Terry et al v. Register Tapes Unlimited, Inc. et al

Filing 19

MEMORANDUM AND ORDER signed by Senior Judge William B. Shubb on 8/8/2016 re 11 Motion to Dismiss: IT IS ORDERED that Endsley and Mate's motion to dismiss Terry's harassment and hostile work environment claim be, and the same hereby is, GRANTED. Plaintiffs have twenty days from the date this Order is signed to file a Second Amended Complaint, if they can do so consistent with this Order. (Kirksey Smith, K)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo----

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ROBERT TERRY, CREST
CORPORATION, and CREST
IRREVOCABLE BUSINESS TRUST
DBA FREEDOM MEDIA,

CIV. NO. 2:16-00806 WBS AC
MEMORANDUM AND ORDER RE: MOTION
TO DISMISS

Plaintiffs,

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v.
REGISTER TAPES UNLIMITED,
INC.; EDWARD “DOUG” ENDSLEY;
ASHLEY MATE; and DOES 1
through 50, inclusive,

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Defendants.
----oo0oo---Plaintiffs Robert Terry, Crest Corporation, and Crest

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Irrevocable Business Trust DBA Freedom Media brought this breach

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of contract and disability discrimination, retaliation, and

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harassment case against defendants Register Tapes Unlimited, Inc.

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(“RTUI”), Edward “Doug” Endsley, and Ashley Mate.

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Mate now move to dismiss Terry’s harassment and hostile work

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environment claim for failure to state a claim upon which relief
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Endsley and

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can be granted pursuant to Federal Rule of Civil Procedure

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12(b)(6).

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I.

Factual and Procedural Background

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RTUI is a Texas corporation that sells pre-printed

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advertising space on the back of receipt tapes at grocery stores.

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(First Am. Compl. (“FAC”) ¶¶ 4, 14 (Docket No. 6).)

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RTUI’s President and Mate is its Chief Operations Officer and

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both live and work in Texas.

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sales manager for RTUI in the Sacramento region and is the sole

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owner of Crest Corporation and Crest Irrevocable Business Trust

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DBA Freedom Media.

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dismiss is limited to Terry’s harassment and hostile work

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environment claim against Endsley and Mate, the court will limit

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its discussion to the allegations relevant to that claim and all

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references to “plaintiff” are to Terry only.

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(Id. ¶¶ 5-6.)

(Id. ¶¶ 2-3.)

Endsley is

Terry worked as a

Because the pending motion to

In October 2010, plaintiff suffered a traumatic brain

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injury from an automobile accident in Alaska while working for

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RTUI.

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reduced his mental capacity, diminished his memory and processing

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speed, and required an accommodation.

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also experienced migraine headaches, low energy, fatigue, and a

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reduced ability to work for extended periods as a result of the

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accident.

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(Id. ¶ 29.)

Plaintiff informed RTUI that the brain injury

(Id. ¶ 31.)

Plaintiff

(Id. ¶ 29.)
In 2013, RTUI allegedly demoted plaintiff and took away

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“the choicest stores in his Sacramento-area territory” and

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assigned those stores to another sales manager.

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Endsley allegedly “blasted” plaintiff for the reduction in his

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sales and threatened to further decrease his sales territory even
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(Id. ¶ 32.)

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though he allegedly knew that plaintiff’s reduced sales were

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because of plaintiff’s disability.

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allegedly falsely accused plaintiff of stealing another sales

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manager’s accounts and took away commissions plaintiff should

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have received from those accounts.

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(Id. ¶ 33.)

Endsley also

(Id. ¶ 34.)

In March 2014, Mate rejected a ten-year advertising

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contract that plaintiff sold and told plaintiff that a contract

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in excess of three years was against company policy even though

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RTUI allegedly lacked a company policy limiting the duration of a

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sales contract and other sales managers had entered into

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contracts for longer than three years.

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2014, Mate “failed to protect Plaintiff’s interests in his

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accounts with RTUI” when he failed to send an email informing

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other sales managers that a certain account belonged to

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plaintiff.

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absences, Mate also allegedly instructed other RTUI employees to

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contact plaintiff with work-related issues.

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(Id. ¶ 37.)

(Id. ¶ 36.)

In about May

While plaintiff was on medical leaves of

(Id. ¶ 40.)

After amending the Complaint once as a matter of

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course, plaintiffs assert ten claims in the FAC: (1) breach of

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contract against RTUI; (2) breach of the implied covenant of good

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faith and fair dealing against RTUI; (3) disability

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discrimination in violation of subsection 12940(a) of

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California’s Fair Employment and Housing Act (“FEHA”), Cal. Gov’t

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Code §§ 12940-12951, against RTUI; (4) failure to engage in the

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interactive process in violation of subsection 12940(n) of FEHA

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against RTUI; (5) failure to accommodate in violation of

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subsection 12926(m)(1) of FEHA against RTUI; (6) retaliation in

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violation of subsection 12940(h) of FEHA against RTUI; (7)
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harassment and hostile work environment based on disability in

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violation of subsection 12940(j)(1) of FEHA against RTUI,

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Endsley, and Mate; (8) failure to prevent discrimination,

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harassment, and retaliation in violation of subsection 12940(k)

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of FEHA against RTUI; (9) wrongful adverse action in violation of

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public policy against RTUI; and (10) failure to pay wages against

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RTUI.

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dismiss plaintiff’s harassment and hostile work environment claim

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for failure to state a claim upon which relief can be granted.

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II.

This Order is limited to Endsley and Mate’s motion to

Analysis
On a motion to dismiss under Rule 12(b)(6), the court

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must accept the allegations in the complaint as true and draw all

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reasonable inferences in favor of the plaintiff.

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Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by

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Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S.

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319, 322 (1972).

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must plead “only enough facts to state a claim to relief that is

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plausible on its face.”

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544, 570 (2007).

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motion to dismiss does not need detailed factual allegations, a

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plaintiff’s obligation to provide the ‘grounds’ of his

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entitle[ment] to relief’ requires more than labels and

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conclusions . . . .”

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original) (citations omitted).

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elements of a cause of action, supported by mere conclusory

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statements, do not suffice,” and “the tenet that a court must

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accept as true all of the allegations contained in a complaint is

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inapplicable to legal conclusions.”

Scheuer v.

To survive a motion to dismiss, a plaintiff

Bell Atl. Corp. v. Twombly, 550 U.S.

“While a complaint attacked by a Rule 12(b)(6)

Twombly, 550 U.S. at 555 (alteration in
“Threadbare recitals of the

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Iqbal, 556 U.S. at 678.

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“The plausibility standard is not akin to a

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‘probability requirement,’ but it asks for more than a sheer

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possibility that a defendant has acted unlawfully.”

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a complaint pleads facts that are merely consistent with a

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defendant’s liability, it stops short of the line between

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possibility and plausibility of entitlement to relief.”

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(internal quotation marks and citation omitted).

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facial plausibility when the plaintiff pleads factual content

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that allows the court to draw the reasonable inference that the

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defendant is liable for the misconduct alleged.”

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Id.

“Where

Id.

“A claim has

Id.

FEHA makes it unlawful for “an employer . . . or any

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other person, because of . . . disability . . . to harass an

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employee.”

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facie case for a harassment and hostile work environment claim

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under FEHA, the plaintiff must show he was subjected to conduct

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or comments that were “(1) unwelcome; (2) because of [his

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disability]; and (3) sufficiently severe or pervasive to alter

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the conditions of [his] employment and create an abusive work

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environment.”

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4th 264, 279 (2006) (internal quotation marks and citations

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omitted).

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not actionable,” because the conduct must be “severe or pervasive

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enough to create an objectively hostile or abusive work

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environment.”

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actionable, [an] objectionable environment must be both

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objectively and subjectively offensive, one that a reasonable

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person would find hostile or abusive, and one that the victim in

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fact did perceive to be so.” (internal quotation marks and

Cal. Gov’t Code § 12940(j)(1).

To establish a prima

Lyle v. Warner Bros. Television Prods., 38 Cal.

“‘[M]erely offensive’ comments in the workplace are

Id. at 283; see also id. at 284 (“To be

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citation omitted)).
In Reno v. Baird, the California Supreme Court

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distinguished between the type of conduct that constitutes

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harassment for which an individual employee could be personally

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liable from the type of conduct that constitutes discrimination

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or retaliation for which only the employer could be liable.

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Cal. 4th 640 (1998); see also Jones v. Lodge at Torrey Pines

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P’ship, 42 Cal. 4th 1158, 1173 (2008) (holding that only the

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employer can be liable for retaliation under FEHA).

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Harassment

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“consists of a type of conduct not necessary for performance of a

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supervisory job” and is “presumably engaged in for personal

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gratification, because of meanness or bigotry, or for other

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personal motives.”

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quotation marks and citation omitted).

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derogatory drawings, [] physically interfer[ing] with freedom of

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movement, [and] engag[ing] in unwanted sexual advances” are

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examples of conduct that is “avoidable and unnecessary to job

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performance” and could amount to harassment.

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(internal quotation marks and citation omitted).

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Reno, 18 Cal. 4th at 645–46 (internal
The use of “slurs or

Id. at 646

On the other hand, “[m]aking a personnel decision is

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conduct of a type fundamentally different from the type of

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conduct that constitutes harassment” and may give rise to only a

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discrimination claim against the employer.

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quotation marks and citation omitted).

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“commonly necessary personnel management actions such as hiring

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and firing, job or project assignments, office or work station

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assignments, promotion or demotion, performance evaluations, the

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provision of support, the assignment or nonassignment of
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Id. (internal

Under this limitation,

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supervisory functions, deciding who will and who will not attend

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meetings, deciding who will be laid off, and the like, do not

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come within the meaning of harassment.”

Id. at 646-47 (internal

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quotation marks and citation omitted).

Because making “personnel

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decisions is an inherent and unavoidable part of the supervisory

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function,” even if the actions are retrospectively found to be

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discriminatory, FEHA limits recourse to a discrimination claim

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against the employer, in part because a supervisor cannot perform

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his job and “refrain from engaging in the type of conduct which

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could later give rise to a discrimination claim.”

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quotation marks and citation omitted).

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Id. (internal

Here, all of plaintiff’s factual allegations about

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Endsley and Mate’s conduct involve necessary personnel decisions

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and cannot constitute harassment under FEHA as a matter of law.

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Plaintiff has alleged only that he was demoted and lost his best

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accounts, (FAC ¶ 32); Endsley “blasted” him for his declining

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sales, threatened to further decrease his sales territory, and

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took away plaintiff’s commissions based on a false accusation

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that plaintiff had stolen another sales manager’s account, (id.

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¶ 33); and Mate rejected the duration of a contract plaintiff

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sold based on a non-existent policy, failed to protect one of

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plaintiff’s accounts, and had other employees contact plaintiff

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while he was on medical leave for work-related issues, (id.

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¶ 36).

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because of plaintiff’s disability, all of the decisions were

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necessary personnel decisions and plaintiff’s remedy is limited

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to a discrimination claim against his employer.

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v. Barton, No. 1:14-CV-00024 AWI, 2015 WL 2455138, at *19 (E.D.

Even assuming Endsley and Mate made these decisions

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Accord Allford

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Cal. May 22, 2015) (citing cases dismissing FEHA harassment

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claims based on allegations that a supervisor reprimanded

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employee, monitored when employee arrived and what employee did

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during workday, and threatened employee with termination if

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employee did not return to work).

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IT IS THEREFORE ORDERED that Endsley and Mate’s motion

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to dismiss Terry’s harassment and hostile work environment claim

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be, and the same hereby is, GRANTED.

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Plaintiffs have twenty days from the date this Order is

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signed to file a Second Amended Complaint, if they can do so

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consistent with this Order.

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Dated:

August 8, 2016

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