McCaskey v. CALIFORNIA STATE AUTOMOBILE ASSN.
118 Cal. Rptr. 3d 34
Cal. Ct. App.2010Background
- CSAA employed the three plaintiffs as sales agents at its San Jose office and each signed an Appointment Agreement tying commissions to a Compensation Plan that could be modified by CSAA and allowed termination with notice.
- Since 1973 CSAA offered a reduced minimum production requirement (MPR) for senior agents (age 55+, long service) to ease workload and retain them; reductions were 15% at 55 with 15+ years, plus an additional 25% at 60 with 20+ years (total 40%).
- By 2001 CSAA adopted a new compensation plan that eliminated the MPR reductions; plaintiffs did not sign the new plan but CSAA stated the prior plan was “no longer in effect.”
- Mellen and Luke continued meeting quotas without adjustments; McCaskey was counseled for underproduction and eventually discharged in 2005 for failing to meet MPRs; Luke and Mellen were discharged in 2005 for refusing to sign the new plan.
- CSAA then prepared another compensation plan in 2005; plaintiffs refused to sign and were discharged; plaintiffs alleged breach of contract and FEHA age discrimination (disparate treatment, disparate impact, retaliation).
- The trial court granted CSAA summary judgment on contract and some FEHA theories; the Court of Appeal reversed in part, finding triable issues on contract and discrimination claims and remanding for adjudication on some FEHA theories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of contract claim under statute of limitations | Plaintiffs contended limitations began when a compensable breach occurred. | CSAA argued limitations started with adoption of the 2001 plan | No outright bar; questions of when breach occurred and duration to honor promised rights require trial |
| Effect of at-will and revision clauses on liability | Promises of reduced quotas could not be superseded or used to discharge without cause. | At-will status and plan modification rights allow modification/discharge per contract terms | Contract must be read to honor MPR reductions; termination for underproduction after promised reductions can be a breach |
| Breach: discharge in violation of promise to honor reduced quotas | CSAA repudiated the MPR reductions after plaintiffs earned them, breaching the promise | Asmus respected, but duration unclear; plan could be terminated after reasonable time | There are triable issues on whether CSAA breached by terminating under the promised reduced quotas and by repudiating the promise |
| Discrimination under FEHA—retaliation and disparate treatment | Older workers were treated differently; evidence of discriminatory motive | Any motive was nondiscriminatory or the plan change was legitimate business necessity | Disparate impact and retaliation theories are to be adjudicated; evidence of discriminatory animus raised triable issues; causation requires trial |
| Disparate treatment framework and pretext | CSAA's reasons for eliminating MPRs were pretextual; motive to push out older agents | Reasons were legitimate and tied to business model and fairness | Triable issues exist on whether CSAA’s stated reasons were genuine and not pretextual |
Key Cases Cited
- Reeves v. Safeway Stores, Inc., 121 Cal.App.4th 95 (Cal. Ct. App. 2004) (independent record review on summary judgment; standard for triable issues of fact)
- Guz v. Bechtel National, Inc., 24 Cal.4th 317 (Cal. 2000) (burden-shifting framework for discrimination cases)
- Mamou v. Trendwest Resorts, Inc., 165 Cal.App.4th 686 (Cal. Ct. App. 2008) (disparate treatment framework and pretext discussion)
- Asmus v. Pacific Bell, 23 Cal.4th 1 (Cal. 2000) (unilateral policy termination; duration of benefits and reasonable time rule)
- Romano v. Rockwell International, Inc., 14 Cal.4th 479 (Cal. 1996) (accrual of contract claims; anticipatory breach considerations)
- Marketing West, Inc. v. Sanyo Fisher (USA) Corp., 6 Cal.App.4th 603 (Cal. Ct. App. 1992) (timing of injury and limitations in FEHA context)
- Consolidated Theatres, Inc. v. Theatrical Stage Employees Union, 69 Cal.2d 713 (Cal. 1968) (durational analysis for contracts with indefinite duration)
- Chinn v. China Nat. Aviation Corp., 138 Cal.App.2d 98 (Cal. App. 1955) (durational implications for performance obligations)
- DiGiacinto v. Ameriko-Omserv Corp., 59 Cal.App.4th 629 (Cal. App. 1997) (continuation of at-will employment to accept new terms; acceptance by performance)