McNicol v. DMB Sports Clubs LP

• Court: District Court, D. Arizona
• Decided: March 20, 2020
• Docket: 2:19-cv-00750
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Stuart McNicol, No. CV-19-00750-PHX-MTL

10 Plaintiff, ORDER

11 v.

12 DMB Sports Clubs LP,

13 Defendant. 14 15 Defendant DMB Sports Clubs LP (“DMB”) has filed a Motion for Summary 16 Judgment (Doc. 42). The Motion is fully briefed. (Doc. 42); (Doc. 53); (Doc. 56.) The 17 Motion is granted in part and denied in part.1 18 I. BACKGROUND 19 Plaintiff Stuart McNicol began working for DMB on March 24, 2014, as the Head 20 Tennis Professional at DMB’s DC Ranch Village Health Club & Spa (“the Village”). 21 (Doc. 42 at 2); (Doc. 53 at 1); (Doc. 48-1 at 9.) McNicol’s job responsibilities included 22 providing tennis instruction for Village members. (Doc. 1-3 at 7, ¶ 22.) He was also 23 permitted to give on-site tennis lessons to non-club members. (Id.) DMB allowed McNicol 24 to string racquets from his home, and he was compensated directly by club members for 25 1 DMB requested oral argument (part of Doc. 42), which the Court granted before the 26 Motion was fully briefed. (Doc. 47.) After reviewing the pleadings, however, the Court determined that oral argument would not have aided the Court’s decisional process. See 27 e.g., Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998); see also LRCiv 7.2(f); Fed. R. Civ. P. 78(b). Oral argument was already vacated. (Doc. 57.) DMB’s request for oral 28 argument (part of Doc. 42) is denied. 1 those services. (Doc. 1-3 at 20, ¶ 11); (Doc. 53 at 3); (Doc. 48-1 at 18-19.) In 2014 and 2 2015 McNicol received favorable year-end employee performance reviews. (Doc. 48-2 at 3 83-91.) 4 McNicol reported directly to the Tennis Director, Nick Heron. (Doc. 42-1 at 97- 5 99.) On July 5, 2016, Mr. Heron drafted an “Expectations for Success” memorandum to 6 McNicol, stating that “[i]n order for our group to succeed, the following expectations of 7 each of us must become effective immediately.” (Doc. 42-1 at 127-28.) The memorandum 8 listed numerous expectations for the group, including attendance at “member events, 9 networking functions and team functions unless prior approval is received from the Tennis 10 Director or General Manager to be absent.” (Id.) 11 On August 1, 2016, Plaintiff met with Mr. Heron and the Village’s General 12 Manager, Jim Krimbill, to discuss the Expectations for Success memorandum. (Doc. 48-1 13 at 25-26); (Doc. 53 at 2); (Doc. 42 at 3.) McNicol maintains that the memorandum was 14 not given to him as a criticism of his work, but as an outline of expectations moving 15 forward. (Doc. 53 at 2-3.) DMB contends that the memorandum identified areas in which 16 McNicol’s work needed improvement and reestablished McNicol’s specific job duties. 17 (Doc. 42 at 3.) The memorandum was signed by both Mr. Heron and McNicol that day. 18 (Doc. 42-1 at 128); (Doc. 48-1 at 25.) 19 Sometime in August 2016, McNicol met with Mr. Krimbill and DMB’s Chief 20 Human Resources Officer to discuss his compensation.2 (Doc. 42 at 3); (Doc. 53 at 3); 21 (Doc. 48-1 at 34.) McNicol alleges that during this meeting the Chief Human Resources 22 Officer told him that he could increase his compensation by working overtime. (Doc. 48- 23 1 at 34); (Doc. 42 at 3); (Doc. 53 at 3.) McNicol responded that he was unaware of his 24 eligibility for overtime pay, but that he had been working overtime between March 2014 25 and August 2015 without compensation. (Doc. 42 at 3-4); (Doc. 53 at 3.) In September 26 2016, after an investigation into McNicol’s unpaid overtime claim, DMB paid McNicol 27 2 DMB states (Doc. 42 at 3) that the meeting between McNicol, the General Manager, and 28 the Chief Human Resources Officer occurred on August 1, 2016, but the record reflects solely that the meeting occurred sometime in August 2016. 1 $5,964.33.3 (Doc. 53 at 3); (Doc. 42 at 4); (Doc. 48-1 at 37.) 2 The Village hired a new Tennis Director, David Critchley, in November 2016. 3 (Doc. 53 at 2); (Doc. 42 at 4.) On December 8, 2016, Mr. Critchley and Mr. Krimbill gave 4 McNicol an unfavorable year-end employee performance evaluation. (Doc. 42-1 at 130- 5 34); (Doc. 42 at 4); (Doc. 53 at 4.) The evaluation alleged that McNicol had a negative 6 attitude toward the Village’s policies and procedures, that he failed to follow through with 7 assigned tasks, and that he poorly managed his time. (Doc. 42-1 at 130-34); (Doc. 42 at 8 4); (Doc. 53 at 4.) McNicol’s 2016 year-end review referenced events that purportedly 9 occurred in July and October 2016. (Doc. 42-1 at 131-32.) 10 In December 2016, DMB purchased equipment that enabled it to offer racquet 11 stringing services on-site at the Village. (Doc. 53 at 3.) Thereafter, McNicol was no longer 12 permitted to string racquets from his home, and his on-the-job responsibilities were not 13 expanded to include on-site racquet stringing services. (Id. at 4.) According to McNicol, 14 DMB hired teenagers to do this work. (Id.) 15 McNicol asserts that in January 2017, Mr. Critchley told him that Mr. Krimbill 16 wanted him fired because he had “cost the company too much money in [his] overtime 17 pay.” (Doc. 48-1 at 41-42); (Doc. 53 at 4); (Doc. 1-3 at 20, ¶ 8); (see also Doc. 48-2 at 18 176.) DMB denies that any such conversation occurred. (Doc. 9 at 2, ¶ 8.) 19 On December 6, 2017, McNicol received a positive year-end employee performance 20 review in which Mr. Critchley described him as a “great asset to the club” and the “face of 21 [the] tennis program.” (Doc. 42-1 at 139.) McNicol’s 2017 evaluation reflected that 22 McNicol had been “very open to the several new responsibilities given to [him] by the 23 director,” that he was “quick to help where needed,” and that he had been “a huge asset to 24 the director . . . .” (Doc. 53 at 4); (Doc. 42 at 5); (Doc. 42-1 at 139-42.) McNicol did not 25 receive a raise in 2017. (Doc. 1-3 at 21, ¶ 20.) 26 In January 2018, DMB’s Director of Membership told McNicol that non-members 27 could no longer receive tennis lessons at the Village. (Doc. 53 at 5.) The next month,

28 3 DMB maintains that it paid the $5,964.33 to McNicol even though it could not corroborate his overtime claim. (Doc. 42 at 4.) 1 allegedly with DMB’s consent, McNicol began teaching lessons part-time at a non-DMB 2 tennis club. (Doc. 42 at 6); (Doc. 53 at 5); (Doc. 48-1 at 50.) McNicol alleges that Mr. 3 Critchley continued to personally teach tennis lessons to non-members at the Village, even 4 though McNicol was no longer permitted to do so. (Doc. 53 at 5.) McNicol claims, 5 moreover, that in mid-April 2018, Mr. Critchley called the other club where McNicol 6 provided instruction and inquired about the identities of McNicol’s students there. (Doc. 7 1-3 at 22, ¶ 26); (Doc. 53 at 6.) 8 Sometime between 2017 and 2018, McNicol asserts that he became aware of what 9 he believed were unlawful employment practices committed by Mr. Critchley within the 10 Juniors Academy at the Village. (Doc. 53 at 5-6); (Doc. 48-1 at 56.) Specifically, McNicol 11 believed that cash payments were made to people “under the table,” that an employee’s 12 hours were manipulated so that he qualified for insurance benefits, and that DMB was 13 employing a foreign citizen without a proper work visa. (Doc. 1-3 at 21, 27, ¶¶ 16-18, 61- 14 63); (Doc. 53 at 5-6.) 15 McNicol discussed these matters, as well as his compensation, job duties and job 16 performance with Mr. Critchley in early April, and again on May 3, 2018.4 (Doc. 48-2 at 17 103, ¶ 12); (Doc. 53 at 6); (Doc. 56 at 5); (Doc. 48-2 at 117-20, 126, 133-35, 145, 160-62.) 18 During the May 3, 2018 conversation and in a subsequent email sent to McNicol on May 19 14, 2018, Mr. Critchley outlined what he “envision[ed] from the Head Pro Role moving 20 forward.” (Doc. 53 at 7); (Doc. 42 at 7); (Doc. 42-1 at 173); (Doc. 48-2 at 132.) Mr. 21 Critchley also discussed the possibility of McNicol forgoing his salaried position and its 22 accompanying administrative duties in exchange for an hourly and commission-based 23 position that would only require him to teach tennis lessons. (Doc. 48-2 at 135.) McNicol 24 alleges that in the May 14, 2018 email, Mr. Critchley added additional duties to the Head 25 Tennis Professional role, including the requirement that McNicol assist with the Juniors 26 Academy, where he believed the illegal hiring practices were occurring. (Doc. 53 at 7); 27 (Doc. 42 at 7.)

28 4 McNicol surreptitiously recorded these conversations. Transcripts of the recordings were attached to McNicol’s Response. (Doc. 48-2 at 114-192.) 1 On May 7, 2018, Mr. Critchley asked the Village’s human resources department to 2 issue a performance improvement plan for McNicol. (Doc. 48-2 at 197-203.) In response 3 to Mr. Critchley’s proposal to present McNicol with a “write up,” a human resources 4 employee noted that there were not enough documented incidents to make it “a Final” and 5 that McNicol could not be written up “for incidents where he notified [Mr. Critchley] 6 beforehand . . . .” (Doc. 48-2 at 197.) On May 15, 2018, Mr. Critchley texted McNicol, 7 requesting a meeting with Mr. Krimbill to review a disciplinary write-up. (Doc. 1-3 at 24, 8 ¶ 41.) The performance improvement plan was never given to McNicol. (Doc. 56 at 6.) 9 On May 16, 2018, through his attorney, McNicol reported the alleged unlawful 10 employment practices to the Village’s president. (Doc. 53 at 6.) An internal investigation 11 ensued. Mr. Critchley admitted that he had personally paid a non-Village employee to 12 assist with tennis lessons, and that he had permitted another employee to do the same. 13 (Doc. 48-2 at 12, 54, 55, 57.) Mr. Critchley was disciplined for these infractions. (Doc. 14 48-2 at 12-13.) 15 Also on May 16, 2018, McNicol’s attorney communicated to Mr. Critchley that 16 McNicol considered himself “constructively discharged” from the Head Tennis 17 Professional position because he was being “forced” to participate in the Juniors Academy. 18 (Doc. 42 at 8); (Doc. 53 at 7-8); (Doc. 42-1 at 176.) McNicol maintains that he thereafter 19 “accept[ed] the offer” to work as a commission-based Tennis Professional at the Village. 20 (Doc. 53 at 8); (Doc. 42 at 8.) 21 DMB terminated McNicol’s managerial access to DMB’s internal system on July 22 16, 2018. (Doc. 1-3 at 25, ¶ 48); (Doc. 56 at 7.) Thereafter, when DMB failed to provide 23 McNicol with what he considered to be meaningful opportunities to teach lessons, he 24 considered himself constructively discharged from the Tennis Professional position, too. 25 (Doc. 53 at 8); (Doc. 42-1 at 179.) DMB maintains that McNicol voluntarily resigned from 26 his employment with DMB on July 20, 2018. (Doc. 42 at 8.) 27 In this lawsuit, McNicol raises claims of retaliation under the Fair Labor Standards 28 Act (“FLSA”) (Count 1) and wrongful termination under the Arizona Employment 1 Protection Act (“AEPA”) (Count 2). (Doc. 1-3 at 19-40.) 2 II. LEGAL STANDARD 3 Summary judgment is appropriate if the evidence, viewed in the light most favorable 4 to the nonmoving party, demonstrates “that there is no genuine dispute as to any material 5 fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A 6 genuine issue exists if “the evidence is such that a reasonable jury could return a verdict 7 for the nonmoving party,” and material facts are those “that might affect the outcome of 8 the suit under the governing law . . . .” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 9 (1986). At the summary judgment stage, “[t]he evidence of the non-movant is to be 10 believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255 (internal 11 citations omitted); see also Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1131 (9th 12 Cir. 1994) (court determines whether there is a genuine issue for trial but does not weigh 13 the evidence or determine the truth of matters asserted). 14 III. ANALYSIS 15 A. FLSA Claim 16 The FLSA makes it unlawful for an employer “to discharge or in any other manner 17 discriminate against any employee because such employee has filed any complaint or 18 instituted or caused to be instituted any proceeding under or related to [the FLSA].” 29 19 U.S.C. § 215(a)(3). When evaluating an FLSA retaliation claim in the summary judgment 20 context, the plaintiff must first make a prima facie case of retaliation by showing: (1) that 21 he or she engaged in protected activity; (2) that he or she suffered an adverse employment 22 decision; and (3) that there was a causal link between the plaintiff’s activity and the adverse 23 employment decision. See Conner v. Schnuck Markets, Inc., 121 F.3d 1390, 1394 (10th 24 Cir. 1997) (applying McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). If a 25 plaintiff establishes a prima facie case, “the burden shifts to the employer to offer a 26 legitimate reason for the [adverse action].” Conner, 121 F.3d at 1394. Once the employer 27 offers such a reason, “the burden then shifts back to the plaintiff to show that ‘there is a 28 genuine dispute of material fact as to whether the employer’s proffered reason for the 1 challenged action is pretextual.’” Id. (internal citations omitted). 2 1. Prima facie showing 3 a. Protected activity 4 To engage in protected activity, the plaintiff must make a “complaint.” 29 U.S.C. 5 § 215(a)(3). McNicol argues that he engaged in protected activity under the FLSA when 6 he filed his overtime claim with DMB in August 2016 and again when he reported the 7 illegal “off the book payments” in April and May 2018. (Doc. 53 at 9-10.) For purposes 8 of this Motion, DMB agrees that McNicol’s overtime claim in August 2016 constituted 9 FLSA-protected activity. (Doc. 42 at 9 n.6.) While DMB challenges the veracity of 10 Plaintiff’s theory that “all of the alleged retaliation up to April 2018 was at the behest of 11 Mr. Krimbill, while all of the alleged retaliation after April 2018 was by Mr. Critchley,” 12 (Doc. 56 at 5), it does not deny that McNicol’s reporting of the “off the book payments” 13 constitutes protected activity. See also 29 U.S.C. § 211(c) (FLSA requires employer to 14 keep and preserve records of its employees’ wages and hours). 15 Because 29 U.S.C. § 215(a)(3) broadly encompasses the filing of “any complaint,” 16 (emphasis added), the Court agrees that McNicol engaged in protected activity when he 17 made his unpaid overtime claim in August 2016 and again when he reported the unlawful 18 payments and hiring practices to Mr. Critchley and the Village president in May 2018. 19 Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 9-10 (2011) (holding that 20 the phrase “any complaint” suggests a broad interpretation). 21 b. Adverse Employment Decision 22 To meet the second prong of the prima facie retaliation test, a court must find that a 23 reasonable employee would have found the challenged action materially adverse. 24 McBurnie v. City of Prescott, 511 Fed. App’x. 624, 625 (9th Cir. 2013). An employer’s 25 action is materially adverse if it “might have dissuaded a reasonable worker from making 26 or supporting” an FLSA complaint. Burlington N. & Santa Fe Ry. v. White, 548 U.S. 53, 27 68-69 (2006) (analyzing adverse employment under Title VII’s antiretaliation provision); 28 McBurnie, 511 Fed. App’x. at 625 (applying the Burlington standard to FLSA claims). 1 Transfers of job duties away from the plaintiff and undeserved performance ratings can 2 constitute adverse employment decisions under the FLSA. Yartzoff v. Thomas, 809 F.2d 3 1371, 1375-76 (9th Cir. 1987). Additional adverse actions can include the denial of a pay 4 raise, see, e.g., Gillis v. Georgia Dept. of Corrections, 400 F.3d 883, 887 (11th Cir. 2005), 5 a reduction of hours, Henderson v. City of Grantville, Ga., 37 F. Supp. 3d 1278, 1283 (N.D. 6 Ga. 2014), and a termination via a constructive discharge, Ford v. Alfaro, 785 F.2d 835, 7 841 (9th Cir. 1986) (constructive discharge constitutes adverse employment decision under 8 FLSA where an ordinary employee would feel compelled to resign if confronted with the 9 difficult work environment). 10 Here, the Court finds that McNicol’s allegations about the unjustified 2016 year- 11 end performance review, the denial of a raise in 2016 and 2017, the reduction of his income 12 through the alleged disparate application of internal policies about providing tennis lessons 13 to non-members, the alleged constructive discharge from the Head Tennis Professional and 14 Tennis Professional positions, the ultimatum to participate in the Juniors Academy and 15 assume additional duties or resign, and DMB’s purported failure to provide him new lesson 16 opportunities after May 16, 2018, (Doc. 1-3 at 24-26, ¶¶ 38-39, 45, 52)—all, if true, fall 17 within the meaning of adverse employment decisions under the FLSA. Each of these 18 actions by DMB, taken individually or in the aggregate, might have dissuaded an ordinary 19 employee from making an FLSA claim. See Danielson v. Brennan, 764 Fed. App’x. 622, 20 623 (9th Cir. 2019) (considering collective actions). Accordingly, McNicol has shown that 21 DMB’s actions meet the second prong of the prima facie retaliation test. 22 c. Causal Link 23 To show causation at the prima facie stage, McNicol must establish that there is a 24 “causal link” between a protected activity and an adverse employment action, which is 25 much less stringent than the “but-for” causation that a jury must find. Knickerbocker v. 26 City of Stockton, 81 F.3d 907, 910-11 (9th Cir. 1996) (applying “but for” standard for 27 causation during trial and on appeal); Starnes v. Wallace, 849 F.3d 627, 635 (5th Cir. 2017) 28 (prima facie inquiry into causation is the “much less stringent” standard); Carmack v. Park 1 Cities Healthcare, LLC, 321 F.Supp.3d 689, 705 (N.D. Tex. 2018) (prima facie burden to 2 show causal link is minimal). 3 Regarding McNicol’s August 2016 overtime claim and the allegedly unjustified 4 2016 year-end performance review—and regarding McNicol’s August 2016 overtime 5 claim and the denial of a raise in 2016—the Court finds that McNicol has made a prima 6 facie showing of causation. When the facts are viewed in the light most favorable to 7 McNicol, the Court agrees that the four-month proximity of McNicol’s overtime complaint 8 and the 2016 year-end performance evaluation and denial of a raise, combined with the 9 alleged retaliatory statement by Mr. Krimbill to Mr. Critchley and the lack of prior 10 discipline to McNicol, all reveal an inference of retaliation sufficient to show a causal link 11 at the prima facie stage. See Knickerbocker, 81 F.3d at 912 (adverse action closely 12 following protected activity can support inference of retaliation); (Doc. 48-1 at 41-42); 13 (McNicol claiming Mr. Krimbill told Mr. Critchley that he wanted McNicol fired because 14 of McNicol’s overtime complaint); (Doc. 48-2 at 176) (Mr. Critchley admitted to McNicol 15 during the recorded conversation on April 4, 2018, that Mr. Krimbill wanted McNicol to 16 “kind of go away”.) 17 While the Court agrees with DMB that McNicol’s favorable year-end performance 18 evaluation in 2017 “dispels any inference of retaliation” stemming from the overtime claim 19 he made in August 2016, (Doc. 42 at 11); see Manatt v. Bank of Am., NA, 339 F.3d 792, 20 802 (9th Cir. 2003) (intervening events, such as pay raises and selection for prestigious 21 assignments, break the causal connection), McNicol engaged in additional FLSA-protected 22 activities when he reported the unlawful employment practices and “under the table” 23 payments in April and May 2018. Because the positive year-end performance evaluation 24 in 2017 does not dispel any inference of retaliation for the subsequent FLSA-protected 25 activities, the Court finds that McNicol made a prima facie showing of causation with 26 regard to his allegations that he was constructively discharged from both positions (Doc. 27 1-3 at 26, ¶ 52), that he was forced to participate in the Juniors Academy and assume 28 additional duties or resign, (Doc. 1-3 at 24, ¶¶ 38-39), and that he was not provided 1 meaningful opportunities for new lessons after May 16, 2018 (Doc. 1-3 at 25, ¶ 45). These 2 alleged adverse employment actions occurred as little as four days after McNicol engaged 3 in the protected activity. (Doc. 48-2 at 200-201.) This temporal proximity alone is 4 sufficient to show a causal link at the prima facie stage. See Passantino v. Johnson & 5 Johnson Consumer Prods., Inc., 212 F.3d 493, 507 (9th Cir. 2000). 6 2. DMB’s proffered reasons 7 Because McNicol established a prima facie case, the burden shifts to DMB to 8 articulate legitimate, nonretaliatory reasons for the alleged retaliatory action taken. 9 Conner, 121 F.3d at 1394. DMB states that McNicol’s unsatisfactory 2016 evaluation and 10 the corresponding denial of a raise were due to McNicol’s “failure to perform the job duties 11 outlined in his job description and the ‘Expectations for Success’ memorandum, such as 12 organizing and attending events and programs, organizing and developing DMB’s racquet- 13 stringing business, and displaying a positive attitude about his job duties . . . .” (Doc. 42 at 14 10.) DMB claims that Mr. Critchley added new administrative duties to McNicol’s 15 position as Head Tennis Professional in May 2018 because DMB’s tennis program had 16 expanded, not because DMB was retaliating against McNicol for reporting the instances of 17 unlawful employment practices and payments. (Doc. 42 at 12-13); (Doc. 48-2 at 29-30.) 18 Finally, DMB asserts that McNicol was not constructively discharged from either the Head 19 Tennis Professional or Tennis Professional position, but that McNicol voluntarily “directed 20 his efforts at other employment with more favorable compensation” and “turned down 21 numerous lesson opportunities offered to him by DMB.” (Doc. 42 at 13.) The Court finds 22 that DMB has stated legitimate reasons for these adverse employment actions. 23 3. Genuine disputes of material fact regarding pretext 24 Because DMB has offered legitimate reasons for the adverse actions, it is McNicol’s 25 burden to show that there is a genuine dispute of material fact as to whether DMB’s 26 proffered reasons for the adverse employment actions are pretextual. Conner, 121 F.3d at 27 1394. McNicol argues that the Expectations for Success memorandum was not a critique 28 of his prior job performance, but more of a generalized memorandum. (Doc. 53 at 13.) 1 Though addressed to McNicol, the memorandum emphasizes “the expectations of each of 2 us” that are necessary for “our group to succeed.” (See Doc. 42-1 at 127-28.) On its face, 3 the memorandum does not purport to identify past alleged instances of poor job 4 performance by McNicol. The Court therefore finds that there are genuine disputes of 5 material fact about the purpose of the Expectations for Success memorandum and whether 6 DMB identified McNicol’s purported job deficiencies prior to his filing of the overtime 7 complaint in August 2016. 8 Regarding the diminished opportunities for teaching new lessons in June and July 9 2018, McNicol has presented evidence that DMB may have offered pretextual reasons for 10 its adverse actions. On May 7, 2018, just four days after McNicol reported the “under the 11 table” payments to Mr. Critchley, Mr. Critchley initiated the process to put McNicol on a 12 performance improvement plan, claiming that he had failed to complete tasks as early as 13 January and March of that year. (Doc. 48-2 at 200-201.) Yet in response to Mr. Critchley’s 14 plan to present McNicol with a “write up,” the Village’s human resources representative 15 noted that there were not enough documented incidents to make it “a Final” and that 16 McNicol could not be written up “for incidents where he notified [Mr. Critchley] 17 beforehand.” (Doc. 48-2 at 197.) Mr. Critchley and Mr. Krimbill ultimately decided not 18 to present this to McNicol, and immediately thereafter McNicol’s opportunities for 19 teaching lessons declined. The timing of these relevant actions and comments raises a 20 genuine dispute of material fact as to “but for” causation. 21 Finally, McNicol has raised a genuine disputed fact as to whether the adding of job 22 duties to the Head Tennis Professional role in May 2018 was pretextual. DMB claims that 23 the additional job duties were added in response to an expanding tennis program; yet 24 nobody was hired to replace McNicol as the Head Tennis Professional after he left, and the 25 administrative duties were assumed by Mr. Critchley. (Doc. 53 at 15-16); (Doc. 48-2 at 26 33.) 27 Because there are material disputed facts about whether DMB’s stated reasons for 28 the adverse actions are pretextual, the Court denies summary judgment to DMB on Count 1 1. This claim shall proceed to trial. 2 B. AEPA Claim 3 McNicol alleges that he was wrongfully terminated from the Head Tennis 4 Professional and Tennis Professional positions. A wrongful termination action under the 5 AEPA lies when, in the course of his or her employment, an employee is terminated in 6 retaliation for refusing to violate Arizona law or for reporting violations of Arizona law. 7 Galati v. America West Airlines, Inc., 205 Ariz. 290, 292 (App. 2003) (citing A.R.S. § 23- 8 1501(3)(c)(i), (ii)). DMB does not dispute that McNicol reported such violations to DMB’s 9 management. (Doc. 42 at 14-18); (Doc. 53 at 16.) The sole argument it advances is that 10 McNicol was not terminated from his employment.5 (Doc. 42 at 14); (Doc. 56 at 8-11.) 11 Termination of the employment relationship is required for a wrongful termination 12 claim under the AEPA. A.R.S. § 23-1501(3)(c)(i), (ii). Termination may be express or 13 constructive. Peterson v. City of Surprise, 244 Ariz. 247, 250 (App. 2018). Constructive 14 discharge transforms a resignation into a discharge, which satisfies the termination element 15 of a wrongful termination claim under the AEPA. Id. In any action under the statutes of 16 Arizona, including the AEPA, constructive discharge may only be established by: (1) 17 evidence of an employer’s failure to remedy “objectively difficult or unpleasant working 18 conditions to the extent that a reasonable employee would feel compelled to resign,” A.R.S. 19 § 23-1502(A)(1); or (2) evidence of “outrageous conduct” by the employer, A.R.S. § 23- 20 1502(A)(2). To preserve the right to bring a constructive discharge claim for “objectively 21 difficult or unpleasant working conditions,” the employee must first give the employer “at 22 least fifteen days’ notice . . . that the employee intends to resign because of [the] 23 conditions.” A.R.S. § 23-1502(A)(1). This notice requirement encourages the employee 24 to communicate to the employer whenever he or she believes working conditions may

25 5 DMB does not challenge causation under McNicol’s AEPA claim. The Court, therefore, does not decide what framework applies or whether there are material disputed facts as to 26 causation on Count 2. Cf. Whitmore v. Wal-Mart Stores Incorporated, 359 F. Supp. 761, 799-800 n.29 (D. Ariz. 2019) (applying McDonnell Douglas burden-shifting framework to 27 plaintiff’s AEPA claim); Revit v. First Advantage Tax Consulting Services, LLC, No. CV10-1653-PHX-DGC, 2012 WL 1230841, at *4-5 (D. Ariz. Apr. 12, 2012) (adopting 28 First Amendment retaliation approach to AEPA claims instead of McDonnell Douglas test). 1 become intolerable, and it gives the employer the opportunity to respond to the employee’s 2 concerns. A.R.S. § 23-1502(A)(1), (E)(2). An employer is deemed to have waived the 3 right to notice of an employee’s intent to resign, however, if the employer failed to provide 4 prior written notice to its employees of the requirements for bringing a constructive 5 discharge claim against the employer. See A.R.S. § 23-1502(E), (E)(2) (providing required 6 language and posting requirements for the employers’ notice to employees). An employee 7 is not required to give prior notice to the employer if the employee is resigning because of 8 the employer’s “outrageous conduct.” A.R.S. § 23-1501(A)(2), (F). 9 McNicol contends that he was expressly terminated and constructively discharged 10 from the Head Tennis Professional position, and that he was constructively discharged 11 from the Tennis Professional position. (Doc. 53 at 16.) DMB argues that McNicol was 12 never expressly terminated, (Doc. 56 at 9), and that he cannot meet the statutory elements 13 of constructive discharge because [i] there was no outrageous employer conduct, [ii] he did 14 not provide DMB 15 days’ notice of his intent to resign, and [iii] because there were no 15 objectively difficult or unpleasant working conditions. (Doc. 42 at 16); (Doc. 56 at 9.) 16 Neither party identifies whether DMB provided its employees with the statutorily required 17 employment notice in A.R.S. § 23-1502(E)(2). 18 Preliminarily, the Court agrees with DMB that McNicol was not expressly 19 terminated by DMB from either position. McNicol has consistently argued only that he 20 was constructively discharged from both positions. (Doc. 1-3 at 28, ¶¶ 66-69.) And the 21 evidence he submitted was in furtherance of the same. The Court therefore grants partial 22 summary judgment in favor of DMB on Count 2 with respect to McNicol’s claim that he 23 was expressly terminated by DMB. 24 The Court also agrees with DMB that there is no evidence of outrageous employer 25 conduct. While the statute defining outrageous employer conduct does not provide an 26 exhaustive list, it names sexual assault, threats of violence, and a continuous pattern of 27 discriminatory harassment as examples. A.R.S. § 23-1502(F). Requiring McNicol to 28 participate in the Juniors Academy, calling the other club to inquire about McNicol’s 1 students, adding additional duties to the job of Head Tennis Professional, engaging in a 2 “systematic and sustained effort to deprive him of almost all lesson income,” and removing 3 his managerial access to DMB’s internal system do not rise to the level of “outrageous 4 conduct” contemplated by the statute. A.R.S. § 23-1502(A)(2); (Doc. 1-3 at 28, ¶ 66); 5 (Doc. 53 at 17.) It is therefore ordered granting partial summary judgment in favor of 6 DMB on Count 2 with respect to McNicol’s claim that he was constructively discharged 7 by outrageous employer conduct. 8 Next, because DMB disregarded § 23-1502(E) in its Motion, the Court assumes that 9 DMB did not comply with its own notice obligations. See Cook v. Scottsdale Ins. Co., No. 10 CV-110938-PHX-DGC, 2012 WL 6089039, at *5 (D. Ariz. Dec. 6, 2012) (assuming by 11 defendant’s disregard of § 23-1502 that they either did not give the employment notice 12 required by § 23-1502(E), or they gave the notice and plaintiff complied with the 15-days’ 13 notice requirement). Without some showing that DMB complied with § 23-1502(E) by 14 giving its employees the required employment notice, the Court cannot find as a matter of 15 law that McNicol was required to give DMB 15 days’ notice of the alleged “difficult or 16 unpleasant working conditions” prior to resigning. See A.R.S. § 23-1502(A)(1), (E) 17 (establishing waiver of an employer’s right to notice under subsection A, paragraph 1). 18 Accordingly, in ruling on summary judgment under § 23-1502(A)(1), the Court will 19 consider only whether McNicol presented evidence to show “objectively difficult or 20 unpleasant working conditions to the extent that a reasonable employee would feel 21 compelled to resign,” and not whether he gave DMB the 15 days’ notice that would 22 otherwise be required by statute. 23 To show difficult or unpleasant working conditions, McNicol focuses on events that 24 occurred after he reported the alleged unlawful employment practices to Mr. Critchley in 25 April 2018. (Doc. 53 at 17.) He claims that he was compelled to resign from the Head 26 Tennis Professional position because: Mr. Critchley called the other club to see which 27 students McNicol was teaching there, DMB management was intent on giving him a “false 28 write up”; DMB added additional duties to his job description; and DMB required him to 1 be part of the Juniors Academy, where McNicol believed the unlawful employment 2 practices were occurring. (Id.) He asserts that he was compelled to resign from the Tennis 3 Professional position because DMB reduced his income to an unsustainable level by 4 depriving him of meaningful opportunities to teach lessons. (Id.) DMB argues that 5 McNicol’s claims of constructive discharge are not credible because he agreed to remain 6 employed at DMB as a Tennis Professional and because lesson income is generally lower 7 in the summer months. (Doc. 42 at 16); (Doc. 56 at 10.) 8 Whether working conditions are so intolerable as to justify a reasonable employee’s 9 decision to resign is generally a fact question for the jury. See West v. Salt River Agr. Imp. 10 and Power Dist., 179 Ariz. 619, 625 (App. 1994). The Court construes the inferences in 11 favor of McNicol and does not weigh the evidence or assess its credibility at the summary 12 judgment stage. Jessinger, 24 F.3d at 1131. Accordingly, the Court concludes that 13 requiring McNicol to teach lessons in the Juniors Academy after he reported unlawful 14 hiring practices within it, threatening a disciplinary write up that was drafted but never 15 substantiated, and adding additional duties to the Head Tennis Professional position 16 without an increase in compensation are sufficient to create a question of fact on whether 17 McNicol was subjected to “objectively difficult or unpleasant working conditions to the 18 extent that a reasonable employee would feel compelled to resign” from the Head Tennis 19 Professional position. A.R.S. § 23-1502(A)(1). The Court further finds that depriving 20 McNicol of opportunities to teach lessons as a commission-based employee creates a 21 question of fact on whether a reasonable employee would feel compelled to resign from 22 the Tennis Professional position. Partial summary judgment is denied to DMB on Count 2 23 with respect to McNicol’s claim that he was constructively discharged by evidence of 24 objectively difficult or unpleasant working conditions to the extent that a reasonable 25 employee would feel compelled to resign. Count 2 shall proceed to trial. 26 IV. CONCLUSION 27 IT IS ORDERED denying summary judgment (part of Doc. 42) to Defendant on 28 Count 1. 1 IT IS FURTHER ORDERED granting partial summary judgment (part of Doc. 2|| 42) to Defendant on Plaintiff's claim in Count 2 that he was expressly terminated (part of || Count 2). 4 IT IS FURTHER ORDERED granting partial summary judgment (part of Doc. 5|| 42) to Defendant on Plaintiff's claim in Count 2 that he was constructively discharged 6|| under A.R.S. § 23-1502(A)(2) (part of Count 2). 7 IT IS FURTHER ORDERED denying partial summary judgment (part of Doc. 8 || 42) to Defendant on the remaining portions of Count 2. 9 IT IS FURTHER ORDERED denying DMB’s request for oral argument (part of 10}| Doc. 42). 11 IT IS FINALLY ORDERED affirming the Final Pretrial Conference on June 8, 12} 2020, and the Jury Trial for June 16, 2020 to June 19, 2020. 13 Dated this 20th day of March, 2020.

Michael T. Liburdi 16 United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28

-16-