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Ochoa v. Santa Clara County Office of Education

United States District Court, N.D. California

June 5, 2017

MICAELA OCHOA, Plaintiff,
v.
SANTA CLARA COUNTY OFFICE OF EDUCATION, et al., Defendants. Source Objection Resolution

          ORDER GRANTING-IN-PART AND DENYING-IN-PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT Re: Dkt. No. 38

          HOWARD R. LLOYD United States Magistrate Judge

         Plaintiff Micaela Ochoa (“Ochoa”), the former Chief Business Officer at Defendant Santa Clara County Office of Education (“SCCOE”), sues her former employer and Defendant Jon Gundry (“Gundry”), the Superintendent, for retaliatory termination in violation of her First Amendment rights and a California whistleblower statute. Dkt. No. 1. She asserts that she engaged in protected speech on two occasions-first, in reporting a perceived violation of law related to the preparation of Gundry's W-2 in February 2015, and second, in speaking out about potential non-compliance with the California Public Records Act (“CPRA”) in June 2015-and that this speech was a substantial or motivating factor in her termination. Defendants move for summary judgment, or, in the alternative, partial summary judgment, and assert various legitimate and non-retaliatory reasons for Ochoa's termination. Dkt. No. 38.

         The parties have consented to magistrate judge jurisdiction. Dkt. Nos. 7, 11. For the reasons explained below, the court grants-in-part Defendants' motion for partial summary judgment only as to Ochoa's damages for lost wages for the time remaining on her employment contract. The court denies Defendants' motion for summary judgment, or, in the alternative, partial summary judgment, in all other respects.

         BACKGROUND

         SCCOE hired Ochoa to serve as its Chief Business Officer in August 2012. Dkt. No. 41, Ochoa Decl., ¶ 4. Her contract, originally for a two-year term, was extended in late 2013 and expired June 30, 2016. Dkt. No. 38, Gordillo Decl., Ex. 2. Ochoa's employment could be terminated without cause; but if this provision were exercised prior to the end of the term, her contract provided for a cash settlement not to exceed her monthly salary multiplied by the number of months remaining on the contract (up to 12 months). Id. Ochoa's annual salary in 2012-2013 was $205, 000, not including deferred compensation and other benefits. Id.

         All SCCOE employees report to the Superintendent. Dkt. No. 38, Gundry Decl., ¶ 7. To manage the large agency, the Superintendent hires a cabinet of officers. Id., ¶ 8. He or she may terminate these cabinet officers with or without cause. Id., ¶¶ 10, 11. This is meant to ensure that the Superintendent has a cabinet of advisors he or she trusts. Id. The Superintendent reports to the Board of Education, but the Board does not employ any other employees of SCCOE. Id., ¶ 7. SCCOE hired Gundry to serve as Superintendent in the summer of 2014. Id., ¶ 2.

         By all accounts, SCCOE in 2014 and 2015 was not a fun place to work. In their declarations and depositions, current and former Board and cabinet members were all too willing to criticize each other. Chief Human Resources Officer Phillip Gordillo and Gundry both asserted that Ochoa did not get along with at least two of her colleagues. Dkt. No. 38, Gordillo Decl., ¶ 4, Gundry Decl., ¶ 17. Chief Strategy Officer Toni Cordova reported that two of her co-workers argued, and that another “constantly complained about everything.” Dkt. No. 43, Cordova Decl., ¶¶ 31, 34. Gundry testified that cabinet member Kelly Calhoun and General Counsel Maribel Medina had a contentious relationship. Dkt. No. 40, Mehta Decl., Ex. D, Gundry Dep. [“Gundry Dep.”], 26:18-24. Medina accused Gundry of harassment and racial discrimination. Dkt. No. 44, Medina Decl., ¶ 11. Gundry described the cabinet environment as “toxic, ” stating, “I thought every person in the room brought conflict to the cabinet.” Gundry Dep., 56:14-25.

         The story of Gundry and Ochoa's relationship dates back to 2013, when Ochoa lost “more than half” of her payroll staff. Dkt. No. 41, Ochoa Decl., ¶ 78. Suspecting problems in that department, Ochoa recommended hiring a new auditing firm to review the payroll. Id., ¶ 79. The auditors found various issues. Id., ¶ 81. Gundry learned of the 2013 payroll errors in fall 2014.

         Dkt. No. 38, Gundry Decl., ¶ 18. He recalled concluding that the payroll errors occurred “due to Plaintiff's poor oversight.” Dkt. No. 38, Gundry Decl., ¶ 20; Gundry Dep., 21:22-25. Gundry testified that he never spoke to Ochoa about the payroll audit or issued any written discipline to her related to the 2013 payroll problems. Gundry Dep., 15:15-24, 20:20-23, 21:22-25.

         The payroll investigation spawned another inquiry, this one into misrepresentations an SCCOE staff member made to the IRS. Though Gundry suspected that Ochoa may have been involved, Gundry ultimately testified that the misrepresentations “had nothing to do with Ms. Ochoa.” Dkt. No. 38, Gundry Decl., ¶¶ 27-29; Gundry Dep., 28:7-25.

         The events related to Ochoa's first instance of alleged protected speech concern Gundry's compensation, which included moving expenses. Ochoa states that she first told Gundry that his moving expenses were taxable in August 2014. Dkt. No. 41, Ochoa Decl., ¶ 13. Gundry disputed this account when the issue came to a head in February 2015, claiming in an e-mail that Medina said his moving expenses would not be taxed. Id., Ex. A. Medina denies having said this. Dkt. No. 44, Medina Decl., ¶ 6.

         Regardless of what Gundry had previously been told, he was “very irritated” to receive a revised W-2 in February 2015 listing his moving expenses as taxable income. Dkt. No. 41, Ochoa Decl., Ex. A. After exchanging e-mails with Ochoa about the issue, and questioning why Ochoa and not Ted O-SCCOE's Director of Business Services, who worked directly for Ochoa and handled W-2s-had responded to his concerns, Gundry went to Ted O's office and yelled at him. Dkt. No. 42, O Decl., ¶¶ 7-21; Dkt. No. 38, Gundry Decl., ¶ 35 (explaining that he was angry about O's unresponsiveness). According to O, Gundry said “if he could not trust Ochoa and [O], we had ‘to go, ' and [Gundry] made a hand gesture with his thumb, like ‘you're out of here.'” Dkt. No. 42, O Decl., ¶ 21, 22. O reports being so frightened by the confrontation that he purchased pepper spray in case Gundry became violent. Dkt. No. 42, O Decl., ¶ 23.

         Though the record does not contain any direct evidence that Gundry asked Ochoa or O to change his W-2, both Ochoa and O understood Gundry's comments as an attempt to bully them into doing so. Dkt. No. 42, O Decl., ¶¶ 24, 25, 28; Dkt. No. 41, Ochoa Decl., ¶¶ 29, 42-46, 57. Further, both believed that intentionally preparing an incorrect W-2 would be tax fraud, and that Gundry's bullying behavior was itself harassment in violation of state or federal law. Id. Fearing retaliation, Ochoa reported these events to Darcie Green, the President of the Board of Education. Dkt. No. 41, Ochoa Decl., ¶¶ 49, 51; Dkt. No. 39, Mehta Decl., Ex. B, Green Dep. [“Green Dep.”], 42:8-11, 49:16-24, Ex. 2. Gundry denies ever being aware of Ochoa's complaint to Green, Dkt. No. 38, Gundry Decl., ¶ 55, and states that he did not know that Ochoa was involved in O's complaint, id., ¶ 36. Nevertheless, Gundry testified that Green told him to “watch [his] tone.” Gundry Dep., 84:2-9. And Green recalled speaking with Gundry about the complaint from Ochoa and O multiple times. Green Dep., 71:5-72:10.

         After this episode, Ochoa reports that she observed a change in Gundry's demeanor towards her, which she describes as a “distinct chilling” in his behavior. Dkt. No. 41, Ochoa Decl., ¶ 70. She also states that Gundry ceased his regular meetings with her in March 2015. Id., ¶ 69. At around the same time, Gundry informed Gordillo in Human Resources that he intended to terminate Plaintiff's employment and asked him to draft a termination letter and separation agreement. Gordillo Decl., ¶ 10.

         Ochoa's second instance of alleged protected speech relates to a California Public Records Act (“CPRA”) request concerning contracts promoted by Gundry. Though there were other contracts involved, one set involved Mark Skvarna, a consultant Gundry hired to assist with various tax and payroll problems. Dkt. No. 38, Gundry Decl., ¶ 40. Gundry came to trust Skvarna, ultimately concluding by the end of the 2014-2015 academic year that he could replace Ochoa. Id., ¶ 41. Not everyone felt as comfortable with Skvarna: both Cordova and Medina complained about his racist and sexist comments. Dkt. No. 43, Cordova Decl., ¶ 15; Dkt. No. 44, Medina Decl., ¶ 9. Medina also notified Gundry that Skvarna's business was not registered with the California Secretary of State. Gundry Dep., 25:10-14.

         In June 2015, reporter Josh Koehn of San Jose Inside submitted a CPRA request for various SCCOE contracts. Communications Director Kenneth Blackstone fielded the request. Dkt. No. 38, Blackstone Decl., ¶¶ 1, 2. After speaking to Gundry, Blackstone produced the documents deemed responsive on June 15, 2015. Id., ¶ 3. The next day, Ochoa e-mailed Blackstone and Gundry, expressing her concern that Blackstone's June 15 e-mail was inaccurate.

         Id., ¶¶ 4, 5, Ex. 3. She also forwarded additional documents she considered responsive. Id. Blackstone met with Gundry to discuss Ochoa's e-mails, and Gundry directed Blackstone to “get a legal opinion” about whether the new documents were responsive. Id., ¶ 6. SCCOE produced the additional contracts to Koehn, and, after Ochoa e-mailed Blackstone with another potentially responsive document, SCCOE produced that document, as well. Id., ¶¶ 6, 7, 8. Ochoa's e-mails expressed her concerns that SCCOE was violating the CPRA. Id., Exs. 5, 6.

         Blackstone asserts that Gundry “never suggested that any responsive documents should be withheld” and “didn't seem to care that the documents had been requested by a reporter.” Id., ¶ 10. Gundry echoes Blackstone's remarks, stating that he initially disagreed with Ochoa that the documents were responsive, but that he “had no interest in not complying with the law.” Gundry Dep., 247:13-19.

         Ochoa points out several inconsistencies in Gundry and Blackstone's accounts of this incident. First, Gundry testified that Medina refused to discuss the CPRA requests and that outside counsel was not involved, and he denies instructing Blackstone to speak to outside counsel. Gundry Dep., 190:5-21. But Blackstone testified that Gundry had directed him to speak to outside counsel. Dkt. No. 40, Mehta Decl., Ex. C., Blackstone Dep., 96:5-9. Medina denied ever refusing to help Blackstone with Koehn's CPRA request. Dkt. No. 44, Medina Decl., ¶ 7. And Cordova recalls Medina and Blackstone arguing over CPRA requests “because [Blackstone] would exclude her from the CPRA process.” Dkt. No. 31, Cordova Decl., ¶ 31. Medina's employment was terminated shortly after this episode. Dkt. No. 44, Medina Decl., ¶ 15.

         Gundry reports several additional grievances related to Ochoa's performance. First, he asserts that Ochoa “almost never attend[ed] meetings of the Business Administration Steering Committee (“BASC”), which he expected her to attend. Dkt. No. 38, Gundry Decl., ¶¶ 37-39. Ochoa states that the only time Gundry asked her about BASC attendance was in December 2014. Dkt. No. 41, Ochoa Decl., ¶ 90. Second, Gundry expressed his dissatisfaction with Ochoa's presentations to the Board, which he found shallow. Dkt. No. 38, Gundry Decl., ¶ 33. But Gundry testified that the Board appeared satisfied with Ochoa's presentations, Gundry Dep., 45:24-47:22, and Green testified that he found the presentations satisfactory, Green Dep., 39:13- 15. Gundry did not discuss his concerns about the presentations with Ochoa. Gundry Dep., 47:9-12. Finally, Gundry asserts that Ochoa's micromanagement of her employees created inefficiencies. Dkt. No. 38, Gundry Decl., ¶ 30. The only time Ochoa recalled Gundry complaining to her about micromanagement was during the W-2 episode, when he accused her of micromanaging Ted O. Dkt. No. 41, Ochoa Decl., ¶ 42.

         Gundry met with the Board in closed session on June 29, 2015. Dkt. No. 38, Gundry Decl., ¶ 53. On July 2, 2015, Gundry terminated Ochoa's employment. Id., ¶ 54. As part of her separation, SCCOE paid Ochoa $271, 242.76, covering her monthly compensation for the months remaining on the contract and her travel, cell phone, deferred compensation, and vacation pay. Dkt. No. 38, Gordillo Decl., ¶ 13.

         Ochoa filed her complaint in this lawsuit in June 2016. She alleges two claims: retaliatory termination in violation of her First Amendment Rights pursuant to 42 U.S.C. Section 1983, and retaliatory termination in violation of California Labor Code Section 1102.5 (a whistleblower statute). Dkt. No. 1. Ochoa seeks damages for lost compensation and employment-related benefits, emotional distress, and out-of-pocket expenses for health care; punitive damages; injunctive relief requiring her reinstatement; and attorney fees and costs. Id.

         In the present motion, Defendants move for summary judgment, or, alternatively partial summary judgment. Defendants assert that they are entitled to summary judgment on Ochoa's First Amendment claim because (1) Ochoa's speech was not a substantial or motivating factor in the adverse employment action, and (2) Gundry would have terminated Ochoa's employment even absent Ochoa's speech. Defendants assert that Ochoa's termination was the result of the payroll problems, conflict with other cabinet members, micromanagement, failures to attend BASC meetings, shallow board presentations, and misrepresentations to the IRS. Defendants next challenge Ochoa's Section 1102.5 claim, asserting that (1) Ochoa did not engage in a protected activity, (2) there was no causal link between Ochoa's alleged protected activity and the adverse employment decision, and (3) Defendants had legitimate, non-retaliatory reasons for the termination. In the alternative, Defendants move for partial summary judgment as to the February 2015 speech, arguing that (1) it did not address a matter of public concern; (2) Gundry did not know about Ochoa's report to Green, so it could not have been a motivating factor in his decision; (3) Ochoa's statements were not protected speech under Section 1102.5; (4) there was no causal link between Ochoa's statements to Green and the employment decision; and (5) the February 2015 statements did not occur within a ...


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