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Husman v. Toyota Motor Credit Corp.

California Court of Appeals, Second District, Seventh Division

June 21, 2017

JOSEPH HUSMAN, Plaintiff and Appellant,
v.
TOYOTA MOTOR CREDIT CORPORATION, Defendant and Respondent.

         APPEAL from a judgment of the Superior Court of Los Angeles County No. BC523358, Holly E. Kendig, Judge. Reversed and remanded.

          Barrera & Associates and Patricio T.D. Barrera for Plaintiff and Appellant.

          Paul Hastings, James A. Zapp, Paul W. Cane, Jr. and Felicia A. Davis, for Defendant and Respondent.

          PERLUSS, P. J.

         Joseph Husman, a 14-year employee of various Toyota divisions at its Torrance campus in southern California, ran the diversity and inclusion program for Toyota Financial Services U.S.A., the brand name for Toyota Motor Credit Corporation (TFS or Toyota). Following his termination in 2011, Husman sued Toyota for discrimination and retaliation in violation of the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.), [1] as well as for wrongful discharge, alleging he had been fired from his executive-level management position because of his sexual orientation and criticisms he made concerning Toyota's commitment to diversity. The trial granted Toyota's motion for summary judgment and entered judgment in its favor. Because Husman presented sufficient evidence a substantial motivating factor for his termination was invidious sex or gender stereotyping related to his sexual orientation-the perception he was “too gay”-we reverse the judgment. However, Husman failed to raise a triable issue of material fact to support his FEHA retaliation and related common law tort claim. Accordingly, on remand the trial court is to enter an order granting Toyota's alternative motion for summary adjudication as to those two causes of action.

         FACTUAL AND PROCEDURAL BACKGROUND

         1. Husman's Advancement at Toyota

         Husman was hired by Toyota in April 1997 and, except for a brief period in 2000, worked in various management-level positions in Toyota's marketing, sales and financial services divisions until his 2011 termination. In 2007 George Borst, the chief executive officer of TFS, decided to create a new management position to enhance Toyota's diversity outreach under the supervision of Julia Wada, TFS's vice president for human resources, who was then Husman's supervisor. When Wada's initial efforts to identify a candidate were unsuccessful, Borst suggested she consider Husman, whom he knew and liked.[2] Borst and Wada knew Husman was gay and had, as Borst put it, “a passion for diversity.” Borst harbored some concern about Husman's reputation for gossiping, but Wada assured Borst she could manage him. Shortly thereafter, Wada selected Husman as TFS's first national manager for diversity and inclusion. He continued to report to Wada.

         By all accounts Husman excelled at important components of his job. He successfully implemented a diversity training program for TFS. During his tenure Toyota was recognized as one of the top 50 companies for diversity by Diversity, Inc. and, beginning in 2009, received a perfect score on the Human Rights Campaign's corporate equality index gauging corporate support of lesbian, gay, bisexual and transgender (LGBT) rights.[3] Toyota also sponsored many national- and community-based philanthropic events, including AIDS Walk LA. Husman's performance was rated as “very good” on annual performance reviews (4 on a scale of 1 to 5), and he received significant annual bonuses. In March 2010 the TFS management committee rewarded him with an “Extraordinary Performance Award, ” in recognition of what Borst described as “put[ting] D[iversity] and I[nclusion] on the map at TFS.” In thanking Borst, Wada and David Pelliccioni, TFS's chief administrative officer and senior vice president of sales, marketing and operations, for the award, Husman also thanked them “for all you have each done to personally support my efforts at TFS....”

         Notwithstanding Husman's impressive employment reviews, Wada believed his internal performance could be improved and counseled him to develop stronger relationships with executive leaders to demonstrate the value of his programs and secure their continued support. She also counseled him on two occasions about leadership role modeling: once, after another manager heard him make disparaging comments about a Toyota executive, and again after he told a self-deprecating joke that made another employee feel uncomfortable.

         2. Husman's Promotion to an Executive-level Position

         These complaints did not impede Husman's career advancement. In August 2010 he was promoted to an executive-level position as the corporate manager of corporate social responsibility, again with Borst's backing. His duties encompassed TFS's efforts in the areas of diversity and inclusion, as well as corporate philanthropy. In his new capacity he reported to Ann Bybee, TFS's vice president for corporate strategy, communications and community relations. Bybee, in turn, reported to Pelliccioni. Like Wada and Borst, Bybee and Pelliccioni had known Husman for more than a decade and knew he identified as gay. Bybee considered him a friend and had no reservations about his promotion. Pelliccioni later stated he had doubts about Husman's promotion but did not express them at the time in light of Borst's support.

         In early 2011 Bybee began to have concerns about Husman's frequent absences from the office and lax management of his team. She counseled him to adjust his schedule to allow more time in the office. Soon thereafter, Bybee learned from Tess Elconin, a human resources manager, of several complaints stemming from inappropriate comments Husman had allegedly made to his coworkers. After a three-week investigation Bybee and Elconin concluded, having corroborated the allegations with at least two sources, that Husman told an applicant for a posted job who had just returned from pregnancy leave that she was “on the mommy track”; instructed his team not to use sports analogies when explaining concepts to women because they would respond better to cooking or gardening analogies; declared the area near his office to be a “Republican Free Zone”; told another woman who recently had a baby that her life was now over; commented on the physical attributes of other employees, referring to them as “short and stocky, ” “always having plates of food, ” “too skinny” and “wasting away”; and disparaged executives as “pleated pants.”[4]

         In April 2011 Bybee and Elconin advised Husman of the results of the investigation and told him he would receive a written warning, certain reduced performance ratings and, consequently, a slightly lower bonus. Because Husman was out of the office the rest of the month, he was not presented with the warning until May 2011. Upset, he refused to sign the warning letter and attempted to negotiate its wording, which had already been reviewed by Borst and Pelliccioni.[5] Bybee made some minor edits to the letter, but Husman still refused to sign.

         After receiving the warning Husman became increasingly uncooperative with Bybee, who requested that Pelliccioni intervene. When Pelliccioni asked to meet with Husman in June 2011, Husman initially declined the meeting. Pelliccioni told him the meeting was not optional. Husman finally met with Bybee and Pelliccioni on June 23, 2011. During the meeting Pelliccioni informed Husman the company wanted him to succeed and offered to hire an executive coach to assist him in meeting their expectations, a strategy Toyota had successfully utilized in the past. In a private meeting with Pelliccioni later that day, Husman expressed his frustration and anger with the disciplinary measures, which he felt were unfair. At some point in these meetings Husman told Pelliccioni he felt Toyota was not supporting the diversity and inclusion program and did not grasp what Husman was trying to do.

         Although Borst and Pelliccioni later stated they had no thoughts of terminating Husman in June 2011, an episode at a diversity awards dinner earlier that month had further alienated Husman. In the fall of 2010 Husman had submitted an application nominating Borst for a corporate leadership award from Diversity Best Practices, Inc. Borst was selected as a recipient of the award, which was conferred at a dinner in New York in early June 2011. In what he later characterized as a joke, Borst said in accepting the award that his goal was to fire Husman. He explained that in the future he hoped a diversity and inclusion program would no longer be necessary at Toyota. Husman believed Borst was mocking him and did not truly care about the issue of diversity.

         Husman's frustration also stemmed from his belief other Toyota executives, including Borst and Pelliccioni, had not been disciplined for comments about employees far worse than those for which he had been disciplined. Pelliccioni had also made comments Husman perceived as anti-gay, observing that Husman made “a very clear statement” about his sexual orientation and should cut his hair and ridiculing him for wearing a scarf as an accessory when it was not cold outside. Husman complained about these comments to Wada and Bybee; but they declined to correct Pelliccioni, who was their boss.

         Husman also believed Pelliccioni paid only lip service to Toyota's sponsorship of events like AIDS Walk LA but did not participate in a meaningful way. When Husman asked Pelliccioni to include AIDS Walk LA on the list of organizations eligible for automatic payroll deductions, Pelliccioni refused on the ground the list was restricted to national organizations. Pelliccioni was aware Husman complained about this decision to Vincent Bray, another executive involved in approving the list. In August 2011 Husman also expressed his frustration with what he perceived as Toyota's lack of progress in supporting its LGBT employees to the company's Diversity Advisory Board, which was comprised of prominent national figures. Asked by one board member about the state of affairs for Toyota's LGBT employees, Husman answered that Toyota had made some progress but had a long way to go, a statement he believed caused Borst to treat him coldly.

         Bybee in turn became increasingly frustrated with what she perceived as Husman's insubordination and his lack of progress on assigned tasks.[6] During the summer he failed to implement Pelliccioni's offer of an executive coach. He continued to be frequently absent from the office and avoided meetings with Bybee. When she asked him to spend more time in the office with his staff and key executives, he told her she was lucky he came into the office at all because of the negative atmosphere. He also referred to her as “low context, ” a term Bybee believed he used in a derogatory manner. When she scheduled a team-building exercise intended to help him strengthen his relationships with his peers, he emailed his response as “tentative, ” even though she had checked his calendar and knew he was free on the scheduled date.

         3. Husman's Termination

         In mid-September 2011 Husman failed to attend two one-on-one meetings with Bybee and resisted attending an executive conference scheduled for September 19, 2011. On September 15, 2011 the executive group (including Husman) received scores from a cultural literacy test administered by a consultant. Husman received the highest score and, referring to the March 2011 investigation, told Bybee he was angry that others who had scored lower had been judging him. Bybee believed this statement revealed Husman had “taken no step forward” after the multiple efforts to assist him. When Borst dropped by her office later that day, she told him she was “at wit's end” and no longer wanted to work with Husman. Later that day, Pelliccioni called her and said, “We're done with Joe.”[7]

         Describing the same events, Borst stated he too had been disturbed by Husman's behavior following the warning letter and viewed Husman's comment to Bybee criticizing those who had scored lower on the cultural literacy test as “the straw that broke the camel's back.” Borst testified he made the decision to terminate Husman after he left Bybee's office and called Pelliccioni from his car to tell him of his decision. He instructed Pelliccioni to provide a generous separation package to allow Husman to leave with dignity. Pelliccioni then called Bybee to pass along those instructions. Pelliccioni told the consultant investigating the termination he did not initiate Husman's termination but was involved in numerous discussions with Bybee, Borst, Wada and members of the legal team about it. According to Pelliccioni, everyone supported the decision.

         Bybee delivered the message in a telephone call to Husman on the following Sunday, September 18, 2011. Bybee and Husman agree she told Husman he was being terminated for “excluding the majority.” Husman claims she also told him he was focusing too much on LGBT issues, a comment he understood as a reaction to his complaint about Pelliccioni's refusal to add AIDS Walk LA to the list of payroll deductions available for charitable gifts by employees and his statement to the Diversity Advisory Board pointing out Toyota's inadequate progress in addressing the issues of LGBT employees. Bybee explained she meant that Husman's job required him “to raise awareness of diversity and inclusion issues within the company” and obtain support, or buy-in, throughout the company for those issues.

         According to Husman, Bybee also told him she was terminating him at the request of Pelliccioni, “who had it out for him, ” and suggested he ask Borst for reconsideration of the decision. Husman texted Borst that evening, apologized for disappointing him, and asked whether the decision could be turned into a “wakeup call” to better his performance. When Borst confirmed the decision, Husman thanked him for all he had done for him over the years and asked if Borst would provide career advice once the dust had settled.

         In a conference call the next day, Elconin, Bybee and general counsel Katherine Adkins proposed a severance agreement allowing Husman to remain on paid administrative leave until November 2, 2011 while the parties negotiated other terms of the agreement. Husman never returned to work, and his duties were assigned to two people: Mark Simmons, who is not gay, was assigned Husman's corporate philanthropy duties; his diversity and inclusion responsibilities were assigned to Stephen Lewis, a gay man.

         4. Husman Alleges He Was Terminated Because of His Sexual Orientation

         On September 23, 2011 Husman's lawyer informed Toyota by email that his client had been subjected to sexual orientation discrimination. After an unsuccessful mediation, Husman also alleged Toyota had retaliated against him.[8]

         Husman sued Toyota on October 3, 2013 alleging sexual orientation discrimination and retaliation under FEHA. He also alleged two common law claims for wrongful termination in violation of public policy paralleling the FEHA claims. Toyota moved for summary judgment on January 8, 2015. At the hearing on March 25, 2015 the court issued a tentative ruling that Husman had raised a triable issue of material fact precluding summary judgment. After a lengthy argument and supplemental briefing, the court issued a ...


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