Sexual Discrimination, Sexual Harassment, Retaliation

Verdicts & Settlements
Supplement to the Los Angeles Daily Journal and San Francisco Daily Journal
February 1, 2008

VERDICT: $19,074,673

RESULT DATE: Dec. 6, 2007

CASE/NUMBER: Stacy Johnson-Klein v. The Board of Trustees of the California State University (05 CE CG 02645 DSB) 07-JV_1907

JUDGE: Hon. Donald S. Black

COURT: Fresno Superior

Plaintiff — Warren R. Paboojian (Oren & Paboojian Inc., Fresno); Dan Siegel (Siegel & Yee, Oakland).
Defendant — Michael G. Marderosian (Marderosian, Runyon, Cercone & Lehman, Fresno); Dawn S. Theodora (The California State University Office of General Counsel, Long Beach).

FACTS:In April 2002, plaintiff was hired as the Head Coach of the Women’s Basketball team at Fresno State University. Plaintiff was terminated in March 2005 for alleged unprofessional conduct, dishonesty, and failure and refusal to perform the normal and reasonable duties of her position as required by Education Code section 89535. Plaintiff filed suit in August 2005 stating nine causes of action for discrimination (gender), retaliation, sexual harassment, hostile work environment, wrongful termination, intentional infliction of emotional distress, negligent infliction of emotional distress, invasion of privacy and defamation, against the university, the athletic corporation, and three individual defendants (the President, the Athletic Director and the Associate Athletic Director).

In December 2005, the court granted CSU’s Anti-SLAPP motion and dismissed the defamation and invasion of privacy claims. In April 2006, after CSU filed a motion for summary adjudication of issues, the parties stipulated to the dismissal of all individual defendants, the athletic corporation, and three additional causes of action (wrongful termination and both emotional distress causes of action).

PLAINTIFF’S CONTENTIONS: Plaintiff contended she was retaliated upon for her complaints of gender inequities including disparate treatment, hostile work environment, and retaliation. The President made public her entire suspension and the report and facts surrounding her suspension during a Press Conference. A 300-page report criticizing Coach Klein was placed on the Internet destroying any hopes of a career that she could have in basketball. Coach Klein was a successful basketball player in College and in a semi-Pro circuit in Europe. She had been a successful Head Coach at Cameron University in the 90’s and also was a successful Assistant Coach at Louisiana Tech. Plaintiff contended Fresno State destroyed her career and her ability to coach in the future.

Plaintiff contended she was sexually harassed by her immediate supervisor, who made demeaning remarks about her appearance and clothing, and the university’s athletic director, who sexually assaulted her and tried to convince her to accompany him to his cabin in the mountains. During the summer and fall of 2004, plaintiff made over a dozen written complaints regarding the unequal treatment of female athletes at Fresno State. On Nov. 30, 2004, Fresno State’s human resources director warned the president of the university and other officials that plaintiff was contemplating making Title IX and whistle-blower complaints. In January 2005, plaintiff made a written complaint of sexual harassment. On Feb. 5, 2005, plaintiff was suspended from her position and was fired a few weeks later.

Furthermore, there was evidence presented at the time of trial that the men’s basketball coach had 457 NCAA violations and was still allowed to coach without any type of reprimand or suspension.

Detective Brad Alcorn testified at the time of trial that he believed during the same period of time of plaintiff’s employment, that the head coach and members of the coaching staff for men’s basketball obstructed justice in a murder investigation.

Finally, the doctor involved with the drug rehabilitation program for the University testified at the time of trial that he believed that Athletic Department cared more about winning than the health, welfare and safety of the student athletes. A majority of the men’s basketball players had toxic levels of marijuana in their system and played even though this violated the school’s drug policy. Not only was the Athletic Department fully aware of this, but the president of the University, Dr. John Welty, was aware of this according to Dr. Kennedy, the physician that was involved in the student athlete rehabilitation program.

All along, the men’s basketball program was allowed to continue with no reprimand or suspension pertaining to the coaches. Once the 2004-2005 season was completed, the men’s basketball coach was allowed to resign and received a $200,000.00 severance package from the University, which was not disclosed to the public.

In addition, there was thousands of dollars of financial improprieties revealed at the time of trial that men’s basketball and men’s football participated in and no men’s coaches were reprimanded, suspended or terminated over the financial improprieties. It was proven at the time of trial that men’s basketball was given a pass and allowed to violate school policies and state law without any type of punishment.

DEFENDENT’S CONTENTIONS: Fresno State’s women’s basketball team had one of the highest budgets in Division 1 women’s basketball in the nation, and in 2003, made its debut in the newly built Save Mart Center, a $103 million arena and events center built by the university for the women’s and men’s basketball teams, and for other university and community events. The Save Mart Center placed the women’s basketball team in one of the most expensive and comprehensive practice and playing venues in the world. Plaintiff regularly advocated for the women’s basketball team, made many requests for program resources and enhancements, and was given everything that she asked for in order to support the women’s basketball program.

Before her termination, plaintiff never complained to anyone that she had been discriminated against because of her advocacy for the women’s basketball program. As late as July 2004, she stated in writing that she and the team were always treated fairly and equally, and that she was very happy with the way Fresno State treated her. Throughout plaintiff’s employment, Fresno State was in compliance with Title IX mandates regarding equal opportunities in its programs, and later received an “A” from the Women’s Sports Foundation for compliance with Title IX.

Despite plaintiff’s initial successes, in January 2005, various team members and subordinate staff members brought forth serious allegations concerning the plaintiff’s conduct and behavior. Because of the seriousness of the allegations, and to protect the health and welfare of the athletes on the women’s team, plaintiff was suspended with pay in February 2005. An extensive investigation was conducted confirming that plaintiff:(1) had repeatedly and inappropriately taken prescription narcotics from student players and staff for her own use; (2) engaged in deceptive and improper fiscal actions; (3) lied during the investigation; (4) threatened to retaliate against the athletes if they reported their concerns to university administrators; and (5) was insubordinate.

The investigation further found that plaintiff disregarded the health and safety of student athletes on a number of occasions, and failed in her obligation to serve as a role model to them. She also took improper actions that resulted in an NCAA violation and placed the university at risk for major NCAA violations, engaged in unprofessional conduct, and created a hostile environment for the team and the assistant coaching staff that led to a virtual complete loss of support for the plaintiff by the team (15 athletes) and her entire coaching staff (4 assistant coaches and managers). All 15 players indicated that they would quit the team and leave the university if plaintiff was allowed to return to her coaching duties.

Plaintiff’s employment was terminated on March 2, 2005 as a result of the findings of the investigation, which resulted in a 380 page report of findings.

Some of the confirmed misconduct, defense claimed was supported by testimony and evidence at trial:

1. Plaintiff falsely arranged a bonus payment scheme from the university in order to improperly re-direct money to herself and a department secretary, who participated in the scheme with her. She then lied about the transactions during the investigation.

2. She illegally obtained a bottle of prescription pain killers from an 18-year-old student athlete for her own use and instructed the athlete and her roommate not to tell anyone. The two athletes were terrified that if they told anyone they would lose their scholarships and be kicked off the team by plaintiff.

3. She repeatedly tried to obtain prescription pain killers for her own use by propositioning other students and staff, who were also fearful to come forward and report plaintiff’s behavior. She lied about these incidents during the investigation.

4. She traveled to China on an alleged “recruiting” trip even after the scheduled NCAA sanctioned event had been cancelled. She took the trip anyway at university expense, and instructed her staff not to tell the university that the business purpose for the trip had been cancelled. She again lied during the investigation.

5. She repeatedly tried to allow athlete’s family members to stay in university paid hotel rooms, while traveling, in violation of NCAA Bylaws.

6. She allowed family members not approved by the university to stay in hotel rooms at the university’s expense while the team was on the road at away games.

7. She repeatedly made contact with athletes whiles she was suspended trying to convince them to lie to university administrators about her previous conduct. She had been instructed not to contact any of the athletes during the suspension. The affected student athletes were fearful of plaintiff and feared retaliation if they spoke up.

Prior to plaintiff’s suspension, she had never complained to anyone that the Athletic Director (or anyone else) had made alleged sexual advances towards her. Prior to her suspension, the Associate Athletic Director, plaintiff’s immediate supervisor, had had two meetings with plaintiff regarding (1) her request to use inappropriate and revealing photographs in the team media guide (which plaintiff agreed not to use), (2) complaints from various members of the public that her game attire was unprofessional and inappropriate, and (3) her use of photographs of only herself and not the team at a team fundraising event placed too much focus on her and not the team. Plaintiff complained once to the Athletic Director regarding these conversations with her supervisor. The Athletic Director immediately met with plaintiff regarding her concerns, and the issues were resolved (according to an email sent by plaintiff after the meeting).

It was not until after plaintiff was suspended that she complained for the first time that she had been allegedly sexually harassed. In fact, after she was suspended, she telephoned the president of the university and threatened to “play” the sexual harassment card if he did not immediately discontinue the investigation and maintain her employment with the university. Thereafter, she stated her complaints for the first time through her attorney at a press conference with local media. Then, despite the university’s repeated requests to determine the nature of her complaints, plaintiff refused to discuss any of the details.

The university hired an independent investigator who conducted a thorough investigation of plaintiff’s sexual harassment complaints, however, the plaintiff refused to speak with the independent investigator. After interviewing several people, and reviewing extensive documents, the independent investigator found no evidence of any sexual harassment. It was not until after plaintiff filed her lawsuit 5 months later that the university was able to learn the specific nature of any her allegations of sexual harassment regarding the Athletic Director and the Associate Athletic Director. Both individuals deny plaintiff’s allegations, and there were no witnesses to any of plaintiff’s claims that the Athletic Director made sexual advances toward her.

CSU is a public entity governed by the California Public Records Act. Plaintiff was a highly public figure in the local Fresno community. Plaintiff was a public employee at all times during her employment. During plaintiff’s suspension and after her termination, the university received 19 different public records requests for the investigative report and documents setting forth the reasons for plaintiff’s termination (mostly from various media outlets). As mandated by the Public Records Act, the university provided copies of the final, substantiated report of findings to the public, with appropriate sections redacted to protect the privacy of third parties.

Despite the public nature of the report, the university never published the report on the internet. However, the report (or portions of the report) may have been published on the internet by local news media outlets. The university also issued press releases and held a press conference regarding plaintiff’s termination, all of which were deemed privileged and protected communications by the court when it granted CSU’s Anti-SLAPP motion.

Despite plaintiff’s previous successes as a coach, the university terminated plaintiff for overwhelmingly legitimate business reasons, as outlined above. Plaintiff’s conduct taken cumulatively resulted in virtually the entire women’s basketball team and staff losing confidence in her ability to lead the program. Of primary concern was the health and welfare of the student athletes who were fearful of plaintiff and who had been terrorized and abused by plaintiff. Student health and welfare is the first and highest priority of the California State University. The university did not terminate plaintiff because of her previous successes or her zealous advocacy for more money or resources or other perks for the women’s basketball team.

Plaintiff was provided with everything she ever requested, whether it was more money, more equipment, more travel, more marketing, or more recruiting. Defendant contended that the evidence at trial showed that everything she requested, she received, and that she never submitted any complaints of any nature pertaining to discrimination or sexual harassment prior to her termination. Nine former athletes testified against plaintiff, as well as six former staff members. No former athletes or staff members testified favorably for plaintiff.

At trial, plaintiff compared her termination to the termination of the men’s basketball coach during the same time frame, whose employment was terminated after a lengthy NCAA investigation regarding improper telephone contacts with potential recruits. When the university’s internal investigation revealed that the men’s coach and/or his staff had engaged in these NCAA violations, the men’s coach admitted his wrongdoing and resigned from his position. The university would have terminated the men’s coach had he not offered to resign. A year after his resignation, the NCAA issued an official report showing that the men’s staff had 457 violations of NCAA rules pertaining to telephone calls with potential recruits.

In contrast, plaintiff refused to admit to any wrongdoing on her own part, lied to administrators when questioned about her wrongdoing, and did not offer to resign rather than be terminated. The men’s coach was not reprimanded or terminated because of marijuana use of his players one year earlier because he did not violate any university policies or rules. Instead, he followed all university rules and policies with respect to treatment and discipline of each of the players who tested positive for marijuana use. The men’s coach was not reprimanded or terminated for alleged “obstruction of justice” in a murder investigation involving a former player of the men’s team because the Fresno police never brought forth any such charges against anyone at Fresno State, nor were there any complaints or evidence of such behavior on the part of the men’s coaching staff. In fact, the former player had been permanently suspended from the men’s team and the university two months prior to his involvement in the homicide.

Just as with plaintiff’s employment, the university (1) released copies of the settlement agreement with the men’s coach to the press pursuant to public records requests, and (2) issued press releases and held a press conference regarding the termination of the men’s coach’s employment, and the reasons therefor.

DAMAGES: Plaintiff’s contract including bonus structures paid approximately $250,000 a year. Plaintiff also received income from outside advertisements.

JURY TRIAL: Length, eight weeks; Deliberation, four hours

SETTLEMENT DISCUSSIONS: According to plaintiff’s counsel, plaintiff made an oral offer to settle the week before trial for $950,000. Plaintiff raised her settlement demand during trial to $2 million. In March of 2007, plaintiff issued a CCP 998 for $3 million.

According to defense, plaintiff’s lowest demand was a CCP 998 demand for $3 million.

Defendant made a CCP 998 offer for $150,000, and their top offer to settle was $550,000.

RESULT: On Dec. 6, 2007, a jury of 11 women and one man returned unanimous verdicts in plaintiff’s favor on her claims of hostile work environment, gender discrimination, and retaliation under the California Fair Employment and Housing Act and Title IX of the Education Amendments of 1972. Plaintiff’s verdict for $19,074,673 ($634,254 for past economic damages; $4,440,419 for future economic damages; $3 million for past non-economic damages; $11 million for future non-economic damages).

Parties stipulated to recoverable costs of $75,000 after trial.

The court granted defendant’s motion for new trial unless plaintiff accepts a remittitur of the damages. The court ordered that the damages award was excessive and reduced the total damages award to $6,624,673.00 (a reduction of almost $13 million). Plaintiff has until February 22 to accept the new damages amount. If the plaintiff fails to accept the remittitur by that date, a new trial shall be ordered.

OTHER INFORMATION: Defendant filed for a remittitur, motion for new trial and JNOV that was heard on Jan. 18, 2007. The court has not yet ruled on the motions.

Plaintiff is in the process of filing a motion for attorneys fees.