Fired for abusing attendance policy

California Courts of Appeal Reports

ROBY v. HBOC, C047617 (Cal.App. 12-26-2006) CHARLENE J.
ROBY, Plaintiff and Respondent, v. MCKESSON HBOC et al.,
Defendants and Appellants. C047617, C048799. Court of
Appeal of California, Third District. December 26, 2006.
Certified for Partial Publication[fn*]

[fn*] Pursuant to California Rules of Court, rules 976 and
976.1, only the introduction, the Factual Background, the
Procedural History, part III of the Discussion and the
Disposition of this opinion are certified for publication.

[EDITORS’ NOTE: PURSUANT TO CALIFORNIA RULES OF COURT,
RULES 976(b) AND 976.1 THIS OPINION IS CERTIFIED FOR
PARTIAL PUBLICATION. THE SHADED TEXT BELOW REPRESENTS THE
ORIGINAL OPINION AND IS PROVIDED FOR REFERENCE PURPOSES
ONLY.]

APPEAL from a judgment of the Superior Court of Yolo
County, No. CV01573, Timothy L. Fall, Judge. Affirmed as
modified.

Howard Rice Nemerovski Canady Falk & Rabkin, Jerome B.
Falk, Jr., Linda Q. Foy, Jason M. Habermeyer; Fitzgerald,
Abbott & Beardsley and Sarah E. Robertson for Defendants
and Appellants McKesson Corporation and Karen Schoener.

Riegels Campos & Kenyon and Charity Kenyon; Christopher H.
Whelan; The deRubertis Law Firm and David M. deRubertis for
Plaintiff and Respondent.

BUTZ, J.

Plaintiff Charlene J. Roby was a stellar employee of
defendant McKesson HBOC, Inc. (McKesson)[fn1] for 25 years
until she developed panic disorder in 1998, which caused
her to start missing substantial time from work. Two years
later, McKesson fired Roby for abusing its attendance
policy, although many of her absences were attributable to
her psychiatric disability.

The jury “threw the book” at McKesson. It awarded Roby
millions of dollars in compensatory damages for wrongful
discharge in violation of public policy, as well as
harassment, disparate treatment, and discrimination/failure
to accommodate under the California Fair Employment and
Housing Act (FEHA) (Gov. Code, § 12900 et seq.).[fn2]
The jury rendered a separate verdict finding Roby’s
supervisor, Karen Schoener, liable for harassment. In a
second phase of the trial, the jury levied a $15 million
punitive damage award against McKesson and $3,000 against
Schoener.

McKesson does not challenge the verdict insofar as the jury
found it liable for wrongful termination, disability
discrimination, and disparate treatment. McKesson and
Schoener do challenge the harassment verdict as unsupported
by substantial evidence. Both defendants also claim that
reductions in the compensatory damage award are necessary
and that the punitive damage award should be stricken or
reduced.[fn3]

We shall conclude that the judgment awards duplicative
noneconomic damages based on alternative theories of
liability for the same wrong, requiring a downward
adjustment. We shall also strike the harassment awards
against McKesson and Schoener for insufficiency of the
evidence. Finally, while we find the evidence sufficient to
support punitive damages, we conclude that a substantial
reduction in the size of the award is necessary to comport
with constitutional constraints.

We shall thus reduce both the compensatory and punitive
damage awards and affirm the judgment as modified.

FACTUAL BACKGROUND

In accordance with well-settled principles of appellate
review, we summarize the facts in the light most favorable
to the prevailing party (respondent herein), resolving all
conflicts in the evidence and all legitimate and reasonable
inferences that may arise therefrom in favor of the
judgment. (Weeks v. Baker & McKenzie (1998) 63 Cal.App.4th
1128, 1137-1138 (Weeks).)

McKesson is a large corporation involved in the worldwide
distribution of pharmaceuticals and other health care
products. Roby worked as a customer service support liaison
for McKesson’s West Sacramento Distribution Center. She had
been an employee of McKesson for 25 years, with good
attendance and an excellent performance record until she
developed panic disorder in early 1998.

Panic disorder is a psychiatric condition that puts the
patient in an extreme state of fear, which seems to come
from “out of the blue.” Symptoms can include extreme
discomfort, heart palpitations, shortness of breath,
dizziness, and feelings of unreality or depersonalization.
The first time Roby experienced one of these episodes, she
thought she was having a heart attack and was rushed to the
emergency room. She ultimately learned it was a psychiatric
problem and she was put under the care of Kaiser
psychiatrist Dr. Joseph Schnitzler on January 6, 1998.

When Roby had a panic attack, she would experience physical
symptoms such as difficulty breathing, uncontrollable
shaking, and scratching or picking at her arms until they
bled. She would also experience head sweating to the point
where her hair was “wringing wet.” Moreover, the
medications she was taking for her condition caused her to
develop an unpleasant body odor that embarrassed her.

When Roby had a panic attack, her symptoms were “very
obvious” to fellow workers. Her supervisor Alan Grover
would typically send her outside on a break and try to calm
her down. He would send a coworker out to check on Roby and
make sure she was all right.

Grover manifested awareness that Roby was suffering from
panic disorder. He and McKesson employee Luan Chew
frequently discussed Roby’s condition and the medications
that were being used to address it. On four or five
occasions, Chew informed Grover that Roby had stayed home
because of a panic attack. Grover became concerned that it
was affecting her job.

In April 1999, Karen Schoener became Roby’s supervisor,
replacing Grover, who received a promotion. Grover told
Chew he was greatly concerned about Schoener becoming
Roby’s supervisor because there was already great animosity
between the two.

In late 1998, McKesson instituted a new, stricter “90-day
rolling” attendance policy, which caused a great deal of
confusion among employees. Under the policy, an employee
could be terminated if she accumulated too many “occasions”
within a specified period. Absences without 24-hour advance
notice were considered occasions. Thus, if an employee woke
up ill and called in sick, that could be counted as an
occasion, even if she was entitled to take the day off as
sick leave or vacation. Tardiness was counted as a
half-occasion. However, if an employee had a clean record
with no occasions for the next 30 days following the 90-day
period, the first occasion would “drop off” and not be
counted against her.

If an employee received two occasions within a 90-day
period, she would receive an oral warning on the third
occasion. Another three occasions during a rolling 90-day
period within six months would result in a written warning.
One more occasion within 30 days would generate a second
written warning. Two more occasions after the written
warnings would result in termination.

Although McKesson allowed employees to take excused time
off under the federal Family and Medical Leave Act of 1993
(the FMLA) (29 U.S.C. §§ 2601-2654; 29 C.F.R.
§§ 825.100 to 825.800), absences were counted
as occasions unless the employee specifically requested
FMLA paperwork. McKesson’s employee handbook contained no
explanation of an employee’s FMLA rights.

Except for one five-day absence for which she filled out
FMLA paperwork, Roby’s absences were always treated as
occasions, regardless of the reason. On the other hand,
McKesson treated other employees far more leniently. Jamie
Steckman, for example, had asthma. When she had asthma
attacks, she was rarely able to give 24 hours’ advance
notice of absence. Yet when she missed 15 to 20 days from
work due to asthma attacks, they were all treated as one
occasion. Luan Chew took off several weeks after suffering
a hand injury, yet was never charged with an occasion.
Roby’s complaints to her supervisors that she was not being
treated the same as other sick and injured employees were
met with indifference.

Schoener made no effort to conceal her dislike of Roby. She
did not return Roby’s greetings and would sometimes turn
her back on her. She referred to Roby’s job as a
“no-brainer.” Once a month she would put a McDonald’s apple
pie on all of her subordinates’ desks except Roby’s. She
would bring back trinkets from her vacations and give them
to every coworker except Roby. She made Roby cover the
phones during the office Christmas party. She would loudly
reprimand Roby in front of her colleagues. Schoener made
negative comments about Roby’s body odor and sometimes
showed a look of disgust as Roby walked by.

In 1999, Roby was absent on January 19, February 8 and
March 31 and received a disciplinary warning on April 2,
signed by supervisor Diane Saamer. Roby told Saamer the
absences were related to her panic disorder, and that she
was trying to get it stabilized. Saamer appeared
sympathetic, but retired from McKesson soon thereafter.

In response to concerns from coworkers, Roby brought in a
note from Dr. Schnitzler dated April 28, 1999, stating that
panic disorder was not contagious. She continued to take
days off to see Dr. Schnitzler and for therapy sessions. On
June 8, 1999, Roby had a panic attack in the parking lot
and took the day off as vacation. The same day she received
a written warning signed by Schoener for accumulating four
more absences within a 90-day period. Roby received a final
written warning on October 22, after she took days off on
July 27 to 28 and October 18, even though the July absences
were accompanied by a note from Dr. Schnitzler verifying
that she was ill and unable to work.

Despite the October 22 notice, Schoener told Roby that if
she could make it to January 18, 2000, without any
occasions, her attendance record would be cleared and she
would gain a new start. Roby reached the January target
date without any occasions. But when she displayed delight
that she had “made it” and was not going to be fired,
Schoener just looked at her without responding.

After unscheduled absences on February 25 and April 11,
2000, Roby was called into Grover’s office on April 13.
McKesson supervisors Christopher Rafter and Grover told
Roby she was subject to termination for abuse of the
absence program. Roby expressed surprise, recounting
Schoener’s assurances that if she made it until January, she
would get a new start. Schoener advised Rafter and Grover
that her remarks had been misinterpreted. Roby also
complained that the absence policy was not being applied
fairly since other employees suffering from medical
conditions were given more leeway. She noted that fellow
worker Bobbe Schenken had all her absences counted as one
occasion when she had gall bladder surgery. Roby was
suspended with pay and told that her supervisors would
investigate the facts and let her know their final
decision.

On April 14, Rafter and Grover telephoned Roby to tell her
she was terminated. Roby protested that her April 11
absence was related to her panic disorder and again
complained that she was not treated the same as other
employees when it came to the absence policy. Roby filed a
written grievance setting forth the same complaints and
asserting that her absences during the last 12 months were
all related to “[her] illness on file.” Grover confirmed
Roby’s termination in a letter of April 17, 2000.

McKesson’s “investigation” consisted of nothing more than
counting up the number of Roby’s absences and reaffirming
its decision to fire her. In upholding the termination,
McKesson did not consider whether Roby’s absences would be
excused under the FMLA, since she had filled out FMLA
paperwork in only one instance.

Roby was financially and emotionally devastated as a result
of the termination. She depleted her savings, lost her
medical insurance, went without treatment for months,
became suicidal and developed agoraphobia. In July 2001,
the Social Security Administration declared her totally
disabled. She now lives on disability payments from Social
Security.

PROCEDURAL HISTORY

The case was tried to a jury in March and April of 2004 on
causes of action for common law wrongful discharge in
violation of public policy, as well as FEHA statutory
claims for disparate treatment based on mental disability (
§ 12940, subd. (a)), disability
discrimination/failure to accommodate ( § 12940,
subd. (m)) and hostile work environment/harassment (
§ 12940, subd. (j)). The chart below summarizes the
special verdicts:

Wrongful Discharge – McKesson

Damages Past economic loss $605,000 Future economic loss
706,000 Past noneconomic loss 250,000 Future noneconomic
loss 250,000 Total: $1,811,000

Disparate Treatment – McKesson

Damages Past economic loss $605,000 Future economic loss
706,000 Past noneconomic loss 200,000 Future noneconomic
loss 100,000 Total: $1,611,000

Hostile Work Environment/Harassment – McKesson

Damages Past noneconomic loss $300,000 Future noneconomic
loss 300,000 Total: $600,000

Hostile Work Environment/Harassment – Karen Schoener

Damages Past noneconomic loss $250,000 Future noneconomic
loss 250,000 Total: $500,000

Disability Discrimination/Reasonable Accommodation
– McKesson

Damages Past economic loss $605,000 Future economic loss
706,000 Past noneconomic loss 400,000 Future noneconomic
loss 400,000 Total: $2,111,000

Because the jury also found that Schoener and McKesson were
guilty of malice, oppression or fraud, the case proceeded
to a punitive damage phase, wherein the jury awarded $15
million in punitive damages against McKesson and $3,000
against Schoener.

The trial court entered judgment for $3,511,000 in
compensatory damages against McKesson and $500,000 against
Schoener. Defendants’ motions for new trial and for
judgment notwithstanding the verdict were denied. However,
owing to Roby’s concession that the jury’s award for past
economic damages included the future value of the same loss,
the order denying defendants’ posttrial motions included a
$706,000 reduction in the verdict “[b]y stipulation of the
parties.”