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Cheeks v. General Dynamics

United States District Court, D. Arizona

May 19, 2014

Loretta H. Cheeks, Plaintiff,
v.
General Dynamics, et al., Defendants

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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For Loretta H Cheeks, Plaintiff, Counter Defendant: Robert T Weeks, LEAD ATTORNEY, Weeks Law Office PLLC, Phoenix, AZ.

For General Dynamics C4 Systems Incorporated, General Dynamics Corporation, Defendants, Counter Claimants: Elizabeth Mary Townsend, Mark G Kisicki, LEAD ATTORNEYS, Ogletree Deakins Nash Smoak & Stewart PC - Phoenix, AZ, Phoenix, AZ.

OPINION

James A. Teilborg, Senior United States District Judge.

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ORDER

Pending before the Court is Plaintiff Loretta H. Cheeks Motion for Partial Summary Judgment (Doc. 85) on Defendants General Dynamics Corporation (" GD" ) and General Dynamics C4 Systems Incorporated's (" GDC4S" ) affirmative statute of limitations and failure to mitigate damages defenses and GDC4S's counterclaim for breach of contract. Also pending is Defendants' Motion for Summary Judgment (Doc. 93) on all of Plaintiff's claims and on GDC4S's counterclaim. Both motions are fully briefed (Docs. 90, 94, 95, 102) and the Court heard oral argument on May 15, 2014. The Court now rules on both motions.

I. BACKGROUND[1]

Defendant GD is the parent company of Defendant GDC4S. (Defendants' Statement of Facts in Support of Motion for Summary Judgment (" DSOF" ), Doc. 88 ¶ 1; Plaintiff's Statement of Facts in Response to Motion for Summary Judgment (" PRSOF" ), Doc. 96 ¶ 1). Plaintiff (a female African-American with a son disabled by autism) began her employment with GDC4S in September 2001 after GDC4S acquired the division of Motorola where Plaintiff worked. (DSOF ¶ 19; PRSOF ¶ 19). As a condition of employment, Plaintiff signed an Employee Confidentiality Agreement in which she agreed not to remove or possess GDC4S property or documents without prior written consent. (DSOF ¶ 20; PRSOF ¶ 20).

Plaintiff was one of thousands of engineers employed by GDC4S whose career paths generally lead to development of either specialized technical or management skills. (DSOF ¶ ¶ 4-7; PRSOF ¶ ¶ 4-7). GDC4S divides its engineers into " sections" managed by a " Section Manager" who helps the engineers find (often temporary) assignments on various customer-funded programs, business development projects, or internal research and development projects. (DSOF ¶ ¶ 8-10; PRSOF ¶ ¶ 8-10). The Section Managers often work directly with " Program Managers" in an informal process to help place engineers in specific projects. (DSOF ¶ ¶ 10-14; PRSOF ¶ ¶ 10-14). When engineers are not assigned to a specific project, they charge their work time as department " overhead." (DSOF ¶ 12; PRSOF ¶ 12). An engineer's grade level, title, salary and benefits do not change regardless of whether the engineer is assigned to a project or charging overhead because GDC4S anticipated it will be able to find future assignments for its engineers. (DSOF ¶ 13; PRSOF ¶ 13). If an engineer seeks a promotion or transfer to a different position involving a title, pay, department, or grade change, then the engineer must formally apply for an open position through GDC4S's Internal Opportunity System (" IOS" ). (DSOF ¶ 15; PRSOF ¶ 15).

During her employment, Plaintiff variously worked on customer-funded projects and internal " overhead." Plaintiff's early

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customer-funded project assignments tended to be focused on management duties rather than technical aspects of the project. (DSOF ¶ ¶ 32-36, 41; PRSOF ¶ ¶ 32-36, 41). In 2004, Plaintiff was removed from a position as project lead on the " Rescue 21" project because of perceived performance issues. (DSOF ¶ 63; PRSOF ¶ 63). After being removed, Plaintiff filed an internal complaint through GDC4S's Dispute Resolution Program (" DRP" ) (DSOF ¶ 69; PRSOF ¶ 69). Although Plaintiff now alleges that the 2004 DRP complaint was also motivated by racial, sexist, and anti-disability bias, she admits that her primary purpose in filing the complaint was to find a position on a customer-funded program. (DSOF ¶ ¶ 71-75; PRSOF ¶ ¶ 71-75). Sometime during the pendency of the 2004 DRP complaint investigation, Plaintiff was placed on a " Mobile User Objective System" (" MUOS" ) project, which, at the time, Plaintiff agreed resolved her complaint. (DSOF ¶ ¶ 68, 74, 77; PRSOF ¶ ¶ 68, 74, 77). Between 2005 and 2009, Plaintiff worked variously on business development and other projects, described her experience as " outstanding," and, at multiple times, worked on overhead without any resulting adverse employment actions or other negative impacts. (DSOF ¶ ¶ 78-83; PRSOF ¶ ¶ 78-83).

Beginning in 2009, drastic government spending cuts (GDC4S's develops technology primarily for government customers) dramatically decreased opportunities for GDC4S engineers. (DSOF ¶ ¶ 84-91; PRSOF ¶ ¶ 84-91). In May 2010, Terry O'Dea (" O'Dea" ) became Plaintiff's section manager and began working to place Plaintiff and other engineers who had no assignment onto available programs. (DSOF ¶ ¶ 93-99; PRSOF ¶ ¶ 93-99). The various program managers offered neither Plaintiff nor many of O'Dea's other engineers (most of whom where Caucasian males) assignments on their projects. (DSOF ¶ ¶ 106, 111-13; PRSOF ¶ ¶ 106, 111-13).

Only one program at GDC4S provided a significant number of assignment opportunities (eventually, 72 assignments) in 2010 and 2011: the new Space Network Ground Segment Sustainment (" SGSS" ) satellite program for NASA which started staffing in the fall of 2010. (DSOF ¶ ¶ 101, 179; PRSOF ¶ ¶ 101, 179). The SGSS program managers, Bill Worger (" Worger" ) and Vince Pipitone (" Pipitone" ), sought engineers with substantial relevant technical experience and informally made assignment decisions based largely on their personal knowledge of each individual's relevant work experience. (DSOF ¶ ¶ 180-84; PRSOF ¶ ¶ 180-84). O'Dea (and other section managers) informally sent lists of available engineers, but most, including Plaintiff, were not specifically considered for SGSS assignments. ( Id. ). Thus, throughout the vast majority of 2010, Plaintiff, as well as many other engineers, had no assignment and charged overhead.

In January 2011, O'Dea expressed growing concern with engineers charging overhead and Plaintiff requested a meeting with O'Dea and HR representatives to express her concerns about finding assignments. (DSOF ¶ ¶ 185, 187; PRSOF ¶ ¶ 185, 187). Prior to meeting, Plaintiff emailed O'Dea: " Thanks for the help. No need at this point. I trust you've done your best," which Plaintiff honestly believed. (DSOF ¶ ¶ 188-89; PRSOF ¶ ¶ 188-89). Shortly thereafter, O'Dea completed the 2011 performance review process of his engineers' 2010 performance. (DSOF ¶ 191; PRSOF ¶ 191). During the process, O'Dea gave a " Needs Improvement" rating to all ten engineers, including Plaintiff, who did not have sufficient customer-funded assignments in 2010 from which performance

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could be evaluated.[2] (DSOF ¶ ¶ 191-92; PRSOF ¶ 191-92). At that point, O'Dea planned to place all ten engineers on a Performance Improvement Plan (" PIP" ) because he thought it was required by company policy. (DSOF ¶ 193; PRSOF ¶ 193). However, O'Dea later learned that a PIP was not mandatory and he did not place any engineers, including Plaintiff, on a PIP. (DSOF ¶ ¶ 194-95, 204-06; PRSOF ¶ ¶ 194-95, 204-06).

On February 3, 2011, Plaintiff filed an administrative charge with the EEOC against GDC4S alleging that her 2004 removal from the Rescue 21 program, various denials of program assignments since that time, and January 2011 placement on a PIP (which did not actually occur) were motivated by racial and sex-based discrimination and retaliation for her 2004 DRP complaint. (DSOF ¶ 207; PRSOF ¶ 207). Later that February, Plaintiff filed charges with the OFCCP claiming that the same actions occurred because of her association with a disabled son. ( Id. ). Kevin Jardine, a HR representative, received the EEOC and OFCCP charges, forwarded them to the legal department, and did not disclose the charges to O'Dea or other managers. (DSOF ¶ ¶ 208-10; PRSOF ¶ ¶ 208-10). However, O'Dea learned about the charges as part of GDC4S's legal department's investigation. (DSOF ¶ 211; PRSOF ¶ 211).

By the spring of 2011, the number of engineers O'Dea was attempting to find an assignment for had increased to 25 or 30. (DSOF ¶ 214; PRSOF ¶ 214). On March 1, 2011, O'Dea informed Plaintiff of a short assignment assisting a MUOS manager with various tasks, which Plaintiff accepted. (DSOF ¶ ¶ 215-16; PRSOF ¶ ¶ 215-16). O'Dea continued to search for longer-term projects for Plaintiff and emailed her multiple IOS requisitions, but noted that they required relocation; Plaintiff declined to apply for any of the positions (DSOF ¶ ¶ 217-19; PRSOF ¶ ¶ 217-19). Also in March, O'Dea successfully placed Plaintiff on a longer-term MUOS assignment under Ivan Hobson (" Hobson" ) and Starlene Maskalenko (" Maskalenko" ). (DSOF ¶ ¶ 220-25; PRSOF ¶ ¶ 220-25).

Shortly after Plaintiff began working on the MUOS project, she received emails one weekend with task requests. (DSOF ¶ 249; PRSOF ¶ 249). In response, Plaintiff sent an email to Hobson and other MUOS managers on Monday, April 4, 2011 stating: " I do not work on Saturday and Sunday. On Friday's [sic] I work intermittent[ly] as needed." [3] ( Id. ). The MUOS managers expressed dissatisfaction with Plaintiff's email and forwarded it to O'Dea. (DSOF ¶ ¶ 253-54; PRSOF ¶ ¶ 253-54). In particular, Hobson expressed an expectation that Plaintiff would be available for work on Fridays.[4] (PRSOF ¶ 533). Also, Maskalenko forwarded other emails to O'Dea that indicated Plaintiff had communication performance problems prior to her April 4 email. (DSOF ¶ 254; PRSOF ¶ 254).

On April 5, 2011, O'Dea emailed HR seeking approval of a draft email response

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to Plaintiff. ( Id. ¶ 538). The draft email states:

As an exempt employee you cannot define your job to be a specific number of hours per week, nor the days you will work. Anyone supporting a program must be flexible and willing to work what is asked. . . . It concerns me when I've worked so hard to find you a position on a paying program, and you tell them as an exempt employee you'll only work the schedule you've defined. This has caused them to question your role on MUOS, and certainly your commitment to making the program a success.

( Id. (emphasis added)). After various discussions between O'Dea, Plaintiff, and HR regarding Plaintiff's communication skills (see DSOF ¶ ¶ 250-62; PRSOF ¶ ¶ 250-62), Plaintiff continued working on MUOS and regularly taking FMLA leave on Fridays, and none of the MUOS program managers raised further issues about or asked that she be removed because of her work schedule. (DSOF ¶ ¶ 263-65; PRSOF ¶ ¶ 263-65). However, on April 16, Hobson complained to O'Dea about Plaintiff's performance and asked that she be removed from the MUOS program. (DSOF ¶ ¶ 270-74; PRSOF ¶ ¶ 270-74). At O'Dea's insistence, Hobson continued working with Plaintiff and Plaintiff continued to have performance problems. (DSOF ¶ ¶ 274-78; PRSOF ¶ ¶ 274-78). Then, on May 30, citing numerous documented performance problems, Hobson firmly requested O'Dea remove Plaintiff from the MUOS project; Plaintiff was removed shortly thereafter and returned to charging her time to overhead. (DSOF ¶ 277; PRSOF ¶ 277).

On June 7, 2011, GDC4S conducted a nationwide Reduction in Force (" RIF" ) of over 450 employees, including Plaintiff. (DSOF ¶ ¶ 281, 288; PRSOF ¶ ¶ 281, 288). As a section manager, O'Dea selected all 29 of his engineers who did not have a current or future long-term customer-funded project assignment, including Plaintiff, for the RIF.[5] (DSOF ¶ 284; PRSOF ¶ 284).

In November 2011, after the RIF, Plaintiff amended her February 2011 EEOC and OFCCP charges, filed an additional EEOC retaliation charge, eventually received right-to-sue-letters, and commenced the instant litigation. (DSOF ¶ ¶ 295-302; PRSOF ¶ ¶ 295-302; Doc. 1).

II. LEGAL STANDARD FOR SUMMARY JUDGMENT

Summary judgment is appropriate when " the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). " A party asserting that a fact cannot be or is genuinely disputed must support that assertion by . . . citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits, or declarations, stipulations . . . admissions, interrogatory answers, or other materials," or by " showing that materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Id. at 56(c)(1)(A)& (B). Thus, summary judgment is mandated " against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

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Initially, the movant bears the burden of pointing out to the Court the basis for the motion and the elements of the causes of action upon which the non-movant will be unable to establish a genuine issue of material fact. Id. at 323. The burden then shifts to the non-movant to establish the existence of material fact. Id. The non-movant " must do more than simply show that there is some metaphysical doubt as to the material facts" by " com[ing] forward with 'specific facts showing that there is a genuine issue for trial.' " Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e) (1963) (amended 2010)). A dispute about a fact is " genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The non-movant's bare assertions, standing alone, are insufficient to create a material issue of fact and defeat a motion for summary judgment. Id. at 247-48. Further, because " [c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, . . . [t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor" at the summary judgment stage. Id. at 255 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970)); Harris v. Itzhaki, 183 F.3d 1043, 1051 (9th Cir. 1999) (" Issues of credibility, including questions of intent, should be left to the jury." ) (internal citations omitted).

Moreover, the Ninth Circuit Court of Appeals " has set a high standard for the granting of summary judgment in employment discrimination cases." Schnidrig v. Columbia Mach., Inc., 80 F.3d 1406, 1410 (9th Cir. 1996). As the Ninth Circuit has explained, " [w]e require very little evidence to survive summary judgment in a discrimination case, because the ultimate question is one that can only be resolved through a 'searching inquiry'--one that is most appropriately conducted by the factfinder, upon a full record." Lam v. Univ. of Hawaii, 40 F.3d 1551, 1564 (9th Cir. 1994) (internal quotations omitted).

III. CROSS-MOTIONS FOR (PARTIAL) SUMMARY JUDGMENT

Plaintiff's Fourth Amended Complaint (" FAC" ) (Doc. 68) alleges seven causes of action against GDC4S: (1) race discrimination in violation of Title VII of the Civil Rights Act of 1964; (2) sex discrimination in violation of Title VII; (3) retaliation for opposing discriminatory practices in violation of Title VII; (4) discriminatory harassment in violation of Title VII; (5) wrongful termination in violation of Arizona law; (6) disability discrimination in violation of the Americans with Disabilities Act (" ADA" ); and (7) retaliation for using Family and Medical Leave Act (" FMLA" ) leave in violation of the FMLA. Plaintiff's FAC also alleges Counts Two, Three, and Seven against Defendant GD. ( Id. at ¶ ¶ 76, 81, 112). In their Answer (Doc. 69), GDC4S preserves 13 " affirmative defenses" [6] to Plaintiff's claims and alleges a single counterclaim against Plaintiff for breach of contract (a confidentiality agreement) ( id. at 15-21).

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Plaintiff's Motion for Partial Summary Judgment (Doc. 85) seeks summary judgment on the breach of contract counterclaim and two of GDC4S's affirmative defenses: failure to mitigate damages (Doc. 85 at 5-6; see Answer, Doc. 69 at 14, ¶ C); and the applicable statute of limitations renders the claim untimely (Doc. 85 at 9-11; see Doc. 69 at 14, ¶ E). In Response (Doc. 90), GDC4S argues that disputed issues of material fact preclude summary judgment on any of these three issues. Additionally, GDC4S's Motion for Summary Judgment (Doc. 93) seeks summary judgment on each of Plaintiff's seven claims and the counterclaim. Similarly, Defendant GD seeks summary judgment on each of the three claims against it (Counts Two, Three, and Seven). ( Id. ). The Court will consider the counterclaim, affirmative defenses, and each claim in turn.

A. GDC4S's Counterclaim for Breach of Contract

Both Parties have moved for summary judgment on GDC4S's counterclaim for breach of contract (an employment confidentiality agreement). (Docs. 85, 93). Specifically, Plaintiff argues that GDC4S's counterclaim fails because GDC4S has not and cannot present evidence of damages. (Doc. 85 at 6-7). GDC4S argues that it is entitled to summary judgment because Plaintiff's breach is not in dispute and the contract was not unconscionable or otherwise unenforceable. (Doc. 93 at 23-24).

1. Breach of Contract and Enforceability

GDC4S moves for summary judgment on its breach of contract counterclaim arguing that there is no genuine dispute of material fact that the contract (a confidentiality agreement) was enforceable and that Plaintiff breached the contract. (Doc. 93 at 23-24). With regard to the contract's enforceability, Plaintiff argues that the confidentiality agreement is invalid because it is an overly broad contract of adhesion. (DSOF ¶ 30; PRSOF ¶ 30). The Court, however, has already denied Plaintiff's similar attempt to have the contract " declared unlawful and illegal." (Plaintiff's Motion to Have Employment Agreement Declared Unlawful and Illegal, Doc. 25; March 27, 2013 Order of the Court, Doc. 42 (denying Plaintiff's motion)).

With regard to breach of the contract, Plaintiff admits that she took various documents from GDC4S and that she currently retains at least some of them. (Defendants' Separate Statement of Facts in Response to Plaintiff's Partial Motion for Summary Judgment (" DRSOF" ), Doc. 91 ¶ 39; DSOF ¶ 30; PRSOF ¶ 30). Nonetheless, Plaintiff argues that she has not breached the contract because " the documents that she retained were only related to her discrimination claims and did not contain any confidential information." [7] (PRSOF ¶ 30). Plaintiff does not dispute, however, that the plain terms of the confidentiality agreement cover " all documents . . . whether or not such materials contain Confidential Information." (DSOF ¶ 20; PRSOF ¶ 20). Thus, there is no genuine dispute of material fact that Plaintiff has breached the contract, regardless of the

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allegedly non-confidential nature of the documents she took and retains.

2. Damages

Plaintiff moves for summary judgment on GDC4S's breach of contract counterclaim arguing that GDC4S has not offered evidence of damages, an essential element of the claim. (Doc. 85 at 6-7). To recover on a breach of contract claim under Arizona law, " a plaintiff must show proximately caused damages." Firetrace USA, LLC v. Jesclard, 800 F.Supp.2d 1042, 1054 (D. Ariz. 2010) (citing Chartone, Inc. v. Bernini, 207 Ariz. 162, 83 P.3d 1103, 1111 (Ariz. Ct. App. 2004); Home Indem. Co. v. Bush, 20 Ariz.App. 355, 513 P.2d 145, 150 (Ariz. 1973)). Plaintiff contends that because GDC4S's counterclaim requests only monetary damages (Doc. 69 at 20) and GDC4S has not demonstrated that Plaintiff sold or otherwise profited from the documents, GDC4S has no proof of damages. (Doc. 85 at 7). In Response, GDC4S argues that it is nonetheless entitled to monetary damages under both the terms of the contract [8] and Arizona's fee shifting statute [9] in the amount of its costs and attorneys' fees " incurred to enforce the contract," which " cannot be determined fully until the counterclaim is litigated to conclusion." (Doc. 90 at 11).

In a recent case strikingly similar to the instant case and predicated on the same contractual terms, the Court has previously confronted Plaintiff's argument that currently unquantified attorneys' fees, alone, are insufficient proof of damages. U.S. ex rel. Cafasso v. Gen. Dynamics C4 Sys., No. CV-06-1381-PHX-NVW, 2009 WL 1457036 (D. Ariz. May 21, 2009), aff'd sub nom. Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047 (9th Cir. 2011). In Cafasso, a GDC4S employee who believed she had been wrongfully terminated removed more than ten gigabytes of GDC4S's data and documents and refused to return them. (Id. at *13 n.2). Although the plaintiff did not sell the documents or profit from her breach, the Court found that " there is no question GDC4S has been damaged" by the cost of years of litigation to enforce its contractual rights. (Id. at *13).

Plaintiff contends (Doc. 94 at 3-4) that Cafasso is inapposite because in Cafasso, the employer also sought equitable relief in the form of an injunction ordering the plaintiff to return GDC4S's documents and data ( Cafasso, 2009 WL 1457036, at *8, 13-15). In contrast, here, GDC4S seeks only attorneys' fees and Plaintiff contends that, rather than attempting to keep the documents confidential, GDC4S " has now publicly disclosed the exact same documents in its motion for summary judgment, making the issue moot." ( Id. ).

The Court disagrees with Plaintiff's assessment. The issue is not moot for two reasons. First, the record is unclear (and Plaintiff cites no evidence supporting its contention) that GDC4S has now publicly disclosed the entirety of the documents Plaintiff took. Second, even if GDC4S has disclosed every document Plaintiff kept, ...


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