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TUESDAY, FEBRUARY 25, 2014 - 8:30 a.m. COURTROOM 19 Judge Arthur A. Wick 3055 Cleveland Avenue, Santa Rosa, CA 95403

SCV-253985; White v. GC Micro Corp.: This is on calendar for Defendants demurrer to the First Amended Complaint. The Plaintiff has sued for (1) Employment Discrimination; (2) Harassment; (3) Violation of Labor Code 970; and (4) Fraud based on her employment with Defendant GC Micro Corp. The Plaintiff has also named Belinda Guadarrama the CEO and Lloyd Chapman, a principle of GC Micro, as defendants. The Plaintiff alleges that Defendant Gaudarrama recruited the Plaintiff to work for Defendant GC Micro. At the time of the recruitment, the Plaintiff was living in Colorado. The FAC alleges that Defendant Gaudarrama induced her to come to Sonoma County with promises of long term employment, and that she would have significant responsibility when the CEO was travelling or out of the office. The Plaintiff left her employment and joined Defendant GC Micro. At the time of her hiring, Defendant Gaudarrama knew that the Plaintiff was a lesbian in a committed domestic partnership. Upon starting her employment, the Plaintiff alleges that she was introduced to Defendant Chapmanwho described himself as responsible for training all sales staff. Defendant Gaudarrama instructed the Plaintiff to attend staff trainings that were put on by Defendant Chapman. The Plaintiff alleges that soon after meeting Defendant Chapman, he began to make derogatory remarks about the Plaintiffs sexual orientation and lifestyle. The Plaintiff also alleges that Defendant Chapman would also discuss his sex life with the Plaintiff. The Plaintiff also alleges that Defendant Chapman required the Plaintiff to watch a lengthy video by Charles Stanley. The Plaintiff alleges that Mr. Stanley has outspoken disdain for homosexuality, and his belief that all homosexuals are sinners. The Plaintiffs employment was terminated five months after she started. First Cause of Action for Sexual Orientation Discrimination The Defendants take issue with the First Cause of Action, contending that the Individual Defendants cannot be held liable for sexual orientation discrimination. (Citing Reno v. Baird (1998) 18 Cal.4th 640; and Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55.) The court in Reno v. Baird [(1998)18 Cal.4th 640], in held that an employee could not sue her individual supervisor for discrimination under California's Fair Employment and Housing Act (FEHA) or for wrongful discharge in violation of public policy, as both causes of action may only be asserted against the employer. (See also Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55.) The Plaintiff contends that the Individual Defendants as

officers and directors of Defendant GC Micro are liable for the alleged discriminationand are not being sued as supervisory employees. ( Citing Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 503-504.) The Plaintiffs attempt to distinguish Reno and Janken is unavailaing. ( See Leek v. Cooper [(2011) 94 Cal.App.4th 399, 409.) Accordingly, the Individual Defendants are not subject to individual liability under the theory posited by the FAC. Further, Plaintiffs resort to an alter ego theory is also misplaced. As the California Court of Appeal held in Leek v. Cooper, there is nothing to indicate that [the plaintiff], if successful against the corporation, will not be able to collect on any judgment against the corporation. Absent such evidence, plaintiffs cannot show that the result will be inequitable, and have not stated the second element of an alter ego claim. (125 Cal.Rptr.3d at 70.) That finding is also true hereindeed, the Plaintiff admits in the FAC that Defendant GC Micro has the financial wherewithal to satisfy a judgment against it. (FAC 2, 10.) Second Cause of Action for Harassment Defendants argue that the harassment cause of action fails because the Plaintiff has failed to allege pervasive and severe harassment by the Defendants. Plaintiff counters by arguing that the facts as alleged constitute harassment. The Plaintiff has alleged two specific instances of harassment: (1) being forced to watch a video directed by and including Charles Stanley; and (2) being told that the Defendants did not want someone who was gay and overweight presenting the business. (FAC 47, 27.) The other allegations are generalized, and do not describe the allegedly harassing and demeaning comments. Looking closer at the allegations, the video that the Plaintiff was allegedly forced to watch was directed by and included Mr. Stanley, she does not allege that the video contained any inappropriate material. Thus, the court is only left with a single offensive comment. This is not enough to support the Plaintiffs harassment claim; as she has not alleged pervasive or sufficiently severe harassment. (See Hocevar v. Purdue Frederick Co. (8th Cir. 2000) 223 F.3d 721, 738 (the nature of the misconduct is clearly relevant to whether a hostile environment exists).) Accordingly, the Defendants demurrer to this cause of action is sustained with leave to amend. Third Cause of Action Violation of LC 970 Defendants contend that the FAC fails to properly allege that Defendant GC Micro made knowingly false representations with respect to any aspect of the Plaintiffs employment. The Plaintiff opposes, arguing that the FAC includes allegations that Defendant Gaudarrama made several statements knowing them to be false to induce the Plaintiff to move to Sonoma County. In particular, that Defendant Gaudarrama made statements regarding the scope of the Plaintiffs position that she knew were false due to the fact that Defendant Chapman would not agree to the Plaintiff holding such a position.

The Defendants argue that these were not knowingly false statements. For purposes of a demurrer, the allegations are liberally construed in favor of the Plaintiff. Here, the alleged misrepresentations, and the allegations that Defendant Gaudarrama knew that they were false because of Defendant Chapmans positionare sufficient to survive on demurrer. Accordingly, the demurrer to this cause of action is overruled. Fourth Cause of Action for Fraud (erroneously labeled Third Cause of Action in the FAC) Defendants contend that they cannot be individually liable for the alleged fraud for the same reasons that they cannot be held individually liable under the discrimination claim. Further, the Defendants argue that the alleged misrepresentations all concerned future events or opinion. The Plaintiff argues that the Defendants characterizations of the alleged misrepresentations are incorrect. The Plaintiff points out that the FAC clearly alleges that Defendant Gaudarrama misrepresented the scope and terms of her employmentknowing full well that the position that she described to the Plaintiff in inducing her to come to work in Sonoma were not possible given Defendant Chapmans position. While there are some instances of statements that can be construed as promises of future events or opinions, there is enough in the FAC to survive on demurrer with respect to Defendant GC Micro. The fraud cause of action, however, has not been adequately pled as to Defendant Chapman, and as discussed above in the discrimination analysis, the fraud claim against Defendant Gaudarrama is not well-taken. Accordingly, the demurrer to the Employment Discrimination and Fraud causes of action are sustained as to Defendants Gaudarrama and Chapman, with leave to amend. The demurrer to the Harassment cause of action is sustained as to all Defendants, with leave to amend. The balance of the demurrer is overruled. The Defendants shall draft an order consistent with this ruling.