Case Name: Dan Gur v. Mellanox Technologies, Inc., et al.
Case No.: 2015-1-CV-282869

Currently before the Court are the following motions: (1) defendant Mellanox Technologies, Inc.’s (“Mellanox”) demurrer to the first amended complaint (“FAC”) of plaintiff Dan Gur (“Plaintiff”); and (2) Plaintiff’s motion to quash a business records subpoena or, in the alternative, for a protective order.

I. Factual Background

This is an action arising from an employment dispute. In the operative FAC, Plaintiff alleges the following: Plaintiff has over 25 years of experience in sales and sales management for prominent technology companies. (FAC, ¶ 9.) In 2010, Mellanox hired Plaintiff as a Business Development and Sales Executive. (FAC, ¶ 10.) During his employment, Plaintiff was responsible for developing and maintaining a close sales relationship with Apple, Mellanox’s largest account. (FAC, ¶¶ 12-13.) In January 2014, Plaintiff noticed that Mellanox was not paying him all of his earned commissions and informed his direct supervisor, Chris Shea (“Shea”), of this fact. (FAC, ¶¶ 16-17.)

In November 2014, Mellanox hired defendant Barbara Carlson (“Carlson”) in a position superior to Plaintiff. (FAC, ¶ 20.) After she was hired, the number of unpaid commissions increased. (FAC, ¶ 23.) When Plaintiff complained to Carlson and Shea about his commissions, they retaliated by placing him on a performance improvement plan (“PIP”). (FAC, ¶ 24.) In January 2015, Plaintiff met with Carlson and Shea to discuss the PIP. (FAC, ¶ 28.) After Plaintiff told Carlson that he had spoken with Mellanox’s CEO concerning the PIP, Carlson began “rant[ing]” and made the following “insult[ing]” remark: “Plaintiff was a ‘fucking disrespectful, lazy, old man, home-phone-sales, SOB.” (FAC, ¶¶ 29-30.) Carlson’s remark was overheard by Shea and other Mellanox employees at the office at that time. (FAC, ¶ 30.) Plaintiff submitted a complaint to human resources and, a month later, Mellanox terminated his employment. (FAC, ¶ 42.)

In the FAC, Plaintiff asserts eight causes of action against Mellanox and Carlson for: (1) breach of contract; (2) breach of employment contract; (3) age discrimination; (4) retaliation; (5) wrongful termination in violation of public policy; (6) violation of Labor Code section 201; (7) “failure to properly investigate;” and (8) slander per se.

II. Demurrer to the FAC

On May 3, 2016, Mellanox filed a demurrer to the eighth cause of action for slander per se on the ground of failure to state sufficient facts to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).) Plaintiff filed his opposition on June 6, 2016. On June 9, 2016, Mellanox filed its reply.

Mellanox contends that the eighth cause of action fails because the statement “Plaintiff was a ‘fucking disrespectful, lazy, old man, home-phone-sales, SOB” constitutes nonactionable opinion.

“In determining whether disparaging remarks are actionable defamation, the question is not strictly whether the published statement is fact or opinion … [r]ather, the dispositive question is whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact. In other words, an opinion or legal conclusion is actionable only if it could reasonably be understood as declaring or implying actual facts capable of being proved true or false.” (Integrated Healthcare Holdings, Inc. v. Fitzgibbons (2006) 140 Cal.App.4th 515, 527.) To determine whether a statement constitutes actionable defamation, “the court examines the communication in light of the context in which it was published.” (Jensen v. Hewlett-Packard Co. (1993) 14 Cal.App.4th 958, 970.) As such, a court should consider relevant facts “such as the occasion of the utterance, the persons addressed, the purpose to be served, and all of the circumstances attending the publication.” (Ibid.) “The critical determination of whether an allegedly defamatory statement constitutes fact or opinion is a question of law for the court and therefore suitable for resolution by demurrer. If the court concludes the statement could reasonably be construed as either fact or opinion, the issue should be resolved by a jury.” (Campanelli v. Regents of University of California (1996) 44 Cal.App.4th 572, 578.)
Here, the alleged disparaging remark was made by one of Plaintiff’s supervisors in the context of a meeting concerning his work performance. (See FAC, ¶¶ 20, 28.) Defamation lawsuits based on statements made during employee performance reviews are strongly disfavored because such a review is “a vehicle for informing the employee of what management expects, how the employee measures up, and what he or she needs to do to obtain wage increases, promotions or other recognition.” (Jensen v. Hewlett-Packard Co. (1993) 14 Cal.App.4th 958, 964.) Thus, unless a supervisor “falsely accuses an employee of criminal conduct, lack of integrity, dishonesty, incompetence or reprehensible personal characteristics or behavior,” statements made in a performance review cannot support a cause of action for defamation. (Id. at p. 964.) In this context, Carlson’s statement that Plaintiff was lazy, old, a home-phone salesman, and an SOB fails to provide a basis for a cause of action for slander because the remark does not concern any criminal conduct or Plaintiff’s lack of integrity, dishonesty, incompetence or reprehensible characteristics or behavior. (See Haley v. Cohen & Steers Capital Management, Inc. (N.D. Cal. 2012) 871 F.Supp.2d 944, 961 [finding that a supervisor’s statement that an employee was lazy and unqualified could not support a cause of action for defamation]; Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1154 [determining that supervisor’s remark that an employee had a “negative attitude” insufficient to allege defamation].)

Moreover, the conclusion that the remark could only be considered a statement of opinion rather than one of fact is reinforced by Carlson’s use of insulting, vulgar, and crude language. Courts have frequently found “rhetorical hyperbole,” “vigorous epithet[s],”and “lusty and imaginative expression[s] of … contempt” to be nonactionable speech because no reasonable reader would take such obviously vulgar and insulting speech as a statement of fact. (Ferlauto v. Hamsher (1999) 74 Cal.App.4th 1394, 1401; Krinsky v. Doe 6 (2008) 159 Cal.App.4th 1154, 1177.) As such, Carlson’s use of two obscenities “scream[ed]” during a “rant” further suggests that Shea and the other Mellanox employees could not have reasonably construed this remark as a statement of fact.

In light of the foregoing, the FAC fails to allege sufficient facts to constitute a cause of action for slander per se. Accordingly, the demurrer to the eighth cause of action is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. (See City of Stockton v. Sup. Ct. (Civic Partners Stockton, LLC) (2007) 42 Cal.4th 730, 747 [stating that leave to amend is liberally allowed where the plaintiff has not previously had the opportunity to amend in response to a demurrer].)

III. Motion to Quash, or, in the alternative, for a Protective Order

On March 28, 2016, Mellanox served a business records subpoena on Plaintiff’s current employer seeking all of his personnel records. Plaintiff subsequently served Mellanox with several objections to the subpoena. On April 25, 2016, the parties’ counsel met and conferred via telephone. Mellanox’s counsel stated that Plaintiff waived his objections to the subpoena because he did not file a motion to quash before the production of the records. Plaintiff’s counsel disagreed and requested that Mellanox withdraw the subpoena as it invaded his right to privacy. Despite additional attempts to meet and confer, the parties were unable to resolve the dispute informally.

On May 9, 2016, Plaintiff filed the instant motion to quash or, in the alternative, request for a protective order, in which he requests monetary sanctions. On June 3, 2016, Mellanox filed its opposition, in which it requests monetary sanctions. Plaintiff filed his reply on June 9, 2016.

A. Legal Standards

The court may, “upon motion reasonably made by a [party] … make an order quashing [a] subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders.” (Code Civ. Proc., § 1987.1, subds. (a), (b)(1).) In addition, the court may make “any other order as may be appropriate to protect the [moving party] from unreasonable demands.” (Code Civ. Proc., § 1987.1, subd. (a).)

B. Timeliness of the Motion

Preliminarily, Mellanox asserts that the motion should be denied because Plaintiff did not file this motion until after the date of production of the subpoena as required by Code of Civil Procedure section 1985.6, subdivision (f)(1). This argument lacks merit.

In Slagle v. Sup. Ct. (1989) 211 Cal.App.3d 1309, 1312, the Court of Appeal expressly rejected this same argument, finding that the statute does not prohibit a party from bringing a motion to quash after the date for production set forth in a subpoena. Instead, the court found that the time limits mentioned Code of Civil Procedure section 1985.6 are merely “designed to guide those involved as to when the witness with the records may safely honor or not honor the subpoena” in the event the employee objects. (Ibid.; see also In re R.R. (2010) 187 Cal.App.4th 1264, 1278 [stating that “[a] motion to quash is typically filed before the time for production …, but the court has authority to consider the motion even if brought after the date for production”].) Accordingly, the Court will not deny the motion on this basis.

C. Waiver of Objections

Mellanox claims that Plaintiff waived all objections to the disclosure of the requested documents because he did not file a motion to quash before the date of production set forth in the subpoena. This argument is not well-taken. A party only waives its objections to documents requested by a third-party subpoena if it fails to assert them before the date noticed for the production of those documents. (Roberts v. Sup. Ct. (1973) 9 Cal.3d 330, 342 [finding that psychotherapist’s disclosure of medical records did not waive the psychotherapist-patient privilege where the patient asserted an objection before disclosure]; see also Monarch Healthcare v. Sup. Ct. (2000) 78 Cal.App.4th 1282, 1289 [finding no waiver where there is a timely objection to a business records subpoena].) Here, Mellanox makes no attempt to demonstrate that Plaintiff failed to object to the disclosure of these records on or before the date noticed for the production of the responsive documents. As such, Mellanox fails to establish that Plaintiff waived his objections.

D. Motion to Quash

Plaintiff moves to quash the subpoena on the ground that it is so overbroad as to invade his right to privacy.

The subpoena at issue requests any and all documents relating to Plaintiff’s employment, including all personnel files, employment applications, agreements related to compensation, work schedules, overtime records, complaints, performance evaluations, records of disciplinary actions, personnel notes and resumes, payroll records, and benefits records.

The right to privacy protects an individual’s “reasonable expectation of privacy against a serious invasion.” (Pioneer Electronics, Inc. v. Sup. Ct. (2007) 40 Cal.4th 360, 370.) It is well established that employees have a privacy interest in their personnel records. (Board of Trustees of Leland Stanford Jr. Univ. v. Sup. Ct. (1981) 119 Cal.App.3d 516, 528-530; El Dorado Savings & Loan Assn. v. Sup. Ct. (1987) 190 Cal.App.3d 342, 345.) Where a serious invasion of the right to privacy is shown, the proponent of the discovery must demonstrate that the information sought is “directly relevant” to a claim or defense, and “essential to the fair resolution of the lawsuit.” (Britt v. Sup. Ct. (1978) 20 Cal.3d 844, 850; see also Binder v. Sup. Ct. (1987) 196 Cal.App.3d 893, 901 [holding “direct relevance” requires something more than an assertion that the requested discovery might lead to admissible evidence].) Once direct relevance has been shown, the court must then carefully balance the right to privacy on the one hand and the right of civil litigants to discover facts on the other. (See Pioneer Electronics, Inc., supra, 40 Cal.4th at p. 371.)

Mellanox persuasively argues that payroll records as well as records concerning Plaintiff’s benefits and compensation from his current employer are directly relevant to the instant action because the value of Plaintiff’s current compensation may be deducted from any recovery for wrongful discharge. (Villacorta v. Cemex Cement, Inc. (2013) 221 Cal.App.4th 1425, 1432 [stating that “[t]he general rule is that the measure of recovery by a wrongfully discharged employee is the amount of salary agreed upon for the period of service, less the amount which the employer affirmatively proves the employee has earned or with reasonable effort might have earned from other employment”].) Accordingly, the Court must balance Plaintiff’s right to privacy in these records against Mellanox right to discover this information.

Here, the payroll, compensation, and benefits records could provide Mellanox with essential evidence necessary to establish the amount of Plaintiff’s damages. While requiring the disclosure of these records will indisputably result in a certain amount of intrusion into Plaintiff’s privacy, to assuage those concerns, the Court orders Mellanox, their attorneys and agents, to refrain from disseminating these records to any non-party except for use in the present litigation. (See Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 38 [stating that privacy concerns are mitigated if “confidential information is carefully shielded from disclosure except to those who have a legitimate need to know”].) Accordingly, given that the compensation, payroll, and benefits records are significant and the presence of the protective order will lessen the impact of any privacy intrusion, Plaintiff’s privacy objection to these records is overruled.

Next, Mellanox claims that all other documents in Plaintiff’s personnel file are directly relevant to this action. It contends that these records could demonstrate that his current position is comparable or substantially similar to his prior position with Mellanox, which is a requirement to mitigate damages based on Plaintiff’s current compensation. (Villacorta, supra, 221 Cal.App.4th at p. 1432 [stating that “[w]ages actually earned from an inferior job may not be used to mitigate damages because if they were used then it would result in senselessly penalizing an employee who, either because of an honest desire to work or a lack of financial resources, is willing to take whatever employment he can find”].) While it is possible that some documents in Plaintiff’s personnel file could be relevant to this determination, Mellanox fails to establish that all of the remaining documents in the personnel file would necessarily do so. For example, Mellanox does not articulate how employee and/or employer complaints at Plaintiff’s new job could demonstrate that the position is comparable or substantially similar. Therefore, since Mellanox fails to demonstrate that all other documents in Plaintiff’s personnel file are directly relevant to a claim or defense in this action, Plaintiff’s privacy objection to these records is sustained. (See El Dorado Savings & Loan Assn., supra, 190 Cal.App.3d at p. 346 [stating that a court may not grant a motion to compel production of an entire personnel file where “it is by no means established that the entire file is relevant to plaintiffs’ … action”].)

In sum, the subpoena as currently drafted is overbroad and would likely elicit private information regarding Plaintiff’s employment that is not directly relevant to any claim or defense in this action. However, the requested compensation, payroll, and benefits records are directly relevant to determining the amount of Plaintiff’s damages and the presence of an appropriate protective order will lessen the impact of any privacy intrusion. Accordingly, the motion to quash is GRANTED IN PART and DENIED IN PART. The motion is DENIED as to the compensation, payroll, and benefits records. The motion is otherwise GRANTED. To the extent that the deposition officer has already produced other personnel records, the Court orders that these documents and any and all copies that may have been made by Mellanox and/or its counsel, be delivered to Plaintiff’s counsel within 10 calendar days of the filing of the Court’s order. In addition, the Court orders Mellanox, their attorneys and agents, to refrain from disseminating the compensation, payroll, or benefits records to any non-party except for use in the present litigation.

E. Request for a Protective Order

In addition, Plaintiff “seeks a protective order from the Court to protect himself from [Mellanox’s] unreasonable demands.” (Mem. Ps & As., p. 3:15-16.) Plaintiff, however, does not articulate the contours or scope of such a protective order or provide a basis for its issuance. Accordingly, Plaintiff’s request for a protective order is DENIED.

F. Requests for Monetary Sanctions

Both parties request monetary sanctions in connection with this motion.

1. Plaintiff’s Request

Plaintiff requests $4,185 in monetary sanctions against Mellanox and its counsel under Code of Civil Procedure section 1987.2, subdivision (a), which provides that a court may in its discretion award the amount of the reasonable expenses incurred in making or opposing a motion to quash if it finds that the motion was made or opposed in bad faith or without substantial justification or that one or more of the requirements of the subpoena was oppressive.”

Here, Mellanox did not oppose the motion in bad faith and acted with substantial justification as it successfully demonstrated that many of the records sought by the subpoena should be produced. Accordingly, Plaintiff’s request for monetary sanctions is DENIED.

2. Mellanox’s Request

Mellanox seeks $5,575 in monetary sanctions against Plaintiff under Code of Civil Procedure section 1987.2, subdivision (a). It argues that Plaintiff filed the motion in bad faith in violation of Code of Civil Procedure section 1985.6, subdivision (f)(1). As previously discussed, section 1985.6 does not prevent Plaintiff from filing the instant motion after the date for production. (See Slagle, supra, 211 Cal.App.3d at p. 1312; In re R.R., supra, 187 Cal.App.4th at p. 1278.) Accordingly, Plaintiff did not file the motion in bad faith and, therefore, Mellanox’s request for monetary sanctions is DENIED.