Hoglund v. Sierra Nevada Memorial-Miners Hospital

Facts

The Hospital hired Jessica Hoglund as a phlebotomist trainee in 2004. (Hoglund, supra, 102 Cal.App.5th at p. 63.) In February 2011, at age 56, she became the Hospital’s sole laboratory supervisor, overseeing all of its phlebotomists. (Ibid.) She loved her job and hoped to work at the Hospital until she was 72. (Ibid.) In May 2011, the Hospital hired Rhonda Horne as its director of clinical operations, making Horne — who was six years younger than Hoglund — her new supervisor. (Ibid.)

From the time Horne was hired until Hoglund was terminated, “Horne made derogatory comments to Hoglund about her age.” (Hoglund, supra, 102 Cal.App.5th at pp. 63–64.) In frequent one-on-one meetings, Horne told Hoglund she looked “sloppy,” disliked her hair and dress, and thought her “old-fashioned.” (Id. at p. 64.) Horne repeatedly asked how long Hoglund planned to stay and whether she would retire, observed that “we have an aging staff,” asked “who do you think is going to retire next,” and said she “wanted to hire babies” because “they’re easier to train.” (Ibid.) She told Hoglund she had been at the Hospital “since the dark ages” and knew “where all the bodies are buried.” (Ibid.) When Hoglund sought a stable workspace after Horne forced her out of her office, Horne threatened to have her “working out of the back of [her] truck.” (Ibid.)

Hoglund repeatedly reported Horne’s conduct to human resources and to Horne’s superiors, telling them she believed Horne “thinks I’m too old to do my job” and was “trying to push her out” because of her age. (Hoglund, supra, 102 Cal.App.5th at pp. 64–67.) Management’s responses were tepid: human-resources staff variously told Hoglund to talk to the CEO, suggested she “talk to Horne,” recommended individual counseling, or “did nothing in response.” (Id. at pp. 64–68.) When Hoglund asked for training on a new computer system essential to her job, Horne refused, saying they would instead “pick out young people because they’re easier to train,” and selected 31-year-old Elizabeth Prout. (Id. at p. 66.) Prout — a former waitress with no supervisory experience, no technology-field experience, and no bachelor’s degree — was then promoted to a second supervisor position equal to Hoglund’s, and Hoglund trained her. (Ibid.)

In June 2017, the Hospital sold its outreach stations and downsized, deciding to retain only one lab supervisor. (Hoglund, supra, 102 Cal.App.5th at p. 68.) Horne, Deb Plass, and Apryl Lucas worked together on the downsizing, and “Lucas and Plass relied on Horne to describe the job requirements of the lab supervisor.” (Ibid.) They selected Prout over the 62-year-old Hoglund, who had four more years of supervisory tenure, reasoning that Prout had “basic computer acumen” and that Hoglund had managed the outreach program being eliminated. (Id. at pp. 68–69.) But Plass had never observed Prout on the new system; neither Plass nor Lucas knew Horne had denied Hoglund training on it; and the Hospital had never actually created an outreach-services-manager position for Hoglund. (Id. at pp. 68–69, 77.) Horne testified she was one of the “decision makers,” though Plass “ultimately … made th[e] decision.” (Id. at p. 68, fn. 1.) Hoglund was told of her termination on June 2, 2017; her last day was July 7, 2017. (Id. at p. 69.)

The statutory framework. Hoglund’s discrimination and harassment claims arise under the California Fair Housing and Employment Act (FEHA) (Gov. Code, § 12940 et seq.). FEHA declares it unlawful “for an employer to discriminate against a person because of age.” (Hoglund, supra, 102 Cal.App.5th at p. 74, citing Gov. Code, § 12940, subd. (a).) A plaintiff is in a protected class “if he or she is 40 years of age or older.” (Ibid., citing Gov. Code, § 12926, subd. (b).) The phrase “‘because of’” requires “a causal link between the employer’s consideration of [the] protected characteristic and the [adverse] action taken by the employer.” (Ibid.) Separately, FEHA “makes it unlawful for an employer to harass an employee because of the employee’s age” (Gov. Code, § 12940, subd. (j)(1)); to prevail, “the employee must show that the harassment unreasonably interfered with the plaintiff’s work performance by creating an intimidating, hostile, or offensive work environment.” (Hoglund, supra, 102 Cal.App.5th at p. 78.)

Standard of review. Because the case was tried to the bench, the appellate court reviewed the FEHA and wrongful-termination findings for substantial evidence, “accept[ing] all evidence in support of the judgment, draw[ing] all reasonable inferences to affirm the judgment, and … not reweigh[ing] the evidence.” (Hoglund, supra, 102 Cal.App.5th at p. 75.) The court reviewed the application of the continuing violations doctrine for substantial evidence as well, “considering the facts in the light most favorable to Hoglund.” (Id. at p. 72.) The attorney-fee award was reviewed for abuse of discretion. (Id. at p. 82.)

Procedural history

Hoglund filed an administrative complaint with the Department of Fair Employment and Housing in February 2018, received a right-to-sue letter, and filed suit in June 2018. (Hoglund, supra, 102 Cal.App.5th at pp. 70–71.) Her operative complaint pleaded five causes of action: FEHA retaliation, FEHA age discrimination (Gov. Code, § 12940, subd. (a)), FEHA harassment (id., subd. (j)), wrongful termination in violation of public policy, and failure to pay overtime wages. (Id. at p. 71.) The trial court granted summary adjudication on the retaliation claim and on punitive damages but otherwise let the case proceed to a bench trial. (Ibid.)

After trial, the court found for Hoglund on age discrimination, harassment, and wrongful discharge, and for the Hospital on the overtime claim. (Hoglund, supra, 102 Cal.App.5th at p. 71.) It held Horne jointly and severally liable with the Hospital on the harassment claim, awarded Hoglund $1,431,800 in damages ($881,800 economic, $550,000 noneconomic), and later awarded $958,297 in attorney fees and $57,332 in costs. (Ibid.)

The appeal came up as cross-appeals. The defendants appealed “on numerous grounds,” challenging the verdict as unsupported by sufficient evidence, the damages as excessive, the statement of decision as inadequate, and the fee and cost awards as lacking evidentiary support; both Hoglund and the defendants thus appear in the caption as “Appellants.” (Hoglund, supra, 102 Cal.App.5th at p. 63.) Hoglund cross-appealed, “arguing that the trial court erred by failing to award a tax neutralization payment.” (Ibid.) The opinion was certified for partial publication, with the discussion of the statement of decision (part IV) and costs (part VI) not certified. (Id. at p. 56.)

Issue

The central published question is one of causation: where a biased supervisor lacks final authority over a termination, but is a significant participant in the decision and supplies the formal decisionmakers with the pretextual rationale on which they act, may the trier of fact impute the supervisor’s discriminatory animus to the employer under the “cat’s paw” theory — such that substantial evidence supports a FEHA age-discrimination verdict and its derivative wrongful-termination claim? The opinion also decides whether the continuing violations doctrine rendered the suit timely despite years of pre-limitations conduct, and whether the director’s ageist remarks sufficed to establish age-based harassment.

Holding

Reasoning

Permanence turns on the employer’s conduct, not the employee’s discouragement. The defendants’ lead timeliness argument was that the one-year FEHA limitations period (Gov. Code, § 12960, subd. (e)) barred reliance on any conduct before 2014, when — they said — Hoglund believed the harassment had become “permanent.” (Hoglund, supra, 102 Cal.App.5th at p. 71.) The court framed the governing rule from Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798: conduct outside the limitations period remains actionable if it is “sufficiently connected” to conduct within it, judged by whether the unlawful actions are similar in kind, occur with reasonable frequency, and “have not ‘acquired a degree of permanence.’” (Hoglund, supra, 102 Cal.App.5th at pp. 71–72.) Only permanence was contested. (Id. at p. 72.) Permanence, the court emphasized, means the employer’s “statements and actions make clear to a reasonable employee that any further efforts at informal conciliation … will be futile,” and it is “based primarily on the employer’s actions and statements, and not … the employee’s subjective belief.” (Ibid.) That framing decided the issue: although Hoglund testified she “wanted to give up” and felt she was “beating a dead horse,” the employer “neither resolved Hoglund’s issues nor communicated to Hoglund by acts or statements that they refused to do so.” (Ibid.) Plass and Lucas kept listening, made suggestions, and promised action; Hoglund “never lost faith” that the Hospital would intervene. (Id. at pp. 72–73.) The court distinguished the permanence line of cases — Jumaane, Cucuzza, Acuna — as ones in which “the employer expressly and repeatedly denied the employee’s complaints, definitively stymying any prospect for resolution.” (Id. at p. 73.) Here, the Hospital’s “tepid and ineffective” engagement was, paradoxically, what kept the limitations clock from starting before termination. (Id. at pp. 72–73.)

The McDonnell Douglas framework supplied the analytic structure. On the merits, the court applied the familiar burden-shifting analysis used for circumstantial discrimination cases. (Hoglund, supra, 102 Cal.App.5th at pp. 74–75.) The defendants conceded that Hoglund was over 40, qualified, performing competently, and subjected to an adverse action; they disputed “solely … the trial court’s finding that Hoglund was terminated based on her age.” (Id. at p. 75.) The court found that contention “distressingly” at odds with the record, noting the defendants’ opening brief “omits virtually all evidence of harassment and discrimination that emerged at trial,” and cautioning counsel that “future misrepresentations of fact, by omission or otherwise, may result in adverse rulings.” (Id. at pp. 75–76 & fn. 3.) Pretext, the court reiterated, “‘may … be inferred from the timing of the company’s termination decision, by the identity of the person making the decision, and by the terminated employee’s job performance before termination.’” (Id. at p. 75.)

Horne’s remarks were direct evidence of discriminatory animus. The court catalogued “copious evidence of Horne’s age discrimination”: criticizing Hoglund’s appearance as old-fashioned and dowdy, repeatedly asking when she would retire, saying she had been there “since the dark ages” and knew “where all the bodies were buried,” declaring she “wanted to hire ‘babies’” who are “easier to train,” suggesting Hoglund was “too old to be running around,” and — at the end — expressing sympathy only for the younger employees who lost their jobs while laughing off Hoglund’s concern for older workers. (Hoglund, supra, 102 Cal.App.5th at p. 76.) “Horne’s statements and actions towards Hoglund are substantial evidence of discriminatory animus … based on her age.” (Ibid.)

The “cat’s paw” theory bridged Horne’s animus to a decision she did not formally make. The pivotal move came in answer to the defense’s argument that “Plass and Plass alone decided to terminate Hoglund, such that Horne’s discrimination could not have motivated the adverse action.” (Hoglund, supra, 102 Cal.App.5th at p. 76.) The court rejected that premise as “neither supported by the law nor the evidence.” (Ibid.) Defining the doctrine, it explained that “‘cat’s paw’ refers to a situation in which a biased subordinate, who lacks decisionmaking power, uses the formal decisionmaker as a dupe in a deliberate scheme to trigger a discriminatory employment action,” quoting EEOC v. BCI Coca-Cola Bottling Co. (10th Cir. 2006) 450 F.3d 476, 484. (Id. at p. 76.) Critically, the court adopted California’s expansive “significant participant” articulation: under the theory, “a showing that any ‘significant participant’ in the adverse employment decision exhibited discriminatory animus is ‘enough to raise an inference that the employment decision itself was discriminatory.’” (Ibid., quoting DeJung v. Superior Court (2008) 169 Cal.App.4th 533, 551; see Reeves v. Safeway Stores, Inc. (2004) 121 Cal.App.4th 95, 110 [causation shown where “any substantial contributor to the decision bore the requisite discriminatory animus”].) Notably, the standard does not demand proof that the formal decisionmaker was actually duped in fact; it asks whether a significant participant harbored animus.

The record satisfied the “significant participant” standard. Substantial evidence showed Horne “was a significant decision maker in the choice to fire Hoglund.” (Hoglund, supra, 102 Cal.App.5th at p. 77.) Horne herself testified she was one of three decisionmakers, and — decisively — “Plass and Lucas relied on Horne for information about Hoglund’s and Prout’s skills and duties to determine whether termination was appropriate.” (Ibid.) They “accepted her account without inquiry,” trusting Horne’s representations “at face value” about which employee had superior computer skills and whether Hoglund’s role lay in the soon-to-be-eliminated outreach program. (Ibid.) That reliance is the mechanism of the cat’s paw: the unbiased decisionmakers acted on a factual picture that the biased subordinate had painted.

Pretext confirmed the inference. The court then showed why the proffered reasons were “pretextual.” (Hoglund, supra, 102 Cal.App.5th at p. 77.) On computer skills, Horne had refused to train Hoglund while training Prout, claimed to have chosen Prout for technical and teaching ability she “did not actually know” Prout possessed, and expressly preferred to train younger employees because they were “easier to train”; Plass and Lucas had no firsthand knowledge of either woman’s skills and did not know Horne had denied Hoglund training. (Ibid.) On the outreach rationale, “the Hospital never created an outreach services manager position,” Hoglund and Prout shared duties and jointly supervised the phlebotomists, and Horne “had been aware for years that the outreach stations were at risk of removal, yet attempted to define Hoglund’s role as one directed towards outreach services.” (Ibid.) Steering Hoglund toward a function Horne knew “may become defunct” suggested Horne “was trying to push her out, and that assigning her to outreach services would create the pretext to do so.” (Ibid.) Combined with the remark that Horne felt sorry only for the younger employees let go, the record left “sufficient evidence … to conclude that there was a causal link between defendants’ discrimination and Hoglund’s termination, and that defendants’ asserted basis for terminating Hoglund was pretextual.” (Id. at p. 78.)

The derivative claims followed automatically. Having sustained the discrimination verdict, the court held that substantial evidence “necessarily” supported the derivative wrongful-termination claim, because “‘FEHA’s policy against age discrimination satisfies each of the four requirements that [the Supreme Court] has established as essential to support a common law tort claim for wrongful discharge in violation of public policy.’” (Hoglund, supra, 102 Cal.App.5th at p. 78, quoting Stevenson v. Superior Court (1997) 16 Cal.4th 880, 897.) And the same ageist remarks that proved animus — mocking Hoglund’s clothes and hair, pushing her to retire, relegating her to a faraway storage closet, then questioning whether she was “too old” to walk the distance — “unreasonably interfered” with her work by creating a hostile environment, supporting the harassment finding under section 12940, subdivision (j)(1). (Id. at p. 78.)

The damages, fee, and tax-neutralization rulings turned on preservation and discretion. The court refused to reach the defendants’ excessive-damages arguments because they never moved for a new trial, and the statement-of-decision statutes they invoked (Code Civ. Proc., §§ 632, 634) and the new-trial statute (§ 662) did not preserve a merits challenge to the damages amount. (Hoglund, supra, 102 Cal.App.5th at pp. 79–80.) On fees, the court held the trial court could anchor reasonable rates to “‘where counsel is located’” (Sacramento) rather than the county of litigation, and that a 1.5 multiplier resting solely on contingent risk — a factor not double-counted in the base rate — was within discretion. (Id. at pp. 81–83.) On Hoglund’s cross-appeal, the court treated the tax-neutralization question as a failure-of-proof issue cognizable without a new-trial motion, but held her expert’s report — an “example” calculation untethered to the actual award and resting on unexplained assumptions — did not “compel[] a finding in [her] favor … as a matter of law.” (Id. at pp. 85–87.)

Significance

Hoglund is a clean, published vehicle for the cat’s-paw theory of imputed animus in California age cases — and it is unusually employer-adverse in two respects that practitioners should mark. First, it confirms that California has not imported the federal Staub v. Proctor Hospital (2011) 562 U.S. 411 gloss requiring that the biased subordinate intend to cause the adverse action and that the bias be a proximate cause. Instead, the court reaffirmed the broader “significant participant” / “substantial contributor” standard of DeJung and Reeves: animus by any significant participant “is ‘enough to raise an inference that the employment decision itself was discriminatory.’” (Hoglund, supra, 102 Cal.App.5th at p. 76.) That a separate, concededly unbiased officer “ultimately … made th[e] decision” (id. at p. 68, fn. 1) did not break the causal chain, because the formal decisionmakers built their decision on the biased subordinate’s account of the facts. The opinion thus illustrates the practical heart of the doctrine: control over the information flow can be as decisive as control over the final signature.

Second, the decision sharpens the “permanence” prong of the continuing violations doctrine in a way that favors plaintiffs who keep complaining. By holding that permanence “is based primarily on the employer’s actions and statements, and not … the employee’s subjective belief” (Hoglund, supra, 102 Cal.App.5th at p. 72), the court made clear that an employee’s private discouragement — even testimony that she “wanted to give up” — does not start the limitations clock so long as the employer keeps the door to resolution nominally open. An employer’s “tepid and ineffective” engagement (id. at p. 73) is, counterintuitively, a limitations liability: only a definitive refusal triggers accrual. Together with the court’s pointed footnote rebuking the defense for an opening brief that omitted the trial evidence (id. at pp. 75–76 & fn. 3), Hoglund is a cautionary tale about both the strength of a well-documented animus record and the perils of an unfair statement of facts on a substantial-evidence appeal.

Key quotes

“In the employment context, ‘cat’s paw’ refers to a situation in which a biased subordinate, who lacks decisionmaking power, uses the formal decisionmaker as a dupe in a deliberate scheme to trigger a discriminatory employment action. … Under the ‘cat’s paw’ theory, a showing that any ‘significant participant’ in the adverse employment decision exhibited discriminatory animus is ‘enough to raise an inference that the employment decision itself was discriminatory.’” (Hoglund, supra, 102 Cal.App.5th at p. 76.)

“Plass and Lucas relied on Horne for information about Hoglund’s and Prout’s skills and duties to determine whether termination was appropriate. … [T]hey appeared to trust Horne’s information, as they accepted her account without inquiry … . This is sufficient to show that Horne was a significant participant in the decision to fire Hoglund.” (Id. at p. 77.)

“[T]he question of permanence … is based primarily on the employer’s actions and statements, and not, as defendants suggest, the employee’s subjective belief.” (Id. at p. 72.)

Read the full opinion (official slip opinion, PDF) →

Practice pointer

Open questions

Because Hoglund applied the deferential substantial-evidence standard to a bench verdict, it did not decide where the cat’s-paw inference fails as a matter of law — for example, how robust a truly independent investigation by the formal decisionmaker must be to sever the causal chain. The opinion notes only that Plass and Lucas “accepted [Horne’s] account without inquiry” (102 Cal.App.5th at p. 77); it does not chart how much independent verification would have insulated the decision, leaving that line for a case in the summary-judgment posture.

The opinion also leaves unresolved the relationship between California’s “significant participant” standard and the federal proximate-cause framework of Staub. The court grounded its rule in DeJung and Reeves without engaging Staub, so whether (and when) a California court might require that the biased subordinate’s act be a proximate cause of, or be intended to bring about, the adverse action remains open. Finally, the published portions do not reach the retaliation theory, which was disposed of on summary adjudication below and not revived on appeal (id. at p. 71) — so Hoglund offers no guidance on how the same factual record would fare under FEHA’s retaliation provisions.