Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Smiley v. Hologic, Inc.

United States District Court, S.D. California

April 12, 2017

HOLOGIC, INC., a Delaware corporation, and DOES 1 through 20, Defendants.


          WILLIAM Q. HAYES United States District Judge.

         The matter before the Court is the motion for summary judgment filed by Defendant Hologic, Inc. (ECF No. 39).

         I. Background

         On November 18, 2015, Plaintiff Karmen Smiley initiated this action by filing a complaint in Superior Court in the State of California for the County of San Diego alleging two causes of action against Defendant Hologic, Inc.: (1) retaliatory termination in violation of California Labor Code section 1102.5, and (2) wrongful termination in violation of public policy. (ECF No. 1-2). Plaintiff's second cause of action alleges that her wrongful termination violates two public policies: (1) “for employers not to retaliate against an employee for disclosing information to another employee with the authority to investigate or correct violations where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute or a violation or non-compliance with a state or federal rule or regulation”, and (2) “to neither discharge, nor formerly discipline, nor otherwise discriminate against an employee who discloses such information.” Id. at 7.

         On January 22, 2016, Defendant removed this action from Superior Court to United States District Court for the Southern District of California pursuant to 28 U.S.C. §§ 1332 and 1441(a), (b). (ECF No. 1 at 2). On January 22, 2016, Defendant filed an Answer. (ECF No. 2).

         On October 14, 2016, Defendant filed a motion for summary judgment, or in the alternative, partial summary judgment. (ECF No. 39). On November 7, 2016, Plaintiff filed a response in opposition. (ECF No. 44). On November 14, 2016, Defendant filed a reply. (ECF No. 46). The Court heard oral argument on the motion for summary judgment on February 24, 2017.

         II. Factual Background

         In a declaration filed by Defendant, Thomas Cardosa, a Hologic Human Resources Business Partner for the Finance Department in San Diego, states,

Based on a review of [Plaintiff's] file, I know Plaintiff worked for Gen-Probe Incorporated from October 2004 until August 2012 when the company was acquired by Hologic, at which point Plaintiff began working for Hologic. . . . Plaintiff originally was hired as a Fixed Asset Accountant (later referred to as an Accountant II). On June 25, 2007, Plaintiff was transferred to the Cost Accounting Department as a Cost Accountant II. Plaintiff held this position until her termination on July 24, 2015. . . . As a HR Business Partner I was also involved with the final decision to terminate Plaintiff's employment and assisted her supervisors Chun Ren and John O'Shea through the process. The decision to terminate Plaintiff's employment was made and finalized within a day of her missing a performance meeting on July 20, 2015. As such, the decision to terminate Plaintiff's employment was finalized no later than July 21, 2015. However, as Plaintiff had already demonstrated that she would not attend a meeting with her supervisors and I, we used a previously scheduled appointment that Plaintiff had with another HR Business Partner, Stephanie Heller, on July 23, 2015 to communicate this decision with her. . . . Plaintiff was initially to be terminated on July 23, 2015. However, as she had a vacation day scheduled for July 24, 2015, the company moved back her official termination to July 24, 2015. Her last day worked, however, was July 23, 2015.

(Cardosa Decl., ECF No. 39-8).

         In the deposition of John O' Shea, Senior Director of Finance at Hologic, O'Shea states that he was hired at Hologic in January of 2015 and was the direct supervisor of Joe Abramson, a senior finance manager, before Abramson left Hologic. O' Shea states that Chun Ren was hired to fill Abramson's position and, following some management changes, became Plaintiff's supervisor. (O'Shea Dep., ECF No. 39-4 at 13-18). O'Shea states that Plaintiff's primary role was cost accounting and that her cost accounting was not reliable. Id. at 19. O'Shea states, “I first became aware that there were issues with Karmen's work beginning in April of 2015 for the March close.” Id.

         In a declaration by Chun Ren, Senior Manager of Cost Accounting at Hologic, Ren states,

From the time of my hire to July 23, 2015, I was Karmen Smiley's direct supervisor. As her direct supervisor, I was responsible for reviewing Ms. Smiley's work. As soon as I began working with Ms. Smiley, I began to notice errors in her work. When I attempted to address these errors with Ms. Smiley, I received push back, and while some of the errors would be corrected, I continued to see errors and have concerns with her performance.
[] Therefore, I began documenting Ms. Smiley's performance issues with the purpose of having a performance discussion with Ms. Smiley. The goal of this performance meeting was never to terminate Ms. Smiley, but rather to engage in dialogue regarding my concerns and issue Ms. Smiley a Performance Improvement Plan. I began documenting my concerns with Ms. Smiley in late May or early June.
[] By mid-July 2015, my supervisor John O'Shea, the Human Resources Business Partner, Thomas Cardosa and I felt we had sufficient specific examples of Plaintiff's performance problems to allow us to have a productive performance conversation with Plaintiff. I emailed my list of performance concerns to Mr. Cardosa, who incorporated the points into an agenda for the meeting. . . .
[] I reached out to Plaintiff by Lync conversation on or about July 16, 2015 to schedule the meeting. . . . Plaintiff failed to respond to my inquiry.
[] Therefore on July 19, 2015, I sent an invitation to Ms. Smiley, Mr. O'Shea and Mr. Cardosa for a meeting to be held on July 20, 2015, to discuss Plaintiff's performance issues and unprofessional attitude and to issue Plaintiff a Performance Improvement Plan.
[] Ms. Smiley failed to attend this meeting, so Mr. O'Shea, Mr. Cardosa, and I were never able to address any of the concerns we had with Plaintiff's performance. Because of Ms. Smiley's demonstrated performance deficiencies, her unprofessional behavior, her outright refusal to work towards a constructive solution to her ongoing problems, and the final straw of her refusal to attend a performance meeting, Mr. O'Shea, Mr. Cardosa and I made the decision to terminate Ms. Smiley's employment.

(Ren Decl., ECF No. 39-6 at 1-4).

         Attached to the Ren declaration is a copy of the proposed agenda for the performance meeting Ren intended to have with Smiley. (Exhibit A, ECF No. 39-7 at 3-5). The proposed agenda documents a number of “work errors” and instances of “attitude/behavior.” Id. Attached to the Ren declaration is a copy of a message Ren sent to Plaintiff. (Exhibit B, ECF No. 39-7 at 7). In the message dated July 16, 2015, Ren states, “Are you going to be in the office on Monday? I am trying to schedule a meeting as we talked about.” Id. Attached to the Ren declaration is a invitation to a meeting dated July 19, 2015, to Ren, Smiley, Cardosa, and O'Shea scheduled for July 20, 2015 at 10:00 a.m. (Exhibit C, ECF No. 39-7 at 9).

         Attached to the deposition of Plaintiff is a copy of Plaintiff's response to the meeting invitation in which Plaintiff states, “Thanks, but please don't” and declines the July 20, 2015 meeting invitation. (Exhibit C, ECF No. 39-4 at 44-45). In a copy of an email chain dated July 20, 2015, Ren states that Plaintiff needs to attend the meeting. (Exhibit C, ECF No. 39-4 at 67-68).

         In the deposition of Thomas Cardosa, Cardosa states that he, Ren, and O'Shea were present for the July 20, 2015 meeting. Cardosa states that Plaintiff was not present. (Cardosa Dep., ECF No. 39-4 at 115-16). Cardosa states,

The recommendation to terminate Karmen's employment was based that [sic] she refused to attend a performance conversation. The previous topics that we discussed today were going to be included in that conversation. In no way, shape, or form was that meeting to be a termination meeting. It was to provide Karmen with specific documented examples where she can - she can understand what's expected of her so that she could be successful as an Accountant II at Hologic.

Id. at 113. Cardosa states that the decision to terminate Plaintiff was made following the scheduled July 20, 2015 meeting that Plaintiff failed to attend. Id. at 117-18.

         In a declaration by John O'Shea, Senior Director of Finance for the Diagnostic Division at Hologic, O'Shea states,

[] Hologic is a leading developer, manufacturer, and supplier of diagnostic products, medical imaging systems and surgical products. Hologic's core business segments include Diagnostics, Breast Health, GYN Surgical, and Skeletal Health. Hologic is a publicly traded company that is required to file quarterly financial statements with the Securities and Exchange Commission.
[] As a Senior Director of Finance for the Diagnostics Division of Hologic, I am a responsible [sic] for managing the finance team in Hologic's San Diego Location. Part of the duties of the San Diego finance team is to complete what is referred to as the Grifols Reclass, which is further explained below. As a result of my experience working with the Grifols Reclass, and supervising the process, I have personal knowledge of the facts below.
[] Hologic's Diagnostic segment includes the Molecular Diagnostics (“MDX”) and Blood Screening divisions, among others.
[] Hologic sells several Diagnostic products across the globe. For internal record keeping, these sales are tracked by division (i.e. MDX or Blood Screening) and by geographic code (“Geo Code”). Different Geo Codes are assigned to different countries. The division allocation is determined by the customer, while the location is determined by the country where the product was sold. As such, the same product, depending on to whom it is sold, can be allocated to different divisions.
[] When a product sells and an invoice is created, Hologic's accounting system automatically generates an entry which “maps” the “revenue” and the “cost of goods sold” for each product listed on the invoice to both a division and to a Geo Code. However within Hologic's accounting system, each product can only be “mapped” to a single Diagnostic division. In the case of these products, when operating correctly, regardless of the customer, a domestic sale of a Diagnostic product should automatically create a Revenue and Cost of Goods Sold entry in the MDX division under a domestic Geo Code. Similarly, an international sale of a Diagnostic product should automatically create a Revenue and Cost of Goods sold entry in the MDX division under the appropriate international Geo Code.
[] Relevant to the current case, Hologic sells several dual-division products through its partnership with Grifols, a Spanish multinational pharmaceutical and chemical company. Diagnostic products sold to Grifols are accounted for under the Blood Screening division. Consequently, and as explained above, because Hologic initially records all Grifols product sales to MDX (either Domestic or International, as appropriate), a manual reclassification must be performed during the month-end close to transfer the Revenues and Costs of Goods Sold attributable to Grifols out of the MDX division and into Blood Screening. Hologic refers to this standard monthly reclassification as the “Grifols Reclass.” Prior to her termination, Ms. Smiley regularly and repeatedly processed the Grifols Reclass entry during month-end close.
[] In June 2015, I received a request to investigate a $1.4 million credit balance in MDX's International Cost of Goods Sold accounts for various international locations related to third-quarter 2015 Grifols sales.
[] Over roughly a one month period, the Senior Manager of Cost Accounting and I, with assistance from Karmen Smiley, investigated the International $1.4 million Cost of Goods Sold credit to determine the source. Ms. Ren and I ultimately determined that during the third-quarter of 2015, Hologic's automated accounting system incorrectly recorded Cost of Goods Sold related to certain international Grifols product sales to the domestic Geo Code instead of the corresponding international Geo Code.
[] This error had two primary effects, the first of which is obvious - it overstated the amount of Costs of Goods Sold attributable to the domestic Geo Code. Second, and less obvious, since Ms. Smiley was unaware of the automated system error, she had continued to do the standard monthly Grifols Reclass. This meant Plaintiff transferred the Costs of Goods Sold from MDX International even ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.