Northern California Record

Sunday, August 18, 2019

Judge denies summary judgment in discrimination suit against San Jose bakery

By Taryn Phaneuf | May 26, 2016

SAN JOSE – In a suit alleging that an employer retaliated against an employee by suing her for defamation, the U.S. District Court for the Northern District of California determined the claim should go to trial.

The judge determined that the Equal Employment Opportunity Commission failed to prove that the owner of Peters’ Bakery in San Jose sued an employee for damaging his reputation because she filed an EEOC charge against the business.

The court’s decision hinged on the owner’s testimony in deposition. In this case, the owner’s testimony left enough of a question about what motivated his lawsuit.

This is a common route for the EEOC to take, Alex Karasik, an associate at Seyfarth Shaw, told the Northern California Record. Karasik focuses on labor and employment law, defending employers on a range of matters.

“There is nothing improper about the EEOC’s recently utilized strategy of taking an employer’s deposition, and thereafter using any unfavorable testimony in a subsequent motion for summary judgment on a retaliation claim,” Karasik said. “Rather, it is an aggressive strategy that can potentially catch an employer off-guard if they are not prepared for their deposition. In practice, the effectiveness of this strategy depends on the deposition testimony elicited. Cases such as EEOC v. Peters’ Bakery illustrate that employers who are able to get their side of the story into the record during such depositions can thereafter use their testimony to counter the EEOC’s summary judgment motion.”

The EEOC sued Peters’ Bakery in 2013 after a Hispanic employee, Marcel Ramirez, filed a charge, alleging she faced discrimination based on race and national origin, as well as retaliation. The suit claims that the bakery owner, Charles Peters, harassed and discriminated against Ramirez, then retaliated when she filed a complaint with the EEOC, including by suing her for damaging his reputation.

He also allegedly refused to pay her back wages and benefits after she was reinstated as an employee and shared the EEOC charge with her co-workers to “chill support for her.”

To prove retaliation, the EEOC has to show that there’s a causal link between employee engaging in a protected activity and suffering an adverse employment action.

The EEOC claimed that Peters' suit cited defamation that occurred on the same day that the EEOC gave notice that he’d been charged with discrimination. In his testimony, he said he filed the suit because of “the things she said on that statement about me being racist. And I’m not a racist.”

Peters claims he sued because Ramirez called him a racist in an internet post, which his girlfriend found and showed to him. In response to the EEOC’s request for summary judgment, the bakery contended that the commission “excluded critical testimony.”

“While the EEOC’s evidence is quite strong, it is insufficient to establish as a matter of law that Ms. Ramirez’s filing of the EEOC charge was the but-for cause of Mr. Peters’ filing of the defamation action against her,” Judge Beth Freeman wrote in the decision.

Karasik agreed with the ruling, saying Peters’ testimony demonstrated he may have had a legitimate reason for the lawsuit.

“Although the court noted that the EEOC’s evidence was strong, if a reasonable jury believed the testimony of Mr. Peters, it could potentially find that he filed the defamation action because he believed that the employee called him a racist on the internet, and not because she filed an EEOC charge,” he said.

It shows why employers should be prepared for a deposition, he added.

“If the employer has a legal, non-discriminatory reason for taking an action that was alleged to be wrongful, it is imperative that the employer share that information during its deposition,” he said. “This testimony can be the difference in overcoming a summary judgment motion.”

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Seyfarth Shaw, LLP U.S. District Court for the Northern District of California U.S. Equal Employment Opportunity Commission

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