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  • THRIVE PSYCHOLOGY GROUP, INC., A CALIFORNIA CORPORATION VS LINDA BAGGETT Other Breach of Contract/Warranty (not fraud or negligence) (General Jurisdiction) document preview
  • THRIVE PSYCHOLOGY GROUP, INC., A CALIFORNIA CORPORATION VS LINDA BAGGETT Other Breach of Contract/Warranty (not fraud or negligence) (General Jurisdiction) document preview
  • THRIVE PSYCHOLOGY GROUP, INC., A CALIFORNIA CORPORATION VS LINDA BAGGETT Other Breach of Contract/Warranty (not fraud or negligence) (General Jurisdiction) document preview
  • THRIVE PSYCHOLOGY GROUP, INC., A CALIFORNIA CORPORATION VS LINDA BAGGETT Other Breach of Contract/Warranty (not fraud or negligence) (General Jurisdiction) document preview
  • THRIVE PSYCHOLOGY GROUP, INC., A CALIFORNIA CORPORATION VS LINDA BAGGETT Other Breach of Contract/Warranty (not fraud or negligence) (General Jurisdiction) document preview
  • THRIVE PSYCHOLOGY GROUP, INC., A CALIFORNIA CORPORATION VS LINDA BAGGETT Other Breach of Contract/Warranty (not fraud or negligence) (General Jurisdiction) document preview
  • THRIVE PSYCHOLOGY GROUP, INC., A CALIFORNIA CORPORATION VS LINDA BAGGETT Other Breach of Contract/Warranty (not fraud or negligence) (General Jurisdiction) document preview
  • THRIVE PSYCHOLOGY GROUP, INC., A CALIFORNIA CORPORATION VS LINDA BAGGETT Other Breach of Contract/Warranty (not fraud or negligence) (General Jurisdiction) document preview
						
                                

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Electronically FILED by Superior Court of California, County of Los Angeles on 02/17/2023 04:38 PM David W. Slayton, Executive Officer/Clerk of Court, by C. Meeks,Deputy Clerk 1 SEYFARTH SHAW LLP Christopher A. Crosman (SBN 190336) 2 E-mail: ccrosman@seyfarth.com D. Joshua Salinas (SBN 282065) 3 E-mail: jsalinas@seyfarth.com 2029 Century Park East, Suite 3500 4 Los Angeles, California 90067-3021 Telephone: (310) 277-7200 5 Facsimile: (310) 201-5219 6 Attorneys for Plaintiffs and Cross-Defendants THRIVE PSYCHOLOGY GROUP, INC., 7 CAMILO RUAN and CHARLYNN RUAN 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 FOR THE COUNTY OF LOS ANGELES - WEST DISTRICT 10 11 THRIVE PSYCHOLOGY GROUP, INC., a Case No. 22SMCV00023 California corporation, 12 Assigned to the Hon. Helen Zukin; Plaintiff, Dept. 207 13 v. RESERVATION ID: 465040293139 14 LINDA BAGGETT, an individual; and, DOES PLAINTIFFS AND CROSS-DEFENDANTS 15 THRIVE PSYCHOLOGY GROUP, INC., 1-50, inclusive, CAMILO RUAN AND CHARLYNN RUAN’S 16 MEMORANDUM IN SUPPORT OF MOTION Defendants. FOR SUMMARY ADJUDICATION 17 Date : May 4, 2023 18 Time : 8:30 a.m. Dept. : 207 19 20 Complaint filed: January 7, 2022 Cross-Complaint Filed: January 24, 2022 21 AND RELATED CROSS-ACTION. 22 23 24 25 26 27 28 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 TABLE OF CONTENTS 2 I. INTRODUCTION .......................................................................................................................... 1 3 II. FACTUAL BACKGROUND ......................................................................................................... 2 4 III. LEGAL DISCUSSION ................................................................................................................... 6 5 A. Summary Judgment Standard ............................................................................................. 6 6 B. Baggett’s Wrongful Termination Claim Fails As A Matter Of Law .................................. 7 7 C. Baggett’s Retaliation Claim Fails ..................................................................................... 10 8 IV. CONCLUSION ............................................................................................................................. 12 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 TABLE OF AUTHORITIES 2 Page(s) 3 Federal Cases 4 Day v. Sears Holdings Corp., 5 930 F.Supp. 2d 1146 (C.D. Cal. 2013) ............................................................................................. 10 6 Holtzclaw v. Certainteed Corp., 795 F. Supp. 2d 996 (E.D. Cal. 2011)................................................................................................. 8 7 McDonnell Douglas Corp. v. Green, 8 411 U.S. 792 (1973) ............................................................................................................................ 8 9 Villiarimo v. Aloha Island Air, Inc., 10 281 F.3d 1054 (9th Cir. 2002) ............................................................................................................ 8 11 State Cases 12 Aguilar v. Atlantic Richfield Co., 25 Cal. 4th 826, 849-854 (2001) ……………………………………………………………………7 13 Arteaga v. Brinks, Inc., 14 163 Cal. App. 4th 327 (2008) ....................................................................................................... 8, 10 15 Cotran v. Rollins Hudig Hall Int’l. Inc., 16 17 Cal. 4th 93 (1998) .......................................................................................................................... 8 17 Diego v. Pilgrim United Church of Christ, 231 Cal. App. 4th 913 (2014) ........................................................................................................... 10 18 Horn v. Cushman & Wakefield Western, Inc., 19 72 Cal. App. 4th 798 (1999) ............................................................................................................... 8 20 King v. UPS, Inc., 21 152 Cal. App. 4th 426 (2007) ............................................................................................................. 8 22 Lawson v. PPG Architectural Finishes, Inc., 12 Cal. 5th 703 (2022) ...................................................................................................................... 10 23 Morgan v. Regents of University of Cal., 24 88 Cal. App. 4th 52 (2000) ................................................................................................................. 8 25 Sequoia Vacuum Systems v. Stransky, 229 Cal. App. 2d 281 (1964) .............................................................................................................. 9 26 27 Stokes v. Dole Nut Co., 41 Cal. App. 4th 285 (1995) ............................................................................................................... 9 28 ii PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 Vatalaro v. County of Sacramento, 79 Cal. App. 5th 367 (2022) ....................................................................................................... 11, 12 2 Wills v. Super. Ct., 3 195 Cal. App. 4th 143 (2011) ............................................................................................................. 8 4 Yanowitz v. L'Oreal USA, Inc., 5 36 Cal. 4th 1028 (2005) ...................................................................................................................... 8 6 State Statutes 7 Labor Code § 1102.5............................................................................................................................... 11 8 Cal. Code Civ. Proc. § 437c(o)(2)……………………………………………………………………….6 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 I. INTRODUCTION 2 Defendant and Cross-Complainant Dr. Linda Baggett (“Baggett”) previously worked for Plaintiff 3 and Cross-Defendant Thrive Psychology Group (“Thrive”) as a psychologist. Prior to joining Thrive, 4 Baggett had attempted to start her own practice, but had been unable to develop a sufficient client base. 5 Therefore, she schemed to gain access to Thrive’s clients as a trusted employee, set up a competing 6 practice, and then use Thrive’s confidential business information to improperly solicit Thrive’s clients 7 for her own practice while still employed by Thrive. When Thrive discovered what Baggett had done, it 8 immediately terminated her employment. However, it was too late. As a result of Baggett’s improper 9 actions, Thrive lost all of the clients Baggett wrongfully solicited, suffering hundreds of thousands of 10 dollars in damages. Thrive has brought this action in order to vindicate its rights. 11 Seeking to retaliate against Thrive, Baggett filed a meritless cross-complaint against it and 12 individual defendants Camilo Ruan and Dr. Charlynn Ruan (the “Ruans”). Bagget’s cross-complaint 13 includes claims for retaliation and wrongful termination that are disingenuous at best. Baggett 14 voluntarily resigned her employment, but then signed an agreement to continue working for Thrive part 15 time. Baggett has admitted that she intentionally deceived Thrive into thinking that she would continue 16 to work for Thrive as a part-time employee while she started up her own practice. She admits that she 17 never intended abide by her part-time employment agreement. Indeed, she has admitted that she 18 engaged in a scheme to deceive Thrive about her true intentions in order to continue to have access to 19 client files and clients. 20 Baggett misused her position of trust with Thrive, reaching out to the clients who she had been 21 seeing and soliciting them to leave Thrive and become clients of her new practice. She did this late on a 22 Friday evening and on Saturday in order to avoid detection by her employer. Some clients she spoke 23 with immediately, but she left voice messages for others. Several clients called back and left voice 24 messages in Thrive’s main voicemail. When the Ruans heard these messages, they realized that Baggett 25 had deceived them and was soliciting Thrive’s clients for her own practice, in breach of her agreements, 26 Thrive policies, and ethical standards for psychologists. Therefore, they immediately terminated 27 Baggett’s employment. 28 1 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 This motion seeks summary adjudication as to Baggett’s claims for retaliation and wrongful 2 termination. The evidence unequivocally demonstrates that the Ruans terminated Baggett because she 3 lied to them, broke company policies, breached ethical principles, and because they believed that she 4 was soliciting Thrive clients to join her own practice. 5 To obtain summary adjudication, it is not necessary for Thrive and the Ruans to prove that 6 Baggett lied to them, breached policies or ethics, or that she was soliciting their clients, only that they 7 believed that she was, and that these were the reasons that they terminated her. However, in this case 8 Baggett admits to lying to Thrive and breaching its policies and therefore it is undisputed that Thrive 9 had lawful reasons to terminate her. Baggett has no evidence to demonstrate that she was terminated for 10 any improper purpose, and therefore summary adjudication should be granted as to her claims for 11 retaliation and wrongful termination. 12 II. FACTUAL BACKGROUND 13 Founded in 2018, Thrive is a successful, established therapy practice that is dedicated to 14 women’s wellness and empowerment. Thrive offers both in-person and online therapy and serves 15 clients in California, Illinois, Washington, Florida, New Jersey and New York. (Thrive’s Separate 16 Statement of Undisputed Material Fact at fact number (“UF”) 1 [Cross-Complaint, ¶ 17; Charlynn Ruan 17 Decl. ¶¶ 2, 3; Camilo Ruan Decl. ¶¶ 2]).1 18 Beginning in March 2020, Thrive employed Baggett as a Lead Clinical Psychologist, based out 19 of Thrive’s Manhattan Beach, CA offices. (UF 1 [Cross-Complaint, ¶ 17; Charlynn Ruan Decl. ¶¶ 2, 3; 20 Camilo Ruan Decl. ¶¶ 2]). Prior to joining Thrive, Baggett worked as a psychologist for the Veterans 21 Administration. (Baggett Dep. 15:12-15:25). She informed Thrive that she had previously attempted to 22 start a private practice, but that she had been unsuccessful due to the cost and difficulty of obtaining 23 clients. (Charlynn Ruan Decl. ¶ 5, Camilo Ruan Decl. ¶ 3). 24 When Baggett joined Thrive, she entered into various agreements with her employer, including a 25 Trade Secret Protection and Fair Competition Agreement (“Trade Secret Agreement”). In that 26 agreement, Baggett acknowledged that she was required to safeguard Thrive’s trade secret and 27 1 Other than the Cross-Complaint, all evidence cited herein is included in Thrive’s Compendium of 28 Evidence, concurrently filed herewith. 2 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 confidential information, including information concerning clients, such as their identities, contact 2 information, treatment history and needs, and payment history. She agreed to keep this information 3 confidential, to use it only for proper business purposes, and not to use it for her own personal gain. (UF 4 2 [Baggett Dep. 49:20-67:6; Charlynn Ruan Decl. ¶ 6 and Ex. A.]). 5 Baggett also agreed that she would follow Thrive’s client transition policy (also referred to as the 6 “Offboarding Policy”) in the event she left Thrive. (UF 3). Pursuant to that policy, upon departing 7 Thrive, Baggett was to facilitate the transfer of clients she was seeing to another Thrive clinician 8 (subject, of course, to the client’s agreement to see the new clinician). She again agreed to follow this 9 policy by acknowledging Thrive’s Employee Handbook. (UF 4). 10 Baggett’s employment with Thrive was fairly uneventful. She specialized in treating clients with 11 issues relating to sexuality and body image.2 (Charlynn Ruan Decl. ¶ 4). Then, on December 1, 2021, 12 she notified Thrive that she was planning to resign, effective December 31, in order to form her own 13 therapy practice. (UF 5). 14 Upon receiving her notice, Thrive discussed with Baggett her options under the Offboarding 15 Policy. (UF 6). The purpose of the Offboarding Policy is to ensure that therapist departures from 16 Thrive, and associated client transitions to new therapists, are handled in a consistent, fair and ethically- 17 responsible manner. (Charlynn Ruan Decl. ¶ 9). The Offboarding Policy was prepared in consultation 18 with representatives from the California Board of Psychology, the APA Ethics Committee Advisor and 19 The Trust, Thrive’s malpractice insurance carrier, to ensure that the policy was completely compliant 20 with all ethical standards. (Charlynn Ruan Decl. ¶¶ 10-14). 21 Thrive’s Clinical Director, Dr. Charlynn Ruan (“Dr. Ruan”) oversees all of the therapists and is 22 responsible for ensuring that ethical rules are strictly followed. (Charlynn Ruan Decl. ¶ 9). In the event 23 that a Thrive therapist breaches ethical rules, Dr. Ruan could be held responsible for such breaches, 24 along with the therapist, and Thrive can also be exposed to legal liability. Id. All of Thrive’s policies 25 and procedures have been carefully crafted to ensure that they meet the ethical standards. (Charlynn 26 2 Thrive’s practice focuses on women’s wellness and empowerment, treating low-risk patients in connection with relationship counselling, sexuality, obsessive-compulsive disorder, issues arising from 27 fertility treatment, etc. Therapists are expressly prohibited from treating high-risk patients, such as those 28 who are struggling with suicidal ideation. (Charlynn Ruan Decl. ¶ 4). 3 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 Ruan Decl. ¶¶ 9-14). Therefore, it is of the utmost importance to Thrive that therapists strictly follow 2 these standards, for the protection of clients, the therapists, Dr. Ruan, and Thrive. 3 Under “Option 1” of Thrive’s Offboarding Policy, Baggett could work with Dr. Ruan to seek to 4 transfer the clients she had been seeing to other Thrive therapists. This process involves working with 5 Dr. Ruan to prepare a transition plan for each client to ensure the client is matched with a therapist who 6 can meet the client’s needs. Of course, the decision remained with the client to determine whether they 7 wanted to see a different therapist through Thrive. (UF 6; Charlynn Ruan Decl. ¶ 16; Baggett Dep. 8 202:15-203:14; 205:2-205:12). 9 Under “Option 2” of the Offboarding Policy, the departing therapist could continue to see clients 10 as a part-time employee of Thrive, while also operating her own competing practice. (UF 7). This was 11 an extraordinary benefit to the departing therapist, because it afforded her a steady stream of income 12 from Thrive while she sought to ramp up her own practice and obtain her own clients. (Charlynn Ruan 13 Decl. ¶ 17). 14 An important aspect of the Offboarding Plan was the timing and content of the messaging to the 15 clients. (Charlynn Ruan Decl. ¶¶ 18-19). Therapists were, naturally, expressly prohibited while still 16 employed by Thrive from soliciting clients to join them in their new practice. (UF 2, 3, 4, 10, Charlynn 17 Ruan Decl. ¶¶ 6, 7, 23, and Exs. A, B, D, and F). Further, under Option 1, clients were only to be 18 notified of a therapist’s departure after their transition plans had been completed. (Charlynn Ruan Decl. 19 ¶ 18). In most cases these communications would be handled by the client’s existing therapist, either 20 alone or together with Dr. Ruan. Id. For both ethical and legal reasons, therapists were not permitted to 21 inform clients of their departure until the transition plan was approved by Dr. Ruan, the Clinical 22 Director. Id. Under Option 2, it was also not necessary to inform clients of the therapist’s new practice. 23 Because the therapist would continue as a part-time employee of Thrive, clients would continue to book 24 appointments and see their therapist through Thrive, just as they had done before. It would have been 25 confusing to clients to inform them of the therapist’s new practice, when the clients would continue 26 treatment through Thrive. (Charlynn Ruan Decl. ¶ 19). 27 On two separate occasions, December 3 and 11, 2021, Baggett informed Thrive in writing that 28 she would continue as a part-time employee pursuant to Option 2. (UF 8, 9). On December 13, she 4 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 returned a signed offer letter for the part-time position, thereby agreeing to the terms outlined therein, 2 which included adhering to the Offboarding Policy, the Trade Secret Agreement, and the Thrive 3 Handbook. (UF 10). 4 However, as Baggett admitted during her deposition, she only signed the part-time offer letter in 5 order to deceive her employer about her true intentions. (UF 11). Baggett never planned to continue 6 working for Thrive part time; she only pretended that she would do so because she wanted to continue to 7 have access to Thrive’s confidential client information, so that she could solicit clients for her new 8 practice. (UF 11). She testified that she “had no intention of working beyond December 31st and was 9 trying to buy time . . ..” (Baggett Dep. 224:13-224:19.). Baggett also admitted that, although she 10 generally scheduled recurring clients about two months in advance, she stopped scheduling clients to be 11 seen through Thrive at this time. (UF 12). Her plan was to steal these clients, which would be more 12 difficult if they had already scheduled appointments through Thrive.3 13 Then, after business hours on Friday, December 17, Baggett accessed Thrive’s secure databases 14 and pulled up the confidential patient information for the clients that she was treating. She then used 15 this information to call each client, one after the other, to inform them that she was leaving Thrive to 16 start her own practice. Baggett engaged in additional calls over the weekend with clients who she had 17 not been able to reach on Friday evening. (UF 13). 18 Baggett timed her solicitation calls to avoid detection by Thrive. As she had planned, because it 19 was the weekend, Thrive did not discover what she was doing for several days. On Sunday, December 20 19, Mr. Ruan was checking voice messages left on Thrive’s system, and heard several messages from 21 clients who were responding to calls from Baggett. (UF 14). These messages revealed that Baggett had 22 informed clients that she was leaving Thrive to start her own practice, and that she had solicited these 23 clients to join her. (Camilo Ruan Dep. 29:11-30:14; 31:11-32:3; 33:13 - 35:14 [one message stated 24 words to the effect of “I’m so excited for you, can’t wait to see you in your new practice”]). The Ruans 25 then checked Thrive’s phone logs and HIPAA Audit Logs and saw that Baggett had accessed the files 26 3 Baggett testified that, a few days before she resigned from Thrive, she prepared a document listing out key information concerning Thrive clients she had seen, including how much they paid per session and 27 how much they had paid overall for treatment. (Baggett Dep. 288:10-291:11). This was clearly done in 28 preparation for soliciting these clients to her own practice. 5 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 for the clients she was treating and then called them one after the other on Friday evening and on 2 Saturday. (UF 15). As there would be no legitimate clinical reason for making these brief, serial calls, 3 and as Baggett did not log the calls in the client’s files as she should have, the logs confirmed to the 4 Ruans that Baggett was soliciting all of these clients for her own practice, in breach of the agreements 5 Baggett had signed, Thrive’s policies, and ethical rules governing psychologists (Baggett’s actions 6 violated numerous ethical standards for psychologists, including APA Ethical Standard 3.12, 7 “Interruption of Psychological Services,” and 10.09, “Interruption of Therapy”). (Charlynn Ruan Decl. 8 ¶ 28). Significantly, Baggett did not note any of these calls in client files, even though she was required 9 to do so, in an apparent effort to avoid detection. (UF 16).4 10 Thrive immediately cut off Baggett’s access to its systems and terminated her employment. The 11 reasons for her termination were that she lied to Thrive, causing the Ruans to lose confidence in her, she 12 breached agreements and Thrive’s policies, and she committed ethical breaches. (UF 17). Any one of 13 these actions, by itself, would have been grounds for terminating Baggett’s employment. (Charlynn 14 Ruan Decl. ¶¶ 27-32; Camilo Ruan Decl. ¶¶ 10-15). As Dr. Ruan testified, she no longer trusted Baggett 15 because of her repeated lies. She therefore “made a decision in that moment” to terminate Baggett, 16 “given the information that I had and the patterns that I had seen,” in order to do what “was in the best 17 interests of the patients.” (Charlynn Ruan Dep. 68:1- 69:7). 18 Unfortunately, the damage had already been done by the time Thrive discovered Baggett’s 19 improper scheme. All of the clients that Baggett had been seeing were lost by Thrive, and most of these 20 clients transferred to Baggett’s new therapy practice.5 (UF 18). 21 III. LEGAL DISCUSSION 22 A. Summary Judgment Standard 23 Summary judgment is compelled where a plaintiff cannot establish an element of a cause of 24 action or where a complete defense exists. Cal. Code Civ. Proc. § 437c(o)(2). The moving defendant 25 4 Baggett admitted that she knew she was required by ethical rules and Thrive policy to note all 26 communications with clients in the client files. (Baggett Dep. 96:1-96:4; 97:9-97:12). 27 5 Baggett estimates that 60-75% of the revenue she has obtained in her private practice has come from 28 former Thrive clients (Baggett Dep. 315:5-315:18). 6 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 need not disprove a claim. Aguilar v. Atlantic Richfield Co., 25 Cal. 4th 826, 849-854 (2001) (the 2 defendant need not “conclusively negate” an element of a cause of action to prevail). The defendant 3 meets its burden by showing “that one or more elements of the cause of action ... cannot be established.” 4 Aguilar, 25 Cal. 4th at 853-854. Once Thrive meets that burden, then the burden shifts to Baggett to 5 show that a triable issue of material fact exists. To satisfy this burden, Baggett may not rely upon the 6 mere allegations or denials of her pleadings. Rather, Baggett must set forth admissible evidence 7 consisting of specific facts that demonstrate the existence of a triable issue of material fact as to that 8 cause of action. Aguilar, 25 Cal. 4th at 854-855. This she cannot do. 9 B. Baggett’s Wrongful Termination Claim Fails As A Matter Of Law 10 Baggett’s claim for wrongful termination in violation of public policy is premised on her claim 11 that she was terminated in retaliation for making a laundry-list of complaints about “wages, conditions 12 of work, or patient safety” as well as purportedly opposing “illegal non-compete and non-solicitation 13 agreements.”6 (Cross-Complaint ¶ 71). Baggett’s claim of retaliatory termination fails because she 14 lacks “specific” and “substantial” evidence of pretext, i.e., that the reason proffered for her termination 15 was false and the real reason was her purported making of protected complaints. 16 When a plaintiff alleges retaliatory termination, courts apply the burden shifting analysis of 17 McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Arteaga v. Brinks, Inc., 163 Cal. App. 4th 18 327, 356 (2008). Under this framework, the plaintiff must first establish a prima facie case by showing: 19 (1) she engaged in a protected activity, (2) the employer subjected her to an adverse employment action, 20 and (3) a causal link existed between the two. Yanowitz v. L'Oreal USA, Inc., 36 Cal. 4th 1028, 1042 21 (2005). The burden then shifts to the employer to proffer a legitimate, non-retaliatory reason for the 22 adverse employment action. Morgan v. Regents of University of Cal., 88 Cal. App. 4th 52, 68 (2000). 23 Once it does so, the presumption of retaliation drops away and the burden rests with the employee to 24 6 25 Although Baggett never made any complaint about ethics directly to Thrive, she now contends that a lengthy letter sent by her attorney, which was filled with untrue statements, extreme accusations, and 26 outright insults, somehow constituted a protected complaint. The Ruans believed this letter was an attempt to intimidate Thrive in order to help Baggett negotiate more favorable terms in connection with 27 her departure, and never saw it as constituting a complaint by Baggett. (Charlynn Ruan Decl. ¶ 20; 28 Camilo Ruan Decl. ¶). 7 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 present “specific” and “substantial” evidence that the proffered reason is untrue or pretextual. Horn v. 2 Cushman & Wakefield Western, Inc., 72 Cal. App. 4th 798 (1999) (“specific” and “substantial” evidence 3 of pretext required to survive summary judgment). 4 Even assuming, arguendo, that Baggett could establish a prima facie claim, her wrongful 5 retaliatory termination claim fails because there is no triable issue as to pretext. As courts have made 6 clear, where an employee is discharged for misconduct, the relevant inquiry is not whether the employee 7 did or did not engage in the misconduct alleged but, rather, whether the employer had a good-faith belief 8 that misconduct occurred. Indeed, “[i]t is the employer’s honest belief in the stated reasons for firing an 9 employee and not the objective truth or falsity of the underlying facts that is at issue . . . .” Holtzclaw v. 10 Certainteed Corp., 795 F. Supp. 2d 996, 1013 (E.D. Cal. 2011); Wills v. Super. Ct., 195 Cal. App. 4th 11 143, 172 (2011) (“[T]he question is whether the [employer] honestly believed [plaintiff] violated its 12 written policy . . . .”); Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1063 (9th Cir. 2002) (courts 13 “only require that an employer honestly believed its reason for its actions, even if its reason is ‘foolish or 14 trivial or even baseless.’); King v. UPS, Inc., 152 Cal. App. 4th 426, 433 (2007) (“[I]t does not matter 15 whether plaintiff actually did commit [the alleged misconduct] as long as [the employer] honestly 16 believed he did.”); see also, Cotran v. Rollins Hudig Hall Int’l. Inc., 17 Cal. 4th 93, 107 (1998) 17 (relevant inquiry is “was the factual basis on which the employer concluded a dischargeable act had 18 been committed reached honestly, after an appropriate investigation and for reasons that are not arbitrary 19 or pretextual?”). 20 Here, Baggett admits that she lied to her employer and signed a part-time employment agreement 21 that she never intended to perform under. She admits that she did this in order to continue to have 22 access to Thrive’s confidential client information, so that she could contact clients. She admits that she 23 discussed her new private practice with clients during calls that she secretly made after hours on a 24 Friday evening and on Saturday. She admits that she breached ethical responsibilities and Thrive 25 policies by failing to note these communications in client files, in an effort to conceal what she was 26 doing. As a result, Thrive lost all of the clients who Baggett had been treating. 27 Baggett’s actions were a clear breach of her duty of loyalty. “Every agent owes his principal the 28 duty of undivided loyalty. During the course of his agency, he may not undertake or participate in 8 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 activities adverse to the interests of his principal. In the absence of an agreement to the contrary, an 2 agent is free to engage in competition with his principal after termination of his employment but he may 3 plan and develop his competitive enterprise during the course of his agency only where the particular 4 activity engaged in is not against the best interests of his principal.” Sequoia Vacuum Systems v. 5 Stransky, 229 Cal. App. 2d 281, 287 (1964). 6 Based on Baggett’s actions in refusing to schedule clients past December 31, and then 7 surreptitiously contacting Thrive clients after hours—which had no clinical purpose and which Baggett 8 did not document in client files—it was objectively reasonable and in good faith for the Ruans to 9 conclude that Baggett had lied to them about her intention to continue working for Thrive part time, and 10 to lose confidence in her. Indeed, Baggett admits that she did, in fact, intentionally deceive Thrive in 11 order to be able to maintain access to clients and client files. These undisputed facts alone are more than 12 sufficient justification for her termination. 13 Further, Baggett also admits that she reached out to Thrive clients to inform them of her 14 departure without having prepared an approved transition plan for those clients, and that she did not 15 record any of these communications in the clients’ files. Both of these actions are serious breaches of 16 Thrive policies and of ethical standards. Again, these undisputed facts provide separate sufficient 17 justification for Baggett’s termination. 18 The Ruans also believed that Baggett had improperly solicited Thrive clients to join her own 19 practice, which is yet another separate sufficient justification for her termination.7 See Stokes v. Dole 20 Nut Co., 41 Cal. App. 4th 285, 296 (1995) (good cause for termination where employer discovered 21 employees were trying to establish a competing business and reasonably believed employees would rely 22 on confidential employer information to develop the new business). While Baggett denies this, it is not 23 necessary for the Ruans to actually prove that she was soliciting clients during these calls. The fact that 24 7 25 Unfortunately, Thrive had prior experience with therapists who acted in deceitful, illegal and unethical ways when departing from employment, including improperly using Thrive’s confidential business 26 information to solicit clients. In one case, the California Attorney General pursued claims against one such therapist, resulting in her losing her license to practice. (Charlynn Ruan Decl. ¶ 26 and Ex. H). 27 Because of their prior experiences, the Ruans were naturally on the lookout for similar improper 28 behavior. 9 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 they believed that she was, and that they terminated her employment because of this, is sufficient to 2 prevail on summary judgment. Arteaga, 163 Cal. App. 4th at 344 (Employers “may fire employees for a 3 good reason, a bad reason, a reason based on erroneous facts, or for no reason at all, as long as its action 4 is not for a discriminatory reason.”); See additional authorities cited supra. In any event, the Ruans had 5 multiple appropriate reasons for terminating Baggett’s employment in addition to her apparent unlawful 6 solicitation of clients. 7 Baggett will likely argue that the temporal proximity between her purported complaints and her 8 termination provides evidence that she was wrongfully terminated. However, the law is clear that 9 “temporal proximity alone is not sufficient to create a triable issue as to pretext.” Arteaga, supra, 63 10 Cal. App. 4th at 341; Diego v. Pilgrim United Church of Christ, 231 Cal. App. 4th 913, 932 (2014) 11 (same); see also Day v. Sears Holdings Corp., 930 F.Supp. 2d 1146 (C.D. Cal. 2013) (temporal 12 proximity alone is not sufficient to raise a triable issue as to pretext).) Therefore, even if Baggett 13 establishes temporal proximity, this is insufficient to support her wrongful termination claim. 14 Thus, because Baggett lacks “specific” and “substantial” evidence that the reason for her 15 termination was a pretext for discrimination, there is no triable issue of material fact, and Baggett’s 16 wrongful retaliatory termination claim fails as a matter of law. 17 C. Baggett’s Retaliation Claim Fails 18 Baggett’s claim for retaliation fails for the same reason her claim for wrongful termination is 19 deficient: there is no evidence that she was terminated for an unlawful reason. Baggett was terminated 20 because the Ruans believed (correctly) that she had lied to them, breached company policies, and 21 engaged in ethical breaches, which amount to multiple legitimate, non-retaliatory reasons for her 22 termination. 23 In evaluating summary adjudication of a claim for whistleblower retaliation under Labor Code 24 section 1102.5, the plaintiff must first establish, by a preponderance of the evidence, that retaliation for 25 the plaintiff’s protected activities was a contributing factor in the termination. Lawson v. PPG 26 Architectural Finishes, Inc., 12 Cal. 5th 703, 718 (2022). Only if the plaintiff is able to make this 27 showing, then the employer may defeat the claim, and obtain summary adjudication, by demonstrating 28 that it would have taken the action for legitimate, independent reasons even if the plaintiff had not 10 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 engaged in the protected activity. Id. See also Vatalaro v. County of Sacramento, 79 Cal. App. 5th 367, 2 379-80 (2022). 3 In Vatalaro, the plaintiff was a civil service employee who raised complaints that she was being 4 made to perform work that was below her service classification.8 Id. at 381. Subsequently, she was 5 terminated from her position and reassigned to a lower level job. Id. at 376. The plaintiff claimed that 6 this action was taken in retaliation for her complaints. Id. The employer’s stated reason for the adverse 7 employment action was that the plaintiff had been “insubordinate, disrespectful and dishonest.” Id. at 8 384. The plaintiff did not deny engaging in the actions that the employer stated were “insubordinate, 9 disrespectful and dishonest,” but rather argued that the real reason she was terminated was in retaliation 10 for her complaints. Id. at 385. 11 The Court of Appeal held that the employer had established that it would have terminated the 12 plaintiff regardless of whether or not she had made complaints.9 Id. at 386. Key to this was the fact that 13 the plaintiff did not dispute she had engaged in the “insubordinate, disrespectful and dishonest” actions 14 that the employer cited as the reasons for her termination. Id. at 385-6. Although the plaintiff argued 15 that she committed these acts in opposition to the supposed wrongful treatment by her employer that she 16 had complained about, the Court found this made no difference, because the employer’s stated reasons 17 for the termination were valid. Id. at 386. Therefore, the Court held that summary judgment in favor of 18 the employer was appropriate on the retaliation claim. Id. at 387-88. 19 In the present case, it is clear that Baggett’s retaliation claim has no merit. First, she has no 20 evidence to demonstrate that her engaging in any protected activities was a contributing factor in her 21 termination. The evidence unequivocally shows that Baggett was terminated because she admittedly 22 23 8 24 The employer disputed that this was a protected “whistleblowing” activity, and the Court of Appeal ultimately did not decide whether it was or not, holding that the employer was entitled to summary 25 judgment on other grounds. 26 9 The Court did not first determine whether or not the plaintiff had met her threshold showing that retaliation for her protected activities was a contributing factor in the termination. Id. at 383. It left that 27 issue undecided, ruling that the employer had met its burden of showing that it would have terminated 28 the plaintiff regardless of her complaint. Id. 11 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 lied to and deceived Thrive, admittedly breached company policies, and admittedly undertook actions 2 that Thrive viewed as ethical violations. 3 But even if Baggett could meet her initial burden, it is clear that she, like the plaintiff in 4 Vatalaro, would have been terminated regardless of whether she made complaints. Like the plaintiff in 5 Vatalaro, Baggett admits she engaged in the behavior that led to her termination. She admits that she 6 only entered into an agreement to continue to work part-time for Thrive because she wanted to retain 7 access to Thrive’s clients and to confidential information about those clients. She admits that she called 8 dozens of Thrive clients over the weekend, without her employer’s knowledge, without having an 9 approved transition plan for these clients, and discussed her new practice with them. She admits that 10 these calls were not in furtherance of her duties for Thrive, and that they were not approved by Thrive. 11 When the Ruans discovered what Baggett had done, they legitimately believed that Baggett had lied to 12 them, breached policies, and committed ethical violations. 13 Under the undisputed facts, it is clear that Baggett would have been terminated for her improper 14 actions, regardless of whether she had made any complaints or not. The Cross-Defendants have met 15 their burden of proof (even assuming Baggett has met her initial burden, which is disputed), and 16 therefore summary adjudication should be granted as to the retaliation claim. 17 IV. CONCLUSION 18 For each of the foregoing reasons, Cross-Defendants respectfully request that the Court grant 19 summary adjudication in their favor as to Baggett’s claims for wrongful termination and retaliation. 20 DATED: February 17, 2023 SEYFARTH SHAW LLP 21 22 By 23 24 Christopher A. Crosman D. Joshua Salinas 25 Attorneys for Plaintiff THRIVE PSYCHOLOGY GROUP, INC. and Cross-Defendants CAMILO 26 RUAN and CHARLYNN RUAN 27 28 12 PLAINTIFFS/CROSS-DEFENDANTS’ MEMORANDUM ISO SUMMARY ADJUDICATION 91864173v.2 1 PROOF OF SERVICE 2 STATE OF CALIFORNIA ) ) SS 3 COUNTY OF LOS ANGELES ) 4 I am a resident of the State of California, over the age of eighteen years, and not a party to the within action. My business address is 2029 Century Park East, Suite 3500, Los Angeles, California 5 90067-3021. On February 17, 2023, I served the within document(s): 6 PLAINTIFFS AND CROSS-DEFENDANTS THRIVE PSYCHOLOGY GROUP, INC., CAMILO RUAN AND CHARLYNN RUAN’S MEMORANDUM IN SUPPORT OF MOTION 7 FOR SUMMARY ADJUDICATION 8 by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid,  in the United States mail at Los Angeles, California, addressed as set forth below. 9 by personally delivering the document(s) listed above to the person(s) at the address(es) set forth 10  below. 11 by placing the document(s) listed above in a sealed envelope or package provided by an  overnight delivery carrier with postage paid on account and deposited for collection with the 12 overnight carrier at Los Angeles, California, addressed as set forth below. 13 by transmitting the document(s) listed above, electronically, via the e-mail addresses set forth  below. 14 electronically by using the Court’s ECF/CM System via Nationwide Legal Express, LLC. 15  16 Stacey Cooper Attorney for Defendant/Cross-Complainant 17 STACEY COOPER LAW, PC LINDA BAGGETT 18 888 Prospect Street, Suite 200 La Jolla, CA 92037 Tel. (619) 673-5022 19 Email: Stacey@cooperlawpc.com 20 I am readily familiar with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with 21 postage thereon fully prepaid in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day 22 after date of deposit for mailing in affidavit. 23 I declare under penalty of perjury under the laws of the State of California that the above is true and correct. 24 Executed on February 17, 2023, at Los Angeles, California. 25 26 Laura Thixton 27 28 1 PROOF OF SERVICE 78893116v.1