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Court of Appeal:
Gender-Bias Suit Against Global Corporation May Proceed
Opinion Says Female Executive Who Was Told That Company Is ‘a Guy’s Club’ and Was Demoted, Then Fired, Was Properly Granted New Trial After Judge Decided He Erred in Granting Summary Judgment to Defendant
By a MetNews Staff Writer
The Court of Appeal has held that a woman who sold her Costa Mesa business to a global technology company and, as part of the deal, was given an executive position, but was soon demoted, advised that the employer “is a guy’s club,” and was then fired, was properly granted a new trial in her gender discrimination suit after the judge decided he had erred in viewing the evidence when he granted summary judgment to the defendant.
There were other factors indicating bias, Justice Maurice Sanchez of the Fourth District’s Div. Three said in an unpublished opinion, filed Wednesday, the totality of which, he declared, requires affirmance of the new-trial order by Orange Superior Court Judge David A. Hoffer.
The victor in a David vs. Goliath battle in the appeals court was Carol Eastman who, in 2011, started up a communications services firm, House of Lync, that was tied to Skype, Microsoft’s telecommunications application. In 2016, her company was acquired by SoftwareONE Inc., which garners $9.6 billion in annual revenues.
Headquartered in Switzerland, it has about 8,700 employees and 65,000 business customers.
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CAROL EASTMAN Business executive |
2016 Press Release
A Nov. 1, 2016 press release announced the purchase and quoted Eastman, then 49, as saying:
“As a member of the Communications community for over 30 years, I am excited for the next chapter with SoftwareONE.”
Her excitement was soon to turn to exasperation. Nine months later, according to her rendition of the facts, a “National Sales Kick-off” event in Mexico was marked by “outlandish behavior.”
She said that the then-chief executive officer of SoftwareONE, Patrick Winter (since deceased), “expected the women to join him on stage to dance, and he poured champagne down their throats.”
Eastman declined, she was to recount, and made a complaint to the president of SoftwareONE’s U.S. division, after which attitudes toward her soured.
She was shunted from her post as head of “solution sales” for the “Skype for Business” unit, was replaced by a male younger than she, and was allegedly advised at a social event by Jason Cochran, SoftwareONE’s director of technical solutions, not only that the company “is a guy’s club” but that she was “never going to make it” there, according to Eastman’s account. In that conversation, she maintains, he termed her a “bitch.”
Eastman was fired on July 20, 2018, after SoftwareONE purchased a company similar to the one it had bought from her.
In his opinion affirming Hoffer’s new-trial order, Sanchez said:
“We conclude the evidence, in the aggregate, is sufficient to support a reasoned inference that plaintiff’s demotion or firing was the result of discriminatory or retaliatory animus.”
He explained:
“Viewed in the light most favorable to plaintiff, we are persuaded plaintiff’s evidence that she was replaced by a younger man, had been performing well at the company, was told defendant was a ‘guy’s club,’ was called a ‘bitch’ by a member of defendant’s leadership team, was demoted and then fired within a relatively short span of time after complaining about defendant’s allegedly discriminatory culture is enough that a jury could reasonably conclude defendant was motivated not by its stated reasons, but by discriminatory or retaliatory animus. That conclusion compels us to affirm the court’s order vacating its prior judgment and granting plaintiff a new trial.”
Hearsay Considerations
Sanchez said that Hoffer erred in taking into account Cochran’s purported remark that Eastman was “never going to make it” at the company because it was hearsay, but that his asserted reference to the company as “a guy’s club” comes under an exception to the hearsay ban.
He invoked Evidence Code §1222 which provides:
“Evidence of a statement offered against a party is not made inadmissible by the hearsay rule if:
“(a) The statement was made by a person authorized by the party to make a statement or statements for him concerning the subject matter of the statement; and
“(b) The evidence is offered either after admission of evidence sufficient to sustain a finding of such authority or, in the court’s discretion as to the order of proof, subject to the admission of such evidence.”
The jurist reasoned that “Cochran’s high position in the corporate hierarchy and defendant’s characterization of him in its motion and supporting evidence as ‘leadership’ are substantial evidence of his authority to speak, in general terms, about defendant’s company culture,” concluding that Hoffer “did not abuse its discretion by overruling defendant’s objection and admitting that statement into evidence.”
‘Same Actor Inference’
Ordinarily, Sanchez acknowledged, where a defendant seeks summary judgment in an employment discrimination suit, the ‘same actor inference’ applies, heightening the plaintiff’s burden where the same person both hired and fired that person. The rationale, he said, is that if an employer harbored a bias against a particular group, a member of that group would not have been hired.
“But that rationale is much weaker when the person being hired is the owner and principal of a firm being simultaneously acquired by the employer,” Sanchez remarked, explaining:
“The employer might be motivated to acquire the business by a desire for access to customer lists and relationships, intellectual or physical property, goodwill, technical expertise, or other considerations having nothing to do with the identity of the owner of the company to be acquired. Thus, a jury might easily conclude the employer hired the principal of the company as a prerequisite for acquiring the company, even while harboring discriminatory motives against that person.”
Standard on Review
Div. Three decided that the abuse-of-discretion standard of review applies in determining if a judge properly granted the plaintiff a new trial after awarding summary judgment to the defendant on the ground that the evidence was insufficient to establish liability, repudiating its former view that a determination should be made de novo.
It’s true, Sanchez wrote, that the California Supreme Court, in its 2010 opinion in Reid v. Google, Inc., addressed de novo whether evidentiary objections upon which the judge had not ruled, in determining a summary judgment motion, should have been sustained. But there, he noted, no discretion had been exercised, rendering an abuse of discretion an impossibility.
“[T]he weight of authority since Reid supports application of the abuse of discretion standard,” he said, announcing that his Orange County-based division was hopping aboard in utilizing that approach, leaving only the Fourth District’s Div. Two, which hears appeals from the superior courts in Riverside and San Bernardino counties, on record as favoring de novo review.
Sanchez observed that “trial courts typically rule on evidentiary objections in summary fashion, which often prevents us from determining the precise nature (i.e., principally legal or factual) of the trial court’s ruling,” rendering an abuse-of-discretion review appropriate.
The case is Doe v. Software One, G060554.
Other Litigation
Sanchez provided no explanation as to why Eastman, whose identity as the founder/CEO of House of Lync is a matter of public knowledge, was allowed to proceed pseudonymously in the appeals court, as she had in the trial court. Eastman has been involved in other litigation with SoftwareONE in her own name.
SoftwareONE’s U.S. headquarters is in Wisconsin. The employer sued Eastman there, alleging that when access to her office-issued laptop was remotely frozen after she was fired, she removed the hard drive disk and refused to return it.
Waukesha County Circuit Court William J. Domina at first denied summary judgment to SoftwareONE based on his impression that there was a triable issue as to whether Eastman had returned the hard drive. After it emerged that FedEx shipment information she had attached to her affidavit related to the sending of some other item, Domina found that Eastman “committed contempt by engaging in misconduct...by lying about having returned Plaintiff’s hard drive,” ordering that she pay a daily fine until the HDD was actually restored to the company.
He ordered her to pay the replacement value of the destroyed laptop, with the amount trebled pursuant to statute.
District II of the Wisconsin Court of Appeals last Feb. 23 found that although “Eastman’s conduct was contemptuous,” the daily fine was unauthorized. However, it affirmed a $4,623 damage-award.
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