Bayne v. Bowles Hall Foundation

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4 UNITED STATES DISTRICT COURT

5 NORTHERN DISTRICT OF CALIFORNIA

6

MELISSA L. BAYNE,

7 Case No. 21-cv-01959-JCS

Plaintiff,

8 ORDER GRANTING MOTION TO

v. DISMISS THE REGENTS OF THE

9 UNIVERSITY OF CALIFORNIA FROM

BOWLES HALL FOUNDATION, et al., PLAINTIFF’S SECOND AMENDED

10 COMPLAINT PURSUANT TO RULE

Defendants. 12(B)(6)

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Re: Dkt. No. 38

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13 I. INTRODUCTION

14 Plaintiff Melissa Bayne brings this gender discrimination and retaliation case against the

15 Regents of the University of California (“Regents”) and the Bowles Hall Foundation (“the

16 Foundation”) based on the failure of the Foundation to renew her employment contract as dean of

17 Bowles Hall Residential College. On August 5, 2021, the Court dismissed Plaintiff’s claims

18 against the Regents with leave to amend, finding that she did not adequately allege that the

19 Regents were a joint employer as to her position or that the Regents knew or should have known

20 about the Foundation’s conduct but failed to undertake prompt corrective measures. Dkt. 34

21 (“August 5 Order”) at 29. Plaintiff filed a second amended complaint (“SAC”) in which she

22 attempted to cure these defects and the Regents have now brought a motion to dismiss the SAC

23 (“Motion”), arguing that it again fails to state any claim against the Regents. The Court finds that

24 the Motion is suitable for determination without oral argument and therefore vacates the motion

25 hearing set for November 19, 2021 at 9:30 a.m. pursuant to Civil Local Rule 7-1(b). The

26 Case Management Conference scheduled for the same date will be conducted at 2:00 p.m. on

27 November 19, 2021 rather than at 9:30 a.m. For the reasons set forth below, the Court

1 prejudice.1

2 II. BACKGROUND

3 The underlying factual allegations in the SAC are substantially the same as those in the

4 First Amended Complaint, which were described at length in the Court’s August 5 Order, and

5 therefore the Court does not summarize them here. Likewise, the claims asserted against the

6 Regents in the SAC are the same. However, Plaintiff has added a section to the complaint

7 addressing joint employer liability in which she alleges as follows:

8 III. JOINT EMPLOYER [LIABILITY] OF THE REGENTS FOR BOWLES

HALL’S ACTIONS TOWARD PLAINTIFF

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35. The Regents exercise a great deal of control over the Foundation, rendering the

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Regents jointly liable for the Foundation’s retaliatory actions toward Dr. Bayne.

11 Furthermore, the Regents knew or should have known about the Foundation’s retaliation

against Dr. Bayne.

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A. The Regents Effectively Control the Foundation’s Operations

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36. The Foundation leases the Bowles Hall building from the Regents. The lease spans a

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40-year time period.

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37. According to the lease, the Foundation and the Regents must comply with a

16 “Cooperation Agreement.” According to a “Cooperation Agreement” between the

Foundation and the Regents, the Foundation “acknowledges and agrees that [the

17 Regents] maintain[] campuswide policies and procedures for the Berkeley Campus as

listed on the Campus website or as otherwise provided to the [Foundation] and

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occasionally adopts non-discriminatory amendments to such rules, regulations and

19 policies for the Berkeley Campus from time to time (such rules regulations and policies,

as so amended from time to time, the ‘Campus Rules’).” (emphasis in original).

20 According to this agreement, the Foundation “shall manage and operate [Bowles Hall] in

compliance with Campus Rules . . . .” According to the Berkeley Campus website,

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Campus Rules “may be issued by the Board of Regents, the Office of the President, or

22 the campus.”

23 38. Campus Rules found on the campus website consist of 472 different policies issued

by the Office of the President alone. These policies cover a wide-ranging list of topics,

24 many of which relate to the Foundation’s operations, including polices requiring the

Foundation to “report[] to designated campus units . . . [any] sensitive or criminal

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activity”, forbidding discrimination and retaliation in employment, requiring that all

26 forms provided to students or staff contain at least three options for gender identity,

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establishing a reporting and investigation procedure for gender-based and race-based

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harassment, establishing a reporting and investigation procedure for allegations of sexual

2 violence, detailing electronic information security protocols, providing specifications for

renovations of facilities, and a multitude of other topics.

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39. In 2018, the Regents conducted an audit of the Bowles Hall. According to the results

4 of the audit, the “Campus Rules” that the Foundation must follow are so complex that the

Foundation’s full compliance with all of these Campus Rules imposed by the Regents is

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unlikely. The auditor recommended that, in order to achieve the Regents’ goals for

6 Bowles Hall, by October 1, 2019, the Regents should implement a system whereby the

Regents “identify, prioritize, and communicate to Bowles Hall Foundation those key

7 rules and requirements that it should be aware of in its operation of Bowles Hall and the

residential college program.” The auditor warned that otherwise, it is likely that the

8 plethora of rules and regulations will prevent the “college dean or other responsible

parties at [Bowles Hall]” from complying with those rules that the Regents actually finds

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important such as “reporting . . . sensitive or criminal activity” to representatives of the

10 Regents.

11 40. Moreover, the Regents are free to impose new rules and obligations on the

Foundation with no input from the Foundation. In fact, according to a 2018 audit of the

12 Foundation performed by the Regents, the auditor recommended that by October 1,

2019, the Foundation be obligated to complete “an annual certification process by which

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the college dean or other designated representatives of the Foundation, certify

14 compliance with the articulated rules and requirements.” As noted, these rules and

requirements can cover virtually any subject and can be unilaterally imposed on the

15 Foundation by the Regents. The auditor suggested that “[c]ampus training and

informational resources could be made available to Bowles Hall staff to help them

16 understand and adhere to the [Regent’s] requirements.” The auditor further observed that

“Bowles Hall does not have a formal emergency operational plan or a business

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continuity plan similar in rigor and detail to those required by campus units . . . .” The

18 auditor recommended that, by October 1, 2019, that the “Foundation develop a specific

emergency plan that will be submitted to the [Regents] for review.” The auditor stated

19 that the Regents can compel the Foundation to create such a plan “under the compliance

with ‘campus rules’ requirement of the [Cooperation Agreement].”

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41. As such, the Regents had the authority to and did control the Foundation’s

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operations, including the day to day responsibilities of its staff, by issuing “Campus

22 Rules,” which the Foundation is contractually obligated to follow.

23 42. In June of 2018, after Dr. Bayne complained about Dr. Varnich’s improper behavior,

the Regents’ general counsel instructed the Foundation to not “proceed with further

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investigation [or] action [against Dr. Vranich] until [the Regents] complete[] [their]

25 investigation.” The Foundation complied with the Regents’ directive. As such, the

Regents exercise control over termination and discipline of Foundation employees.

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43. The Regents also exercise control over the Foundation through its appointment of

27 members of the Foundation’s Board of Directors. Under the Cooperation Agreement

of the Campus faculty and one of the . . . Directors shall be a senior administrator on the

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Campus.” According recommendations resulting from a 2018 audit of the Foundation by

2 the Regents, the Regents could “strengthen [their] oversight of the Bowles Hall

arrangement by creating an official charge from the [Regents] to its three representatives

3 serving on the Foundations board as to their fiduciary duty on behalf of the [Regents].”

The auditor recommended that by October 1, 2019, the Regents “will work with Bowles

4 Hall Foundation to establish official charge letters with terms of service for all UC

Berkeley faculty and staff that Serve on the Bowles Hall Foundation Board of Directors.”

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Moreover, the Regents “will also implement an ‘annual report’ requirement

6 which will enable campus administration to be briefed on the programmatic, operational,

financial and compliance status of the residential college elements of Bowles Hall.”

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44. In sum, the Regents exercise control over the operations of the Foundation through

8 representation on the Foundation’s board of directors, as well as through rules and

policies promulgated by the Regents that the Regents may unilaterally impose on the

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Foundation and that may dictate virtually any aspect of the Foundation’s operations.

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B. The Regents Knew or Should Have Known About The Foundation’s Retaliation

11 Against Dr. Bayne

12 45. The Board of Directors that decided to not renew Dr. Bayne’s contract contained two

senior administration officials: Robert Jacobsen, Dean of Undergraduate Studies at the

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College of Letters and Science and Stephen Sutton, vice chancellor of the Student

14 Affairs Division. These board members were required to report the retaliation against Dr.

Bayne to the Berkeley Campus Title IX office.

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16 SAC ¶¶ 35-45.

17 In the Motion, the Regents argue that Plaintiff still does not properly allege any adverse

18 employment action on the part of the Regents or a joint employer relationship with the

19 Foundation. Motion at 6-10. The Regents argue further that even if the allegations in the SAC

20 were sufficient to show a joint employer relationship, they do not establish that the Regents can be

21 held liable for the Foundation’s conduct because the SAC does not allege specific facts showing

22 that the Regents knew or should have known about Plaintiff’s termination but failed to undertake

23 prompt corrective measures. Id. at 10-11. Finally, the Regents argue that the claims against them

24 should be dismissed with prejudice and without leave to amend because Plaintiff has already been

25 given an opportunity to address these shortcomings and has been unable to establish a basis for

26 liability as to the Regents. Id. at 11-12. Therefore, they assert, amendment is futile. Id.

27 In her Opposition, Plaintiff argues that the allegations in the SAC establish that the

1 In particular, she points to the allegations that the 40-year lease between the Regents and the

2 Foundation requires that the Foundation comply with a Cooperation Agreement and that the

3 Cooperation Agreement, in turn, requires the Foundation to follow Campus Rules and gives the

4 Regents the right to appoint three members of the Foundation’s Board of Directors. Id. Plaintiff

5 also points to her allegations about a 2018 audit of Bowles Hall by the Regents in which the

6 auditor concluded the Campus Rules were too complex and therefore difficult to comply with and

7 recommended the Regents “identify, prioritize, and communicate to Bowles Hall Foundation those

8 key rules and requirements that it should be aware of in its operation of Bowles Hall and the

9 residential college program.” Id. at 8 (quoting SAC ¶ 39). In support of her assertion that the

10 Regents have control over discipline and termination of the Foundation employees, Plaintiff

11 points to her allegation that the Regents’ counsel instructed the Foundation not to “proceed with

12 further investigation [or] action [against Dr. Vranich] until [the Regents] complete[] [their]

13 investigation.” Id. at 9 (citing SAC ¶ 42).

14 In support of her assertion that the Regents can be held liable for her termination, Plaintiff

15 points to her allegation that two Foundation Board members who were appointed by the Regents

16 were senior administration officials and were required to report the retaliation against Dr. Bayne to

17 the Berkeley Campus Title IX office. Id. at 10 (citing SAC ¶ 45).

18 Plaintiff asks that she be permitted to amend the complaint if the Court finds that her

19 allegations regarding joint liability are not sufficient. Id. at 22.

20 III. ANALYSIS

21 A. Legal Standards Under Rule 12(b)(6)

22 A complaint may be dismissed under Rule 12(b)(6) of the Federal Rules of Civil Procedure

23 for failure to state a claim on which relief can be granted. “The purpose of a motion to dismiss

24 under Rule 12(b)(6) is to test the legal sufficiency of the complaint.” N. Star Int’l v. Ariz. Corp.

25 Comm’n, 720 F.2d 578, 581 (9th Cir. 1983). Generally, a plaintiff’s burden at the pleading stage

26 is relatively light. Rule 8(a) of the Federal Rules of Civil Procedure states that a “pleading which

27 sets forth a claim for relief . . . shall contain . . . a short and plain statement of the claim showing

1 In ruling on a motion to dismiss under Rule 12(b)(6), the court analyzes the complaint and

2 takes “all allegations of material fact as true and construe[s] them in the light most favorable to the

3 non-moving party.” Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995).

4 Dismissal may be based on a lack of a cognizable legal theory or on the absence of facts that

5 would support a valid theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir.

6 1990). A complaint must “contain either direct or inferential allegations respecting all the material

7 elements necessary to sustain recovery under some viable legal theory.” Bell Atl. Corp. v.

8 Twombly, 550 U.S. 544, 562 (2007) (citing Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101,

9 1106 (7th Cir. 1984)). “A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation

10 of the elements of a cause of action will not do.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

11 (quoting Twombly, 550 U.S. at 555). “[C]ourts ‘are not bound to accept as true a legal conclusion

12 couched as a factual allegation.’ ” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S.

13 265, 286 (1986)). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of

14 ‘further factual enhancement.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557)

15 (alteration in original). Rather, the claim must be “ ‘plausible on its face,’ ” meaning that the

16 plaintiff must plead sufficient factual allegations to “allow [] the court to draw the reasonable

17 inference that the defendant is liable for the misconduct alleged.” Id. (quoting Twombly, 550 U.S.

18 at 570).

19 B. Legal Standards Governing Joint Employer Liability

20 Under Title VII, a plaintiff may have more than one “employer” for purposes of liability.

21 U.S.E.E.O.C. v. Global Horizons, Inc., 915 F.3d 631, 637 (9th Cir. 2019) (“The law recognizes

22 that two entities may simultaneously share control over the terms and conditions of employment,

23 such that both should be liable for discrimination relating to those terms and conditions.”). In

24 Global Horizons, the Ninth Circuit concluded that the common-law agency test governs the

25 determination of whether an entity is a joint employer in the Title VII context. Id. at 638. “Under

26 the common-law test, ‘the principal guidepost’ is the element of control—that is, ‘the extent of

27 control that one may exercise over the details of the work of the other.’ ” Id. (quoting Clackamas

1 omitted)). The Supreme Court has provided a non-exhaustive list of factors to consider when

2 analyzing whether the requisite control exists:

3 the skill required; the source of the instrumentalities and tools;

the location of the work; the duration of the relationship

4 between the parties; whether the hiring party has the right to

assign additional projects to the hired party; the extent of the

5 hired party’s discretion over when and how long to work; the

method of payment; the hired party’s role in hiring and paying

6 assistants; whether the work is part of the regular business of

the hiring party; whether the hiring party is in business; the

7 provision of employee benefits; and the tax treatment of the

hired party.

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9 National Mutual Ins. Co. v. Darden, 503 U.S.318, 323–24 (2003) (internal quotation marks

10 omitted). This test also applies in the context of Title IX. See Emeldi v. Univ. of Oregon, 673

11 F.3d 1218, 1223 (9th Cir. 2012) (holding that Title VII framework governs Title IX retaliation

12 claims).

13 California courts that have considered the meaning of “joint employer” under FEHA have

14 relied heavily on federal court decisions interpreting Title VII. Hall v. Apartment Inv. & Mgmt.

15 Co., No. C 08-03447 CW, 2011 WL 940185, at *5 (N.D. Cal. Feb. 18, 2011) (citing Vernon v.

16 State, 116 Cal. App. 4th 114, 123, (2004)). In Vernon, the court observed that “[t]he common and

17 prevailing principle espoused in all of the tests directs us to consider the ‘totality of

18 circumstances’ that reflect upon the nature of the work relationship of the parties, with emphasis

19 upon the extent to which the defendant controls the plaintiff’s performance of employment

20 duties.” 116 Cal. App. 4th at 124 (citations omitted). It listed the following factors that courts

21 consider in determining whether an entity is a joint employer:

22 Factors to be taken into account in assessing the relationship of the

parties include payment of salary or other employment benefits and

23 Social Security taxes, the ownership of the equipment necessary to

performance of the job, the location where the work is performed, the

24 obligation of the defendant to train the employee, the authority of the

defendant to hire, transfer, promote, discipline or discharge the

25 employee, the authority to establish work schedules and assignments,

the defendant’s discretion to determine the amount of compensation

26 earned by the employee, the skill required of the work performed and

the extent to which it is done under the direction of a supervisor,

27 whether the work is part of the defendant’s regular business

operations, the skill required in the particular occupation, the duration

employment.

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2 Id. at 125 (citations omitted).

3 “[E]ven if a joint-employment relationship exists, one joint employer is not automatically

4 liable for the actions of the other.” Global Horizons, 915 F.3d at 641. Rather, liability may only

5 be imposed if the defendant employer knew or should have known about the other employer’s

6 conduct and failed to undertake prompt corrective measures. Id.

7 C. Discussion

8 Like the First Amended Complaint, the SAC does not allege any direct involvement by the

9 Regents in hiring Plaintiff, evaluating her performance or terminating her. To the contrary, the

10 SAC alleges it was the Foundation that did these things. See SAC ¶¶ 10 (“Dr. Bayne was hired by

11 the Foundation in or around August 2016”), 15 (“the Bowles Hall Foundation Board of Directors .

12 . . invited Dr. Bayne to discuss complaints regarding her performance as Dean of Students”), 20

13 (during “a conference call with the executive committee of the [Board of Directors] . . . President

14 John Baker chastised Dr. Bayne for reporting these incidents regarding Dr. Vranich to UC

15 Berkeley”), 31 (at a meeting of the BOD that Plaintiff “was asked to attend[ ] [s]he was informed

16 that Bowles Hall would not renew her contract for the 2019/2020 school year.”). Thus, the

17 Regents can only be liable on a joint employer theory. Considering the totality of the

18 circumstances as alleged in the SAC, however, the Court finds that Plaintiff has not alleged facts

19 that raise a plausible inference that the Regents and the Foundation were Plaintiff’s joint

20 employer. Therefore, the Court concludes Plaintiff’s claims against the Regents fail to state a

21 claim.

22 The SAC alleges that the Foundation leases Bowles Hall from the Regents, SAC ¶ 36,

23 arguably pointing in favor of a joint employer relationship under the Vernon factor that looks to

24 the location where the work is performed (on campus). See 116 Cal. App. 4th at 125. The

25 allegation that the lease between the Regents and the Foundation has a 40-year term, see id., is

26 another factor that supports such a finding. None of the remaining Vernon factors supports a

27 finding that the Regents were in a joint employer relationship as to Plaintiff’s employment with

1 Plaintiff’s salary, benefits, or Social Security taxes in connection with her job as dean or

2 determining the salary she would be paid. Nor does the SAC contain any allegations suggesting

3 the Regents provided “equipment” necessary for her to perform her position, supervised her work

4 or determined her assignments.

5 Plaintiff attempts to show that the Regents had authority with respect to hiring, disciplining

6 and termination based on the Foundation’s obligations under the Cooperation Agreement but those

7 allegations fall short. First, to the extent the Cooperation Agreement is alleged to require the

8 Foundation to adhere to the Campus Rules, Plaintiff’s allegations as the nature of those rules do

9 not raise a plausible inference that the Regents exercised control over the conditions of Plaintiff’s

10 employment. Rather, the description of the Campus Rules in the SAC indicates that while they

11 cover a “wide-ranging list of topics” they impose only general obligations that do not specifically

12 relate to Plaintiff’s employment as dean of Bowles Hall. See SAC ¶ 38 (alleging Campus Rules

13 cover policies “requiring the Foundation to ‘report[] to designated campus units . . . [any] sensitive

14 or criminal activity’, forbidding discrimination and retaliation in employment, requiring that all

15 forms provided to students or staff contain at least three options for gender identity, establishing a

16 reporting and investigation procedure for gender-based and race-based harassment, establishing a

17 reporting and investigation procedure for allegations of sexual violence, detailing electronic

18 information security protocols, providing specifications for renovations of facilities, and a

19 multitude of other topics”).

20 Likewise, allegations about recommendations that came out of a 2018 audit of Bowles Hall

21 by the Regents do not specifically relate to Plaintiff’s position. See SAC ¶¶ 39 (“The auditor

22 recommended that, in order to achieve the Regents’ goals for Bowles Hall, by October 1, 2019, the

23 Regents should implement a system whereby the Regents ‘identify, prioritize, and communicate to

24 Bowles Hall Foundation those key rules and requirements that it should be aware of in its

25 operation of Bowles Hall and the residential college program.’ ”), 40 (“the auditor recommended

26 that by October 1, 2019, the Foundation be obligated to complete ‘an annual certification process

27 by which the college dean or other designated representatives of the Foundation, certify

1 that these recommendations were implemented.

2 Moreover, even to the extent the Campus Rules give the Regents control over some aspects

3 of the “Foundation’s operations[,]” see SAC 41, Plaintiff has not alleged facts linking that control

4 to any specific aspect of Plaintiff’s performance of her job as dean of Bowles Hall. Nor has she

5 cited any authority suggesting that this type of general authority of one entity over another is

6 evidence of a joint employment relationship as to a specific employee. Finally, even if the

7 Regents have the authority to change the Campus Rules without consulting Bowles Hall, as

8 Plaintiff alleges, see SAC ¶ 40, the possibility that the Regents might in the future adopt rules that

9 directly relate to Plaintiff’s job at Bowles Hall is simply too speculative to support a finding that

10 the Regents are Plaintiff’s joint employer.

11 The Court also finds unpersuasive Plaintiff’s reliance on allegations that the Regents are

12 authorized under the Cooperation Agreement to appoint three members of the Foundation’s Board.

13 See SAC ¶ 43. There is no allegation that these three members constituted a majority such that

14 they controlled the Board; nor does the SAC allege any specific facts showing that board members

15 who were appointed by the Regents (only two are specifically listed), see SAC ¶ 45, exercised any

16 control over Plaintiff in her position as dean.

17 Plaintiff’s reliance on the allegation that the Regents asked the Foundation not to proceed

18 with its investigation of Dr. Vranich until they had finished their own investigation, see SAC ¶ 42,

19 is also misplaced. Assuming that actions taken in connection with Dr. Vranich can support an

20 inference as to the Regent’s control over Plaintiff’s termination and discipline (an inference that

21 the Court finds to be reasonable given that the two held the same position at Bowles Hall), the

22 allegation supports at most a very weak inference of control as it relates only to the timing of the

23 Foundation’s investigation and termination and not the Foundation’s findings or determination of

24 what discipline would be taken in light of those findings.

25 In sum, considering the totality of the circumstances, the Court finds that Plaintiff has

26 failed to allege facts sufficient to raise a plausible inference that the Regents were her joint

27 employer under either federal or California law. Consequently, all of the claims she asserts against

1 opportunity to amend the complaint to allege further facts in support of the Regents’ joint

2 || employer status, she has not pointed to any additional facts she could allege to cure the defects

3 identified above. As the Court has already given Plaintiff an opportunity to amend and she has not

4 || been able to allege facts sufficient to raise a plausible inference of joint employer liability, it

5 concludes that amendment is futile. See Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc., 368

6 || F.3d 1053, 1061 (9th Cir. 2004) (holding that a district court does not err in denying leave to

7 amend where amendment would be futile) (citing Saul v. United States, 928 F.2d 829, 843 (9th

8 || Cir. 1991)).

9 || IV. CONCLUSION

10 The Motion is GRANTED. Plaintiffs claims against the Regents (Claims One, Two,

11 Three, Four and Seven) are dismissed with prejudice as to the Regents only. The Regents are

12 || dismissed from this case.

13 IT IS SO ORDERED.

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15 || Dated: November 9, 2021

tens

J PH C. SPERO

17 ief Magistrate Judge

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