Case:
Brian Gate v. Auto-Chlor System of Washington, Case No. 19STCV43923
Verdict (P) $700,000
$534,000 in past economic damages, $66,000 in past non-economic damages, and $100,000 in punitive damages, plus pre-judgment interest pursuant to Civil Code § 3291, attorney’s fees, and costs.
Plaintiff’s Counsel
Steven M. Rubin The Rubin Law Corporation A Professional Law Corporation Los Angeles, CA
Together with co-counsel:
Lawrance A. Bohm, Lead Trial Counsel Kelsey K. Ciarimboli, Second Chair Bohm Law Group, Inc. Sacramento, CA
Brandon P. Ortiz Ortiz Law Office, Inc. Santa Monica, CA
Case Summary
For 80 years Auto-Chlor has been providing commercial kitchens leased dishwashing machines and cleaning supplies. The company operates nationally but is headquartered in Mountain View, California. The business of Auto-Chlor is based upon getting restaurants to lease the company’s washing machines on a five-year lease agreement. Once the machine is leased and installed in a restaurant Auto-Chlor will also provide monthly “service” to check on the machine and provide whatever repairs or additional supplies (soap) that may be needed. Each month the service techs are supposed to collect the lease and soap fees. Much of the business is done by cash (no surprise there). Also no surprise, often times restaurants cannot pay their bills.
Auto-Chlor divides its business in the U.S. into 5 regions. Back in 2014, Los Angeles was considered part of the Southwestern Region. Each region has approximately 12 to 15 branches. At this time, the company was looking for someone to work as the branch manager of their Van Nuys branch. Normally the company prefers to promote from within, but for this historically poorly organized and performing branch Auto-Chlor had to look outside of the company for talent capable of fixing the issues. Eventually the company found and hired our client, Brian Gate, age 36 at the time, as the new Branch Manager for Van Nuys. Mr. Gate’s last job before A/C was working as a store manager for Staples. Mr. Gate only stopped working for Staples because the company was closing locations for financial reasons and sought volunteers to take a severance before any layoff. As one of Staples’ newer store managers, Mr. Gate volunteered for severance rather than be unexpectedly laid off with no cushion further down the line.
When Mr. Gate was hired to fix up the struggling Van Nuys branch, he inherited a mess. Worse, Mr. Gate had no experience in the restaurant industry or with dish washing machines. At first this was a very challenging gig. Mr. Gate had to learn every aspect of the business from making dishwashing soap to fixing/installing dishwashing machines. Mr. Gate received months of training and eventually began to find his rhythm. When he first inherited the branch, it leased about 400 machines doing about $2M in collected lease revenue each year. By the end of 2016, Mr. Gate successfully increased the branch revenue to 700 machines earning over $3M annually. His superiors at the company were very complimentary about his success. Mr. Gate was invited to the very ritzy and posh Terranea Resort in Palos Verdes for an awards retreat for the top performing managers at A/C. While at the retreat, the owner of the company, Mr. Jerry Ivy, made it a point to pull Mr. Gate aside to tell him how impressed he was with the turnaround he managed in the Van Nuys branch. “I did not think it was possible,” Mr. Ivy said. Later the following year, senior company executives decided to remodel and expand the Van Nuys branch to accommodate the 50% increase in branch operations and revenue. Mr. Gate’s staff also grew from 5 route drivers to 7 because of the numerous additional machines added under Mr. Gate’s leadership. The rapid growth and turnaround caused administrative work to fall behind. This was made worse by an underperforming administrative assistant named Jennifer who was just not getting it done. Eventually, Mr. Gate had to let Jennifer go in hopes of getting someone who could actually keep pace with the much busier and more successful branch. For most of his employment (beginning 2016) up to this point, Mr. Gate was directly supervised by Regional Vice President, Mr. Jonah Beckstead.
Interestingly, when a branch manager fires an employee at A/C the work will then pass back to the manager. So when Jennifer was fired, Mr. Gate had to assume her work. Now in addition to all the work of a branch manager, Mr. Gate was be responsible for all the account collections, invoicing, and vendor payments. Normally branches had an assistant manager to help with this overflow but Mr. Gates’ request to fill this position were denied. As of 2018, Mr. Gate began searchingh for a new administrative assistant with the help of an employment agency (AppleOne). This proved to be a challenging task because A/C uses an assessment test as a hiring prerequisite. If the applicant does not score well on the assessment they will not be hired permanently. Mr. Gate interviewed numerous candidates over several months before he met and interviewed Cynthia Cordero for the position. Ms. Cordero did great on the interview. She seemed eager to have the job and demonstrated a good work ethic. Unfortunately, her assessment test score prevented A/C from hiring Ms. Cordero permanently. Instead, A/C decided to hire Ms. Cordero as a temporary worker through AppleOne.
Ms. Cordero began her work at A/C in April 2018. Because she was a temporary worker, A/C did not want her to have the same training as a permanent worker. The lack of training caused numerous deficiencies in Ms. Cordero’s ability to know aspects of her job. Nevertheless, Ms. Cordero’s arrival was much appreciated by Mr. Gate, who took on the role of training Ms. Cordero as much as he could while also completing the various tasks of Branch Manager. As a temporary worker, there were some aspects of the position Ms. Cordero was not permitted to do, i.e. taking deposits to the bank, so this additional work remained with Mr. Gate until Ms. Cordero became permanent or a different permanent worker was found.
Around the same time in April 2018, Mr. Gate’s direct boss was changed from being directly supervised by the company’s Regional Vice President Jonah Beckstead to being supervised by an intermediate Regional Manager by the name Jose Perez. It was well known in the Southwest Region that Mr. Perez and Mr. Beckstead were friends. Mr. Perez and his wife helped plan a baby shower for Mr. Beckstead, who admitted to considering Mr. Perez a friend. Mr. Beckstead promoted his friend twice – to branch manager and regional manager – between 2016 and 2018. Initially, Mr. Gate thought a new boss could be a good thing in terms of helping him manage the Van Nuys branch. This did not end up being the case. Instead of helping improve operations, Mr. Perez caused more work for Mr. Gate. Shortly after becoming Regional Manager, Mr. Perez fired one of the 7 route drivers for wearing earrings at work without coordinating the termination with Mr. Gate. Unprepared to lose the route driver, the responsibility of servicing the dishwashers in the high desert area of Los Angeles (Lancaster/Palmdale) fell to Mr. Gate. For about a month, Mr. Gate did the job of Branch Manager, service tech, and the left-over work Ms. Cordero could not perform.
Over the next few months, Ms. Cordero seemed to be finding a rhythm in the office and was exponentially improving in her performance despite the lack of training. Leading up to that time, Mr. Gate periodically requested to Mr. Perez that Ms. Cordero be made permanent. Mr. Perez passed off the request, stating that it would be up to the Regional Vice President, Mr. Beckstead. When Mr. Gate inquired of Mr. Beckstead, he received vague responses like “maybe, let’s see how she does”. In the meantime, Mr. Gate was instructed to continue looking for a new administrative assistant candidate with passing assessment scores.
Toward the very end of July 2018, Mr. Perez approached Mr. Gate to let him know that he just informed Ms. Cordero of her two-week notice. Mr. Gate remembers being very disappointed by this news because he had just hired a replacement high desert route driver who was slated to begin shortly and now, he would have to go back to doing all the administrative work in addition to his branch manager work. Mr. Gate was also concerned because they had not yet found a replacement administrative assistant and it was obviously better to have Ms. Cordero in the role than having nobody to provide assistance. Similar to the 7th route driver, Mr. Perez did not strategize or coordinate the removal of Ms. Cordero with Mr. Gate.
Later the same day, while Mr. Gate was working the high desert route for nearly the last time, he was called by Ms. Cordero who arranged to meet with Mr. Gate to discuss concerns she had about her job ending the following Monday. That Monday at lunch, Ms. Cordero informed Mr. Gate that she believed her position was ending because she was not engaging Mr. Perez in numerous flirty overtures. Ms. Cordero explained that Mr. Perez frequently asked about what she looked like when she was not at work, leered at her, pulled her shirt up one time to see her tattoo on her lower back, sent flirty text messages, and asked to meet up with her when not at work.
Mr. Gate informed Ms. Cordero that she needed to report her concerns to Human Resources. Ms. Cordero indicated she was scared about reporting. Mr. Gate advised he would be reporting it no matter what so she might as well report it too.
Immediately after lunch, Mr. Gate contacted corporate Human Resources asking to speak with the director to make the report of sexual harassment. After several unreturned messages, Mr. Gate learned the director was out of the office. Her assistant offered to take the report and communicate it to the HR Director. Accordingly, Mr. Gate informed the assistant of all he learned from Ms. Cordero regarding the allegations of sexual harassment and retaliation by Mr. Perez. Thankfully, the company’s internal documents corroborate the fact that Mr. Gate reported the conduct. Interestingly the email memorializing Mr. Gate’s report, that was supposedly attached to the Sexual Harassment Investigative Report, went “missing” and was never produced in discovery. At trial, Auto-Chlor attempted to assert that Mr. Gate did not report any sexual harassment.
A couple of days after the lunch meeting, Ms. Cordero approached Mr. Gate to ask that he review a draft of an email she planned to send to HR about the conduct of Mr. Perez. The email explained the situation and attached several text messages. Mr. Gate recommended she send the email, and Ms. Cordero sent the report to HR. Shortly after the report was sent to HR, Mr. Gate came to the branch and observed Mr. Perez in the office with Ms. Cordero. Mr. Gate immediately contacted HR to alert them because he felt that Mr. Perez should not be working around Ms. Cordero until the allegations were handled. HR agreed and received authorization from Mr. Beckstead to have Mr. Perez relocated to another branch while the allegations were investigated.
Between August 8 and 10, 2018, the HR Director conducted an investigation and spoke to 7 witnesses in addition to Ms. Cordero and Mr. Perez. Mr. Gate was not interviewed as part of the investigation. Numerous witnesses corroborated the flirty behavior and leering at Ms. Cordero.
As for the text messages, Mr. Perez claimed he was just having friendly text messages and that he was not looking to hook up in any way with Ms. Cordero. Ultimately, an investigation report was prepared wherein the company concluded that Mr. Perez would be warned about sending inappropriate text messages.
Ms. Cordero’s temporary assignment was deemed concluded and the matter was resolved. Mr. Gate was never provided a copy of the report.
After the removal of Ms. Cordero, Mr. Gate worked extremely hard to keep up with the demands of his position and Ms. Cordero’s work. These demands were particularly high at this time because the branch location was in the midst of the remodel due to increased sales growth. Mr. Gate did not complain and kept doing the work as he always had. By the middle of September, Mr. Gate finally found a new permanent administrative assistant; however, she would be trained in another branch for the next month so he still had to do that job in addition to his own. From the time he was hired until September 28, 2018, Mr. Gate never received any negative feedback about his work as Branch Manager. The only evaluation he ever received (back in 2015) was positive. Mr. Beckstead never performed an annual evaluation of Mr. Gate. Mr. Gate received a raise every year and lots of oral praise. His sales were consistently over $3M and most of his metrics for sales and profit were positive. Nevertheless, on September 28, 2018, Mr. Beckstead entered Mr. Gate’s office to say, “Today is your last day working here”. He handed Mr. Gate an envelope with his paycheck and information about health benefits. Stunned, Mr. Gate asked, “Why?” Mr. Beckstead’s only stated reason was that it took too long for Mr. Gate to find a permanent administrative assistant. Mr. Gate explained that he had just hired someone who was being trained, but Mr. Beckstead indicated the decision had been made.
Since Mr. Gate had to leave his corporate car behind, Mr. Beckstead drove Mr. Gate home. The drive was terrible and awkward as they listened to sports talk radio. When Mr. Gate arrived at his apartment, Mr. Beckstead told Mr. Gate he would be happy to offer a reference. This puzzled Mr. Gate who never took him up on this offer. After he was fired, Mr. Gate applied to approximately 300-400 jobs over the course of 18 months. During that time, his emotional condition suffered. Thankfully, a new job at 7/11 as a franchise field consultant helped the situation. Unfortunately, the company two years later underwent layoffs and as a new employee Mr. Gate was let go.
This time Mr. Gate applied to approximately 400-500 jobs over the course of two years. Once again Mr. Gate’s emotional condition deteriorated. Adding to the dilemma, his longtime girlfriend and primary source of support was diagnosed with breast cancer. Desperate for work, in July 2024, Mr. Gate found employment with a federal contractor that provides support to US Passport Services processing applications and preparing passport booklets. The work pays $30k less per year as compared to what Mr. Gate would have earned working at Auto-Chlor.
It was not until after his lawsuit was filed and discovery began that Mr. Gate learned that Auto-Chlor was claiming it fired him for “poor performance” as Branch Manager related to an insufficient collection of unpaid invoices (“accounts payable”), writing off too much bad debt, writing off too little bad debt, and not keeping up with the administrative office work. (If these reasons sound bogus and internally inconsistent it is because they are.) No documentation or warnings about these issues exist from the time. All documentation of these alleged performance issues, which include grainy black-and-white photos of documents piled on the ground, were created within a week of Mr. Gate’s first attorney filing the complaint and serving it on Auto-Chlor. Although the documents are clearly dated in December 2019, Mr. Beckstead has testified that these are the very documents he relied upon in 2018 when he fired Mr. Gate.
The jury found for Mr. Gate on his FEHA retaliation claim and awarded him $534,000 in past economic damages, $66,000 in past non-economic damages, and $100,000 in punitive damages, plus post-judgment interest, attorneys’ fees, and costs. Mr. Gate will also be entitled pre-judgment interest pursuant to Civil Code § 3291 for serving a California Code of Civil Procedure section 998 Offer to Compromise, which was served on February 3, 2021.
Plaintiff’s Experts
Charles R. Mahla, Ph.D.
EconOne
Sacramento, CA
Specialty: Economics
Anthony Reading, Ph.D.
Los Angeles, CA
Specialty: Psychology
Defendant’s Experts
David Fractor, Ph.D.
Pasadena, CA
Specialty: Economics
Award
Past Economic Damages: $534,000
Past Non-Economic Damages: $66,000
Punitive Damages: $100,000
TOTAL: $700,000
