaintiff alleges that she spoke with personnel from Esalen’s Human Resources (“HR”) department and complained that she was working as an emergency nurse without pay. Plaintiff contends that she asked Esalen’s HR personnel to bring her complaints to the attention of Scott Stillinger (“Stillinger”), Esalen’s Head of HR and Education.

         In May 2015, Plaintiff “was forced to go to England for a family medical crisis.” Id. ¶ 48. In September 2015, as Plaintiff prepared to return to the United States, Stillinger contacted Plaintiff and informed Plaintiff that she had been fired. Id. ¶¶ 49-50.

         Over the course of her time at Esalen, Plaintiff alleges that Defendants knew that Plaintiff performed unpaid medical nursing services and that Defendants misrepresented the hours that Plaintiff worked in order to avoid paying her unemployment insurance, health insurance, and other benefits. Id. ¶¶ 90-92.

         B. Procedural History

         Plaintiff filed the original complaint in this action on November 30, 2015. ECF No. 1 (“Compl.”). Plaintiff filed the FAC on March 30, 2016. The FAC alleges eighteen causes of action. Some of these causes of action have been brought only against Esalen, while others have been brought against Esalen; Scott Stillinger; Esalen’s Board of Trustees; and the individual members of Esalen’s Board of Trustees.[1] On May 17, 2016, Defendants filed the instant motion to dismiss. Plaintiff filed a response on May 31, 2016, and Defendants filed a reply on June 7, 2016. ECF No. 17 (“Opp’n”); ECF No. 18 (“Reply”).


         A. Motion to Dismiss

         Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss an action for failure to allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement, ’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

         Nonetheless, the Court is not required to “‘assume the truth of legal conclusions merely because they are cast in the form of factual allegations.’” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (quoting W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Mere “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004); accord Iqbal, 556 U.S. at 678. Furthermore, “‘a plaintiff may plead [him]self out of court’” if he “plead[s] facts which establish that he cannot prevail on his . . . claim.” Weisbuch v. Cnty. of L.A., 119 F.3d 778, 783 n.1 (9th Cir. 1997) (quoting Warzon v. Drew, 60 F.3d 1234, 1239 (7th Cir. 1995)).

         B. Leave to Amend

         Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely granted when justice so requires, ” bearing in mind “the underlying purpose of Rule 15 to facilitate decision on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (ellipses omitted). Generally, leave to amend shall be denied only if allowing amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir. 2008).


         Defendants move to dismiss the fourth, fifth, sixth, eighth, ninth, and eleventh causes of action in the FAC. Defendants also move to dismiss various causes of action against Stillinger and the individual members of Esalen’s Board of Trustees. The Court addresses these two sets of arguments in turn.

         A. Motion to Dismiss Fourth, Fifth, Sixth, Eighth, Ninth and Eleventh Causes of Action

         1. Fourth Cause of Action: Retaliation in Violation of Public Policy (against Esalen)

         “[E]mployment relationships in California are ordinarily ‘at will, ’ meaning that an employer can discharge an employee for any reason.” Freund v. Nycomed Amersham, 347 F.3d 752, 758 (9th Cir. 2003). However, in Tameny v. Atlantic Richfield Co., 610 P.2d 1330 (Cal. 1980), “the California Supreme Court carved out an exception to [this general] at-will rule by recognizing a tort cause of action for wrongful terminations that violate public policy.” 347 F.3d at 758. In order to plead a Tameny claim, the public policy must be “(1) delineated in either constitutional or statutory provisions; (2) ‘public’ in the sense that it ‘inures to the benefit of the public’ rather than serving merely the interests of the individual; (3) well established at the time of discharge; and (4) substantial and fundamental.” Id.

         In the instant case, Plaintiff attempts to plead a Tameny claim based on Esalen’s violation of two California statutory provisions: Cal. Labor Code § 1102.5 and Cal. Labor Code § 132a. The Court reviews these provisions in turn.

         a. Cal. Labor Code § 1102.5

         Known commonly as California’s whistleblower statute, Cal. Labor Code § 1102.5 states that “[a]n employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information, or because the employer believes that the employee disclosed or may disclose information . . . to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance.” Cal. Labor Code § 1102.5(b). “Violations of California Labor Code § 1102.5 can support a” Tameny claim, Ferretti v. Pfizer Inc., 855 F.Supp.2d 1017, 1025 (N.D. Cal. 2012), because Cal. Labor Code § 1102.5 “reflects the broad public policy interest in encouraging workplace whistle-blowers to report unlawful acts without fearing retaliation, ” McVeigh v. Recology San Francisco, 152 Cal.Rptr.3d 595, 616 (Ct. App. 2013).

         “In order to establish a prima facie case for a labor code violation under § 1102.5, a plaintiff must show (1) she engaged in a protected activity, (2) her employer subjected her to an adverse employment action, and (3) there is a causal link between the two.” Bowen v. M. Caratan, Inc., 142 F.Supp.3d 1007, 1030-31 (E.D. Cal. 2015) (internal quotation marks omitted).

         Here, Plaintiff alleges that she spoke with Esalen HR personnel after filing her February 2015 workers’ compensation claim. During this meeting, she stated that she was not being paid for her medical assistance work, in violation of Cal. Labor Code § 1194, which provides a cause of action to “any employee receiving less than the legal minimum wage or . . . legal overtime.” Cal. Labor Code § 1194. Plaintiff further asked that these complaints be reported to Esalen’s Head of HR and Education, Scott ...

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