Overhill Farms, Inc. v. Lopez

190 Cal. App. 4th 1248, 119 Cal. Rptr. 3d 127, 31 I.E.R. Cas. (BNA) 809, 2010 Cal. App. LEXIS 2109, 110 Fair Empl. Prac. Cas. (BNA) 1460
CourtCalifornia Court of Appeal
DecidedNovember 15, 2010
DocketNo. G042984
StatusPublished
Cited by29 cases

This text of 190 Cal. App. 4th 1248 (Overhill Farms, Inc. v. Lopez) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Overhill Farms, Inc. v. Lopez, 190 Cal. App. 4th 1248, 119 Cal. Rptr. 3d 127, 31 I.E.R. Cas. (BNA) 809, 2010 Cal. App. LEXIS 2109, 110 Fair Empl. Prac. Cas. (BNA) 1460 (Cal. Ct. App. 2010).

Opinions

Opinion

BEDSWORTH, J.

INTRODUCTION

In 2009, the United States Internal Revenue Service (IRS) informed plaintiff Overhill Farms, Inc. (Overhill), that 231 of its then current employees had provided invalid Social Security numbers. Overhill was advised its use of invalid tax identification information exposed it to the imposition of penalties and criminal liability. Overhill contacted the employees identified by the IRS, advised them that their Social Security numbers were invalid according to the IRS, and provided them the opportunity to correct the erroneous information to avoid the termination of their employment with Overhill. One of the identified employees provided Overhill information showing that the employee’s invalid Social Security number was an error. The remainder of the identified employees either admitted they had submitted an invalid Social Security number and were not authorized to work in the United States, or ignored Overhill’s requests for information; their employment with Overhill was thereafter terminated.

Several of Overhill’s employees, including defendants Teresa Cortez, Alma Salinas Renteria, Bohemia Y. Agustiano Saguilan, Marcelino Arteago, Agapita Padilla and Fernando Morales Lira, led by defendant Nativo Lopez, a “community activist” (collectively referred to as defendants), participated in protests outside Overhill’s two plants and outside of one of Overhill’s customers’ place of business. Defendants’ protest efforts included issuing a press release, carrying signs, and handing out leaflets, flyers, and handbills which stated, inter alia, that Overhill had used a “supposed discrepancy” in [1252]*1252Social Security numbers as a pretext for employment terminations which were both racist and a targeted attack on older and more senior employees.

Overhill sued defendants for defamation, intentional interference with prospective economic advantage, intentional interference with contractual relations, extortion, and unfair competition; all of Overhill’s claims were based on alleged defamatory statements made by defendants in the course of the protests. Although Overhill sought damages, it alleged that defendants are “virtually judgment proof,” and made clear that injunctive relief to prohibit future misconduct was its primary goal. Defendants filed an anti-SLAPP motion to strike the first amended complaint pursuant to Code of Civil Procedure section 425.16.1 The trial court granted the anti-SLAPP motion as to the unfair competition claim, but otherwise denied the motion. The court concluded that although Overhill’s claims arose out of protected conduct, Overhill had carried its burden of proving a probability of prevailing on the merits of all its claims except its unfair competition claim.

We affirm. Defendants’ primary contention on appeal is that none of their alleged statements were actionable as defamation because none declared or implied a provably false assertion of fact under the totality of the circumstances. (See Milkovich v. Lorain Journal Co. (1990) 497 U.S. 1, 19 [111 L.Ed.2d 1, 110 S.Ct. 2695] (Milkovich).) However, the statements reflected in defendants’ written press release, leaflets and flyers accused Overhill of more than harboring racist attitudes; they accused Overhill of engaging in a mass employment termination based upon racist and ageist motivations. Such a contention is clearly a “provable fact”; indeed an employer’s motivation for terminating employment is a fact plaintiffs attempt to prove routinely in wrongful termination cases. Nor can we excuse the statements on the basis they were made on “fully disclosed facts.” The record indicates defendants revealed only very selected facts in support of their claims that Overhill had used the discrepancies in Social Security numbers as a mere pretext for the firings.

Defendants’ other arguments fare no better. We presume there was substantial evidence to support the court’s determination Overhill demonstrated a prima facie case in support of its other causes of action, and defendants did not demonstrate otherwise. Moreover, the bulk of defendants’ contentions in connection with these causes of action rest on the assumption they did nothing wrongful in connection with their “peaceful protests.” We have [1253]*1253already concluded, however, that there is substantial evidence they made provably false statements in the course of those protests. Finally, we find no merit in defendants’ assertion the court committed reversible error in its evidentiary rulings. Among other problems, there is no showing that the rulings, even if erroneous, were prejudicial.

FACTS

Overhill is a publicly traded company which manufactures frozen food products and employs 1,000 employees in Vernon, California. Most of Overhill’s production workers are members of the United Food and Commercial Workers Union, Local 770 (the union), which is their certified collective bargaining representative.

I.

The IRS Informs Overhill Several of Its Employees Have Provided Invalid Social Security Numbers; Overhill Terminates the Employment of Those Employees Identified by the IRS Who Fail to Provide a Valid Social Security or Valid Tax Identification Number Within 60 Days.

In 2008, the IRS conducted a revenue and payroll audit of Overhill. In 2009, the IRS notified Overhill that many of its employees provided invalid Social Security numbers and that it might be subjected to over $80,000 in penalties for its “role in reporting tax withholding through an invalid social security number.” The IRS provided Overhill with a list identifying former employees and 231 then current employees, who had provided invalid Social Security numbers (the IRS list). An IRS agent orally informed Overfull’s tax attorney that Overhill could not continue to employ anyone who was unable to provide a valid number.

On April 6, 2009, Overhill sent a letter to each of the employees identified on the IRS list, including Agustiano Saguilan, Renteria, and Cortez, which informed them that they had provided an invalid Social Security or tax identification number and offered them the opportunity to correct any errors or discrepancies within 30 days, during which time they would continue to be paid. Only one employee attempted to provide information showing the invalid Social Security number was an error. Overhill confirmed the invalid Social Security number was an error, corrected the mistake, and the employee remained employed with Overhill. A few other employees responded to the letter by admitting they had provided false Social Security numbers and permanent residence cards, and had entered the United States illegally. In [1254]*1254addition, 31 employees voluntarily resigned from their employment without addressing the invalid Social Security number issue.

However, the vast majority of the employees who were sent the letter (including Agustiano Saguilan, Renteria, and Cortez) did not respond to the letter or request additional time to correct the problem with their Social Security number. Notwithstanding their failure to respond to the April 6 letter, Overhill sent these employees a second letter on May 1, providing the employees an additional 30-day period (until May 31) to comply with the instructions. These employees were suspended, but continued to receive benefits at Overfill’s expense through May 31.

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Bluebook (online)
190 Cal. App. 4th 1248, 119 Cal. Rptr. 3d 127, 31 I.E.R. Cas. (BNA) 809, 2010 Cal. App. LEXIS 2109, 110 Fair Empl. Prac. Cas. (BNA) 1460, Counsel Stack Legal Research, https://law.counselstack.com/opinion/overhill-farms-inc-v-lopez-calctapp-2010.