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Russell v. Kronos Inc.

United States District Court, N.D. California

December 11, 2019

TALA RUSSELL, Plaintiff,


          EDWARD M. CHEN United States District Judge.

         Plaintiff Tala Russell has filed an employment discrimination case against her former employer Kronos Inc. The specific claims she has asserted are as follows:

• Sex discrimination in violation of FEHA and Title VII (claims 1 and 7).
• National origin discrimination in violation of FEHA and Title VII (claims 2 and 8).
• Race discrimination in violation of FEHA and Title VII (claims 3 and 9).[1]
• Retaliation in violation of FEHA and Title VII (claims 4 and 10).
• Failure to prevent discrimination and harassment in violation of FEHA (claim 5).
• Wrongful discharge in violation of public policy (claim 6).

         Currently pending before the Court is Kronos's motion for summary judgment. Kronos asks for summary judgment on all causes of action.


         The evidence submitted by the parties reflects as follows. (Where there are disputes of fact, or evidentiary objections in need of ruling, they are so noted.)

         Ms. Russell is a Hispanic woman. See Burton Decl., Ex. 211 (Russell Depo. at 18). She worked for Kronos from approximately September 2013 to July 2017 (almost four fiscal years[2]) as a Senior Sales Executive. Kronos terminated Ms. Russell purportedly because of poor performance. The decision to terminate was made by her direct supervisor, Chris Lipscomb, with the approval of Human Resources and Mr. Lipscomb's superiors (Tony Lombardi and Robert Kennedy). See Cullen Decl. ¶ 9.

         For Ms. Russell's first year of employment with Kronos (FY2014), there is no evidence in the record about her performance.[3]

         For Ms. Russell's second year of employment (FY2015), it appears that she achieved 66% of her annual quota. See Cullen Decl., Ex. 178 (draft LOC). Her direct supervisor at the time, Mike Solomon gave her a performance review that included some positives but also included some criticisms. His overall rating for her performance was “Inconsistent.” Hudson Decl., Ex. 63 (Performance Review at 10).

         For Ms. Russell's third year of employment (FY2016), Ms. Russell achieved 95% of her quota. See Russell Decl. Ex. 194 (FY2016 Worldwide Sales Rankings). Kronos maintains, however, that quota attainment is not the only metric on which a sales executive's performance is measured. See Cullen Decl. ¶ 8; Lipscomb Decl. ¶ 28. Kronos also asserts that the 95% quota attainment for FY2016 is misleading because it includes split commissions. According to Kronos, if two deals (with DirecTV and U.K. Celesio) are excluded because they involved split commissions, then Ms. Russell's quota attainment for FY2016 is actually 32%. See Lipscomb Decl., Ex. 164 (Mr. Lipscomb's notes); Cullen Decl. ¶ 7 & Ex. 170 (email). Kronos adds that, even if only the U.K. Celesio deal is excluded (i.e., Ms. Russell disputes that the DirecTV deal involved a split commission), her quota attainment is only about 63%. See Cullen Decl., Ex. 178 (draft LOC). In response, Ms. Russell argues that “there is no written requirement that a sales executive must complete the deals alone to be successful.” Opp'n at 2.

         In or about October 2016, i.e., following the close of FY2016, Ms. Russell's direct supervisor at the time, Mr. Solomon, drafted a Letter of Concern (“LOC”) regarding Ms. Russell's performance. See Cullen Decl., Ex. 178 (LOC); Cullen Decl., Ex. 177 (email). In the draft LOC, Mr. Solomon questioned her sales productivity (based on her quota attainments for the prior two years) and also her “pipeline” development (i.e., possible deals). The LOC was never issued because Mr. Solomon resigned thereafter and “it was felt the matter should wait for plaintiff's new supervisor to assume his or her post.” Cullen Decl. ¶ 6.

         In addition, in or about October 2016, Kronos reorganized the “vertical” (i.e., line of business) in which Ms. Russell worked. More specifically, Kronos created a new subvertical, “targeting larger accounts with an international footprint, ” and “[s]everal sales executives, including Tommy Chacko, were promoted to a Global Account Manager at that time.” Lombardi Decl. ¶ 5. The restructuring resulted in the transfer of three of Ms. Russell's accounts to Mr. Chacko. The three accounts were McKesson, Microsoft, and Teletech.[4] See Lombardi Decl. ¶ 5. According to Ms. Russell, the transfer of the three accounts was a major factor in her sales numbers going down. However, she testified at her deposition that she did not have any reason to believe that the transfer of the accounts had anything to do with her sex or ethnicity.[5] See Hudson Decl., Ex. 190 (Russell Depo. at 41-42).

         For the McKesson account, Ms. Russell continued to do work even after the transfer of the account to Mr. Chacko - through approximately March 2017. See Russell Decl., Ex. 207 (emails). Ms. Russell's direct supervisor at the time (Mr. Lombardi) told Ms. Russell that she would be entitled to split commissions with Mr. Chacko for the first three quarters of FY2017. See Lombardi Decl. ¶¶ 6-7. Ms. Russell was ultimately fired at the end of 3Q FY2017 before any McKesson deals actually closed and thus she never received any split commissions. See Russell Decl., Ex. 207 (emails). According to Ms. Russell, Mr. Chacko deliberately delayed in closing the McKesson deals in order to deprive her of the split commissions. Mr. Chacko, however, denies such. See, e.g., Chacko Reply Decl. ¶ 3 (testifying that “[t]he notion that I would deliberately delay . . . in order to avoid sharing a commission is absurd” because, “[a]s anyone involve[d] in sales understands, securing the customer's signature on a contract is the only effective assurance that a sale will occur”); Chacko Reply Decl. ¶ 5 (testifying about the “[m]any factors caus[ing] the closing of the McKesson contract to be delayed”). Mr. Chacko is not a named defendant and he is not alleged to be a decisionmaker here.

         Mr. Lipscomb became Ms. Russell's direct supervisor in or about February 2017. See Lombardi Decl. ¶ 10. Approximately a month later, in March 2017, Mr. Lipscomb told Ms. Russell that she “would be more suited to take a customer service role.” Hudson Decl., Ex. 46 (Ms. Russell's notes). In April 2017, Mr. Lipscomb began to work with Human Resources on a LOC regarding Ms. Russell's performance. See Lipscomb Decl. ¶ 13. According to Mr. Lipscomb, there were several considerations that led to his conclusion that a LOC was necessary. For example, Ms. Russell's quota attainment at the time was below 12% (2Q FY2017 had just closed). See Lipscomb Decl. ¶ 4. Also, Ms. Russell's opportunities in the pipeline were not qualified and were not progressing through sales stages. See Lipscomb Decl. ¶ 6; see also Lombardi Decl. ¶ 9 (testifying that a qualified opportunity is “an opportunity where a prospect has an actual need for a product or service offered by Kronos, and there is a reasonable probability that that prospect will actually purchase from Kronos”). Sales productivity and pipeline development were issues that had also been identified by both of Ms. Russell's prior direct supervisors, Mr. Solomon (who authored the draft LOC discussed above) and Mr. Lombardi. See Lombardi Decl. ¶ 9 (discussing pipeline development).

         Mr. Lipscomb issued the LOC to Ms. Russell on April 13, 2017. Areas of concern identified on the LOC included sales productivity (based on quota attainment for the year) and pipeline development. See Lipscomb Decl., Ex. 112 (LOC).

         On June 2, 2017, Mr. Lipscomb issued a performance improvement plan (“PIP”) to Ms. Russell, purportedly because her performance continued to be poor. See Lipscomb Decl., Ex. 20 (PIP); Lipscomb Decl., 127 (email). In the PIP, Mr. Lipscomb set certain performance goals for Ms. Russell to obtain by July 14, 2017 (i.e., just after 3Q FY2017). For example, “[a] minimum quota attainment of 75% YTD is expected.” Lipscomb Decl., Ex. 20. Also, “[e]xpect a pipeline of 3x annual quota (with movement through stages) and forecast of minimum 80% of quota as well (monthly & quarterly).” Lipscomb Decl., Ex. 20. Ms. Russell suggests that these were unrealistic goals.

         Shortly before the PIP review period was to close, Mr. Lipscomb communicated with Human Resources about Ms. Russell's performance. He noted, inter alia, that her quota attainment for FY2017 remained quite low. See Lipscomb Decl., Ex. 164 (Mr. Lipscomb's notes) (indicating 9% for Q1, 1% for Q2, and 7% for Q3). He also indicated that Ms. Russell's forecast for Q4 was questionable. See Lipscomb Decl., 164; see also Lipscomb Decl. ¶¶ 26, 29 (indicating that two opportunities identified by Ms. Russell never closed).

         The decision to terminate Ms. Russell was made by Mr. Lipscomb with the approval of Human Resources and his two superiors, Mr. Lombardi (who had been Ms. Russell's direct supervisor for a brief period of time) and Mr. Kennedy. According to Mr. Lipscomb,

[t]he decision to terminate Plaintiff in July of 2017 was not a one-dimensional decision based on just plaintiff's quota attainment in fiscal year 2017. We looked at the entire picture, and considered other factors, including the following: (1) plaintiff had worked for Kronos as a Senior Sales Executive since 2013, and therefore had almost four years to build her pipeline; (2) plaintiff was assigned to a mature vertical, the Services and Distribution vertical; (3) during FY 2017 plaintiff had not demonstrated progress in moving opportunities in her pipeline through the various sales stages; as of July of 2017, it did not appear that any significant sales were on the horizon; (4) I had personally observed plaintiff's performance during numerous sales meetings, and her performance was unimpressive; she often exhibited a serious lack of preparation and planning, as well as a lack of attention and participation in the meetings; (5) although plaintiff had nominally achieved 95% of her quota in FY 2016, this was the only year she came close to achieving her quota, and she did so only because of major transactions on which another sales representative was, at a minimum, a major contributor; and (6) plaintiff's forecasting of sales was generally neither sufficient nor accurate.

Lipscomb Decl. ¶ 31. The decision to terminate was communicated to Ms. Russell on July 17, 2017. See Lipscomb Decl. ¶ 30.

         Ms. Russell was replaced by a woman. See Cullen Decl. ¶ 12.


         A. Legal Standard

         Federal Rule of Civil Procedure 56 provides that a “court shall grant summary judgment [to a moving party] if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). An issue of fact is genuine only if there is sufficient evidence for a reasonable jury to find for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). “The mere existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party].” Id. at 252. At the summary judgment stage, evidence must be viewed in the light most favorable to the nonmoving party and all justifiable inferences are to be drawn in the nonmovant's favor. See Id. at 255.

         Where a defendant moves for summary judgment based on a claim for which the plaintiff bears the burden of proof, the defendant need only by pointing to the plaintiff's failure “to make a showing sufficient to establish the existence of an element essential to [the plaintiff's] case.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986) (stating that, “if the movant bears the burden of proof on an issue, either because he is the plaintiff or as a defendant he is asserting an affirmative ...

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