Smith v. Williams-Sonoma CA2/2

CourtCalifornia Court of Appeal
DecidedOctober 1, 2021
DocketB305144
StatusUnpublished

This text of Smith v. Williams-Sonoma CA2/2 (Smith v. Williams-Sonoma CA2/2) 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
Smith v. Williams-Sonoma CA2/2, (Cal. Ct. App. 2021).

Opinion

Filed 10/1/21 Smith v. Williams-Sonoma CA2/2 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

KELLIE SMITH, B305144 (Los Angeles County Plaintiff and Respondent, Super. Ct. No. 19STCV36093) v.

WILLIAMS-SONOMA, INC., et al.,

Defendants and Appellants.

APPEALS from an order of the Superior Court of Los Angeles County, Terry A. Green, Judge. Affirmed in part, reversed in part, and remanded with directions. Orrick, Herrington & Sutcliffe, Frank N. Zalom, Lynne C. Hermle and Julia C. Riechert for Defendants and Appellants. Doumanian & Associates, Nancy P. Doumanian; The Arkin Law Firm and Sharon J. Arkin for Plaintiff and Respondent. _____________________________________ Respondent Kellie Smith sued appellant Williams-Sonoma, Inc. (WSI) alleging workplace misconduct. WSI moved to strike the complaint as a strategic lawsuit against public participation (SLAPP). (Code Civ. Proc., § 425.16; Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1007, fn. 1 (Bonni).)1 An anti- SLAPP motion is “a procedure for weeding out, at an early stage, meritless claims” that chill First Amendment rights. (Baral v. Schnitt (2016) 1 Cal.5th 376, 384 (Baral).) On de novo review, we conclude that Smith cannot assert claims arising from WSI’s (1) protected right to report employee theft to police and (2) preparatory investigation before calling police. However, claims of workplace misconduct under the Fair Employment and Housing Act (FEHA), wrongful termination in violation of public policy, and emotional distress do not arise from WSI’s protected conduct in investigating and reporting theft to police and do not fall within section 425.16. FACTS AND PROCEDURAL HISTORY Smith’s Complaint WSI hired Smith in 2005. She began as an associate, became a coordinator, and was promoted to assistant store manager in 2010. She voluntarily left WSI in 2011. When she later returned to WSI’s employ, she was not given a managerial position. She alleges that WSI has a poor attitude toward female employees and is reluctant to promote them. In 2012, Smith secured a lead position in inventory control at WSI’s distribution center. By 2018, she was the lead person in charge of customer returns. Though she supervised 30

1Undesignated statutory references are to the Code of Civil Procedure. Codefendant WSI managers Christopher Cuyler, Wesley Hashimoto, and Efren Sierra also appeal.

2 employees, Smith claims she had “no real management duties when compared to her male counterparts.” She believes men are paid more and criticized less than woman employees at WSI. She asserts that WSI created a hostile environment, placing women in entry level positions at undesirable stores, not promoting them as quickly as men, and treating them without respect. Smith alleges that she complained of violations of law and company policy, specifically about maltreatment of herself and other women. As a result of her complaints, WSI subjected her to adverse employment actions, including criticism, discipline, demotions, denial of salary or bonuses, and termination. WSI terminated Smith’s employment on June 14, 2018. It accused her of theft, fraud, dishonesty, and violation of company policy. She denies wrongdoing and alleges that WSI did not give her or other women the opportunity to defend themselves. Male employees who engaged in fraud, theft, and dishonesty were not punished as harshly as their female colleagues. WSI “initiated the filing of criminal charges and a criminal prosecution” by making a police report. Smith had to hire an attorney and suffered emotional distress by becoming the target of a criminal investigation. Though prosecutors did not press charges against her, the incident damaged her reputation and ability to find work. Smith’s complaint asserts 13 causes of action. This includes six alleged violations of FEHA; wrongful discharge in violation of public policy; defamation; emotional distress; malicious prosecution; and abuse of process. Appellants’ Motion to Strike WSI’s motion detailed the circumstances leading to Smith’s termination. In April 2018, WSI’s accounting department noticed

3 that returned merchandise designated for resale was “scrapped.” WSI investigated why saleable goods were scrapped. Operations manager Luz Villanueva declared that WSI has a system to process returns, including furniture and home accessories. Returned goods are inspected and assigned a designation. A “retail” designation means an item will be sent to a retail store or used to fulfill an online order. “Outlet” items are sent to outlet stores for resale. Some items are repaired and resold; some are sold to a liquidator. Valueless items unsuitable for resale are designated “donation” or “scrapped.” WSI has a charitable program to donate scrapped goods to Habitat for Humanity (Habitat). WSI employees load items designated for donation into trailers; Habitat then hauls the trailers from WSI. Saleable goods are not donated to Habitat. WSI discovered that Smith was responsible for scrapping saleable goods on April 7, 2018. Documentation showed that four trailers of goods worth hundreds of thousands of dollars were designated “outlet.” Smith manually changed the designation to “scrapped,” making the goods worthless. When confronted, Smith claimed appellants Sierra and Cuyler walked by her that day; she asked to send the trailers to Habitat and they agreed. Smith also blamed Hashimoto for allowing her to scrap the trailers. The three managers denied authorizing Smith to scrap saleable goods. WSI’s charitable program was run by inventory manager Keith Wong. WSI’s investigation revealed that Wong paid a Habitat driver to take trailers bound for Habitat to Wong’s home. Loss prevention manager Torri Piper, a former federal agent, conducted her investigation with an eye toward criminal prosecution or civil litigation. She discovered that Wong diverted

4 goods designated for sale at WSI outlets. He wrote the names of WSI associates on merchandise so they could buy it cheaply at a Habitat thrift store. Trailers scrapped by Smith on April 7 went to Wong. Wong and 12 other WSI employees were involved in this scheme. As a result of the investigation, WSI’s director of human resources (HR), Kecia Bailey, terminated 13 male and female employees. Smith was terminated for improperly scrapping saleable merchandise, causing WSI to lose over $100,000. Bailey declared that WSI employees must adhere to polices requiring respect and equality and prohibiting harassment, discrimination, and retaliation, as described in the employee handbook. Bailey is available to hear concerns and investigates complaints about policy violations. WSI’s business records contain no complaints from Smith of harassment, discrimination or retaliation, nor did she disclose unlawful conduct or activities. No records show she was denied promotions. Luz Villanueva was Smith’s direct supervisor. They interacted regularly yet Smith never complained of harassment, discrimination, or retaliation. Had Villanueva observed misconduct, she would have intervened and reported it to HR. The WSI managers named in Smith’s complaint denied that they harassed or discriminated against her, or observed any misconduct against her, or heard her complain of harassment, discrimination, or retaliation. They had little interaction with her and did not direct her to scrap goods designated for sale in WSI outlet stores. Piper presented her findings to the Los Angeles County Sheriff’s Department.

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Bluebook (online)
Smith v. Williams-Sonoma CA2/2, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-williams-sonoma-ca22-calctapp-2021.