Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County No. 06CC06647, Daniel J. Didier, Judge.
Brown & Lipinsky, Daren H. Lipinsky, John Fessler; Law Office of Aaron Ray Boyd and Aaron Ray Boyd for Plaintiff and Appellant.
Tredway, Lumsdaine & Doyle, Roy J. Jimenez and Pamela K. Tahim for Defendant and Respondent.
OPINION
O’LEARY, J.
Narayan Kane appeals from a judgment in favor of his former employer, Label-Aire, Inc., in his age discrimination action brought after he was laid off in a company-wide work force reduction. He contends the trial court erred by granting Label-Aire’s motion for summary judgment. We find no error and affirm the judgment.
FACTS
Complaint
Label-Aire designs and manufactures labeling equipment. In his complaint against Label-Aire for age discrimination, Kane alleged he was hired by Label-Aire (at age 66) as a mechanical engineer in 2001. In April 2005 (at age 72), his employment was terminated for the stated reason his position had been eliminated. Kane alleged his age was a motivating factor in his termination. His position was not eliminated. Instead, a younger employee from another department, who had only six months seniority and less training and experience, was moved into Kane’s position. Kane’s complaint contained a cause of action for age discrimination in violation of Government Code sections 12940 and 12941, and wrongful termination in violation of public policy (i.e., age discrimination).
Kane’s complaint also contained causes of action for disability discrimination (tendonitis), but he does not challenge the summary adjudication of those causes of action. Accordingly, we will not discuss facts related to those claims.
Label-Aire’s Summary Judgment Motion
Label-Aire filed a motion for summary judgment on the grounds Kane’s position was eliminated as part of a company-wide work force reduction and reorganization. Kane could not make a prima facie case of age discrimination or show Label-Aire’s legitimate business reason for terminating his employment was a mere pretext for age discrimination.
Label-Aire relied on the following facts. When Kane was hired at the age of 66 as a mechanical engineer, he was told in his job interview with George Allen, Label-Aire’s Senior Executive Officer, that Allen was interested in him because of his background in designing labeling systems. Allen hired Kane for the purpose of expanding that segment of the company’s business.
Kane was let go in April 2005, for economic reasons, as part of “Project Burning Tree,” a program initiated to address the company’s financial hardships. Project Burning Tree’s goal was to reduce work force and reorganize the company. Employee layoffs began about one month after Project Burning Tree was initiated and 12 employees (including Kane) were let go.
The company needed to reduce salary overhead in its engineering department, and Kane was one of the department’s most highly paid employees. Sometime prior to the layoffs, Kenichi Yamamoto, Director and Manager of the Engineering Department (Kane’s supervisor), asked Kane about his age and when he planned to retire. But Yamamoto did not discuss Kane’s age with anyone prior to Kane’s termination. Additionally, although Yamamoto was directed to compile a list of likely candidates for laying off in the reorganization, he did not include Kane on that list. After the layoffs, there were several other employees in the engineering department between the ages of 50 and 60.
After Kane’s termination, Israel Vega, a mechanical engineer in the Research and Development department (R&D), was transferred into the engineering department under Yamamoto’s supervision. Yamamoto testified that as part of the reorganization, the R&D department was basically dissolved (one of the three R&D mechanical engineers was terminated as part of Project Burning Tree, Vega was transferred to engineering, and one mechanical engineer was left in R&D). Kane’s systems design duties were absorbed by the four mechanical engineers in the engineering department, including Vega, who also retained his previous responsibilities.
In deciding who to layoff, management attempted to balance the need for budget reductions against the company’s engineering needs. Allen testified he selected Kane because he was anticipating losing business on the labeling systems design side, which was Kane’s area of expertise. Sue Farrah, Label-Aire’s Human Resources Manager, testified Kane had been hired to primarily work on labeling systems design and the company was curtailing that area of its business—the company did not need to retain an engineer at Kane’s level of compensation with systems expertise. Yamamoto similarly testified he understood the labeling systems design business, Kane’s area of expertise, was going away, and since the layoffs, there had been a “noticeable” decline in the systems business.
Allen testified keeping Vega and transferring him to the engineering department was “an easy decision” for him because Vega knew the product line, had more familiarity with “new systems” than Kane, he was “more intimate with the core product” including the “applicator product line[,]” and had been the lead mechanical engineer on designing and building the company’s “new core product.” Yamamoto testified Vega had wide breath of knowledge about applicators and had been instrumental in designing the company’s next generation applicators.
Although he was younger than Kane, Vega had job seniority over Kane by several months. (All but one of the remaining employees in the engineering department had job seniority over Kane.) Farrah testified consideration was given to Vega’s seniority because that was usually done, but she could only “speculate” that was done in this case.
Kane disputed that he was terminated strictly for economic reasons. He cited as evidence the facts that Vega’s salary was only a few hundred dollars a year less than his own, and another mechanical engineer in the engineering department was paid about $4,000 a year more. The four mechanical engineers who were not terminated were all younger than Kane. (Kane was 72, Vega was 37, the other engineers were ages 22, 53, and 57.)
Kane disputed he was the logical person to be terminated under the circumstances. His supervisor, Yamamoto, did not include Kane on his list of possible terminations. Kane testified in his deposition his area of expertise was designing labeling systems and when he was hired, he knew he was being hired to work on systems. But he also had experience in applicators. Although during his employment he spent the majority of his time focused on systems design work, he was “many times” assigned on the applicator side. Between 2001 and 2005, he worked with R&D on two or three applicator designs.
Kane disputed that Vega was more familiar with the new product line or new systems, or that Vega was instrumental in designing the new core product. He relied on deposition testimony from Steve Winders (Label-Aire’s designated person most knowledgeable about the new core product) that the new core product had been initially developed by Mike Crankshaw, a mechanical engineer who retired from Label-Aire in 2002. But Winders also testified it was Crankshaw who started the project, but “[Vega] was part of the team that finished it.” In his declaration, Kane stated whenever he interacted with the R&D department in 2002, it was his observation that Crankshaw spearheaded development of the new core product and he usually saw Vega working on other projects. In his deposition, Kane testified he was familiar with the company’s new core product.
The Ruling
In granting summary judgment, the trial court concluded Kane had failed to present any substantial evidence of pretext or discriminatory animus on the part of Label-Aire. The trial court found it was undisputed Kane was terminated during a work force reduction in which 11 other employees were let go. Several employees who remained in the engineering department were between 50 and 60 years old. The court found the evidence was inconclusive as to whether Kane’s position was eliminated or whether Vega had replaced him. Vega already had the same job title as Kane (mechanical engineer), and after transferring to engineering retained that title, but after the reorganization there were fewer mechanical engineers in the company in total. The undisputed evidence was that Vega was more familiar with the new product line of applicators, and the labeling systems work that was Kane’s area of expertise was being reduced. The court subsequently entered judgment in favor of Label-Aire. Kane appeals.
DISCUSSION
Summary judgment is properly granted when there is no triable issue as to any material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) “A defendant seeking summary judgment bears the initial burden of proving the ‘cause of action has no merit’ by showing that one or more elements of plaintiff’s cause of action cannot be established or there is a complete defense. [Citations.] Once the defendant’s burden is met, the burden shifts to the plaintiff to show that a triable issue of fact exists as to that cause of action. [Citation.] [¶] ‘[We] review[] de novo the trial court’s decision to grant summary judgment and we are not bound by the trial court’s stated reasons or rationales. [Citations.]’ We accept as true the facts alleged in the evidence of the party opposing summary judgment and the reasonable inferences that can be drawn from them. [Citation.] However, to defeat the motion for summary judgment, the plaintiff must show ‘“specific facts,”’ and cannot rely upon the allegations of the pleadings. [Citations.]” (Horn v. Cushman & Wakefield Western, Inc. (1999) 72 Cal.App.4th 798, 805 (Horn).)
Federal and state law prohibit an employer from discriminating against an employee because of the employee’s age. (Gov. Code, § 12941, subd. (a); 42 U.S.C. § 2000e et seq.) Prohibited discrimination is generally found on one of two theories: “‘disparate treatment’” when the employer intentionally discriminates against an employee on prohibited grounds, or “‘disparate impact’” when “regardless of motive, a facially neutral employer practice or policy, bearing no manifest relationship to job requirements, in fact had a disproportionate adverse effect on members of the protected class. [Citations.]” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 354, fn. 20 (Guz).) Kane only pled his case as one of disparate treatment.
Kane contends he demonstrated a material issue of fact as to whether Label-Aire intentionally discriminated against him because of his age by laying him off. Discriminatory intent is a necessary element of his disparate treatment claim. (Clark v. Claremont University Center (1992) 6 Cal.App.4th 639, 662.) Because direct evidence of such intent is rare, “California has adopted the three-stage burden-shifting test [originally] established by the United States Supreme Court” in McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792 (McDonnell Douglas), for trying disparate treatment claims, but which has also been extended to rulings on summary judgment motions. (Guz, supra, 24 Cal.4th at p. 354.)
“At trial, the McDonnell Douglas test places on the plaintiff the initial burden to establish a prima facie case of discrimination. . . . [¶] The specific elements of a prima facie case may vary depending on the particular facts. [Citations.] Generally, the plaintiff must provide evidence that (1) he was a member of a protected class, (2) he was qualified for the position he sought or was performing competently in the position he held, (3) he suffered an adverse employment action, such as termination . . . and (4) some other circumstance suggests discriminatory motive. [Citations, fn. omitted.] [¶] If, at trial, the plaintiff establishes a prima facie case, a presumption of discrimination arises. . . . [¶] Accordingly, at this trial stage, the burden shifts to the employer to rebut the presumption by producing admissible evidence, sufficient to ‘raise[] a genuine issue of fact’ and to ‘justify a judgment for the [employer],’ that its action was taken for a legitimate, nondiscriminatory reason. [Citations.] . . . [¶] If the employer sustains this burden, the presumption of discrimination disappears. [Citations.] The plaintiff must then have the opportunity to attack the employer’s proffered reasons as pretexts for discrimination, or to offer any other evidence of discriminatory motive. [Citations.] . . . [Citations.] The ultimate burden of persuasion on the issue of actual discrimination remains with the plaintiff. [Citations.]” (Guz, supra, 24 Cal.4th at pp. 354-356.)
Guz explained that appellate courts have differed as to exactly how to apply the McDonnell Douglas test to a motion for summary judgment against a claim of prohibited discrimination, i.e., must the plaintiff first demonstrate a prima facie case? Or, applying the usual summary judgment rule that the moving party bears the initial burden, must the defendant initially provide evidence either that the plaintiff cannot establish a prima facie case and/or that the employer has a legitimate nondiscriminatory reason for its action (the second step of McDonnell Douglas)? (Guz, supra, 24 Cal.4th at pp. 356-357.)
Guz did not resolve the conflict because the employer set forth competent admissible evidence showing a legitimate business reason for its action, thereby shifting the burden to the plaintiff to demonstrate that a rational juror could find, more likely than not, that the employer’s proffered legitimate reason was untrue or a pretext for discrimination. (Guz, supra, 24 Cal.4th at p. 356.)
Kelly v. Stamps.com Inc. (2005) 135 Cal.App.4th 1088, 1097-1098 (Kelly), articulated a formulation of the Guz standard in view of Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851, which we will follow here: “A defendant employer’s motion for summary judgment slightly modifies the order of [the McDonnell Douglas] showings. If, as here, the motion for summary judgment relies in whole or in part on a showing of nondiscriminatory reasons for the discharge, the employer satisfies its burden as moving party if it presents evidence of such nondiscriminatory reasons that would permit a trier of fact to find, more likely than not, that they were the basis for the termination. [Citations.] To defeat the motion, the employee then must adduce or point to evidence raising a triable issue, that would permit a trier of fact to find by preponderance that intentional discrimination occurred. [Citations.] In determining whether these burdens were met, we must view the evidence in the light most favorable to plaintiff, as the nonmoving party, liberally construing her evidence while strictly scrutinizing defendant’s. [Citation.]”
The parties argue about whether Kane established a prima facie age discrimination case. The elements are not in dispute: an employee must show (1) he was 40 years of age or older, (2) suffered an adverse employment action, (3) was satisfactorily performing his job at the time, and (4) employee was replaced in his position by a significantly younger person. (Hersant v. Department of Social Services (1997) 57 Cal.App.4th 997, 1003 (Hersant).) Label-Aire argues Kane could not establish the last element because he was not replaced by a younger person, his position was eliminated. Kane counters he was replaced by a younger person because Vega was transferred into the engineering department and assumed his former duties. In its ruling, the trial court found the evidence inconclusive as to whether Kane was “replaced” by Vega or his position “eliminated.” We need not belabor the point. Once the employer proffers a legitimate nondiscriminatory reason for the employment action, the presumptions raised by the prima facie case disappear, and we are concerned then only with whether the employee has put forward substantial evidence from which a trier of fact could conclude the employer’s proffered reasons were merely pretexts for discrimination. (Guz, supra, 24 Cal.4th at pp. 354-356.)
The basis for Label-Aire’s summary judgment motion was that Kane was terminated for legitimate, nondiscriminatory business reasons, namely, Label-Aire’s economically induced restructuring and reduction of its work force in April 2005. Twelve employees were laid off, including two mechanical engineers—Kane from the engineering department and another mechanical engineer from R&D. No new mechanical engineers were hired by the company. Instead, Vega was moved from R&D into the engineering department. He and the three other remaining mechanical engineers absorbed Kane’s responsibilities into their existing duties. Allen, who was apparently the decision maker, testified he hired Kane because of his systems design expertise. But at the time of the reorganization, Allen anticipated a decline in that area of business. Vega had more experience in applicators and the company’s new core product. Thus, Allen believed it made better business sense to let Kane go as his expertise would not be as critical in Label-Aire’s changing business environment. “From the evidence defendant initially presented, this explanation may be deemed a legitimate, nondiscriminatory reason, sufficient to shift to plaintiff the burden of showing a triable issue of its falsity, with respect to [him], and ultimately of discriminatory motive instead.” (Kelly, supra, 135 Cal.App.4th at p. 1098.)
Once Label-Aire offered a legitimate business reason for its decision, the burden shifted to Kane to put forward evidence of discriminatory intent. To do this, he was required to present “‘substantial responsive evidence’ that the employer’s showing was untrue or pretextual.” (Martin v. Lockheed Missiles & Space Co. (1994) 29 Cal.App.4th 1718, 1735; Guz, supra, 24 Cal.4th at p. 356.) “[A]n employer is entitled to summary judgment if, considering the employer’s innocent explanation for its actions, the evidence as a whole is insufficient to permit a rational inference that the employer’s actual motive was discriminatory.” (Guz, supra, 24 Cal.4th at p. 361.)
Kane contends he satisfied his burden by putting forward evidence Label-Aire’s explanation was “unworthy of credence.” He argues the following facts cast doubt on the sincerity of Label-Aire’s stated reasons. Kane was one of four mechanical engineers in the engineering department, but was the oldest and was the only one laid off. The fact Vega was subsequently transferred into the engineering department shows the department still needed four mechanical engineers. The economic excuse was implausible because Vega was paid only slightly less than Kane and at least one mechanical engineer who was not laid off made more than Kane. The evidence of an anticipated decline in systems design business was weak, because it was based only on Allen’s testimony he anticipated such a decline, and Farrah’s hearsay testimony she was told a decline was anticipated. There was no confirmation such a decline occurred—Yamamoto testified the decline in systems design work that followed was “noticeable” not that it was “significant.” Kane also argues Allen’s assertion Vega was more qualified on the company’s new core product was implausible because the new core product was actually conceived by Crankshaw, who retired in 2002. And Yamamoto, who was head of engineering, did not recommend Kane be let go.
None of these facts were sufficient to permit a trier of fact to find Label-Aire’s proffered reasons were a pretext for a discriminatory motive. An employee may not defeat summary judgment by establishing nothing more than a factual dispute as to whether the employer’s decision was wrong, imprudent, or mistaken “‘since the factual dispute at issue is whether discriminatory animus motivated the employer, not whether the employer is wise, shrewd, prudent, or competent. [Citations.] Rather, the [employee] must demonstrate such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer’s proffered legitimate reasons for its action that a reasonable factfinder could rationally find them “unworthy of credence,” [citation], and hence infer “that the employer did not act for the [asserted] non-discriminatory reasons.” [Citations.]’” (Hersant, supra, 57 Cal.App.4th at p. 1005.)
Although not specifically discussed by either party, we take note that due to the “same actor presumption” Kane bore a heavy burden to overcome Label-Aire’s nondiscriminatory reasons for terminating. The evidence demonstrated Allen hired Kane in 2001, at the age of 66, and made the decision to let him go in 2005, when he was 72. Horn, supra, 72 Cal.App.4th 798, is instructive. There, the court considered an age discrimination suit by a former employee who was hired at age 55, and as part of a company wide reorganization, let go four and one-half years later (at the age of 59) by the same decision maker. The court noted there was a very strong same actor presumption of nondiscrimination. “‘[W]here the same actor is responsible for both the hiring and the firing of a discrimination plaintiff, and both actions occur within a short period of time, a strong inference arises that there was no discriminatory motive.’ [Citations.] . . . ‘One is quickly drawn to the realization that “[c]laims that employer animus exists in termination but not in hiring seem irrational.” From the standpoint of the putative discriminator, “[i]t hardly makes sense to hire workers from a group one dislikes (thereby incurring the psychological costs of associating with them), only to fire them once they are on the job.”’ [Citation.]” (Id. at p. 809.) And while Horn observed that most cases applying this presumption involve shorter spans of time between the hiring and termination, “five years is a relatively short time and is not so long a time as to attenuate the presumption.” (Id. at p. 809, fn. 7.)
Kane does not dispute that Label-Aire was undergoing a company-wide reorganization and reduction in work force because of its financial difficulties and the company wanted to reduce salary overhead in its engineering department. Kane was one of the most highly paid employees in the department. That the later transfer of Vega into the engineering department might have wiped out the salary savings for that department does not obviate the financial benefit to the company as a whole from the layoffs—no new mechanical engineers were hired.
Kane makes much of the fact that on two occasions Yamamoto asked about his age and retirement plans. He asserts this is proof age was the reason for his being let go, but that is pure speculation. It is undisputed that Yamamoto was not the decision maker and in fact he did not identify Kane as a potential for layoff. It is undisputed that Yamamoto never discussed Kane’s age with anyone else, and there is no evidentiary support for Kane’s claim Yamamoto must have been told to ask about such things. Yamamoto’s comments were nothing more than “stray remarks” insufficient to demonstrate age discrimination on the part of the decision maker. (See Nesbit v. Pepsico, Inc. (9th Cir. 1993) 994 F.2d 703; Merrick v. Farmers Ins. Group (9th Cir. 1990) 892 F.2d 1434.)
Kane vigorously disputes that Vega was the more logical mechanical engineer for the company to retain. Allen testified keeping Vega and transferring him to the engineering department was “an easy decision” for him because Vega had more familiarity with applicators and the new core product. Yamamoto also testified Vega was very knowledgeable about applicators and had been instrumental in designing the company’s next generation applicators.
Kane points out that he too had experience with applicators, having assisted in the design of two or three during his tenure at Label-Aire. But Kane’s argument is mainly based on his subjective opinion as to who was better qualified. “[A]n employee’s subjective personal judgments of his or her competence alone do not raise a genuine issue of material fact. [Citation.]” (Horn, supra, 72 Cal.App.4th at p. 816.) And Kane’s criticism of Vega’s experience is based on his observations from three years earlier concerning the design of the new core product. He offered no evidence to contradict the testimony of Winders that while Crankshaw started the project, “[Vega] was part of the team that finished it.”
We observe that Kane’s assertions are largely nitpicking about his and Vega’s relative engineering experience. But at the end of the day, the relevant inquiry is not which of the two mechanical engineers was the best qualified. It may well be that in hindsight Allen made a poor decision, possibly losing a more versatile employee. The relevant inquiry is whether Allen had legitimate reasons for retaining Vega and reasonably believed Kane’s expertise was not as critical for where the company was headed. Allen testified for him it was a logical decision to keep Vega and let Kane go because Kane’s expertise in labeling systems design was not going to be needed in that declining side of the company’s business. Vega’s expertise in applicators and the new core product was more important to Allen. Kane has put forward no evidence beyond his own disagreement with Allen’s opinions. That is not sufficient to establish the legitimate nondiscriminatory reasons were simply a pretext for ridding the company of an older worker.
In conclusion, “summary judgment for the employer may . . . be appropriate where, given the strength of the employer’s showing of innocent reasons, any countervailing circumstantial evidence of discriminatory motive, even if it may technically constitute a prima facie case, is too weak to raise a rational inference that discrimination occurred. Such is the case here.” (Guz, supra, 24 Cal.4th at p. 362.) We are sympathetic to Kane’s disappointment and anger at being terminated from his position. But Kane has not produced evidence from which a rational trier of fact could find more likely than not that Label-Aire’s proffered legitimate business reason for the termination was untrue or a pretext for discrimination.
DISPOSITION
The judgment is affirmed. The Respondent is awarded its costs on appeal.
WE CONCUR: RYLAARSDAM, ACTING P. J., FYBEL, J.