NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

TAMAR KASBARIAN ,

Plaintiff

- Appellant ,

v. EQUINOX HOLDINGS, INC.; et al

. ,

Defendants

- Appellees

. No. 16

- 56798
D.C. No. 2:16

- cv - 01795

- MWF

- JC

MEMORANDUM *

Appeal from the United States District Court f or the Central District of California Michael W. Fitzgerald, District Judge, Presiding Argued and Submitted June 4 , 2018 Pasadena , California Before: FISHER and OWENS , Circuit Judges, and MOLLOY, * * District Judge.
Tama r Kasbarian (“Kasbarian”) appeals the district court’s grant of
summary judgment on her claims for retaliation, breach of contract, defamation, and intentional infliction of emotional distres s against her former employer,

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3.

* * The Honorable Donald W. Molloy, United States District Judge for the District of Montana, sitting by designation. 

# FILED

JUN 25 2018 MOLLY C. DWYER, CLER K U.S. COURT OF APPEAL S2

Eq uinox Holdings, Inc. (“Equinox”)

. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm in part, reverse in part, and remand. Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a)

. “[I]n ruling on a motion for summary judgment, the evidence o f the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor.” Tolan v. Cotton , 134 S. Ct. 1861, 1863 (2014) (per curiam) ( internal quotation marks, alteration, and citation omitted ).
1. The district court did not err when it dismissed defendants Equino x Fitness Marina Del Rey, Inc. and Equinox Fitness Sep ulveda, Inc. as “sham defendants” to be ignored for the purposes of assessing diversity jurisdiction. See Weeping Hollow Ave. Trust v. Spencer , 831 F.3d 1110, 1113 (9 th Cir. 2016). Equinox specifically state d which entities it sought to have dismissed and e xplained that neither had been Kasbarian’s employer during any relevant period. Kasbarian produced no evidence to the contrary.
2. The di strict court correctly gra nted summary judgment as to Kasbarian’s breach of contract claims because, assuming Kasbarian was terminated via constructive discharge, she was an at

- will employee

. Equinox’s letter extending Kasbarian an offer of employment , the Equinox employee handboo k, and the Equinox confidentiality and non

- solic it ation agreement all provided Kasbarian’s3

employment was “at will.” See Freund v. Nycomed Amersham , 347 F.3d 752, 758 (9th Cir. 2003) (“Unless the parties contract otherwise, employment relationships
in California are ordinarily ‘at will,’ meaning that an employer can discha rge an employee for any reason.” (citing Cal. Lab. Code § 2922 ) )

. While “disclaimer language in an employee handbook or policy manual does not necessarily mean an employee is employed at will . . . neither can such [] provision[s] be ignored in determining whether the parties’ conduct was intended, and reasonably understood, to create binding limits on an employer’s statutory right to terminate the relationship at will. ” Guz v. Bechte l Nat’l Inc. , 8 P.3d 1089 , 1103

– 04 ( Cal. 2000).
T hough Kasbarian claims her highly accomplished, nearly f ive year tenure at Equinox created a cause requirement , that evidence does not create a dispute of material fact in light of the parties’ express unde rstanding that Kasbarian’s employment was at will. Id. at 1100

– 02

. 3. The district cou rt did not err when it granted summary judgment on Kasbarian’s claim for intentional infliction of emotional distress (“IIED”)

. An IIED claim requires extreme or outr ageous conduct by the defendant, meaning that conduct “ exceeds all bounds of decency usually tolerated by a decent society, and is of a nature which is especially calculated to cause, and does cause, mental distress.” Fisher v. San Pedro Peninsula Hosp. , 262 Cal. Rptr. 842, 857 (Ct. App. 1989). Although Kasbarian has adduced evidence that she was treated poorly

—4

suspended, tr ansferred, and called names

— no reasonable factfinder could conclude that conduct was extreme or outrageous

. See id. (“L iability does not extend to mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities.”).
4. Nor did the district court err by granting summary judgment as to Kasbarian’s claim for defamation. To prevail on a claim o f defamation, Kasbarian must prove “(a) a publication that is (b) false, (c) defamatory, and (d) unprivileged, and that (e) has a natural tendency to injure or that causes special damage.” Taus v. Loftus , 151 P.3d 1185, 1209 (Cal. 2007) ( internal quotatio n marks omitted). “Because the statement must contain a provable falsehood, courts distinguish between statements of fact and statements of opinion for purposes of defamation liability.” Summit Bank v. Rogers , 142 Cal. Rptr. 3d 40, 59 (Ct. App. 2012)

. “ To determine whether a statement implies a factual assertion, we examine the totality of the circ umstances in which it was made. ” Lieberman v. Fieger , 338 F.3d 1076,
1079

– 80 (9th Cir. 2003) (internal quotation marks omitted ). Viewed in the light most fav orable to Kasbarian, the facts here would not allow a reasonable fac t finder to determine the statements made about Kasbarian were false so as to support a claim for defamation

. 5. The district court erred , however, when it granted summary judgment on
Ka sbarian’s retaliation cla ims . “When a plaintiff alleges retaliatory employment5

termination . . . as a claim for wrongful employment termination in violation of public policy, and the defendant seeks summary judgment, California follows the burden shifting analysis of M cDonnell Douglas Corp. v. Green , 411 U.S. 792 (1973), to determine whether there are triable issues of fact for resolution by a jury.” Loggins v. Kaiser Permanente Int’l , 60 Cal. Rptr. 3d 45, 50

– 51 (Ct. App. 2007)

. So too where a plaintiff alleges retaliation in violation of California Labor Code § 1102.5(b). See Taswell v. Regents of the U niv . of Cal. , 232 Cal. Rptr. 3d 628, 645

– 46 (Ct. App. 2018) (applying, but not discussing, burden shifting test). At step one, the plaintiff must make a prima facie case by show ing “ (1) he or she

en gaged in a ‘ protected activity, ’ (2) the employer subjected the employee to an adverse employment action, and (3) a causal link existed between the protected activi ty and the employer’s action.” Yanowitz v. L’ Oreal USA, Inc

. , 116 P.3d 1123, 1130 (Cal. 2005)

. “ If the employee successfully establishes these elements and thereby shows a prima facie case exists, the burden shifts to the employer to provide evidence that there was a legitimate, nonretaliatory reason for the adverse employment action. ” L oggins , 60 Cal. Rptr. 3d at 51

. If the employer provides a legitimate reason fo r the adverse employment action , “ the burden shifts b ack to the employee to provide substantial re sponsive evidence that the emplo yer’ s proffered reasons were untrue or pretextual. ” Id. ( internal quotation marks omitted).6

Kasbarian has established a prima facie case of retaliation. First, a jury could find Kasbarian engag ed in protected activity when she inform ed Equinox about the potentially fraudulent membership charges. She “ha[d] reasonable cause to believe that the information disclose[d] a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation.” Cal. Lab. Code § 1102.5(b). Kasbarian’s concern about charging a guest’s c ard for a membership the guest d i d not approve is sufficient without pointing to a particular statute or law. See Patten v. Gr ant Joint Union High Sch. Dist. , 37 Cal. Rptr. 3d 113 , 118 (Ct. App. 2005 ) (holding plaintiff engaged in protected activity when she reported activity she thought was illegal). Second , a jury could find Kasbarian suffered an adverse employment action when Equinox reassigned her to the Marina Del Rey loc ation. That assignment “materially affect[ed] the terms, conditions, or privileges of employment.”
Yanowitz , 116 P.3d at 1137 . While the reduction in commissions was not unique to Kasbarian , as the West L

. A

. club systematically restr uctured its bonus sy stem to correct for a payroll error , Kasbarian’s forced reassignment move d her individually to a less prestigious club for a significantly lower hourly wage ($9.00 per hour instead of $19.23 per hour)

. See Patten , 37 Cal. Rptr. 3d at 120

– 22 (holding that transfer of an administrator from one school to another, although considered a7

“lateral transfer” by the school district, “raised a triable issue of material fact
rega rding adverse employment action ”). Third, a jury could find a causal link between th e adverse employment action and the protected activity. “For purposes of making a prima facie showing, the causal link element may be established by an inference derived from circumstantial evidence. ” McRae v. Dep’ t of Corr. & Rehab. , 48 Cal. Rptr. 3d 313, 321 (Ct. App. 2006) . Accordingly, “[a] plaintiff can satisfy his or her initial burden under the test by producing evidence of nothing more than the employer’s knowledge that the employee engaged in protected activities and the proximit y in time between the protected action and the allegedly retaliatory employment decision.” Id

. Both Jack Gannon, Regional Vice President, and Brian Hemedinger, a Regi o nal Director, decided, after the investigation, to transfer Kasbarian. Ka sbarian had, in turn, reported what she believed to be illegal activity at the West L

. A

. club to both Gannon and Hemedin ger. Gannon and Hemedinger belittled and i nsulted Kasbarian in response. Gannon also asked Jim Burger to investigate the West L

. A . club following a customer complaint, and partnered with Burger in that investigation. Finally, though the adverse employment action did not immediately follow Kasbarian’s complaints to management, it i s proxi mate enough in time for a jury to find a causal link

.8

Because Kasbarian has presented a prima facie case , the burd en shifts to Equinox “to provide evidence that there was a legitimate, nonretaliatory reason for the adverse employment action. ” L oggins , 60 Cal. Rptr. 3d at 51

. Equinox has done so here, asserting it r eassigned Kasbarian as part of an effort to “create a fresh culture” after its investigation. Therefore, “the burden shifts back to [Kasbarian] to provide substantial responsive evidence that [Equinox]’s proffered reasons were untrue or pretextual.” Id

. ( internal quotation marks omitted). Kasbarian’s “burden is to prove, by competent evidence, that [Equinox]’s proffered justification is a mere pretext; i.e., that the presumptively va lid reason for the employer’s action was in fact a coverup.” McRae , 48 Cal. Rptr. 3d at 321 . The proof and argument she makes here is sufficient to submit the question to a jury

. Kasbarian points to conflicting testimony from Burger and Gannon as to who initiated the investigation into the West L.A. club. K asbarian also n otes that Gannon and Hemedinger admitted she did not engage in any terminable conduct. But another membership advisor , who was also found not to have engaged in any terminable conduct, was allowed to stay at West L.A. As Kasbarian notes, allowing another membership advisor to stay cuts against Equinox’s assertion that
it wanted to create a “fresh culture” at the club. Finally, prior to her reassignment, Kasbarian had received exemplary reviews from management, and was rewarded with all

- expense - paid trips to New York and Miami for four consecutive years.9

See Flait v. N. Am. Watch Corp. , 4 Cal. Rptr. 2d 522, 530 (Ct. App. 1992) (“Pretext may also be inferred from the timing of the company’s termination decision, by the identity of the person making the decision, and by the terminated employee’s job performance before termination.”). Viewed in the light most favorable to Kasbari an, a reasonable fact finder could conclude that Equi nox’s reason for reassigning Kasbarian to the Marina Del Rey club was pretextual. In granting summary judgment for Equinox, the district court did not address whether Kasbarian was constructively disc harged. Because constructive discharge is a materially adverse employment action, Steele v. Youthful Offender Parole Bd. , 76 Cal. Rptr. 3d 632, 642 (Ct. App. 2008) , it could pertain both to Kasbarian’s California Labor Code § 1102.5(b) retaliation claim , as well as her § 1102.5(b) and § 923 claims for wrongful termination in violation of public policy . According ly, we reverse as to all three

. 6. Bec ause the dis trict court erred by granting summary judgment on Kasbarian’s ret aliation claims, it also erred in denying her request for punitive damages. See Cal. Civ. Code § 3294(b). Each party shall bear its own costs on appeal. The j udgment is AFFIRMED as to Claims Three, Four, Five, Eight, and Nine. The j udgment is REVERSED as to Claims One , Six, and Seven , and
REMANDED for further proceedings consistent with the above .