King v. United Parcel Service, Inc.

Facts

The court announced its analytical frame in the first sentence: the case “is not about whether a long-term supervisory employee of United Parcel Service, Inc. (UPS), asked or encouraged a driver to falsify a timecard to bring it into compliance with federal regulations limiting driving time, but whether UPS had an honest, good faith belief that the driver had violated its integrity policy when it fired him.” (King v. United Parcel Service, Inc. (2007) 152 Cal.App.4th 426, 429.) Because the appeal arose from summary judgment, the court recited the undisputed facts “from the moving party’s perspective,” reserving the plaintiff’s competing evidence for the claim-by-claim analysis. (Id. at p. 430.)

Richard King was “a highly valued employee for nearly 30 years”; UPS did not dispute that his drivers respected him and that Scott Vix, the division manager who fired him, “hated to lose him.” (King, supra, 152 Cal.App.4th at p. 430.) In UPS’s telling, “the story begins and ends with integrity.” (Ibid.) Federal law bars truck drivers from driving after 60 on-duty hours in seven consecutive days; in October 2002, UPS changed its reporting policy to count break time as on-duty hours, because violations “can result in severe fines and penalties, up to and including the loss of UPS’s operating rights.” King, a “feeder supervisor” in Redding, acknowledged he was responsible for monitoring compliance. (Ibid.) On November 7, 2002, UPS fired King’s feeder manager, Rob Nunes, for failing to review the new recording procedures with King after a driver in King’s department violated hours-of-service rules on six consecutive days. Five days later Vix drove to Redding to review compliance procedures with King and warn him “his own job was in jeopardy if he failed to prevent future violations.” (Id. at pp. 430–431.) When another Redding driver exceeded the limit by 3.9 hours on December 9, Vix returned on December 13, reviewed the integrity policy, instructed King “not to conceal any violation, but to notify him immediately,” and had King sign an acknowledgment. (Id. at p. 431.)

Three days later, during a Monday power outage, King authorized driver Jeff Lester to make afternoon pickups. The next morning King’s assistant, Leslie Allen, calculated that Lester was out of hours and confirmed the calculation with Sacramento. King told Allen that Lester’s timecard was inaccurate, went into an office with Lester and the original timecard, emerged with a new one, and instructed Allen “to remove the previously submitted hours information from the UPS computer.” The following day Allen found the original timecard in a trash can in that office. (King, supra, 152 Cal.App.4th at p. 431.) UPS security investigated, taking statements from four witnesses; Vix determined Lester had worked until 6:00 p.m. although his second timecard showed him off duty at 2:30 p.m. Lester admitted the falsification and wrote that he “was asked by Rick King to change my Time Card … so I would not be over hours … .” (Id. at pp. 431–432.) On December 19, 2002, a delegation including the district security manager, an employee relations manager, and Vix confronted King, who initially denied everything; shown the original timecard retrieved from the garbage, he exclaimed, “You got me.” UPS terminated him for falsifying records in breach of its integrity policy. Vix declared: “I felt bad about terminating King. I respected him for his years of service and the work he had done in the Redding facility. However, I had no choice because of King’s serious integrity violation.” (Id. at p. 432.)

King’s side of the story centered on his health and his history: he had performed competently for nearly 30 years before being diagnosed with a blood disorder requiring a medical leave from May through September 2002, and he was fired less than two months after returning. (King, supra, 152 Cal.App.4th at pp. 434, 436.) In March 2002, before the leave, he had been required to work “double duty” as feeder supervisor and supervisor of the “local sort,” pushing his hours from roughly 8:00 a.m.–6:00 p.m. to 1:00 p.m.–10:00 p.m.; when he left a note quitting the local sort, two managers treated it as a resignation from the company, and King won reinstatement through the grievance procedure. (Id. at p. 434.)

Procedural history

King sued UPS and related defendants in Sacramento County Superior Court, pleading causes of action for disability discrimination under the FEHA (Gov. Code, § 12900 et seq.), failure to provide reasonable accommodation, breach of an implied contract to terminate only for good cause, and defamation. Finding no triable issues of material fact, the trial court granted UPS’s motion for summary adjudication of those claims — a disposition the Court of Appeal noted rendered the remaining causes of action moot. (King, supra, 152 Cal.App.4th at pp. 429–430 and fn. 1.) The Third District affirmed in an opinion by Justice Raye, ordered published June 22, 2007; the Supreme Court denied review on September 25, 2007. (Id. at p. 445 and print header.)

Issue

Four questions: (1) whether King produced “specific and substantial responsive evidence” that UPS’s integrity-violation rationale was a pretext for disability discrimination — including whether inconsistencies in witness statements, the timing of the discharge after medical leave, and the hostility of non-decisionmaker supervisors could carry that burden (King, supra, 152 Cal.App.4th at pp. 433–437); (2) whether the trial court violated the so-called “golden rule” of summary judgment by considering evidence not referenced in the separate statement (id. at pp. 437–438); (3) whether, assuming an implied contract requiring good cause, UPS acted in good faith on reasonable grounds after an adequate investigation under Cotran (id. at pp. 438–440); and (4) whether King’s accommodation claim survived where his physician released him to “his regular duties and regular hours” and he never presented specific restrictions (id. at pp. 442–444).

Holding

Reasoning

The framework: McDonnell Douglas with the employer’s honest belief at the center. The court applied the burden-shifting formula of McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792 “as the basic framework for reviewing motions for summary judgment in discrimination cases,” noting UPS did not contest the prima facie case, so the burden shifted to UPS to produce admissible evidence of a legitimate, nondiscriminatory reason under Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 355–356 — a burden that “coincides with UPS’s burden as the moving party to negate an element of plaintiff’s cause of action.” (King, supra, 152 Cal.App.4th at pp. 432–433, fn. 2.) UPS’s evidence “satisfies the employer’s burden” to make a “‘sufficient showing of a legitimate reason for discharge’” (id. at p. 433, quoting Hanson v. Lucky Stores, Inc. (1999) 74 Cal.App.4th 215, 225), and — the doctrinal pivot — the decision makers’ honest belief sufficed regardless of underlying truth, per Villiarimo v. Aloha Island Air, Inc. (9th Cir. 2002) 281 F.3d 1054, 1063. (Ibid.) Once the employer carries that burden, the employee “must present specific and substantial responsive evidence that the employer’s evidence was in fact insufficient or that there is a triable issue of fact material to the employer’s motive” — evidence “that a discriminatory reason more likely motivated the employer or that the employer’s explanation is unworthy of credence.” (Ibid., quoting Chiaramonte v. Fashion Bed Group, Inc. (7th Cir. 1997) 129 F.3d 391, 398.) The court stacked three limiting principles on top: a triable issue exists “if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof” (ibid., quoting Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850); “plaintiff’s subjective beliefs in an employment discrimination case do not create a genuine issue of fact; nor do uncorroborated and self-serving declarations” (ibid.); and “plaintiff’s evidence must relate to the motivation of the decision makers to prove, by nonspeculative evidence, an actual causal link between prohibited motivation and termination.” (Id. at pp. 433–434, citing Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 774.)

Non-decisionmaker hostility is immaterial. King accused UPS of “cloak-and-dagger” techniques in a conspiracy to force him out, pointing to supervisors Murphy, Rogers, and Zakoor, with whom he had clashed over the local-sort hours before his leave. The court accepted that “[i]t is not unreasonable to infer from this record that these supervisors harbored a lingering resentment toward plaintiff,” but held the animosity of coworkers, “even if superior to plaintiff in rank or tenure, is not material to the sole issue contested by UPS”: none of the three “participated in the decision to fire him,” so “their feelings regarding plaintiff’s performance have no bearing in the summary judgment proceedings.” (King, supra, 152 Cal.App.4th at p. 434.)

Attacking the investigation’s witnesses requires a link to the decisionmakers. King’s most serious argument attacked the statements Vix relied on: Lester testified at deposition that he had no specific memory of how his timecard “got changed,” described intimidating interview conditions, and claimed he was not interviewed by security until after King was fired — from which King inferred that UPS solicited false statements. The court called the accusation “indeed a serious one,” but dispositive was the missing connection: “Even if we were to assume that someone either backdated Lester’s statement or pressured him into writing a false statement, plaintiff offers no evidence to connect the wrongdoing with any of the decision makers.” Lester never denied falsifying the timecard, so “it would be rank speculation to infer a causal connection between any possible wrongdoing in the solicitation of Lester’s statement and the decision to terminate plaintiff.” (King, supra, 152 Cal.App.4th at p. 435.) Nor did Lester’s backtracking deposition “exonerate” King — Lester admitted asking King what would happen if he was over hours and being told “I’m fired,” and testified UPS never asked him to fabricate anything. (Ibid.)

The honest-belief rule: the truth of the accusation is not the question. King went “to some length” to show Lester actually had 8.8 hours remaining — so there was nothing to hide and no motive to falsify. The court’s answer is the opinion’s most-quoted passage: “But everyone, including Lester, believed at the time that he was over hours. We need not waste time reviewing the accuracy of Allen’s, Lester’s, or anyone else’s calculations because the truth or falsity of the calculations is not at issue. It is the employer’s honest belief in the stated reasons for firing an employee and not the objective truth or falsity of the underlying facts that is at issue in a discrimination case.” (King, supra, 152 Cal.App.4th at pp. 435–436.) On the whole record, King “failed to submit substantial evidence that UPS did not honestly believe plaintiff had violated its integrity policy when it fired him.” (Id. at p. 436.)

Timing and compensation grievances do not substitute for animus evidence. King asked the court to infer discrimination from his discharge “less than two months after returning from a four-month leave of absence.” The court refused: “a disabled employee has no greater prerogative to compromise his integrity than any other employee,” and the mere fact of a post-return integrity finding “is insufficient to raise an inference that his blood disorder prompted his discharge.” (King, supra, 152 Cal.App.4th at p. 436.) His 2002 bonus denial traced to the March hours dispute, not his disability, and fell “woefully short” of showing that Vix “and the others decided to discharge him nine months later because he had become disabled.” (Ibid.) The inference was “particularly weak” against UPS’s prior conduct: the company had sustained King’s grievance over his supervisors’ objections, fired Nunes rather than King for the earlier violation, and twice sent Vix to warn him — “there is no reasonable inference to be drawn that UPS, which had forgone several opportunities to discharge plaintiff, suddenly changed course and fired him because of his blood disorder.” (Id. at pp. 436–437.)

The “golden rule” of separate statements is discretionary, not absolute. King argued the trial court could consider only evidence expressly delineated in the separate statement, citing San Diego Watercrafts, Inc. v. Wells Fargo Bank (2002) 102 Cal.App.4th 308. The court, following its own precedent in Fenn v. Sherriff (2003) 109 Cal.App.4th 1466, 1480–1481, held that “[s]uch a rigid rule of exclusion is contrary to the express terms of the summary judgment statute” (Code Civ. Proc., § 437c, subd. (b)), and quoted San Diego Watercrafts itself: “Whether to consider evidence not referenced in the moving party’s separate statement rests with the sound discretion of the trial court.” (King, supra, 152 Cal.App.4th at pp. 437–438.) “The separate statement is not designed to pervert the truth, but merely to expedite and clarify the germane facts.” Because King had notice of the single dispositive issue and ample opportunity to rebut the declarations, and this was not a case of “the sneaky introduction of new evidence for the first time in the defendant’s reply,” there was no abuse of discretion. (Id. at p. 438.)

Good cause under Cotran: an adequate investigation as a matter of law. On the implied-contract claim the court assumed, without deciding, that UPS had agreed to terminate only for good cause — defined in Cotran v. Rollins Hudig Hall Internat., Inc. (1998) 17 Cal.4th 93, 108 as “fair and honest reasons, regulated by good faith on the part of the employer, that are not trivial, arbitrary or capricious, unrelated to business needs or goals, or pretextual.” The critical question was “not whether plaintiff in fact violated the integrity policy . . . but whether UPS, acting in good faith following an appropriate investigation, had reasonable grounds for believing plaintiff had done so.” (King, supra, 152 Cal.App.4th at p. 438.) “Flexibility is the signature lesson from Cotran“: no “precise type of investigation” is compelled “as long as the process is inherently fair.” (Id. at p. 439.) Here, supervisors began an informal inquiry, the security department interviewed the key witnesses, and management presented the evidence to King and let him respond. “Because neutral personnel investigated the facts, eyewitnesses provided statements, and plaintiff was given an opportunity to explain what happened, we conclude UPS conducted an adequate investigation as a matter of law.” (Id. at p. 440.) Nor could termination for an integrity violation be called trivial or arbitrary when “[n]oncompliance with federal regulations risks UPS’s license to conduct business.” (Id. at p. 439.)

Defamation: the common-interest privilege covers explaining a termination to affected employees. Statements to employees about the reasons for a coworker’s termination are conditionally privileged under Civil Code section 47, subdivision (c), because employer and employees share “a common interest in protecting the workplace from abuse.” (King, supra, 152 Cal.App.4th at p. 440.) King’s malice theory merely recycled his pretext evidence: “If the discharge was neither pretextual nor in bad faith, it certainly was not malicious.” (Ibid.) Vix stayed in Redding until midnight explaining the discharge to drivers “individually or in small groups, to reassure them and boost morale”; Murphy answered a driver’s direct question; Zakoor briefed junior supervisors “to reinforce the importance of the integrity policy.” There was no overpublication and no evidence of statements to anyone “with no interest in the business.” (Id. at pp. 441–442.) The court closed the point with a line that captures the whole opinion: “We do not know, and cannot determine, whether plaintiff was guilty of the malfeasance as alleged. But his factual innocence or guilt is beyond the purview of this appeal.” (Id. at p. 442.)

Accommodation: the employee must ask, specifically. The failure-to-accommodate claim under Government Code section 12940, subdivision (m) required separate analysis, because an accommodation violation exists “even in the absence of an adverse employment action” (King, supra, 152 Cal.App.4th at p. 442, citing Jensen v. Wells Fargo Bank (2000) 85 Cal.App.4th 245, 256), and the court conceded the issue was “a much closer one to resolve” (ibid.). But the undisputed fact was that King’s doctor released him to “his regular duties and regular hours” with no restrictions. (Id. at p. 443.) The court invoked the employee-initiative line of authority: “‘[T]he interactive process of fashioning an appropriate accommodation lies primarily with the employee’” (ibid., quoting Spitzer v. Good Guys, Inc. (2000) 80 Cal.App.4th 1376, 1384); “[a]n employee cannot demand clairvoyance of his employer” (ibid., citing Conneen v. MBNA America Bank, N.A. (3d Cir. 2003) 334 F.3d 318, 331); and “[i]t is an employee’s responsibility to understand his or her own physical or mental condition well enough to present the employer at the earliest opportunity with a concise list of restrictions which must be met to accommodate the employee” (ibid., quoting Jensen, supra, 85 Cal.App.4th at p. 266). King described “in painful detail how poorly he felt,” but never established that he communicated his distress or made “the kind of specific request for a modified work schedule required to trigger an employer’s duty to provide accommodation.” While “no magic words are required,” it was “incumbent upon him to produce clear and unambiguous doctor’s orders restricting the hours he could work” — particularly given his pre-disability complaints about the same local-sort hours and his admission that he was able to “get the job done” after returning. (Id. at p. 444.)

Significance

King is California’s fullest statement of the honest-belief rule on summary judgment. Where Guz and the Hersant line teach that pretext means proving the stated reason false or a discriminatory reason more likely, King adds the employer-protective corollary: proving the underlying accusation false is not enough if the decisionmakers honestly believed it when they acted. That move — imported from Ninth Circuit authority (Villiarimo) and knit to Cotran‘s good-faith standard for contract claims — lets an employer win even where, as the court twice acknowledged, the employee may have been factually innocent. (King, supra, 152 Cal.App.4th at pp. 436, 444.) The opinion’s decisionmaker-centric rule of materiality (evidence “must relate to the motivation of the decision makers,” id. at p. 433) has proved equally consequential, supplying employers a tool to strip oppositions of coworker-hostility evidence — though plaintiffs should note that King itself preserves the counter-move: the court faulted King for failing to connect the alleged witness coercion to the decisionmakers, implying that a proven link (the classic “cat’s paw” theory) changes the outcome. (Id. at p. 435.)

In the disability context, King‘s accommodation holding sits at the employer-friendly end of a line the courts have continued to calibrate. Its demand for “a specific request” and “clear and unambiguous doctor’s orders” (152 Cal.App.4th at pp. 443–444) must now be read with decisions such as Scotch v. Art Institute of California (2009) 173 Cal.App.4th 986, which frames the interactive process as a mutual, good-faith obligation, and with cases reversing summary judgment where the employer had notice of the disability from any source — e.g., Soria v. Univision Radio Los Angeles, Inc. (2016) 5 Cal.App.5th 570 — and with Wallace v. County of Stanislaus (2016) 245 Cal.App.4th 109, which stresses that disability discrimination does not require animus in the invidious sense. The procedural holding — that consideration of evidence outside the separate statement “rests with the sound discretion of the trial court” (King, at p. 438) — resolved a then-live split in favor of discretion and is regularly cited in general MSJ practice, well beyond employment law. Finally, a note on how this case is sometimes miscited: King is occasionally invoked for the proposition that shifting employer justifications show pretext. The opinion holds nearly the opposite on its facts — it found UPS’s reasons consistent and rejected inference-stacking from witness inconsistencies. The shifting-justifications principle lives in other authority; King is the honest-belief case.

Key quotes

“It is the employer’s honest belief in the stated reasons for firing an employee and not the objective truth or falsity of the underlying facts that is at issue in a discrimination case.” (King, supra, 152 Cal.App.4th at p. 436.)

“[P]laintiff’s evidence must relate to the motivation of the decision makers to prove, by nonspeculative evidence, an actual causal link between prohibited motivation and termination.” (King, supra, 152 Cal.App.4th at pp. 433–434, citing Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 774.)

“Because neutral personnel investigated the facts, eyewitnesses provided statements, and plaintiff was given an opportunity to explain what happened, we conclude UPS conducted an adequate investigation as a matter of law.” (King, supra, 152 Cal.App.4th at p. 440.)

Read the full opinion (Justia) →

Practice pointer

Open questions

King expressly declined to adjudicate guilt: “We do not know, and cannot determine, whether plaintiff was guilty of the malfeasance as alleged” (152 Cal.App.4th at p. 442) — the honest-belief rule makes that question unreviewable on summary judgment, and the opinion does not say what quantum of investigative sloppiness would defeat the honesty of a belief, only that this investigation sufficed “as a matter of law” (id. at p. 440). It likewise leaves the cat’s-paw question open in terms: the court assumed arguendo that “someone either backdated Lester’s statement or pressured him into writing a false statement” and held only that no evidence connected that wrongdoing to the decisionmakers (id. at p. 435), reserving the case where such a connection is shown. On the contract claim, the court found it unnecessary to decide “who had the burden of proving whether plaintiff remained an at-will employee” (id. at p. 438). On accommodation, the court called the issue “a much closer one” (id. at p. 442) and grounded its ruling in the absence of specific restrictions and communications — leaving unresolved how far an employer must probe an ambiguous release when it has actual knowledge of a serious condition, a line later interactive-process cases continue to draw. The punitive damages claim was mooted rather than decided. (Id. at p. 444.)