Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-00262/USCOURTS-caed-2_04-cv-00262-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1332 Diversity-Employment Discrimination

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1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

ROEL OLIVARES, 

Plaintiff,

v.

CANTEEN VENDING SERVICE;

COMPASS GROUP USA, INC.; and

DOES 1 to 50, 

Defendants. 

CIV-S-04-0262 DFL-PAN

MEMORANDUM OF OPINION 

AND ORDER

Plaintiff Roel Olivares (“Olivares”) was fired by his

employer, defendants Canteen Vending Service (“Canteen”) and

Compass Group USA (“Compass”), for allegedly stealing money. 

Olivares asserts that he was fired because of his age. He brings

claims for: (1) age discrimination in violation of the California

Fair Employment and Housing Act (“FEHA”); (2) tortious

termination in violation of public policy; and (3) breach of the

covenant of good faith and fair dealing. Canteen and Compass

move for summary judgment on all of Olivares’s claims. For the

following reasons, the court GRANTS defendants’ motion. 

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 For the sake of simplicity, the court refers to both 1

defendants as “Canteen” in this order. 

2

I. 

Canteen, a division of Compass, operates a large vending

machine business. (Mot. at 2.) Olivares, who was 57 during the 1

relevant time period, was employed by Canteen as a relief driver

from 1970 until his termination in 2003. (Opp’n to Defs.’ SUF ¶

1; Opp’n at 7.) According to Olivares, his employment was

subject to a collective bargaining agreement under which he could

not be fired “without just cause.” (Pl.’s Ex. 1 at 15.) 

Canteen’s employment policies provided that employees can be

“immediately terminated (and possibly prosecuted) for, among

other things, . . . taking money from the cash register, money

bags or petty cash fund.” (Carp. Decl. Ex. A at Doc. 21.) 

Wendell Nall was Olivares’s manager. (Nall Decl. ¶¶ 2, 4.) 

As a relief driver, Olivares filled in for regular route

drivers as needed, servicing the vending machines on their

routes. The servicing of a vending machine involves the

following steps: (1) the driver replenishes the product stock,

removes the dollar bills and change from the collection portion

of the machine, and places the collected bills and coins in a

“collections bag;” (2) he then checks the machine’s “coin

mechanism” to make sure there are adequate coins to make change;

(3) if the coin mechanism is low or empty, the driver refills the

coin mechanism with a roll of coins from his “change bank” or

“nickel fund;” and (4) if the driver has to replenish the coin

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 Olivares disputes this fact. He claims that he was 2

responsible for a different route during these four weeks. 

(Opp’n to Defs.’ SUF ¶ 16.) However, the evidence presented by

Olivares does not contradict or call into question this fact; at

most, it suggests that Olivares was working more than one route

during this time period. (Pl.’s Ex. 3.)

 For example, the next highest shortage rate for that 3

period was 3.58 percent. (Id.)

3

mechanism, he takes bills from his collections bag to replenish

his change bank. (Pl.’s Ex. 10 at 21-23.) 

During a four-week period in May and June 2003, Olivares was

the sole driver responsible for Route 44. (Nall Decl. ¶ 5; Pl.’s 2

Ex. 12 at 18.) During this period, Route 44 was “short” more

than $1,000, or 6.3 percent. (Pl.’s Ex. 3.) Although Canteen’s

records show that drivers were often “over” or “short” for their

routes, a 6.3 percent shortage on Route 44 was an unusually high

shortage rate. (Id.) 3

Olivares had been reprimanded on prior occasions about the

shortage rate on his routes. He received two counseling reports,

in 1995 and 1996, in which he was reprimanded for shortages on

the machines he was servicing. (Cohen Decl. Ex. A at 76-77,

79-80, exs. 7, 10). Additionally, in 2001, a letter addressed to

him and four other drivers was posted in the company’s office,

warning the drivers that their route accounting far exceeded the

company’s policy on shortages (.05 %). (Pl.’s Ex. 7.)

 The high shortage rate on Route 44 during this four-week

period caught the attention of John Williamson, a customer

service manager for Canteen. (Pl.’s Ex. 12 at 18.) Suspecting

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 Olivares claims that this is a disputed fact. (Opp’n to 4

Defs.’ SUF ¶ 21.) However, Olivares has submitted no evidence

that directly contradicts Williamson’s declaration. Rather, he

only points to his deposition testimony in which he denies

stealing the money and generally describes the process by which

he would top off the coin mechanism and replace the coins with

bills collected from the machine. (Pl.’s Ex. 10 at 21-26.) This

does not create a genuine factual dispute. 

 Williamson and Coates did not actually count the money 5

Olivares turned in, nor did they watch while the money was

counted. (Pl.’s Ex. 11 at 23-26.) Rather, the money was counted

by Canteen’s vault clerk. (Id.)

4

theft, Williamson and another customer service manager, John

Coates, requested and received authorization from Nall to audit

the four machines on Olivares’s route before he arrived to

service them on June 4, 2003. (Nall Decl. ¶ 6.) As part of the

audit, Williamson and Coates ensured that the coin mechanisms

were full so that Olivares would have no need to take coins from

his nickel fund. (Williamson Decl. ¶ 2.) 4

After Olivares serviced the machines later that day,

Williamson and Coates compared their figures to the amount

Olivares turned in. (Id.) Based on this comparison, Williamson 5

and Coates concluded that Olivares was forty dollars short in

bills. (Id.; Id. Exs. A-E.). Williamson and Coates informed

Nall of the results of their investigation. (Nall Decl. ¶ 7.) 

Williamson specifically told Nall that he made sure the coin

mechanisms on the machines were full. (Williamson Decl. ¶ 4.) 

On receiving this information, Nall called Olivares into his

office on June 6, 2003 and confronted Olivares with the evidence

from the investigation. (Pl.’s Ex. 10 at 40.) Olivares offered

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no explanation in response to these allegations. (Id. at 45.) 

Accordingly, Nall informed Olivares he was being terminated for

suspected theft. (Nall Decl. ¶ 8.) 

After Olivares’s termination, Canteen was required to, and

did, put the position out to bid with the Teamsters Union. (Id.

¶ 8.) Canteen was required to accept the highest bidder. (Id. ¶

9.) Only after none of the existing employees bid for the

position was a replacement hired from outside the company. (Id.) 

Olivares’s position was eventually taken over by an individual

under the age of 40. (Pl.’s Ex. 12 at 27-28.) 

II. 

A. Age Discrimination FEHA Claim

Olivares has not presented any direct evidence of age

discrimination. Accordingly, to prevail, he must satisfy the

McDonnell-Douglas three-step burden-shifting scheme for

discrimination claims based on disparate treatment. Guz v.

Bechtel Nat., Inc., 24 Cal.4th 317, 354, 100 Cal.Rptr.2d 352

(2000). Under this burden-shifting scheme, 

a plaintiff must first establish a prima facie case of

discrimination. If the plaintiff establishes a prima

facie case, the burden then shifts to the defendant to

articulate a legitimate nondiscriminatory reason for

its employment decision. Then, in order to prevail, the

plaintiff must demonstrate that the employer’s alleged

reason for the adverse employment decision is a pretext

for another motive which is discriminatory.

Nidds v. Schindler Elevator Corp., 113 F.3d 912, 916 (9th Cir.

1996) (emphasis in original). The court finds that Olivares

fails to establish a prima facie case of age discrimination, let

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alone rebut or overcome the legitimate, nondiscriminatory reason

Canteen has put forward. 

1. Prima Facie Case

Although the specific elements of a prima facie case may

vary depending on the particular facts of the case, generally,

the plaintiff must provide evidence that “(1) he was a member of

a protected class, (2) he was qualified for the position he

sought or was performing competently in the position he held, (3)

he suffered an adverse employment action . . ., and (4) some

other circumstance suggests discriminatory motive.” Guz, 24

Cal.4th at 355. Olivares has failed to establish the final

element of his prima facie case. 

Olivares argues that this element is satisfied because he

was replaced by an individual under 40. (Opp’n at 7.) Normally,

such evidence is sufficient to satisfy this element of the prima

facie case. See Douglas v. Anderson, 656 F.2d 528, 533 (9th Cir.

1981). However, Canteen has presented undisputed evidence

showing it was required to, and did, put Olivares’s position up

for bid with the Teamsters Union, and that it was obligated to

accept the highest bidder. It was only after none of the

existing employees bid on the position that Canteen was able to

hire from outside the union. This evidence negates Olivares’s

contention that his replacement is “some other circumstance

suggest[ing] discriminatory motive.” In light of the lack of any

other evidence suggesting age discrimination, Olivares has failed

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 Olivares also makes passing reference to an allegation 6

that, at some earlier point in his tenure with Canteen, he was

passed over for promotion by a younger man. (Opp’n at 7.) 

However, he has provided almost no information regarding this

allegation, such as, when it happened, what happened, whether he

was qualified for the position, and whether he was more qualified

than the individual who got the position. This conclusory

statement cannot support his prima facie burden. 

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to establish a prima facie case. 

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2. Evidence of Pretext or Discriminatory Intent

Even if Olivares’s evidence is sufficient to satisfy his

prima facie burden, Olivares has failed to rebut or overcome

Canteen’s proffered, nondiscriminatory reason for firing him. 

Canteen asserts it fired Olivares because it believed he had

stolen money. (Mot. at 7.) Accordingly, to avoid summary

judgment and satisfy his burden at this stage of the burdenshifting scheme, Olivares must “show that the articulated reason

is pretextual ‘either directly by persuading the court that a

discriminatory reason more likely motivated the employer or

indirectly by showing that the employer’s proffered explanation

is unworthy of credence.’” Villiarimo v. Aloha Island Air, Inc.,

281 F.3d 1054, 1062 (9th Cir. 2002). Where a plaintiff is

relying solely upon indirect or circumstantial evidence of

pretext, such evidence must be “specific” and “substantial” to

survive summary judgment. Id. (citing Godwin v. Hunt Wesson,

Inc., 150 F.3d 1217, 1221 (9th Cir. 1998)). 

Evidence that a defendant’s articulated reasons for an

adverse action were “objectively false” or that the employer made

a mistake does not constitute evidence of pretext. Id. at 1063. 

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Rather, courts “only require that an employer honestly believed

its reasons for its actions, even if the reason is ‘foolish or

trivial or even baseless.’” Id. (citing Johnson v. Nordstrom,

Inc., 260 F.3d 727, 733 (7th Cir. 2001)) (holding it was

unavailing for plaintiff to show that her employer’s stated

reason for firing her was objectively false because she presented

no evidence suggesting that her employer did not honestly believe

its proffered reasons). 

Here, Olivares has presented no evidence suggesting that

Canteen did not believe he engaged in theft. Rather, a

significant portion of his evidence focuses on whether he

actually stole the money. He asserts that the shortages

occurred, not because of theft, but because he took bills from

his collection bag to replenish his “change bank.” (Pl.’s Ex. 10

at 45.) As an initial matter, this theory is not plausible,

given Williamson’s declaration that he specifically controlled

for this possibility. Even if this theory were plausible, it

does not call into question Nall’s assertion that he believed

Olivares was stealing.

 Similarly, Olivares argues that Canteen incorrectly asserts

that his route was showing a high shortage rate. (Opp’n at 4.) 

Canteen was mistaken, he asserts, as to which route he was

working during that time period. (Id.) However, Olivares has

offered no evidence contradicting Canteen’s assertion that he was

working Route 44 during the relevant four-week period. Moreover,

Canteen did not rely solely on the shortages rate reported on

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Olivares’s route, but also conducted an investigation to

corroborate its suspicions. Finally, even if Canteen had looked

at the figures for the wrong route, this would only show that

Canteen may have been mistaken in believing that Olivares had

stolen; it does not call into question whether Nall actually

believed that Olivares had been stealing. 

Olivares’s other arguments are equally unavailing. First,

he challenges the thoroughness of Canteen’s investigation,

claiming that Canteen’s record-keeping is an “accounting

nightmare” and that it is not possible to know if any shortages

were truly the result of theft. (Opp’n at 7.) While the

thoroughness of an investigation can be relevant to determining

whether an employer’s proffered nondiscriminatory reason is

pretextual, the record here shows that Canteen conducted a

thorough investigation. It even went so far as to implement a

“sting” operation to confirm whether the shortages were the

result of theft. At best, Olivares’s evidence raises questions

about the accuracy of the investigation’s outcome, but does not

suggest that Canteen’s proffered reason was pretextual.

Second, Olivares argues that Canteen’s nondiscriminatory

reason is not plausible because all route drivers are over or

short by some amount. (Id.) His evidence, however, shows at

most that a significant portion of routes report minimal

shortages or overages. (Pl.’s Ex. 3.) The evidence does not

contradict Canteen’s assertion that the shortage rate on

Olivares’s route was abnormally high and suggestive of theft. 

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Moreover, Canteen did not rely solely on the shortages rate on

Olivares’s route as a basis for its termination of Olivares. 

In short, Olivares presents no evidence calling into

question Canteen’s assertion that Olivares was fired because Nall

thought he was stealing. Rather, the evidence suggests just the

contrary. In fact, in his deposition, Olivares admitted that he

believes he was fired because Nall thought that he was stealing. 

(Cohen Decl. Ex. A. at 58.) The court GRANTS summary judgment in

favor of Canteen on the age discrimination claim. 

B. Tortious Termination in Violation of Public Policy Claim

Olivares’s tortious termination in violation of public

policy claim is premised on his age discrimination claim. 

(Compl. ¶ 14-19.) Accordingly, the court GRANTS Canteen’s motion

for summary judgment on this claim as well. 

C. Breach of the Covenant of Good Faith and Fair Dealing

“The covenant of good faith and fair dealing, implied by law

in every contract, exists merely to prevent one contracting party

from unfairly frustrating the other party’s right to receive

benefits of the agreement actually made.” Guz, 24 Cal.4th at 349

(emphasis in original). The termination of an at-will employee

without good cause cannot support a claim for breach of the

implied covenant. Id. at 350. 

Summary judgment is appropriate on this claim for several

reasons. As an initial matter, Olivares fails to establish the

existence of any contract, either express or implied, that can

serve as the basis of this claim. Olivares argues that his

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 Olivares did not allege a federal claim under section 301 7

in his complaint; in fact, he made no mention of the collective

bargaining agreement. Accordingly, he cannot raise this claim

for the first time at the summary judgment stage. Gilmour v.

Gates, McDonald, and Co., 382 F.3d 1312, 1315 (11th Cir. 2004). 

11

employment was subject to a collective bargaining agreement that

provided he could only be fired for cause. (Opp’n at 2.) 

However, to the extent a collective bargaining agreement controls

Olivares’s employment, this state-law claim is preempted by § 301

of the Labor Management Relations Act (“section 301"), 29 U.S.C.

§ 185. See Young v. Anthony’s Fish Grottos, Inc., 830 F.2d 993, 7

997 (9th Cir. 1987) (“The preemptive force of section 301 is so

powerful as to displace entirely any state claim based on a

collective bargaining agreement, and any state claim whose

outcome depends on analysis of the terms of the agreement.”) 

Absent reference to the collective bargaining agreement,

Olivares has not alleged sufficient facts to establish the

existence of an implied contractual term limiting Canteen’s

ability to terminate him. Olivares asserts that such an implied

contract exists based on: (1) a statement in Canteen’s employee

handbook that employees could not be fired for shortages “unless

clear proof of negligence is shown;” and (2) his 33 years of

employment with Canteen. (Opp’n at 2.) Neither argument is

convincing. 

First, the Canteen policy Olivares identifies comes from an

outdated and superseded version of Canteen’s employee handbook. 

(Reply at 9.) The handbook in effect during the relevant time

period does not contain the provision relied on by Olivares. 

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 Even if the handbook relied on by Olivares had not been 8

superseded, Olivares mischaracterizes Canteen’s old rules. The

provision Olivares identifies actually stated that “employees

shall not be charged for loss or shortages unless clear proof of

negligence is shown.” (Pl.’s Ex. 2.) This provision had nothing

to do with discharge. Instead, discharge was explicitly

addressed separately: “Employees who are unable to account for

the employer’s money, equipment or merchandise, may be considered

as unable to perform their job and may be subject to disciplinary

action, including discharge.” (Id.) 

12

Instead, it contains a cash-handling policy stating that

employees may be “immediately terminated (and possibly

prosecuted) for, among other reasons, . . . taking money from the

cash register, money bags or petty cash fund.” (Supp. Carroll

Decl. Ex. A at 21.) This language does not create an implied

contract limiting Canteen’s right to terminate Olivares.8

Second, although long and successful service may be relevant

to the existence of an implied contract, “an employee’s mere

passage of time in the employer’s service, even where marked with

tangible indicia that the employer approves of the employee’s

work, cannot alone form an implied-in-fact contract that the

employee is no longer at will.” Guz, 24 Cal. 4th at 341-42. 

Finally, Olivares himself admitted in his deposition that he

believed he could be fired by Canteen at any time for any reason. 

(Cohen Decl. Ex. A. at 93.) For the above reasons, Olivares has

not established the existence of a contract, express or implied,

that could support a claim for breach of the covenant of good

faith and fair dealing.

Even if Olivares had established that he could only be fired

“for cause,” he has not created a factual dispute as to whether

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Canteen breached this requirement. “[I]f an implied contract

exists, employers who fire employees for misconduct are not

required to prove that the alleged misconduct actually occurred.” 

Silva v. Lucky Stores, Inc., 65 Cal.App.4th 256, 262, 76

Cal.Rptr. 382 (1998). Rather, courts only consider “whether the

factual basis on which the employer concluded a dischargeable act

had been committed was reached honestly, after an appropriate

investigation and for reasons that were not arbitrary or

pretextual.” Id. Under this standard, only three determinations

are relevant to the question of employer liability: “(1) did the

employer act with good faith in making the decision to terminate;

(2) did the decision follow an investigation that was appropriate

under the circumstances; and (3) did the employer have reasonable

grounds for believing the employee engaged in the misconduct.” 

Id. at 264 (citing Cotran v. Rollins Hudig Hall Int’l., Inc., 17

Cal.4th 93, 109, 69 Cal.Rptr.2d 900 (1998)). 

Olivares has not created a factual dispute on any of these

questions. Olivares fails to raise an issue of bad faith

because, as described above, he has not called into question

Canteen’s assertion that it fired him because it thought he was

stealing. Likewise, again for the reasons described above,

Olivares has not created a triable issue regarding the

reasonableness of Canteen’s grounds for believing that Olivares

had stolen money.

Finally, Olivares has not created a triable issue regarding

whether there was an appropriate investigation. Olivares

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 Olivares contends that Nall did not provide any details 9

of the investigation at the meeting. (Opp’n at 4.) However,

Olivares’s deposition testimony reveals that Nall at least told

him how much money he was accused of stealing. (Pl.’s Ex. 10 at

35.) His deposition testimony also suggests he was told other

information, such as the route the audited machines were on,

though his deposition testimony is ambiguous on this point. (Id.

at 36.) The court will treat this fact as disputed. 

14

contends the investigation was inappropriate because neither

Williamson nor Coates had any prior training on how to undertake

an audit. (Opp’n at 4.) He also claims the investigation was

faulty because neither of them counted or verified the allegedly

missing money after it was turned in to the vault. (Id.) 

Neither of these assertions is convincing. Although

Williamson and Coates did not count the money once it was

deposited in the vault, the money was counted by the vault

cashier. Olivares has not provided any evidence challenging the

cashier’s counting procedures. Likewise, although neither

Williamson nor Coates had any prior training on how to conduct an

audit/investigation, the investigation they conducted was

objectively reasonable and sufficient. 

Olivares also contends that the investigation was

insufficient because Nall never gave Olivares a sufficient chance

to rebut the allegations. (Id.) However, the evidence shows

that Olivares was given a fair opportunity to provide an

explanation. Nall informed him that two supervisors had

conducted an audit of four of the machines he serviced and that

the results of the investigation showed the collection bags

Olivares turned in were missing $40. Olivares was given a chance 9

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 Olivares presents three other arguments regarding the 10

adequacy of the investigation, all of which are equally

unavailing. First, Olivares contends that the “over and short”

document Canteen submitted is fabricated. (Opp’n at 4.) 

Specifically, Olivares contends that Canteen produced a report

dated February 8, 2005 that altered the shortage figures for a

certain route. (Id.) Second, Olivares argues that Canteen’s

reliance on prior warning letters regarding shortages from 1995,

1996, and 2001 was improper and violates the collective

bargaining agreement. (Id. at 5.) Finally, Olivares contends

that the investigation was inadequate because Canteen violated

the collective bargaining agreement by failing to proceed with

Union grievance process. (Id. at 6.) However, Olivares has

presented no credible evidence showing that the document was

altered or fabricated. Additionally, Canteen did not fire

Olivares based upon the old warnings. Finally, to the extent

Olivares seeks to allege a breach of the collective bargaining

agreement, this claim is preempted by federal law. 

15

to respond to these accusations, but did not do so. Even though

Olivares alleges he was never told the date and route the

investigation was conducted on, he was not prevented from asking

for that information at the meeting. 

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For all of the above reasons, the court GRANTS Canteen’s

motion for summary judgment on this claim. 

III.

The court GRANTS Canteen’s motion for summary judgment on

all of Olivares’s claims. The clerk shall enter judgment. 

IT IS SO ORDERED.

Dated: 6/21/2005

 /s/ David F. Levi 

DAVID F. LEVI 

United States District Judge 

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