Husman v. Toyota Motor Credit Corp.

Facts

FEHA “prohibits an employer from, among other things, discharging a person from employment because of his or her gender, gender identity, gender expression or sexual orientation.” (Husman, supra, 12 Cal.App.5th at p. 1180, quoting Gov. Code § 12940, subd. (a).) The statute’s express purposes are “to provide effective remedies that will both prevent and deter unlawful employment practices and redress the adverse effects of those practices on aggrieved persons” (Gov. Code § 12920.5), and the Legislature has mandated that its provisions “shall be construed liberally” to accomplish those purposes (Gov. Code § 12993, subd. (a)). (Husman, supra, 12 Cal.App.5th at p. 1180.) The operative facts must be read against that remedial backdrop.

Joseph Husman was “a 14-year employee of various Toyota divisions” who “ran the diversity and inclusion program for Toyota Financial Services U.S.A.” (TFS), the brand name for Toyota Motor Credit Corporation. (Id. at p. 1173.) Hired in 1997, he rose through marketing, sales, and financial-services management roles. (Id. at p. 1173.) In 2007 George Borst, TFS’s chief executive officer, created a diversity-outreach position and — at the suggestion of human-resources vice-president Julia Wada, then Husman’s supervisor — Husman became “TFS’s first national manager for diversity and inclusion.” (Id. at p. 1173.) Borst and Wada “knew Husman was gay and had, as Borst put it, ‘a passion for diversity.’” (Ibid.)

“By all accounts Husman excelled at important components of his job.” (Id. at p. 1173.) During his tenure Toyota was recognized as a top-50 company for diversity and, beginning in 2009, “received a perfect score on the Human Rights Campaign’s corporate equality index.” (Ibid.) His reviews were rated “very good,” he earned significant bonuses, and in March 2010 the management committee gave him an “Extraordinary Performance Award.” (Id. at p. 1174.) Wada nonetheless counseled him to build stronger executive relationships and, on two occasions, on “leadership role modeling.” (Ibid.)

In August 2010 Husman was promoted, again with Borst’s backing, to an executive-level position as corporate manager of corporate social responsibility, reporting to vice-president Ann Bybee, who in turn reported to David Pelliccioni, TFS’s chief administrative officer and senior vice-president. (Id. at p. 1174.) Bybee “considered him a friend and had no reservations about his promotion,” whereas Pelliccioni “later stated he had doubts” but “did not express them at the time in light of Borst’s support.” (Ibid.)

In early 2011 Bybee grew concerned about Husman’s absences and management of his team. (Id. at pp. 1174–1175.) After a three-week investigation, Bybee and a human-resources manager corroborated several inappropriate comments Husman had made — among them telling a returning-from-leave applicant she was “on the mommy track,” instructing his team to use cooking or gardening rather than sports analogies with women, and declaring an area a “Republican Free Zone.” (Id. at p. 1175.) Husman received a written warning, reduced ratings, and a lower bonus; “[u]pset, he refused to sign the warning letter.” (Id. at pp. 1175–1176.) Relations deteriorated through a June 23, 2011 meeting at which Pelliccioni offered an executive coach. (Id. at p. 1176.)

Critically, Husman testified that 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.” (Id. at p. 1176.) Husman complained about these comments to Wada and Bybee, who “declined to correct Pelliccioni, who was their boss.” (Ibid.)

The firing crystallized on September 15, 2011, after Husman, having scored highest on a cultural-literacy test, told Bybee “he was angry that others who had scored lower had been judging him.” (Id. at p. 1177.) Bybee told Borst she was “at wit’s end”; Pelliccioni later told her, “We’re done with Joe.” (Ibid.) Borst described the comment as “the straw that broke the camel’s back” and testified he made the termination decision from his car. (Id. at pp. 1177–1178.) Bybee told Husman on September 18, 2011 that he was terminated for “excluding the majority”; Husman claims she also said he “was focusing too much on LGBT issues” and that Pelliccioni “had it out for him.” (Id. at p. 1178.) His duties were split between a non-gay manager and Stephen Lewis, “a gay man.” (Id. at p. 1178.)

Procedural history

On September 23, 2011 Husman’s lawyer notified Toyota that his client had been “subjected to sexual orientation discrimination,” and after an unsuccessful mediation Husman added a retaliation theory. (Husman, supra, 12 Cal.App.5th at p. 1179.) Husman sued on October 3, 2013, “alleging sexual orientation discrimination and retaliation under FEHA,” plus “two common law claims for wrongful termination in violation of public policy paralleling the FEHA claims.” (Ibid.)

Toyota moved for summary judgment on January 8, 2015. (Id. at p. 1179.) At the March 25, 2015 hearing the court issued “a tentative ruling that Husman had raised a triable issue of material fact precluding summary judgment,” but “[a]fter a lengthy argument and supplemental briefing, the court issued a final decision granting the motion.” (Ibid.) Judgment was entered against Husman on October 5, 2015, following an unsuccessful reconsideration motion. (Ibid.) The trial judge was Holly E. Kendig.

The Court of Appeal, Second District, Division Seven, in an opinion by Presiding Justice Perluss (Segal, J., and Small, J., sitting by assignment, concurring), reversed in part and affirmed in part. (Id. at p. 1173.) The Supreme Court denied review on September 27, 2017 (S243136). (Id. at p. 1195.) The panel directed that, on remand, summary adjudication be denied as to the discrimination and parallel common-law claims but granted as to the FEHA retaliation and related tort claims. (Id. at pp. 1173, 1194–1195.)

Issue

The dispositive question was whether a FEHA discrimination plaintiff can defeat summary judgment when the employer has shown a genuine, nonpretextual reason for the discharge — that is, whether the mixed-motive “substantial motivating factor” analysis of Harris v. City of Santa Monica (2013) 56 Cal.4th 203 applies on summary judgment and, if so, whether Husman’s evidence of stereotyping satisfied it. As the court framed the inquiry, “[i]f triable issues of material fact exist whether discrimination was a substantial motivating reason for the employer’s adverse employment action, even if the employer’s professed legitimate reason has not been disputed, the FEHA claim is not properly resolved on summary judgment.” (Husman, supra, 12 Cal.App.5th at p. 1186.) A subsidiary issue was whether Husman engaged in protected activity sufficient to support his retaliation and parallel tort claims.

Holding

Reasoning

The court began with the McDonnell Douglas frame, then explained why it is incomplete for mixed-motive cases. California courts “have long used the three-stage burden-shifting approach” of McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792. (Husman, supra, 12 Cal.App.5th at p. 1181.) Under that test the employer, once a prima facie case is shown, must articulate a legitimate reason, after which “the employee then must show that the employer’s reasons are pretexts for discrimination, or produce other evidence of intentional discrimination.” (Ibid.) But as Harris recognized, that framework “‘presupposes that the employer has a single reason for taking an adverse action … and that the reason is either discriminatory or legitimate,’” aiming “‘to ferret out the “true” reason.’” (Id. at p. 1182, quoting Harris, supra, 56 Cal.4th at p. 215.) “‘In a mixed-motives case, however, there is no single “true” reason.’” (Ibid.)

It traced Harris, Price Waterhouse, and the “substantial motivating factor” standard. The court recounted that in Price Waterhouse v. Hopkins (1989) 490 U.S. 228 a senior manager “described as ‘macho’ and ‘masculine’” and told to act “more femininely” established that sex stereotyping is actionable discrimination even where the employer offers a legitimate reason. (Husman, supra, 12 Cal.App.5th at pp. 1182–1183.) Following Harris, the court held the Legislature “intended California workplaces to be free from prohibited discrimination even if the employer acted in part with a legitimate purpose,” so “an employer’s same-decision showing should not be a complete defense to liability.” (Id. at p. 1184.) Quoting Harris, the court stressed that “‘discrimination can be serious, consequential, and even by itself determinative of an employment decision without also being a “but for” cause.’” (Ibid.) The controlling causation standard, drawn from Harris, is that a “plaintiff must demonstrate ‘discrimination was a substantial motivating factor, rather than simply a motivating factor.’” (Id. at p. 1186.)

It made new law by extending Harris’s mixed-motive analysis to the summary-judgment context. Although “Harris concerned an appeal from a jury verdict,” the court held “its mixed-motive analysis translates readily to the summary judgment context.” (Id. at p. 1184.) Acknowledging it had “found no published California decision relying on Harris’s mixed-motive analysis for review of a summary judgment,” the panel borrowed the federal formulation from Quigg v. Thomas County School Dist. (11th Cir. 2016) 814 F.3d 1227: the inquiry “‘requires a court to ask only whether a plaintiff has offered “evidence sufficient to convince a jury that: (1) the defendant took an adverse employment action against the plaintiff; and (2) [a protected characteristic] was a motivating factor.”’” (Id. at pp. 1184–1186.) The court reconciled the two frameworks: “whether a court applies the McDonnell Douglas framework or the mixed-motive analysis … the relevant inquiry devolves to a showing of some discriminatory animus.” (Id. at p. 1186.)

It conceded Toyota carried its burden of a genuine, nonpretextual reason — and corrected the trial court’s rationale. “The summary judgment record plainly demonstrates Toyota had a legitimate, nondiscriminatory reason for discharging Husman that was nonpretextual,” rooted in Bybee’s September 15 frustration with his absences and insubordination. (Id. at p. 1186.) The court rejected the trial court’s reliance on the May 2011 warning, noting “both Bybee and Pelliccioni testified termination was not contemplated” at the June 23 meeting. (Id. at p. 1187, fn. 12.) The burden thus “shifted back to Husman to show his termination was also substantially motivated by impermissible bias.” (Ibid.)

It held Husman had not forfeited mixed-motive analysis. Although “neither party discussed Harris or mixed-motive analysis in its summary judgment papers,” the court “instructed counsel to be prepared at oral argument to address the applicability of Harris.” (Id. at p. 1187.) Distinguishing its own Alamo v. Practice Management Information Corp. (2013) 219 Cal.App.4th 466 as a post-trial affirmative-defense case, the court exercised its discretion to reach the issue because Husman “provided the trial court with all of the elements of a mixed-motive claim,” and “the inquiry at this stage … is essentially the same.” (Id. at pp. 1187–1188.)

It rejected Toyota’s “same-actor” inference and credited the competing “cat’s paw” theory. Toyota leaned on the fact that Borst both championed and fired Husman — “same-actor” evidence supporting “a strong inference … no discriminatory motive” exists. (Id. at p. 1188.) The court explained the inference “has lost some of its persuasive appeal,” citing Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243 and scholarship on “moral licensing” showing that a later negative decision by the same actor “is more likely to have resulted from bias, not less.” (Id. at pp. 1188–1189.) On the record, the inference was defeated because TFS decisions were “made by consultation with members of a management committee,” so “Borst’s claim he made the decision unilaterally is incompatible with the record’s depiction of how management operated.” (Id. at pp. 1189–1190.) Husman’s “cat’s paw” theory — that Pelliccioni’s bias tainted the decision — found support in Bybee’s statements that Husman was fired for “excluding the majority” and that Pelliccioni “had it out for him.” (Id. at p. 1190.)

It treated Pelliccioni’s stereotyping remarks as connected, not stray. Citing Reid v. Google, Inc. (2010) 50 Cal.4th 512, the court explained that “‘[a] stray remark alone may not create a triable issue … . But when combined with other evidence of pretext, an otherwise stray remark may create an “ensemble [that] is sufficient to defeat summary judgment.”’” (Id. at pp. 1190–1191.) Pelliccioni’s comments that Husman had made “‘a very clear statement’” about his orientation, should “cut his hair,” and was ridiculed for wearing a scarf “reveal the same kind of stereotypical thinking that led [the Price Waterhouse] partners not to promote Ann Hopkins.” (Id. at p. 1191.) Drawing on commentary about the “‘gayer’ plaintiff” — “an LGBT person who is treated worse than another employee of the same sexual orientation” who deflects attention from that status — the court reasoned the remarks suggested Husman was seen as “‘too gay,’ … even if a less obviously gay employee would be acceptable.” (Id. at pp. 1191–1192.) “[E]ven if Pelliccioni’s remarks were not made in the direct context of the termination decision,” his position made it “difficult to deny that any bias he felt or expressed … had the capacity to affect management’s perceptions.” (Id. at p. 1192.) Indulging those inferences, Husman “raised a triable issue of material fact that impermissible bias was a substantial motivating factor.” (Ibid.) The court candidly called this “a close case.” (Ibid.)

It affirmed dismissal of the retaliation claim for lack of protected activity. A retaliation plaintiff must have engaged in protected activity, and “‘the relevant question … is … whether the employee’s communications to the employer sufficiently convey the employee’s reasonable concerns that the employer has acted or is acting in an unlawful discriminatory manner.’” (Id. at p. 1193, quoting Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1047.) Husman’s complaint about the AIDS Walk payroll-deduction denial failed because that denial “did not violate any FEHA prohibition,” and his Diversity Advisory Board remark “falls short of communicating a particularized complaint,” reading instead as “an exhortation common among diversity advocates … that … much work remains to be done.” (Id. at pp. 1193–1194.) Because the retaliation claim failed, so did the parallel public-policy tort. (Id. at p. 1195, fn. 15.)

Significance

Husman is the first published California decision to import Harris’s mixed-motive, “substantial motivating factor” analysis into the summary-judgment arena — a gap the court itself flagged. (Husman, supra, 12 Cal.App.5th at p. 1184.) Its doctrinal payload is that an employer’s genuine, nonpretextual reason is no longer a sure ticket to summary judgment. Where the plaintiff cannot show pretext under McDonnell Douglas but can adduce evidence that bias was a “substantial motivating factor,” the claim must go to a jury. The same-decision defense codified in CACI Nos. 2500, 2505, and 2512 thus operates not as a liability shield at the pleading-and-summary-judgment stage but as a remedy-limiting affirmative defense decided by the trier of fact: under Harris, a successful same-decision showing bars “damages, backpay, or … reinstatement” but leaves the plaintiff eligible for “declaratory or injunctive relief” and “reasonable attorney’s fees and costs.” (Id. at p. 1184, fn. 10.)

The opinion is equally notable for its treatment of the same-actor inference. By marshaling Nazir and the “moral licensing” literature, the court refused to let the hirer-equals-firer pattern carry an employer “over the hurdle of summary judgment,” relegating it to one circumstance for the jury to weigh. (Id. at pp. 1188–1189.) Coupled with its endorsement of the “cat’s paw” theory in a layered corporate structure, the decision narrows two of the defense bar’s most familiar summary-judgment levers in discrimination litigation.

Finally, Husman meaningfully advances sexual-orientation law by recognizing the “‘too gay’” or “‘gayer’ plaintiff” theory: discrimination against an employee for failing to conform to stereotypes about how a person of his sexual orientation should present is actionable sex/gender stereotyping under the Price Waterhouse logic, even when a “less obviously gay” employee would have been tolerated. (Id. at pp. 1191–1192.) The holding’s limits are candidly stated — the court called the result “close” and stressed Toyota’s “ongoing efforts to promote diversity.” (Id. at p. 1192.)

Key quotes

“If triable issues of material fact exist whether discrimination was a substantial motivating reason for the employer’s adverse employment action, even if the employer’s professed legitimate reason has not been disputed, the FEHA claim is not properly resolved on summary judgment.” (Husman, supra, 12 Cal.App.5th at p. 1186.)

“Husman argues these remarks, while possibly not patently offensive to a nongay observer, revealed that Pelliccioni viewed him as ‘too gay’ and incompatible with Toyota’s corporate culture, even if a less obviously gay employee would be acceptable. … [T]hese remarks reveal the same kind of stereotypical thinking that led those partners not to promote Ann Hopkins.” (Id. at p. 1191.)

“While this is a close case, especially in light of the evidence of Toyota’s ongoing efforts to promote diversity and inclusion, the trial court’s failure to look behind the company’s assertions of moral right and Borst’s purportedly autonomous role in the decision to fire Husman was error and contrary to Harris’s nuanced analysis of complex discriminatory behavior.” (Id. at p. 1192.)

Read the full opinion (official source) →

Practice pointer

Open questions

The court expressly noted the novelty of its move and left its outer boundaries for future cases: it had “found no published California decision relying on Harris’s mixed-motive analysis for review of a summary judgment,” adopting the federal Quigg formulation to fill the void. (Husman, supra, 12 Cal.App.5th at p. 1184.) How that standard interacts with the McDonnell Douglas “specific and substantial” pretext requirement in a single case remains to be worked out; the court reconciled them only at the level of generality that both “devolve[] to a showing of some discriminatory animus.” (Id. at p. 1186.)

The opinion also leaves the same-decision defense itself for trial. Because the issue before the court was only whether a triable issue existed, it did not decide whether Toyota could ultimately prove it “would have made the same decision at the time” so as to limit Husman’s remedies under Harris. (Id. at p. 1184, fn. 10.) Whether the discriminatory animus was in fact a substantial motivating factor — the court repeatedly emphasized this is “a close case” — is reserved for the jury. (Id. at p. 1192.) Finally, the precise reach of the “‘gayer’ plaintiff” theory beyond the grooming-and-appearance remarks at issue here is undeveloped and awaits later litigation.