Mamou v. Trendwest Resorts, Inc. (165 Cal. App. 4th 686, 2008)

Opinion

RUSHING, P. J.

Plaintiff Tamer Mamou sued his former employer, Trendwest Resorts, Inc. (Trendwest), charging it with employment discrimination on account of his Syrian national origin and with retaliation for his resistance, as he alleged, to his supervisors’ stated plans to discriminate against employees taking sick leave. Mamou also alleged that Trendwest defamed him by telling former coworkers that he had been discharged for theft and poor performance and was continuing to engage in reprehensible conduct by using misappropriated customer information to compete with Trendwest. Trendwest moved for summary judgment, relying pervasively on the premise that the decision to dismiss Mamou was made not by his immediate supervisors, who might have possessed the requisite discriminatory or retaliatory motives, but by more remote managerial officers as to whom there was no evidence of any such motive. Trendwest also contended that any defamatory statements its managers might have made were shielded by the statutory privilege for statements between persons with a common interest in the subject matter. The trial court granted the motion and entered judgment for Trendwest. We hold that this was error. The record presents triable issues of fact on the discrimination claims in view of evidence that the decision to dismiss Mamou was in fact made by his own immediate supervisor in consultation with his supervisor, and that the former was angered by Mamou’s open resistance to his expressed desire to discriminate against workers taking medical leave, while the latter was heard to refer to the “fucking rag heads” whom the company needed to “get rid of.” The record also presents triable issues with respect to the existence of the malice that will overcome a statutory privilege, as reflected in evidence from which a fact finder could reasonably infer that the authors of at least some of the defamatory statements knew they were false when made and, in one case, had vowed to “get” or “get even” with Mamou. Accordingly, we will reverse the judgment.

I. Background

A. Trendwest

Trendwest sells vacation time-shares under the name Worldmark, The Club. More precisely, Trendwest sells credits with which owners can purchase vacation packages at various resorts. It markets these credits principally through sales presentations at offices in various locations. When successful, the presentations result in the buyer’s execution of a sales contract. The buyer often has a statutory right to rescind the contract within a specified period. Thus in California, if specified conditions are present, a timeshare purchase contract is “voidable by the purchaser, without penalty, within seven calendar days” after specified events. (Bus. & Prof. Code, § 11238, subd. (a); see Bus. & Prof. Code, former § 11024, subd. (a), repealed by Stats. 2004, ch. 697, § 12 [three-day rescission period].) During this period the buyer is vulnerable to what one Trendwest witness called “poaching” by other sellers of credits. A secondary market exists for the resale of credits through businesses existing for that purpose. Trendwest does not participate directly in the resale market, but apparently charges a fee for processing any resulting transfers, and at least arguably benefits from the added value and reduced risk to buyers resulting from the existence of the resale market.

Trendwest operates in the western United States, Mexico, Canada, Australia, and Fiji. Its offices are administered in various regions. This case largely concerns the Northern California region, which covers somewhere between six and 12 sales offices, including Roseville, San Jose, and Walnut Creek. Trendwest sets sales and efficiency goals for each office, and a sales and budget and efficiency standard for the region. The sales operation in each office is headed by a project director. Project directors, and apparently some other employees, are or may be compensated, in whole or part through incentive and other payments apparently amounting in effect to commissions.

In 2002, Trendwest was acquired by Cendant Corporation (Cendant). In August 2003, ownership of Trendwest was transferred to a wholly owned subsidiary of Cendant Timeshare Resorts Group (CTRG), some of whose officers were involved in some of the events described below. CTRG apparently has its principal offices in Florida. Subsequent events in the entity’s corporate history need not concern us here.

B. Mamou’s Employment

Mamou alleged, and it has not been disputed, that he is a naturalized United States citizen of Syrian birth. Trendwest hired him in 1992 as a sales representative in its Santa Clara office. Over the next five years he received a series of promotions, from assistant manager to sales manager to San Jose office project director, the top sales position in that office. In 2000 he was promoted to regional sales director for the Northern California region. In that position he oversaw six sales offices, more or less. (See fn. 3, ante.) He held this position until early 2003, with one complication: In February 2002 he agreed, at the request of regional vice-president of operations John Nye, to help out in the San Jose office, whose project director had just been removed. Mamou thus assumed the role of acting project director for San Jose, and apparently was classified as such for a brief period. He then apparently returned to the regional director position until early 2003. At that time he left the regional director position and officially became San Jose project director because, according to him, he was told that Trendwest was reducing the compensation for the regional position. He later asserted that these statements had been false and were made to induce him to leave the position, which was then filled by Larry McDowell, who Mamou believed got a materially better compensation package than had been offered to him. McDowell was replaced in a few months by William Brown.

In November 2003, Kevin Fiore became regional vice-president for Northern California. He was responsible for the “development side” of Trendwest’s business in the region, including sales, marketing, finance, administration, and human resources. In March of 2004, he asked Mamou to assist with the company’s Walnut Creek office, which the parties agree was “struggling.” Eventually it was agreed that Mamou would assume the role of project director for that office while remaining the project director in San Jose. He was to receive full compensation as Walnut Creek project director, plus a 25 percent “override and efficiency bonus” for the San Jose office. Mamou declared that they further agreed “that this arrangement would stay in place for the entirety of the Second Quarter of 2004”—meaning, under Trendwest’s fiscal calendar, that the arrangement would continue through June 18. Fiore, however, terminated the arrangement around mid-May when, as he testified, “[I]t wasn’t working. Him running two stores, both stores were not performing at or even close to what our expectations were.” Mamou testified, however, that the Walnut Creek store won a $50,000 prize for the most improvement in the company during the second quarter of 2004. Fiore denied any recollection on this point.

C. Regional Director Position

In the spring of 2004, the Northern California regional director position again became vacant and Trendwest posted an opening for it. Fiore was responsible for filling the position. On May 12, Mamou notified Fiore that he was interested in the position. He submitted a résumé and a skills assessment form.

On May 26, 2004, Fiore discussed the opening over lunch with Carter Lee, then the project director for an office in Federal Way, Washington. Two days later, apparently, Fiore conducted what he called an “interview” of Mamou, which he said lasted from 30 to 60 minutes. Mamou testified in deposition that there was no real job interview, but “just a visit,” lasting “probably five to ten minutes max.” He also described it as a “five minute brush-off interview.” In an e-mail written about a month after the fact, he described it as “a 20- to 25-minutes brush-off interview . . . .” He testified that immediately after the interview he called Richard Folk, another regional director, who told him that Carter Lee had already been chosen for the position.

Trendwest asserts that Fiore only made his decision after “consulting with other senior managers” and “comparing the financial performance of the two candidates . . . .” The only evidence of consultation, however, is Fiore’s testimony that he asked Ted Curtis for a recommendation and asked two other people “how is Carter as a leader.” And as Mamou points out, the only evidence that Fiore examined Mamou’s performance records was Fiore’s testimony that he “would have” looked at such records, and the further response, when pressed, that he “believe[dj” he looked at “historical documents” of Mamou’s performance in the regional position. On May 31, Fiore e-mailed several Trendwest managers that he had “decided to offer the job to Carter.”

Apparently about this same time, Mamou was assigned exclusively to the Walnut Creek office. Around mid-May, according to him, Trendwest stopped paying him the 25 percent incentive from the San Jose office. He asserts that this violated the agreement with Fiore under which he would receive that sum through June 18.

D. Medical Leaves

Fiore acknowledged in deposition that during the period preceding Mamou’s discharge he had thought “there were an excessive amount of sales employees on leaves of absence within the Northern California region.” He understood that most of the leaves were medical in origin. He had a concern—he declined to characterize it as a suspicion—that there were likely people on a medical leave who were not legitimately in need of one. Later he described it as a “fear” that people were inappropriately using medical leave “as a means of taking days off.” He evidently found such leaves objectionable even if an employee were truly sick: “I felt that, in comparison to my own approach to work, if I’m sick or whatever, have stress or whatever, my opinion is people should still work and I still work.”

Lee testified that he too was concerned that “some of the medical leaves were suspicious . . . .”

Mamou declared that in March 2004, when Fiore and Brown asked him to “help out with the Walnut Creek sales office,” the three of them “had a long discussion about the issue with employees on medical leaves of absence. Mr. Fiore was clearly very upset about the number of such leaves and specifically told me that he wanted me to help him make sure that those who were out on leave never came back; or if they did come back, that I would make their lives so miserable that they would quit. I told Mr. Fiore that I would not do that. By that time, I had already been wrongly named as a defendant in three lawsuits by former Trendwest employees and knew that if I carried out Mr. Fiore’s directive, I would just be inviting more such lawsuits. Mr. Fiore was unhappy with my response to him, but we ultimately agreed that I would take over the Walnut Creek office.”

There is evidence that Fiore and Lee continued to press the issue. In a June 7 e-mail to Mamou, Fiore responded as follows to the news that an employee was going on medical leave: “I know you and Carter [Lee] talked about these ‘leave of absences’ last week. Q] I am disappointed that we have so many people from our region that use this as a means of taking days off. When I see people like Hoda and Bijan taking such time off, I honestly am discouraged. . . . [f] I continue to look to you as a leader of this region. Hopefully, you find this type of stuff equally as disappointing. You continue to work your ass off to make the region better. Many of your people do as well. For us to really make substantial improvements in our performance, this type of stuff needs to come to an end. Your leadership can go a long way in ensuring that happens.” In deposition, Fiore described the message as an “overreaction,” an “overstatement,” and an “emotional” response.

E. Welcome Grants

Meanwhile friction had arisen between Mamou and Trendwest over “welcome grants” of stock options that had been issued to Trendwest managers in 2002, when Trendwest was acquired by Cendant. The relative distribution of shares was determined by Trendwest’s senior management, with a few “minor tweaks” by “Cendant corporate.” Mamou received 8,000 shares. Every other regional director received 20,000 shares. The typical project director received about 3,000 shares. On August 15, 2002, Mamou e-mailed Nye seeking his “help” to “correct[]” what he then viewed as a mistaken allocation of fewer shares to him than to other regional directors. He attributed this discrepancy to the unfortunate timing of the allocations during his “temporar[y] reclassification] as a project director.” “Since I was listed as Project Director and not as the [Regional] Director of Sales I became significantly harmed in the number of stock options that were given to me. [][] I would appreciate your assistance in correcting this misunderstanding of [my] status so that I would be fairly compensated with stock options for the position that I fulfill . . . .”

Nye promptly replied, stating, “Tamer, your summary is absolutely correct. I am forwarding this to Al Schriber and will follow with a phone call early tomorrow and will do whatever I can.” He sent copies of this message, appending Mamou’s original message, to Schriber and another senior manager.

So far as the record shows, there was no further communication on the subject until December 13, 2003. On that date, Mamou forwarded to Fiore and Brown a copy of his e-mail exchange with Nye, accompanied by the note, “hi bill can you or kevin help me with this ??????” Fiore forwarded the message to Nye, asking “what was done to fix it?” and “does H[uman] Resources] know about this?” Nye replied tentatively that “Al S.” may have “made appropriate changes to pay,” but that “[i]t look[ed]” as if “Al” might not have “record[ed] title changes and the subsequent stock shortfall.” He noted that in a similar situation elsewhere “we were unable to correct after the fact.” By way of possible solutions, he wrote, “My direction would be to work with HR who should have changes on file. ... It is my plan to adjust if we have stock program in 04’ [szc].” On January 2, 2004, Fiore forwarded the entire message thread to human resources vice-president Jan Cannon asking, “Do you have any recollection of this? It seems like a deal was reached with Al based on the John Nye correspondence. If so, it sounds like Tamer should have been given some options, [ft] Is this true?” Cannon replied, “No[] but I will research it and get back to you. [Interesting he waits this long to surface again. [Mjust be that old stock price going up thing. I am out of the office until February 12 [i.e., 40 days later] but will see what I can find out for you.”

On January 13, Fiore e-mailed Mamou that he had “researched this issue with everyone involved, except Duke. Apparently, the number of options you received was considered at the Corporate level by Al and Jan. The consideration given included discussions with John Nye, Duke, and the Corporate Administration group. They felt the options distributed were appropriate. Based on my research it seems that you were given more than a normal P[roject] D[irector] but less than a sales director. As such, there will be no change to the number distributed.”

On April 26, 2004, Mamou spoke to sales vice-president Michael Feorene about the welcome grants. On April 27, he sent Feorene a copy of his original e-mail exchange with John Nye. Feorene forwarded this to Cannon saying, “Tamer spoke to me about this on the 26th of this month. Seems to be 2 years old. Your thoughts?” Cannon replied, “We thought we closed this door a long time ago. Whether Tamar [sz'c] was a P[roject] Director] or a D[irector] 0[f] S[ales] does not matter. Both positions are at the S[ales] M[anager] level and have tiie same band. More or less shares were given based on the manager’s perception of the employee’s contribution. He just doesn’t seem to understand the program or chooses not to. He has contacted just about everyone in the company about this. Sometimes no just means no.”

On May 14, 2004, apparently invoking Trendwest’s avowed “open door policy,” Mamou e-mailed Don Harrill, the president of Trendwest, and Lauren DeSimon Johnson, CTRG’s vice-president of human resources, with copies to various other persons. He again summarized the history of the welcome grants issue, continuing to characterize the allocation as a “mistake” that then managers “promised . . . would be corrected,” and asserting that by any objective criterion he had not gotten his “fair share of stock options.” Johnson replied that she would discuss the issue with appropriate parties and respond to Mamou shortly. Apparently the inquiry was again referred to Cannon, whose e-mails from the outset could be found to betray a certain impatience with Mamou’s concerns. On May 24, Cannon wrote to Johnson that Mamou “spent a relative small amount of time in the [regional director of sales] role. His award was not a mistake. He has been a problem off and on during his tenure here.”

Trendwest again refused to issue additional shares to Mamou. However, Fiore lobbied other members of management to assuage Mamou’s concerns by allowing him some kind of compensation. This led to a decision to offer Mamou $15,000 in cash and $35,000 in options, the latter to vest in six to 12 months. Trendwest characterized the offer as “contingent on Mamou’s complete support in improving the Walnut Creek store and long-term commitment to the company.” According to Mamou, it was contingent on his “pledging to support the unlawful activities of Mr. Fiore and Mr. Lee in regard to the treatment of Trendwest employees who had exercised their right to take medical leave of absences . . . .” The offer was conveyed by Fiore and Lee on June 14, 2004, in a meeting Mamou later described as three hours of “finger-pointing, arm-twisting tactics, and wrongful accusations.” He testified that at the outset of the meeting, Lee told him, “ ‘Look, Tamer, . . . [w]e know you got F’d [szc]—okay?—but we cannot un-F you, okay?’ He said, ‘Now there’s a lot of issues that we’re going to discuss, okay?’ And then he went—they went on the attack of me undermining them and not being supportive and playing by their rules—okay?—and he says, ‘We’re going to make you an offer today, and you have—’ I believe they gave me 24 hours or 48 hours to consider on—on the offer. . . . [B]ut he says, ‘Before we even get there, here’s stuff we want taken care of,’ and they went down the list— okay?—of the stuff that I’m supposed to do or not to do or say or not to say. . . .” Mamou told them that there were some management activities of which he “wouldn’t want to be supportive.” Among these was “them wanting to fire everybody who’s on medical leave or never even promote them.”

Mamou testified that during this meeting he also brought up his own suspicion that Trendwest was “planning to get rid of me.” He alluded to “David, the cleaner, who was hired, who came in to the Roseville office, and he promised to get rid of the Middle Eastern regime, and he be coming to Walnut Creek to take care of me, get me blown out.” He said, “Here’s, here’s a guy who comes from outside of the company, walks into a sales office . . . claims that he—that Bill Brown was booted out of the company like a football, and he’s—next week he’s going to Walnut Creek. He’s going to take care of Tamer Mamou, and that Middle Eastern regime is going to be gone.” Further, he queried, if Trendwest were not trying to get rid of him, “why did they not give me the stock options .... They awarded stock options to everybody else in the region. I was the only one that wasn’t awarded.”

Mamou did not accept the offer. On June 16, 2004, he sent an e-mail to Cendant vice chairman Steve Holmes, CTRG president Jack McConnell, and Cendant chairman and CEO Henry Silverman. In doing so, he testified, he was “taking advantage of the open-door policy” and relying on assurances that “there would not be a problem” so long as he was “going through the chain of command.” Apparently to show compliance with this condition, he incorporated in the message copies of earlier messages he had sent and received on the subject. In the new message, he complained that the welcome grant issue remained unresolved after two years, and added, “I believe a thorough investigation would clearly indicate that I was discriminated against.” He also referred to a promise by Fiore that “there would be absolutely no retaliation or repercussions if I were to take this issue to the Cendant Timeshare level in Orlando.” However, he wrote, “ever since I sent an email requesting justice, and for the company to honor all their promises, things have deteriorated.” He then listed five “examples,” beginning with the awarding of the regional director position to Lee “even prior to my interview,” despite what Mamou believed were Lee’s inferior qualifications. He wrote that “another form of retaliation, intimidation and harassment” appeared in the conduct of “the Cleaner, David,” who “was sent to the region supposedly to clean house.” On June 2, 2004, he wrote, “David reported to Roseville Office. First David makes a statement that ‘Bill Brown was “booted” out of the company like a football’. He makes a threat that ... he will be going to Walnut Creek Office to handle Tamer Mamou and to straighten out Walnut Creek Office.” Mamou went on to detail unseemly conduct by “David” toward or with other Trendwest employees, and then wrote that when he reported this to Lee, he was “perceived as undermining management and not supporting David.” Mamou then turned to a June 10 meeting in Walnut Creek, at which Lee made a number of comments Mamou found objectionable because of profane, homophobic, or otherwise offensive content. Among these was a request by Lee that project directors “send him an e-mail with a list of all those on medical leave, and that he wanted to know the [project directors’] opinion as to which ones were legit and which were not, so they could be terminated or denied future promotions.”

In this e-mail, Mamou characterized Trendwest’s offer as a “bribe” because of the conditions attached to it, and an “ultimatum” because he was “given a 24-hour window to make up my mind,” after which the offer would be “off the table.” He wrote that Lee and Fiore “surprised” him at the meeting by raising the possibility that he might “accept their offer of $50,000 and then end up leaving the company . . . .” “I am happy, committed and love my job,” he wrote. “However, I told Kevin that they should not expect me to be a follower and a supporter of such behaviors as: [f] 1. Double standards when it comes to compensation, [f] 2. Double standards when it comes to hiring and promoting. [][] 3. Behaviors such as Carter[’]s during the June 10th meeting. [][] 4. Behaviors such as David’s (the cleaner) in Roseville.”

Mamou went on to identify a number of questions that he felt should be addressed in any investigation of his charges. These included: “Is it true that Tamer applied for the Regional Director of Sales and he was promised interviews with Kevin, Michael, and Ted, yet the interviews never took place??? Why didn’t Michael and Ted interview Tamer? Can that be explained? [][]... Is it true that Tamer’s interview with Kevin on the 28th of May was actually after Carter Lee had been selected for the position?” Other questions alluded to Mamou’s arguably superior qualifications and his willingness to take the position “with a straight commission based on performance,” whereas “Carter Lee was given a guaranteed salary.”

On June 17, this e-mail became the topic of a conference call among Holmes, Johnson, Harrill, and two in-house attorneys. The result was a decision to modify the offer to Mamou by making it all cash—$15,000 up front, and $35,000 after an additional year in service. The offer was to be conditioned on Mamou’s execution of a general release. Trendwest asserts that the offer was made because Mamou was a valued employee who had “lost focus” over the welcome grants.

Harrill sent Fiore a set of “talking points,” authored by Johnson and Cendant house counsel John Dempsey, to use in communicating the new offer to Mamou. Fiore, accompanied by director of human resources Michael Meic, presented the offer on June 19, 2004. Fiore also told Mamou that Trendwest was going to investigate the other issues raised in his June 16 message.

Mamou rejected this offer. On June 20, 2004, he sent an e-mail to Fiore, with copies to senior managers and in-house attorneys, recounting the June 19 meeting and explaining his refusal of the offer, which he had apparently communicated to Fiore and Meic at that time. He wrote that “[n]one of the discrimination or retaliation issues were discussed or addressed,” and that his response to the offer “was the same as that of last Monday, that I decline and that I cannot accept anything less than the equivalent of the actual real value of the stocks as if I were to exercise my options today.” He recounted Fiore’s statement that “[Steve] Holmes and [Henry] Silverman elected not to get involved with this situation due to the fact that they get hundreds of e-mails a day,” and concluded that if this were “the company’s final resolution to everything that I listed in my email, I would appreciate a written notification to that [effect.] I will then have no choice but to seek legal advice.”

On June 21, Holmes called Mamou. Mamou testified that the conversation took about an hour. According to him, Holmes corroborated what was then Mamou’s understanding about the original stock allocation, which was that “ ‘[I]t was an error,’ ” in that it was based on “the title that the employee held,” and “ ‘[S]omebody from Trendwest made the mistake [of] listing you as project director.’ ” Holmes asserted, however, that it was impossible under the securities laws to issue options retroactive to a specific date, so there had to be a different way of providing fair compensation. With respect to the other issues raised by Mamou, Holmes said that “they were extremely serious,” that he “took them to heart,” but that there were “too many” to work through, and so Trendwest was sending Johnson to lead an investigation into Mamou’s charges of wrongdoing. Holmes added that it would take Johnson a week or 10 days to get to California to undertake the investigation. Mamou “told him that, if they deliver based on the threats and the promises and the discrimination, all these issues[,] based on that, I’m almost out the door. I’m making plans to move on. I really don’t want to. If justice is served, then I’ll be totally fine, and I’d like to continue on with my career . . . .” Holmes “assured me—he asked me to—not to do anything.” Mamou also told him of “my understanding” that “they[’re] going to terminate me the next day.” Holmes gave him “his word that they won’t do a termination until [Johnson] can conclude her determination.” Mamou proposed that upon conclusion of the investigation, if any of his charges were shown to be unsupported, or “if there’s one thing I’m in violation of, I’ll—I’ll walk away, no hard feelings.”

Holmes’s account of the conversation differed in some respects from Mamou’s. In a contemporaneous e-mailed summary, Holmes wrote that while Mamou continually referred to the proposed payment as a “ ‘bribe,’ ” Holmes “stopped him three times to tell him it was a payment to correct what he perceived as an underpayment in the welcome grant and that my view is that he is owed zero, but in the interest of keeping him focused on his business we were willing to make the proposal that Kevin gave him. I told him that Kevin is 100% the person t[o] handle those discussions. Tamer said he was really confused by Kevin making the offer, since he felt that Kevin was to a degree involved in some of the problems in the offices .... I told him he was confusing a couple of issues . . . Kevin was talking to Tamer about settling the question surrounding the stock options and a separate investigation led by [Johnson] would look into his other issues. Tamer said that the settlement with Kevin would have meant that he would never be able to call or e-mail Cendant people again or speak out if he saw things that were wrong within Trendwest—‘It is not worth $50,000 for him to lose his right to speak freely.’ ” (Second ellipsis in original.)

Holmes reported that Mamou appeared “surprised that I called and at one point got so emotional that he had to take a couple of deep breaths and we had to take a bit of a break. His emotion (or good acting if I were cynical) relates to what he considers a series of very unprofessional and inappropriate behaviors by the Trendwest management group.” Mamou “continually said that he wanted to stay with the company and be a high performer again. He said that he is fiercely loyal and willing to speak out at injustice—and that these characteristics are being viewed as threatening to many of the new management.” Mamou “said that [Lee] is telling a bunch of people that he, [Lee], is being sent to Walnut Creek to ‘clean out those that are loyal to Mamou or Brown.’ ” “The way I left it,” Holmes concluded, “was for him to discuss the settlement with Kevin but recognize that it would require some sort of release because it would be irresponsible for us to make a payment without one. And that [Johnson] would probably be contacting him relative to her investigation into other matters.”

E Attempt to Form Resale Corporation

Meanwhile, on or shortly after May 19, 2004, Mamou had submitted for filing by the California Secretary of State a set of proposed articles of incorporation accompanied by his personal check for the filing fee. The proposed articles are not included in the present record, but it appears that the proposed corporation was to be named “WorldMark Heaven, Inc.” and its proposed business was identified as “Rental and Resale of Timeshare.” Mamou testified that he sought to form the corporation not out of a fixed intention to operate it, but because he had decided “that I should have a Plan B” in the event that his position with Trendwest continued to deteriorate. He declared that during the preceding half-year, “the old guard of Trendwest management was steadily being terminated . . . .” About the same time, he began to notice what he perceived as adverse actions against him by Fiore. Thus in April 2004, Fiore stopped reimbursing him for certain out-of-pocket expenses Mamou had incurred on Trendwest’s behalf. Fiore also failed to fulfill a promise he had made to supplement Mamou’s compensation on account of time he was forced to spend away from productive work assisting in the defense of lawsuits brought against Trendwest by three former employees. Trendwest also failed to reimburse certain out-of-pocket expenses incurred by Mamou in connection with those suits, and claimed by him in expense sheets. In mid-May of 2004, Fiore “suddenly” stopped paying Mamou the 25 percent share of San Jose “overrides” and efficiency bonuses that Fiore had agreed to pay through June 18 as an inducement to Mamou’s acting as project director for the Walnut Creek office.

By the spring of 2004, Mamou declared, he had become “very worried that my time with Trendwest was nearing an end.” He did not wish to leave the company, but “the company’s attitude—towards both the old Trendwest guard in general, and me in particular—was leading me to believe that I might be next on the chopping block.” Therefore, he declared, “by early May 2004, I decided that I better prepare myself for the event that the company may terminate my employment.” Toward that end he applied to the Secretary of State to incorporate a potential time-share resale company. In doing so, he declared, “I had absolutely no intention of starting the business at that time, or at any time so long as I remained employed by Trendwest.” Instead, he testified, he considered starting his own resale business “one of the options that potentially I should consider especially [since] ... the company in the past has welcomed and worked with resale brokers that used to work for the company . ...” He cited a specific example of a Trendwest employee whom he understood to have set up a time-share resale company while still employed by Trendwest, without “suffer[ing] any consequences for doing so.” As for his use of the term “Worldmark,” he declared, “[Njobody had ever told me—not even at my termination meeting—that using the name may be improper.” “I simply had no idea,” he declared, “that I was doing anything wrong . . . .” When, after his discharge, he started the corporation and received a cease-and-desist letter regarding its name, he changed the name “[i]mmediately.”

G. Termination of Employment

At some point between June 4 and June 23, 2004, Trendwest received a letter apparently mailed by a documents examiner with the California Secretary of State stating that the articles of incorporation for Worldmark Heaven, Inc., were being “retum[ed], unfiled,” for correction of a stated defect. Although the envelope is not included in the record, it may have been addressed simply to “Trendwest” at its San Jose office. Enclosed with the letter was Mamou’s May 19 check for the filing fee.

Although intervening events are far from clear, it is undisputed that on June 23, 2004, Fiore and Curtis convened a meeting with Mamou at which Fiore showed him the documents from the Secretary of State and terminated his employment. Trendwest asserts that at the meeting, “Mamou did not deny that he had attempted to establish a resale company using the Worldmark name.” Mamou testified, however, that his attempts to explain his conduct were rebuffed and that nearly all the talking was done by Fiore, with Curtis sitting by and Lee immediately outside the door. At the start Fiore held up the incorporation documents and said, “ ‘This has been brought to our attention, and we decided to terminate you effective immediately. We would like you to pick up your personal belonging—belongings and leave the premises immediately.’ [][] I said, ‘May I explain what this is all about?’ [f] He goes, ‘No, no need to.’ [1] I said, ‘Can ... we call Staff Services or Steve Holmes or Corporate to explain?’ [][] They says, ‘No.’ [f] I said, ‘Can we have a change of status? Give me a specific reason why termination?’ [|] They says, ‘No need to. We will need the keys. We want you off the premises immediately.’ [f] I said, ‘Can I just elaborate and explain?’ [1] They says, ‘No.’ [f] I said, ‘Can I talk to—may I call the Corporate?’ [f] They says, ‘No.’ ” At the conclusion of this fruitless exchange, Curtis—who had not otherwise spoken—said, “ ‘I’m disappointed in you, my Arab friend.’ ” Fiore then escorted Mamou out of the office, saying that he wanted to be sure the key Mamou surrendered was actually his key to the premises.

In a change-of-status form memorializing the termination of Mamou’s employment, the reason for that action was given under the termination code “157: Misconduct/Theft/Violation of Policy.” Although Fiore conceded in deposition that Mamou was not fired “for performance reasons,” he instructed Meic on June 23, 2004, to “take the lead on building a file relating to Tamer’s performance over the last six months.” Specific areas to be addressed included “[disability claims” and “[o]ther HR related claims.”

H. Discriminatory and Retaliatory Animus

Mamou offered evidence to show that Curtis, Lee, and Fiore all “had a demonstrated bias against people of Middle Eastern or Arabic descent.” In the case of Curtis, former Trendwest employee Robert Bishop declared that during a phone conversation in May 2004—the month before Mamou’s dismissal—Curtis asked him, “What the hell is going on down there in that Northern California region with all those fucking rag heads,” and said, “We’ve got to get rid of those fucking rag heads.” Later, according to Mamou, it would be Curtis who capped the meeting at which Mamou was fired by commenting, “I am disappointed in you, my Arab friend.”

With respect to Lee, former Walnut Creek employee Richard Hicks declared that “[d]uring 2004, both before and after Mr. Mamou’s termination, I heard Mr. Lee bragging that he and the company were ‘busting up’ and ‘getting rid of’ the ‘Syrian regime’ and the ‘Arab regime.’ At the time of these statements, there were several Syrian or Arab management-level employees in the Northern California region.” Former Trendwest employee Sandy Klein declared that during a visit to the Roseville office by Lee in the fall of 2004, Kristine Sevy came into the room where Klein was working and spontaneously said “that Carter Lee had just said to her that, T [Carter Lee] am here to get rid of the Syrian Regime . . . .’ ”

Jennifer Loftin declared that at a meeting at the Roseville office in October 2004—some four months after Mamou’s dismissal—Lee announced, “The regime’s time when Tamer was here is gone . . . .” Loftin understood this to be a reference to employees of Middle Eastern descent. Trendwest’s blanket objection to this evidence is colorable as to this one statement on the ground that it constitutes opinion without any apparent foundation in personal knowledge. However, a fact finder could infer that Lee’s references to a “regime” including Mamou—even if unaccompanied by a racist slur—were a tacit allusion to his Middle Eastern ethnicity. The comments echoed Lee’s remarks to Richard Hicks about “busting up” and “getting rid of’ the “Syrian” and “Arab” “regime.” They also echoed remarks Mamou attributed in deposition to “David, the cleaner,” who, as he reportedly complained to Fiore and Lee, “came in to the Roseville office, and ... promised to get rid of the Middle Eastern regime, and [that he was] . . . coming to Walnut Creek to take care of me, get me blown out.” Mamou also told them that David said he was “going to take care of Tamer Mamou, and that Middle Eastern regime is going to be gone.”

Former Trendwest employee Anthony Pereira declared that in October 2004 he had a conversation with Carter Lee in which Lee “asked with a disgusting facial expression, ‘Aren’t you one of them?’ I said to Carter Lee, ‘Excuse me.’ Carter Lee then responded, ‘You know, Arab, Syrian.’ I then told Carter Lee, ‘No, I am Portuguese.’ Mr. Lee then said to me, ‘Oh, you are Mexican.’ I then told Mr. Lee, ‘No, I am Portuguese from Portugal.’ ” Later, at a meeting attended by Lee, Pereira recounted this exchange, whereupon Lee “stood up, pointed a finger in my face and abruptly screamed at me, ‘You ffiggin liar. I said you were Arab.’ ”

Mamou testified in deposition that Fiore, for his part, developed and implemented a policy of turning away would-be customers of Middle Eastern and East Indian origin while explaining this action to vendors by designating the customers “HI,” a code for persons lacking United States residency. The apparent gist of the testimony was that Fiore categorically spumed the business of such persons because “he believed those tours were difficult to sell and costing—affecting the bottom line of the store profitability.” Mamou also testified that in his first meeting with Lee after the latter became regional manager, Lee appeared to confide in him that “Kevin doesn’t like you, doesn’t want you here. He doesn’t think highly of you. He doesn’t like Ed Nimri. He doesn’t like Ayman Damlakhi, but if you guys play with the rules, especially you help me out, I can tell you Kevin Fiore will be out of a job. He’s a—a bean counter. He doesn’t know a damn thing about sales or marketing or resort timeshare business.” Mamou asked, “Why would Kevin have a problem with me?” to which Lee replied that it was “more than I can tell you at this stage,” repeating that Fiore and Curtis “will be gone.” Assuming the named coworkers were also Middle Eastern—Nimri may be Indian, and Damlakhi appears to be Syrian—this testimony could constitute an admission by Trendwest’s agent Lee that he had observed anti-Middle Eastern bias in his fellow supervisor, Fiore.

Mamou separately asserted that Fiore harbored animus toward him as a result of Mamou’s e-mail of June 16, 2004, suggesting that his treatment with respect to stock options was discriminatory and retaliatory. In deposition Fiore described himself as “dumbfounded” by the e-mail, adding, “This was ... the worst information I could have ever received in terms of, I guess, loyalty, in terms of professional courtesy, that sort of thing. So I took this as bad as you can.” He declined to describe himself as angry, but said that he was “so disappointed that you can’t even put it in words.” Fiore felt that by sending e-mail to senior managers “with my name involved and retaliation and discrimination,” Mamou was “hurting my credibility with senior management. . . .”

I. Posttermination Events

On the day after his discharge Mamou completed the incorporation of his company, apparently under the name Worldmark Heaven, Inc. Trendwest sent him a letter demanding that he stop using “Worldmark.” Mamou declared that he did not realize the use of that term would be problematical: “I had seen many advertisements prominently [displaying] the name Worldmark and had never heard of Trendwest considering that to be in any way improper.” He had never received any training on that point and had no education in trademark or intellectual property. Immediately upon receiving the cease-and-desist letter, he dropped Worldmark and changed his company’s name to Timeshare Angels.

Mamou introduced evidence that after his discharge, Trendwest managers made numerous disparaging statements about him. Sandra Bárese testified about a managers’ meeting at the Roseville office, apparently in mid-October 2004, attended by Fiore and Lee. Lee announced that “the company had evidence that somehow information of sales from Trendwest was being funneled to Tamer Mamou in order for our owners to cancel with us and purchase from him.” Lee angrily declaimed that “business was being stolen from Trendwest, that there was evidence that there were company leaks, and some of these leaks came from our office. He was going to get to the bottom of this, and he was going to get Tamer. Tamer would pay for this. And no one was to have any conversation with Tamer Mamou, by threat of termination. And if or when—I don’t recall which word—he found out who was leaking this information, they would be terminated.” Apparently the gist of the accusation was that a current Trendwest employee was taking information concerning recent purchasers from the Roseville office and turning it over to Mamou, who then sold the purchasers a similar product, causing them to cancel their contract within Trendwest. Lee specifically asserted that he had “evidence that this was happening,” consisting of specific owner numbers. He did not state a number of owners, but he used the plural.

After the meeting, B árese approached Fiore and asked him to “give me the owner numbers so I could go further and investigate, because it was our office. ...[][] So at that point he asked me—he said sure, send me an e-mail, remind me, which I did that day, and requested the owner numbers that he had and referred to in the meeting.” She probably sent a copy to Lee. Fiore did not respond until after she sent a second inquiry, perhaps a week later. This is probably the message dated October 22, 2004, and appended to Fiore’s deposition as an exhibit. In it, Bárese asked Fiore to “forward me the owner number of the contract that was cancelled from our office and made a purchase from the resale company run by Tamer.” Fiore replied, “i can’t find that letter, i must have given [it] to either carter or bill or lost it. sorry, please let me know how it goes with your follow up.”

Bárese attempted to investigate the Lee/Fiore allegations by calling every owner who had cancelled a contract within the preceding three months. She succeeded in contacting about two-thirds of them. One owner reported having cancelled a contract with Trendwest and “purchased resale,” but from a reseller other than Mamou. Another owner “had gone home, found resale information on line, canceled, but at that time had not repurchased. And that was also not Tamer’s company.” Bárese reported these findings to Fiore within perhaps a week of undertaking her investigation.

Months later, according to then Bakersfield project director Jerry Fleenor, Lee told him that Mamou was “in breach of his contract” and was ‘Tunneling leads to Timeshare Angels,” which Fleenor understood to mean that Mamou “had stolen leads—potential customers—from Trendwest.” Lee also told Fleenor “that while Mr. Mamou was working for Trendwest, he ‘was stealing leads and databases from the company’ and that the company had ‘evidence or documentation that he [Mr. Mamou] did these things. In those same conversations, Mr. Lee told me that Mr. Mamou was ’totally unethical,’ was a ‘thief,’ had ‘no integrity,’ was a ‘poor performer,’ was ‘terminated for poor performance,’ and had engaged in ‘theft.’ ”

Robert Bishop declared that when he asked Lee why Trendwest had fired Mamou, Lee “told me that the company had discovered that Tamer Mamou had been stealing from the company . . . .”

Lee admitted in deposition that in addition to “characterizing] [Mamou] as a thief’ to Kevin Fiore and Richard Folk, he told them that Mamou was totally unethical and that he had no integrity. Lee allowed that he “probably” repeated this last assertion to Kim Roman.

II. Procedural Principles

We summarized the principles governing an appeal of this type in Reeves v. Safeway Stores, Inc. (2004) 121 Cal.App.4th 95, 106-107 [16 Cal.Rptr.3d 717] (Reeves): “On appeal from an order granting summary judgment ‘we must independently examine the record to determine whether triable issues of material fact exist. [Citations.]’ [Citation.] The question is whether defendant 1 “ ‘conclusively negated a necessary element of the plaintiffs case or demonstrated that under no hypothesis is there a material issue of fact that requires the process of trial.’ [Citation.]” [Citation.]’ ([Citations]; see Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 335, fn. 7 [100 Cal.Rptr.2d 352, 8 P.3d 1089] (Guz) [‘the issue ... is simply whether, and to what extent, the evidence submitted for and against the motion . . . discloses issues warranting a trial’].) . . . [Citation.] Moreover, ‘we must view the evidence in a light favorable to plaintiff as the losing party [citation], liberally construing [his] evidentiary submission while strictly scrutinizing defendants’ own showing, and resolving any evidentiary doubts or ambiguities in plaintiff’s favor. [Citations.]’ [Citations.] And a plaintiff resisting a motion for summary judgment bears no burden to establish any element of his or her case unless and until the defendant presents evidence either affirmatively negating that element (proving its absence in fact), or affirmatively showing that the plaintiff does not possess and cannot acquire evidence to prove its existence. [Citations.]”

We also wrote, quoting Guz v. Bechtel National Inc., supra, 24 Cal.4th at page 334 (Guz), that “[w]e must ‘considerQ all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained.’ ” (Reeves, supra, at pp. 106-107.) As a chief contributor to the jurisprudential chaos now surrounding the treatment of evidentiary issues on summary judgment, this statement has proven to be among the more mischievous dicta in recent history. It appears to originate in Artiglio v. Corning Inc. (1998) 18 Cal.4th 604, 612 [76 Cal.Rptr.2d 479, 957 P.2d 1313] (Artiglio), where the only authority cited for it is the summary judgment statute, Code of Civil Procedure section 437c (section 437c), subdivision (c). But the statute says nothing about what evidence a reviewing court must consider. It directs “the court,” meaning the trial court, to “consider all of the evidence set forth in the papers, except that to which objections have been made and sustained by the court. . . .” (§ 437c, subd. (c).)

The effect of extending this directive to a reviewing court is to grant conclusive effect to the trial court’s treatment of the evidence before it, however patently erroneous that treatment may be. We would have thought it obvious that in reviewing summary judgment, as in any other appeal, if a party’s position depends on patently inadmissible evidence admitted over a proper objection, a reviewing court would be empowered, and indeed obliged, to acknowledge the error and disregard the evidence. There is no reason to adopt a different rule merely because the trial court fails to expressly rule on a meritorious objection. Such failures are commonplace, because it has become practically impossible for the trial court to address each of the innumerable objections commonly thrown up by the parties as part of the all-out artillery exchange that summary judgment has become. Yet under the Artiglio dictum, the trial court’s failure to rule has the effect of defenestrating the entire Evidence Code for purposes of appellate review.

It takes little imagination to foresee that under such a regime parties will eventually learn, if they have not already, to load up their supporting and opposing papers with every factual assertion, competent or otherwise, that may support their position, reasonably expecting that the trial court will be too deeply submerged in the deluge of evidentiary and other procedural issues to rule correctly, if at all, on any significant fraction of them—let alone on the merits. This will force us to decide what to do when flagrantly improper evidence—say, an expert opinion by a lay witness, with no pretense of a factual foundation, on an ultimate issue—is pressed upon us as conclusive in view of the trial court’s failure to sustain an objection. Perhaps this would generate a whole new body of law, a sort of mini-Evidence Code to accompany the minipleading code now developing in connection with the “separate statement” requirement of section 437c, subdivision (b).

A far better idea is to abandon this mischievous dictum and drain the whole evidentiary swamp to which it has contributed so greatly.

m. Employment Discrimination and Retaliation

A. Mamou’s Pleaded Causes of Action

The California Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.) declares it an “unlawful employment practice” for any employer “because of the race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation of any person, ... to discharge the person from employment. . . , or to discriminate against the person in compensation or in terms, conditions, or privileges of employment.” (Gov. Code, § 12940 (section 12940), subd. (a).) Mamou alleges that Trendwest committed such a practice by dismissing him and failing to pay him promised compensation because of his Syrian national origin.

It is also unlawful under the statute for an employer “to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring.” (§ 12940, subd. (k).) Mamou alleges that Trendwest violated this provision by failing to take reasonable steps to prevent national origin discrimination in his workplace.

The statute also prohibits employers from “discharging], expel[ling], or otherwise discriminating] against any person because the person has opposed any practices forbidden under this part . . . .” (§ 12940, subd. (h).) Among the “practices forbidden under this part” is discrimination against employees because of “medical condition.” (§ 12940, subds. (j), (a).) In his third cause of action Mamou alleges that defendants’ decision to terminate him was “based, at least in part, upon his complaining” about Fiore’s and Lee’s adverse treatment of employees who exercised their right to family medical leave, and thus constituted retaliation in violation of the foregoing provision.

Mamou also alleged that his discharge was independently tortious for violating public policy in that his national origin and complaints about unfair treatment of employees who took medical leave were a motivating factor in the decision to terminate his employment.

B. Elements and Presumptions

Viewing the language of the statute in light of familiar principles of tort law, it would appear that the elements of a claim for employment discrimination in violation of section 12940, subdivision (a), are (1) the employee’s membership in a classification protected by the statute; (2) discriminatory animus on the part of the employer toward members of that classification; (3) an action by the employer adverse to the employee’s interests; (4) a causal link between the discriminatory animus and the adverse action; (5) damage to the employee, and (6) a causal link between the adverse action and the damage.

The elements of a claim for retaliation in violation of section 12940, subdivision (h), are substantially the same: (1) the employee’s engagement in a protected activity, i.e., “oppos[ing] any practices forbidden under this part”; (2) retaliatory animus on the part of the employer; (3) an adverse action by the employer; (4) a causal link between the retaliatory animus and the adverse action; (5) damages; and (6) causation.

Proof of two of these elements—the second and fourth—is likely to depend on circumstantial evidence, since they consist of subjective matters only the employer can directly know, i.e., his attitude toward the plaintiff and his reasons for taking a particular adverse action. Given the resulting difficulties of proof, the courts have fashioned a special presumption shifting the burden of production—but not persuasion—to the employer upon a prescribed showing by the plaintiff. Specifically, the employee “may raise a presumption of discrimination by presenting a ‘prima facie case,’ the components of which vary with the nature of the claim, but typically require evidence that ‘(1) [the plaintiff] was a member of a protected class [or engaged in a protected activity], (2) he was qualified for the position he sought or was performing competently in the position he held, (3) he suffered an adverse employment action, such as termination, demotion, or denial of an available job, and (4) some other circumstance suggests discriminatory [or retaliatory] motive. [Citations.]’ (Guz, supra, 24 Cal.4th at p. 355.) A satisfactory showing to this effect gives rise to a presumption of discrimination which, if unanswered by the employer, is mandatory—it requires judgment for the plaintiff. (Ibid.) However the employer may dispel the presumption merely by articulating a legitimate, nondiscriminatory reason for the challenged action. (Id. at pp. 355-356.) At that point the presumption disappears. (Id. at p. 356.)” (Reeves, supra, 121 Cal.App.4th at pp. 111-112; see McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792, 802-804 [36 L.Ed.2d 668, 93 S.Ct. 1817].)

C. Prima Facie Case

Trendwest says that Mamou has failed to make the “prima facie case” described above. It does not dispute Mamou’s membership in a protected class or that there is evidence of his engaging in protected activity. Nor does it coherently dispute any of the other elements necessary to trigger the presumption. Instead it asserts that “Mamou has no evidence whatsoever that his national origin played any role in the decision to terminate his employment.” This of course is not what the “prima facie case” requires. Properly understood, it defines what will constitute, in the first instance, evidence of wrongful discrimination or retaliation. And for purposes of that test, it is enough for the plaintiff to present “some other circumstance” that “suggests” a proscribed motive. (Reeves, supra, 121 Cal.App.4th at p. 112.) We think there is more than a suggestion of discriminatory motive in evidence that Curtis referred to “all those fucking rag heads,” whom he pledged to “get rid of,” and that Lee alluded to “busting up” and “getting rid of’ the “Syrian regime” and the “Arab regime.” As for retaliatory motive, on the evidence before the trial court a jury could readily infer that Fiore was “unhappy” when Mamou initially refused to participate in discriminating against persons on medical leave; that Fiore nonetheless persisted in seeking to enlist Mamou’s aid; that when Mamou protested and stood fast in his refusal, both Lee and Fiore excoriated him for undermining their authority; and that Fiore was outraged when Mamou invoked the “open door policy” to protest to upper management his retaliatory or, as he by then feared, discriminatory treatment.

In sum there was ample evidence to sustain the “prima facie case” described above.

D. Causation

1. Pretext

As we have noted, the presumption of an unlawful employment practice arising from the employee’s presentation of a “ ‘prima facie case’ ” affects only the burden of production, i.e., “the employer may dispel the presumption merely by articulating a legitimate, nondiscriminatory reason for the challenged action. [Citation.] At that point the presumption disappears. [Citation.]” (Reeves, supra, 121 Cal.App.4th at pp. 111-112.) The plaintiff then bears the burden of persuasion with respect to all elements of the cause of the action, including the existence and causal role of discriminatory or retaliatory animus.

Some courts have muddied the waters by stating that once the employer cites a reason, the “ultimate issue” is whether the cited reason was a “pretext.” (Muzquiz v. City of Emeryville (2000) 79 Cal.App.4th 1106, 1117 [94 Cal.Rptr.2d 579]; Taub v. Fleishman-Hillard, Inc. (9th Cir. 2007) 256 Fed.Appx. 170, 172; Hugley v. Art Institute of Chicago (N.D.Ill. 1998) 3 F.Supp.2d 900, 906, fn. 7.) We have criticized this view before. (Reeves, supra, 121 Cal.App.4th at p. 111, fn. 11.) While “pretext” is certainly a relevant issue in a case of this kind, making it a central or necessary issue is not sound. The central issue is and should remain whether the evidence as a whole supports a reasoned inference that the challenged action was the product of discriminatory or retaliatory animus. The employer’s mere articulation of a legitimate reason for the action cannot answer this question; it can only dispel the presumption of improper motive that would otherwise entitle the employee to a judgment in his favor. Thus, citing a legitimate reason for the challenged action will entitle the employer to summary judgment only when the employee’s showing, while sufficient to invoke the presumption, is too weak to sustain a reasoned inference in the employee’s favor. That, and not “pretext,” must be the focus of the judicial inquiry.

However, evidence that the employer’s claimed reason is false— such as that it conflicts with other evidence, or appears to have been contrived after the fact—will tend to suggest that the employer seeks to conceal the real reason for its actions, and this in turn may support an inference that the real reason was unlawful. This does not mean that the fact finder can examine the employer’s stated reasons and impose liability solely because they are found wanting. But it can take account of manifest weaknesses in the cited reasons in considering whether those reasons constituted the real motive for the employer’s actions, or have instead been asserted to mask a more sinister reality.

Here there was ample evidence to support such an inference, beginning with the fact that Trendwest never res