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Filed 3/18/05
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

MARGIE MCRAE,

Plaintiff and Respondent,

A098073,
A100745, A104701
v.

DEPARTMENT OF CORRECTIONS,
(Alameda
County

Super. Ct. No. 8107136)

Defendant and Appellant.

MARGIE MCRAE,

Plaintiff and Appellant,

A098330,
A098910
v.

BRUCE WILTSE et al.,
(Alameda
County

Super. Ct. No. 8107136)

Defendants and Respondents.

Dr. Margie McRae filed suit against her employer, the California Department of
Corrections (the Department) and four individual defendants, seeking damages for
discrimination and retaliation in violation of the California Fair Employment and
Housing Act (FEHA).

The trial court granted summary judgment to the four individual defendants, and
Dr. McRae appeals from an order awarding these defendants their costs. (Case Nos.
A098330 & A098910.) The case proceeded to trial against the Department. The jury
returned a verdict against Dr. McRae on her claims of discrimination, but awarded her
$75,000 on her claim of retaliation. The Department appeals from the judgment entered
on the jury's verdict, and from postjudgment orders awarding attorney fees to Dr. McRae.
(Case Nos. A098073, A100745, A104701.)

1

We reverse the judgment. Neither the law, nor the evidence, permits a finding that
Dr. McRae suffered the kind of adverse employment action required for a claim of
retaliation. And, even if one action taken by the Department--transferring Dr. McRae
from one facility to another--might be deemed an adverse employment action,
Dr. McRae did not rebut the Department's evidence that there was a legitimate,
nonretaliatory reason for the transfer. We also reverse the orders awarding Dr. McRae
her attorney fees. Finally, we affirm the order awarding costs to the individual
defendants, and remand the matter to the trial court to award costs to the Department to
the extent those costs are not duplicative of those awarded to the individual defendants.1
BACKGROUND

Dr. McRae, a board certified surgeon, began working for the Department in 1992,
at the California Medical Facility in Vacaville (CMF). For several years there were no
complaints about the quality of Dr. McRae's work. To the contrary, she regularly and
uniformly received excellent performance evaluations.

In 1995, Dr. McRae applied for a position as Chief Medical Officer (CMO) at the
California State Prison in Solano (Solano Prison). On April 25, 1997, after another
person was appointed to that position, she filed a complaint with the Department of Fair
Employment and Housing (DFEH), claiming that she was denied the appointment
because of her race.2 In Dr. McRae's view, her filing of this complaint triggered a
number of retaliatory actions by the Department, three of which provided the basis for
her claims of unlawful retaliation.

1 The trial court reasoned that since there were five defendants, each would be
awarded one-fifth of the costs. Dr. McRae contends that the Department actually paid all
of the costs; therefore, the court erred in awarding costs to the individual defendants. As
we reverse the judgment, Dr. McRae will be responsible for all of the disputed costs,
whether they were paid by the Department or by the individual defendants. There is
therefore no reason for us to decide how those costs should be divided among the various
defendants.
2 Dr. McRae is African-American.

2

Dr. McRae alleged that the first retaliatory action was a June 26, 1997 letter of
instruction issued by Dr. Raymond Andreasen, the CMO at CMF, following a report that
Dr. McRae had left her position in the emergency room unattended. Dr. Andreasen
instructed Dr. McRae to read and familiarize herself with regulations and memoranda
outlining the obligation of physicians and surgeons to be at their posts during their
rotations, and to notify her supervisor about any need to leave the job site or to report in
late. On June 20, 1998, Dr. McRae filed a second DFEH complaint, claiming that the
letter of instruction had been issued to retaliate against her for filing her first complaint.

Dr. McRae alleged that the second retaliatory action was an internal investigation
related to reports that Dr. McRae had failed to follow two of Dr. Andreasen's directives,
had refused to provide medical information that would have facilitated a patient's transfer
to Hospice, and had delayed the administration of antibiotics to another patient without
first examining him. The investigation led to a July 14, 1998 decision by Dr. Susan
Steinberg, Deputy Director of Health Care Services Division, to suspend Dr. McRae for
30 days. This decision was never implemented, however, because Dr. McRae was absent
on nonindustrial disability leave.3 Dr. McRae remained unaware of Dr. Steinberg's
decision until after she filed her complaint.

Dr. McRae alleged that the third retaliatory action was a change in her work
assignment. On July 29, 1998, Dr. McRae was informed that her disability leave would
expire on August 15, and was told to report to work at Solano Prison rather than return to
CMF. Dr. McRae did not report to work at Solano Prison as directed. On August 18,
1998, she filed a third DFEH complaint, asserting that her transfer from CMF to Solano
Prison was retaliatory. When Dr. McRae did return to work, in March 1999, she reported

3 In April 1998, Dr. McRae had a verbal confrontation with two registered nurses,
one of whom called her a liar and, according to Dr. McRae, jabbed his finger at her,
touching her hand as she attempted to shield her face. Dr. McRae believed that
Dr. Andreasen did not take appropriate action to protect her during the confrontation, and
did not support her during its aftermath. Dr. McRae went out on nonindustrial disability
leave the next day, and sought a restraining order against the two nurses.

3

to Solano Prison. She left approximately two and one-half weeks later, and instituted this
action.
DISCUSSION

The parties paint two very different pictures of Dr. McRae's experience with the
Department. Dr. McRae claimed that there was no valid basis for the letter of instruction
or the investigation, concluding that they must have been issued to retaliate against her
for filing the grievance concerning her failure to be appointed Chief Medical Officer.
Dr. McRae complained that the investigation into her conduct was done by a layperson
who reported to the administration. In her opinion, any investigation should have been
done through peer review. She asserted that the investigation was done with the intent to
discredit her and protect another physician. Dr. McRae believed that Dr. Andreasen's
conduct in connection with the confrontation with the two nurses was further evidence of
retaliation, which continued when the Department failed to take action against the nurses.
When Dr. McRae complained, the Department again retaliated against her by transferring
her to a dangerous situation at Solano Prison.

According to the Department, the letter of instruction was intended to remind
Dr. McRae that her duties required her to arrive on time and ensure that she, or some
other qualified person, was available to handle her duties during her absences. The
investigation followed reports that Dr. McRae had been derelict in her duties, and was
designed to determine if those reports were true. As the purpose of the investigation was
to determine the truth of reports that Dr. McRae had failed to take actions that were part
of her job responsibilities, there was no reason to subject the matter to peer review.4
Dr. McRae was transferred to Solano Prison as a means of removing her from a situation

4 Dr. McRae, citing two exhibits, asserts that she requested that medical staff
conduct a peer review of her cases, and that medical staff exonerated her. The exhibits
show only that she sent a letter to the Medical Executive Committee asking if her conduct
had failed to meet the standard of care, and had received the response that she had "no
pending peer review issues." She was not exonerated; she simply never was investigated
for failing to meet the standard of care.

4

that had become so unpleasant for her that she had taken nonindustrial disability leave for
nearly a year, and to make it possible to employ both Dr. McRae and the two nurses.
RETALIATION
General Legal Principles

Government Code section 12940, subdivision (h) makes it unlawful for an
employer "to discharge, expel, or otherwise discriminate against any person because the
person has opposed any practices forbidden under this part or because the person has
filed a complaint, testified, or assisted in any proceeding under this part." (See also Lab.
Code, � 1102.5, subd. (b).) In cases brought on claims of discrimination, including
claims of retaliation, California applies the formula set forth in McDonnell Douglas
Corp. v. Green (1973) 411 U.S. 792, 802) (the McDonnell Douglas test).) Under that
formula, "[t]o establish a prima facie case of retaliation, the plaintiff must show (1) he or
she engaged in a protected activity; (2) the employer subjected the employee to an
adverse employment action; and (3) a causal link between the protected activity and the
employer's action. [Citations.]" (Akers v. County of San Diego (2002) 95 Cal.App.4th
1441, 1453 (Akers).)

It is undisputed that the activity in question--filing complaints with the DFEH, is
a protected activity.
Adverse Employment Action

The FEHA does not itself define "adverse employment action," and the
countervailing concerns in this area of the law have led different courts to adopt different
definitions of that term. It is recognized that " `[w]orkplaces are rarely idyllic retreats,
and the mere fact that an employee is displeased by an employer's act or omission does
not elevate that act or omission to the level of a materially adverse employment action.'
[Citation.] If every minor change in working conditions or trivial action were a
materially adverse action then any `action that an irritable, chip-on-the-shoulder
employee did not like would form the basis of a discrimination suit.' [Citation.]"
(Thomas v. Department of Corrections (2000) 77 Cal.App.4th 507, 511.) "On the one
hand, we worry that employers will be paralyzed into inaction once an employee has

5

lodged a complaint . . . , making such a complaint tantamount to a `get out of jail free'
card for employees engaged in job misconduct. On the other hand, we are concerned
about the chilling effect on employee complaints resulting from an employer's retaliatory
actions." (Brooks v. City of San Mateo (9th Cir. 2000) 229 F.3d 917, 928.)

The only published California cases on point have held that it is not enough for the
plaintiff to show that he or she has been subjected to some form of adverse treatment.
The plaintiff must show the employer's retaliatory actions had a detrimental and
substantial effect on the plaintiff's employment. (Akers, supra, 95 Cal.App.4th at
p. 1455; Thomas v. Department of Corrections, supra, 77 Cal.App.4th at pp. 510-511,
and see Robinson v. City of Pittsburgh (3d Cir. 1997) 120 F.3d 1286, 1300, Torres v.
Pisano (2d Cir. 1997) 116 F.3d 625, 640.) "A change that is merely contrary to the
employee's interests or not to the employee's liking is insufficient." (Akers, supra, at
p. 1455.) The reasoning is that "[r]equiring an employee to prove a substantial adverse
job effect `guards against both "judicial micromanagement of business practices"
[citation] and frivolous suits over insignificant slights.' [Citation.] Absent this threshold
showing, courts will be thrust into the role of personnel officers, becoming entangled in
every conceivable form of employee job dissatisfaction. While the Legislature was
understandably concerned with the chilling effect of employer retaliatory actions and
mandated that FEHA provisions be interpreted broadly to prevent unlawful
discrimination, it could not have intended to provide employees a remedy for any
possible slight resulting from the filing of a discrimination complaint." (Ibid.)

Dr. McRae contends that the rule stated by these cases is too restrictive, preferring
a rule adopted by some federal courts, including the Ninth Circuit. This rule, as
articulated by the Ninth Circuit, incorporates language from the Equal Opportunity
Employment Commission's (EEOC's) Compliance Manual, and holds that an adverse
employment action is " `any adverse treatment that is based on a retaliatory motive and is
reasonably likely to deter the charging party or others from engaging in protected
activity.' " (Ray v. Henderson (9th Cir. 2000) 217 F.3d 1234, 1242-1243, citing EEOC
Compliance Manual Section 8, "Retaliation," � 8008 (1998).) The Ninth Circuit has held

6

that adverse employment actions might include demotions, disadvantageous transfers or
assignments, refusals to promote, unwarranted negative job evaluations and toleration of
harassment by other employees. (Ray v. Henderson, at pp. 1241-1242.) The Ninth
Circuit explained, "While some actions that we consider to be adverse (such as
disadvantageous transfers or changes in work schedule) do `materially affect the terms
and conditions of employment,' others (such as an unfavorable reference not affecting an
employee's job prospects) do not." (Id. at p. 1242.)

In our opinion, the deterrence test, as articulated by the Ninth Circuit, is
overbroad. The Ninth Circuit recognizes that "non-trivial" actions should not be deemed
"adverse employment actions." (Brooks v. City of San Mateo, supra, 229 F.3d at p. 928.)
Nonetheless, the deterrence test could support a finding of adverse employment action in
nearly any employment action or decision. An employee quite possibly and reasonably
might wish to avoid the move of an office or a desk, the addition or subtraction of other
employees, the addition or subtraction of responsibilities, a change in opening or closing
times or the introduction of a dress code; yet we believe that none of these things, in and
of themselves, should provide the basis for a claim of retaliation.

The deterrence test attempts to avoid this result, at least in part, by adding a
retaliatory element to the definition of adverse employment. Under the EEOC guideline,
it is not enough that the employment action would be likely to deter an employee from
engaging in the protected activity; it also must be based on a retaliatory motive. (EEOC
Compliance Manual, Section 8, "Retaliation," � 8008 (1998); Ray v. Henderson, supra,
217 F.3d at pp. 1242-1243.) This definition causes the "causal link" prong of the prima
facie test to collapse into the "adverse employment action" prong. (Id. at p. 1243, fn. 6),
making it inconsistent with the McDonnell Douglas test. In addition, as will be
discussed, post, the "causal link" element of the prima facie test can be satisfied by as
little as showing the employment action followed the protected conduct closely in time
and the employer was aware of the protected conduct. (Morgan v. Regents of University
of California (2000) 88 Cal.App.4th 52, 69.) Adding a retaliatory element to the second

7

prong of the McDonnell Douglas test, therefore, does little to prevent the litigation of
frivolous claims.

We therefore align ourselves with existing California decisions, holding that an
adverse employment action means an employment action that causes substantial and
tangible harm, such as, but not limited to, a material change in the terms and conditions
of employment. A plaintiff need not show that the employment action was retaliatory in
order to establish that it meets the second prong of the McDonnell Douglas test, although
the plaintiff, of course, will need to make such a showing to satisfy the third prong of the
test. We hold, further, that while something less than an "ultimate employment action"5
may be actionable, a plaintiff may seek redress through the courts only for final
employment actions; i.e., those that are not subject to reversal or modification through
internal review processes.
Causal Link Between Protected Activity and Employer's Action

For purposes of making a prima facie showing under the McDonnell Douglas test,
the causal link element may be established by an inference derived from circumstantial
evidence. 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 proximity in time between the protected action and the
allegedly retaliatory employment decision. (Morgan v. Regents of University of
California, supra, 88 Cal.App.4th at p. 69.)

Such evidence, however, only satisfies the plaintiff's initial burden. "Once an
employee establishes a prima facie case, the employer is required to offer a legitimate,
nonretaliatory reason for the adverse employment action. [Citation.] If the employer
produces a legitimate reason for the adverse employment action, the presumption of
retaliation `drops out of the picture,' and the burden shifts back to the employee to prove

5 Certain courts, among them those of the Fifth and Eighth Circuits, take the
position that only "ultimate employment decisions," such as firing, demotion or a
reduction in pay, are sufficient to state a retaliation claim. (Mattern v. Eastman Kodak
Co. (5th Cir. 1997) 104 F.3d 702, 707; Ledergerber v. Stangler (8th Cir. 1997) 122 F.3d
1142, 1144.)

8

intentional retaliation. [Citation.]" (Akers, supra, 95 Cal.App.4th at p. 1453.) The
plaintiff must have the opportunity to attack the employer's proffered reasons as pretexts
for discrimination, or to offer any other evidence of discriminatory motive. The
plaintiff's burden is to prove, by competent evidence, that the employer's proffered
justification is mere pretext; i.e., that the presumptively valid reason for the employer's
action was in fact a cover-up. (Perez v. County of Santa Clara (2003) 111 Cal.App.4th
671, 676.)

In responding to the employer's showing of a legitimate reason for the
complained-of action, the plaintiff cannot " `simply show the employer's decision was
wrong, mistaken, or unwise. Rather, the employee " `must demonstrate such weaknesses,
implausibilities, inconsistencies, incoherencies, or contradictions in the employer's
proffered legitimate reasons for its action that a reasonable factfinder could rationally
find them "unworthy of credence," [citation], and hence infer "that the employer did not
act for the [ . . . asserted] non-discriminatory reasons." [Citations.]' [Citation.]" ' "
(Morgan v. Regents of University of California, supra, 88 Cal.App.4th at p. 75.) "The
ultimate burden of persuasion on the issue of actual discrimination remains with the
plaintiff." (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 356.)
Actions Taken Against Dr. McRae
The Letter of Instruction

On May 13, 1997, Dr. Andreasen received notice that Dr. McRae had filed a
complaint with the DFEH complaining that she had been denied the position of Chief
Medical Officer at Solano Prison because of her race.6 On May 16 and again on June 6,
Dr. Andreasen sent memoranda to all physicians and surgeons, reminding them that they
were expected to be at their posts during their rotations and that no exceptions could be

6 Notice was provided by a letter addressed to Dr. Andreasen from the DFEH.
Dr. Andreasen testified that he did not recall seeing the letter, and was not aware that
Dr. McRae had filed a DFEH complaint when he issued the letter of instruction. He
assumed that he had forwarded the DFEH letter to the legal office, believing that it did
not apply to him. For purposes of our discussion here, we assume that Dr. Andreasen did
in fact receive notice of Dr. McRae's complaint.

9

made without the specific signed authorization of the CMO. On May 22, Dr. Andreasen
wrote a note to his supervisory file on Dr. McRae, reporting that she had left her position
as an emergency room physician to attend a meeting without securing adequate coverage
for her position in the emergency room, without informing the CMO's office that she was
leaving the emergency room or that she was in need of relief for a medical staff function.

On June 12, 1997, Dr. Andreasen wrote another memorandum to his supervisory
file, stating that there were reports that Dr. McRae had been coming in at 9:30 a.m. when
she was on duty at 8:00 a.m., and on one day had worked only from 9:30 a.m. to
10:40 a.m., without notifying the CMO's office that she was going to take time off.
Dr. Andreasen wrote, further, that he had scheduled a meeting with Dr. McRae on June 9,
apparently to talk about these reports, but Dr. McRae called in sick. Dr. Andreasen
rescheduled the meeting for the following day, but Dr. McRae did not appear. She was
paged and stated that she would not be able to attend the meeting because she was taking
a training session. The meeting was rescheduled again, for the next day. Dr. McRae
called in sick.

Dr. Andreasen then issued the "Letter of Instruction" to Dr. McRae on June 26,
1997. The letter reported that three days earlier, Dr. McRae had failed to notify her
supervisor that she was leaving the job site, and had failed to report to her assigned post
for emergency room coverage. Andreasen wrote that Dr. McRae's conduct violated
provisions of the California Code of Regulations and Dr. Andreasen's own memoranda to
all providers, dated May 16, 1997, and June 6, 1997. Dr. Andreasen instructed
Dr. McRae to read and familiarize herself with the cited regulations and memoranda, and
to notify her supervisor about any need to leave her job site or to report in late.
Dr. McRae refused to accept or sign the letter, and Dr. Andreasen placed it his
supervisory file.

There is no evidence that the letter of instruction resulted in any loss of pay, status
or job responsibilities to Dr. McRae. It was not a performance evaluation. There is no
evidence that the letter itself could or did lead to any alteration of the terms and
conditions of Dr. McRae's employment, or that its existence deprived her of any

10

promotional opportunities. (Compare with Akers, supra, 95 Cal.App.4th at pp. 1456-
1457.)7 We do not believe that a negative performance evaluation, even if unwarranted,
can trigger an FEHA claim. Employee criticism is a useful and necessary tool that
benefits not only the employer, but also the employee and the public. Although the
FEHA seeks to prevent the chilling effect of retaliatory action, it should not be
interpreted in a way that discourages employers from informing employees of any
dereliction of duty, or of the need to improve their performance. The interest in allowing
employers to take corrective action as needed, or to warn employees that their conduct
may lead to an adverse employment action, requires an interpretation that tolerates the
risk that an employee may be unable to seek redress through the FEHA for such criticism,
even when that criticism in fact may be retaliatory.

Nor did the letter of instruction become an adverse employment action because it
was attached to the investigation report and may have been a factor in the decision to
suspend Dr. McRae for 30 days. Assuming that the decision to suspend was an adverse
employment action (and for reasons we will state, we have concluded that it was not),
and assuming, further, that the decision to suspend was based, in part, on the letter of
investigation, the letter would be relevant to the question of whether the asserted reasons
for the decision were pretextual. That written criticism leads to an adverse employment
action, however, does not relate back so as to make the criticism itself an adverse
employment action.

This does not mean that negative employment evaluations cannot be considered in
deciding whether an employee has been subjected to an adverse employment action. A
pattern of negative employment evaluations, or a negative employment evaluation
accompanied by other conduct, might create a hostile work environment, providing

7 The threat that an employer might retaliate by issuing a letter of instruction
which might deter an employee from engaging in protected activity, could be an adverse
action under the "deterrence test" adopted by the Ninth Circuit. (See Brooks v. City of
San Mateo, supra, 229 F.3d at p. 928; Yartzoff v. Thomas (9th Cir. 1987) 809 F.2d 1371,
1375-1376.) In California, however, a mere oral or written criticism of an employee does
not meet the definition of an adverse employment action under FEHA (Akers, supra,
95 Cal.App.4th at p. 1457 & fn. 4.)

11

grounds for a retaliation claim on that basis. In addition, adverse employment actions
such as terminations, demotions, etc., may be based in part on unwarranted criticism. In
such cases, the fact that the criticism is unwarranted will be a factor in deciding if the
employer's motive for the adverse action is pretextual, but it is the later action, and not
the criticism itself, that is the adverse employment action.

For all of these reasons we conclude that the letter of instruction, even if
unwarranted or based on an improper motive, is not an adverse employment action.
The Investigation and Decision to Suspend

On January 27, 1998, Warden Anna Ramirez-Palmer filed an internal affairs
investigation request, alleging that (1) on December 16, 1997, Dr. McRae disobeyed two
directives, issued by Dr. Andreasen, to contact the family of a patient inmate to report on
the inmate's medical condition; (2) Dr. McRae had refused to provide medical
information about the patient to another physician that would have allowed the patient to
transfer to Hospice;8 and (3) Dr. McRae acted improperly in connection with another
patient inmate. As to the third allegation, Dr. Andreasen asserted that the patient had
been admitted at a time when Dr. McRae was on duty. The patient had been diagnosed
with pneumonia, and the admission orders called for intravenous antibiotics. Nursing
staff could not find a vein that would sustain an IV, and called Dr. McRae, who, without
examining the patient, gave a telephonic order to staff to delay giving antibiotics until IV
access could be secured the following day. Dr. Andreasen alleged, further, that it
appeared that Dr. McRae's decision contributed to the patient's subsequent respiratory
failure.

On June 25, 1998, after receiving a report of the investigation and its findings,
Warden Ramirez-Palmer recommended that Dr. McRae be suspended for 30 days. This
recommendation was passed on to Donna Wilson, the Chief Deputy of Clinical Services,
and from her to Dr. Susan Steinberg, the Deputy Director of Health Care Services
Division, for final approval. Dr. Steinberg signed off on the proposed action on July 14,

8 It appears that, early into the investigation, the second allegation was found to
be untrue.

12

1998, and a Statement of Adverse Action was drafted. The suspension, however, never
was implemented, and while Dr. McRae was aware of the investigation, she did not know
about the suspension until after she commenced this case.

A 30-day suspension would be an adverse employment action. Here, however,
while there was a decision to suspend, the suspension never took place. By the time the
decision had been reached, Dr. McRae was on nonindustrial disability leave. She
returned to work nearly one year later, worked for two and one-half weeks, and left
without ever learning of the decision to suspend. The record does not disclose whether
there was any intention to implement that decision after Dr. McRae returned from
nonindustrial disability leave. The decision to suspend Dr. McRae, therefore, had no
actual impact on the terms and conditions of her employment. Moreover, the decision
was not final. The notice of adverse action, prepared for Dr. McRae and signed by
Dr. Wilson (but never sent to Dr. McRae), informed Dr. McRae that she had the right to
contest the matter by stating her position in writing and/or requesting an interview with
Dr. Wilson. Dr. Wilson explained that she had the discretion to alter the decision.
Dr. McRae also had the right to appeal the decision to the State Personnel Board. A
negative evaluation is not an adverse employment action when the plaintiff has the power
to appeal, even if the plaintiff leaves his or her employment while an appeal of the
evaluation is pending. " `To rule otherwise would be to encourage litigation before the
employer has an opportunity to correct through internal grievance procedures any wrong
it may have committed.' " (Brooks v. City of San Mateo, supra, 229 F.3d at p. 930.)

We find, therefore, that the 30-day suspension was not an adverse employment
action as a matter of law. This is not to say that the investigation is irrelevant to
Dr. McRae's claims of retaliation. Evidence of an unfounded and retaliatory
investigation, for example, like evidence of an unfounded and negative employment
evaluation, might provide grounds for a claim of hostile work environment. We hold
here only that the decision to suspend an employee is not itself an adverse employment
action unless or until that decision is implemented.

13

The Transfer to Solano Prison

The confrontation between Dr. McRae and the two nurses was triggered by
Dr. McRae's actions with respect to a "HEPA" air filter, a filter that destroys bacteria.
The filter had been placed close to Dr. McRae's desk, and she was concerned that the
filter might be leaking ultraviolet light, causing her injury. She filed a grievance, asking
that the filter be moved. When the grievance was denied, Dr. McRae simply unplugged
and moved the filter herself. A pattern apparently developed, where Dr. McRae would
move the filter, and when she left the room, someone would move it back.

On the morning of April 16, 1998, Dr. McRae had moved the filter and was
treating a patient at her desk. The two nurses, defendants Bruce Wiltse and Richard
Burkhart, entered and confronted Dr. McRae about her actions. Mr. Burkhart moved the
filter back, and plugged it in. Dr. McRae unplugged it. This happened three times.
Dr. McRae telephoned Dr. Andreasen and another physician in the building, Dr. Kevin
Geraghty, who also was her union steward. According to Dr. McRae, as she was telling
Dr. Andreasen what had happened, Mr. Burkhart yelled, "Liar, liar," jabbed his finger at
her face, and at one point touched her on the hand as she was attempting to shield her
face from him. Dr. Geraghty testified that he came into the room at about that time.
Dr. Andreasen was there, but did not appear to be doing anything. After Dr. Geraghty
called Dr. Andreasen by name, Dr. Andreasen left the room with Mr. Wiltse and
Mr. Burkhart. Dr. McRae testified that although Dr. Andreasen was present for a couple
of minutes before Dr. Geraghty arrived, he took no action until Dr. Geraghty indicated
that he was there. Dr. McRae went out on nonindustrial disability leave the next day, and
sought a restraining order against Mr. Burkhart and Mr. Wiltse.

Approximately two weeks later, Dr. Wilson was hired as the Chief Deputy of
Clinical Services at CMF. On July 29, 1998, Dr. Wilson wrote to Dr. McRae that her
disability leave would expire on August 15, directing her to report to work at Solano
Prison rather than to return to work at CMF. She wrote: "You are being transferred to
Solano in an effort to resolve several of your safety concerns here at CMF. Your transfer
to Solano will alleviate your concerns about working in close proximity to Mr. Wiltse

14

and Mr. Burkhart and will resolve the Temporary Restraining Orders on file with the
Solano County District Attorney's Office. Your transfer to Solano will also resolve your
concerns regarding exposure to the HEPA FILTER and UV light, your concerns with the
B-1 Clinic health hazards and inadequate B-1 office space. Your transfer to Solano will
also resolve your concerns about having to perform MOD duty." Dr. McRae responded
by filing a third DEFH complaint on August 18, 1998, asserting that the transfer was a
retaliatory act, and requesting that the decision to transfer her be reversed. On August 25,
Dr. Wilson reported back to Dr. McRae that her grievance had been denied. In March
1999, Dr. McRae reported to work at Solano Prison, but left within three weeks.

There is no question but that a transfer can be an adverse employment action,
when it results in substantial and tangible harm. It also is settled that an adverse
employment action does not occur when the transfer is into a comparable position not
resulting in substantial and tangible harm. (Akers, supra, 95 Cal.App.4th at p. 1457.)
The District of Columbia Circuit, in Brown v. Brody (D.C. Cir. 1999) 199 F.3d 446, after
surveying the relevant case law, stated a formulation that reflects our own view: "[A]
plaintiff who is made to undertake or who is denied a lateral transfer--that is, one in
which she suffers no diminution in pay or benefits--does not suffer an actionable injury
unless there are some other materially adverse consequences affecting the terms,
conditions, or privileges of her employment or her future employment opportunities such
that a reasonable trier of fact could conclude that the plaintiff has suffered objectively
tangible harm. Mere idiosyncrasies of personal preference are not sufficient to state an
injury." (Id. at p. 457.)

This formulation was drawn, in part, from the opinion in Burlington Industries,
Inc. v. Ellerth (1998) 524 U.S. 742 (Burlington), where the United States Supreme Court
used the term "tangible employment action" to define actionable harm in discrimination
cases, importing that term into its discussion of a vicarious liability issue. The Supreme
Court held: "A tangible employment action constitutes a significant change in
employment status, such as hiring, firing, failing to promote, reassignment with
significantly different responsibilities, or a decision causing a significant change in

15

benefits. Compare Crady v. Liberty Nat. Bank & Trust Co. of Ind., 993 F.2d 132, 136
[7th Cir. 1993] (`A materially adverse change might be indicated by a termination of
employment, a demotion evidenced by a decrease in wage or salary, a less distinguished
title, a material loss of benefits, significantly diminished material responsibilities, or other
indices that might be unique to a particular situation'), with Flaherty v. Gas Research
Institute, 31 F.3d 451, 456 [7th Cir. 1994] (a `bruised ego' is not enough), Kocsis v.
Multi-Care Management, Inc., 97 F.3d 876, 887 [6th Cir. 1996] (demotion without
change in pay, benefits, duties, or prestige insufficient), and Harlston v. McDonnell
Douglas Corp., 37 F.3d 379, 382 [8th Cir. 1994] (reassignment to more inconvenient job
insufficient)." (Burlington, supra, at p. 761.)

The transfer of Dr. McRae from CMF to Solano Prison did not entail a demotion,
a reduction in pay or a loss of benefits. It did not involve a change in status or a less
distinguished title. There is no evidence that it involved any significant change in job
responsibilities, or, except for on-call duty, in work hours or commute time.

Dr. McRae nonetheless successfully contended that the transfer was an adverse
employment action, asserting that some aspects of the work at Solano Prison were more
unpleasant to her than some aspects of employment at CMF, and also that Solano Prison
presented a dangerous environment. For Dr. McRae to prevail on this point, the record
must contain substantial evidence that Solano Prison in fact presented a less desirable
work environment than CMF, and, further, that the change was not just somewhat less
pleasant, but had materially adverse consequences comparable in significance to a
demotion, a decrease in wages or salary, a less distinguished title, a material loss of
benefits, or significantly diminished responsibilities.

"In determining whether a judgment is supported by substantial evidence, we may
not confine our consideration to isolated bits of evidence, but must view the whole record
in a light most favorable to the judgment, resolving all evidentiary conflicts and drawing
all reasonable inferences in favor of the decision of the trial court. [Citation.] We may
not substitute our view of the correct findings for those of the trial court [or jury]; rather,
we must accept any reasonable interpretation of the evidence which supports the [fact-

16

finder's] decision. However, we may not defer to that decision entirely. `[I]f the word
"substantial" means anything at all, it clearly implies that such evidence must be of
ponderable legal significance. Obviously the word cannot be deemed synonymous with
"any" evidence. It must be reasonable in nature, credible, and of solid value; it must
actually be "substantial" proof of the essentials which the law requires in a particular
case.' [Citations.]

"Although each case must be judged for sufficient evidence on its own peculiar
circumstances, a number of general guidelines may be set forth. First, a judgment may be
supported by inference, but the inference must be a reasonable conclusion from the
evidence and cannot be based upon suspicion, imagination, speculation, surmise,
conjecture or guesswork. [Citation.] Thus, an inference cannot stand if it is unreasonable
when viewed in light of the whole record. [Citation.] And although an appellate court
will normally defer to the trier of fact's drawing of inferences, it has been said: `To these
well settled rules there is a common sense limited exception which is aimed at preventing
the trier of the facts from running away with the case. This limited exception is that the
trier of the facts may not indulge in the inference when that inference is rebutted by clear,
positive and uncontradicted evidence of such a nature that it is not subject to doubt in the
minds of reasonable men. The trier of the facts may not believe impossibilities.' " (Beck
Development Co. v. Southern Pacific Transportation Co. (1996) 44 Cal.App.4th 1160,
1203-1204.)

Dr. McRae testified that she was aware that Solano Prison had a reputation among
physicians as one of the worst facilities in the system, and physicians were sent there
before they were dismissed. Dr. McRae, however, produced no evidence that anyone
else was aware of this reputation. In other words, while Dr. McRae stated her own belief
that Solano Prison had a poor reputation, she produced no evidence that it in fact had a
poor reputation. In addition, she produced no evidence that the Department routinely
sent physicians there as a step towards dismissal, and her claim on this point is
undermined by the fact that she actively sought a position at that facility.

17

Dr. McRae testified that she was unable to get a lab coat at Solano Prison, and had
to wear a paper gown to keep her clothing clean. Dr. McRae had her own desk while
working at CMF, but claimed she had no desk or specific workplace at Solano Prison,
and sometimes had to use a stand ordinarily used to hold medical instruments. One of the
other doctors allowed her to use his office on occasion, and sometimes she used the
treatment room as an office. A nurse there complained that she was using his desk.
Dr. McRae's testimony was corroborated, somewhat, by the testimony of Barbara
Clayton, the Department's northern regional health service administrator. Ms. Clayton
confirmed that space was limited at Solano Prison, that there were only two actual
treatment areas for doctors in the primary area and that four doctors were assigned to
work in those areas. As a result some of the doctors worked out of the emergency room
or shared space.

There is little question but that the lack of a lab coat or the need to share a desk
would have been inconvenient and irritating. On the other hand, work at CMF exposed
Dr. McRae to the HEPA filter and to two nurses against whom she had sought a
restraining order, and required her to work under a supervisor she felt did not support her.
Even assuming, however, that the overall environment at CMF was more pleasant for
Dr. McRae than the environment at Solano Prison, matters such as the lack of a lab coat
or a desk do not compare in significance with matters such as demotions, loss of pay or
benefits, or harassment in the workplace. In short, they do not amount to a tangible
injury supporting a claim of adverse employment action.

Dr. McRae also complained of the differences in on-call duty required by CMF
and Solano Prison. At CMF, Dr. McRae was required to spend two to four nights per
month at the hospital. At Solano Prison, she was required to be on-call for a full week at
a time. Dr. McRae claimed that physicians on this duty had to be within a 30-minute
response of the institution. As she lived more than 30 minutes away, Dr. McRae asserted
that she would have to move out her home for about a week, live in a motel, eat in
restaurants and arrange for the care of her dog, and would have to bear the expense of
these items.

18

Dr. McRae, however, did not prove the truth of her assertions. She produced no
evidence of an order or policy requiring on-call physicians to arrive at the facility within
30 minutes of a call. She also produced no evidence that any Solano Prison physician
had actually moved out of his or her home during the week of on-call duty, or that there
had been any complaints that a physician had failed to arrive at the facility within 30
minutes of being called.

As evidence supporting her claim, Dr. McRae cites her own testimony, where she
stated her belief that on-call physicians had to be within a 30-minute response time of the
institution. Dr. McRae explained, further, "I don't recall specifically who told me that,
but I think it was Dr. Ziesma [who, Dr. McRae stated, was in a supervisory position]. I
believe the other doctors may have said it, too, but the response time for emergencies was
30 minutes. It may have been even less than that, but I don't think it was more than 30
minutes. If there was an emergency at the facility, the physician on duty had to get there
within 30 minutes was my understanding."

Dr. McRae also cites the collective bargaining agreement between the State of
California and the Union of American Physicians and Dentists. As relevant, the
agreement provided that the on-call assignment was a work shift of seven consecutive
days in which the employee is available by telephone or electronic paging device at all
times, and "normally immediately available to return to the facility." Employees would
be entitled to pay for every hour actually worked plus one hour for travel time.

Dr. McRae's opinion, or even the opinion of a supervising physician, has no
probative value absent a showing that the opinion is based on fact. The collective
bargaining agreement required only that the employee be "immediately available to
return to the facility." "Immediately available to return" suggests that the employee must
be prepared to drop whatever he or she might be doing immediately, and return.
Dr. McRae did not establish that the agreement required her, or any other physician, to be
able return within any particular period of time. That an employee will be paid for no
less and no more than one hour of travel time is not a mandate that the employee be
within 30 minutes of the facility.

19

The Department introduced evidence that Dr. McRae's beliefs were unfounded.
Ms. Clayton, the Department's northern regional health service administrator, who also
had been the labor liaison from 1994 until 1999, and was the person who dealt with
collective bargaining issues, testified that there was no requirement that an on-call
physician had to be within 30 minutes of the facility. She explained that on-call duty at
Solano Prison meant that nursing staff would contact the on-call physician if there were
an emergency, if staff needed to receive orders about a patient or it was necessary for the
physician to come in. Most of the facility's physicians lived out of the area. Most of the
time they would not come in, but would make telephone orders. Solano Prison was not
licensed for acute care, so a physician would not need to return even if a serious
emergency arose. The physician instead would order the patient sent to another facility.
The Department's evidence, therefore, was that on-call physicians were not required to be
within 30 minutes from the prison at all times during periods of on-call duty, and
Dr. McRae's evidence provided no valid basis for concluding otherwise.

Dr. McRae also complained that Solano Prison provided a more dangerous work
setting than CMF. Neither side produced much evidence on the relative safety of either
facility, and Dr. McRae's stated concerns about safety are somewhat undermined by the
fact that she actively sought employment at Solano Prison. Both facilities house
prisoners, and both facilities, therefore, have safety issues. CMF houses inmates at all
levels, including those at level 4, who are considered to be more dangerous than the
general prison population. CMF also provides secured housing units for inmates who
have been segregated from the general population because of their violent conduct.
Solano Prison, in contrast, houses only level 2 and 3 inmates, who are considered to be
only medium custody inmates. Solano Prison, which was built more recently than CMF,
has gun towers and an observation area in the housing unit facing the yard, both of which
are manned by armed correctional officers. There is an armed entryway into the prison.
There is no similar protection for staff at CMF.

Ms. Clayton explained: "Solano has more visible uniform staff than . . . CMF.
CMF is a closed quarter, which is maybe the width of this room, maybe a little bit wider,

20

where you have staff and inmates who are in the same general area. The only protection
for staff is that they have--they are supposed to walk in this marked off area, which is in
the center corridor, which is white lines in the center of the corridor, and the staff are to
walk within that area, and that is supposed to be their protection there at CMF."

This evidence does not establish, or even allow an inference, that Solano Prison
provides a more dangerous environment than CMF. To the contrary, the evidence
supports the conclusion that Solano Prison provides a safer work environment than the
environment at CMF.

Dr. McRae testified that she felt fear for her safety because she believed she
lacked the support and protection of the administration. This was based, in part, on her
experience at CMF, and, in part, on the failure to provide her with an orientation after she
began working at Solano Prison. Dr. McRae explained that an orientation would have
dealt with safety issues, including "what areas you may and may not walk into; what it
means when there is a yard down; what kind of special rules are in effect for employees
at that particular facility to ensure [their] safety." Dr. McRae testified, further, that she
had received information that an orientation was very important and that it was to take
place quite soon after a person came on duty. When she complained that she had not had
an orientation, she was told, simply, that one would be scheduled. Dr. McRae explained,
further, that she had concluded that the administration at Solano Prison would not support
her because it had failed to provide her with a lab coat and a desk and there had been a
complaint about her use of the common workspace.

Dr. McRae's testimony does not support a finding that the transfer compromised
her safety. The evidence is that CMF and Solano Prison do not share administrations.
That Dr. McRae was not supported at CMF, therefore, would not mean that she would
lack support at Solano Prison. As Dr. McRae was transferred from CMF to Solano
Prison, she was transferred away from employees and administration she believed to be
hostile to her. In addition, even if Dr. McRae's troubles at CMF meant that she lacked
support at Solano Prison, her complaint is with the administration of both facilities, and
does not support a claim that the transfer compromised her safety, at least in the absence

21

of some evidence that Solano Prison was in fact a more dangerous environment so that
the lack of support would be felt more acutely.

As to the orientation, Dr. McRae was at Solano Prison for only two and one-half
weeks. Ms. Clayton, although testifying that orientations were given to employees as
soon as possible after they reported to work, also testified that orientations generally were
given once a month. In the meantime, employees received on-the-job training. The
purpose of an orientation was to familiarize the employee with the setting and explain
how to function within it, including how to work safely. As orientations are standard, an
orientation would have been review for Dr. McRae, who had worked for six years at
CMF. On-the-job training would cover matters such as physical layout. Dr. McRae
produced no evidence contradicting Ms. Clayton's testimony. The evidence, therefore,
does not establish either that Dr. McRae was denied an orientation, or that the failure to
provide her with one rendered the job unsafe.

As noted above, an employment action is not an adverse employment action
unless it results in a materially adverse change in employment conditions comparable to a
termination of employment, a demotion evidenced by a decrease in wage or salary, a less
distinguished title, a material loss of benefits or significantly diminished material
responsibilities. (Brown v. Brody, supra, 199 F.3d at pp. 456-457.) On our review of the
record as a whole, resolving all factual differences in favor of the jury's verdict, and
drawing all reasonable inferences from the evidence, we cannot find substantial evidence
that the transfer of Dr. McRae from CMF to Solano Prison amounted to an adverse
employment action.

We have not considered whether Dr. McRae met her burden of showing that the
letter of instruction or unimplemented decision to suspend her were causally connected to
her protected activity of filing DFEH complaints, as we have concluded there is no
reason to conclude that either action was an adverse employment action. While we have
concluded that the transfer of Dr. McRae from CMF to Solano prison is not an adverse
employment action, it did result in physical changes in her employment environment.

22

We have, therefore, also reviewed the evidence in light of the third prong of the
McDonnell Douglas test.

The Department proffered a compelling reason for transferring Dr. McRae to
Solano Prison--her relationship with other CMF employees had so deteriorated that she
had sought a restraining order against them and had taken nonindustrial leave in mid-
April, and did not return to work until nearly a year later. Under those circumstances, the
decision to transfer Dr. McRae into a new work environment away from the other
employees has at least the appearance of a reasonable management decision.

The burden, therefore, shifted to Dr. McRae to produce competent evidence that
the Department's proffered reason for the transfer was pretextual, by demonstrating such
weaknesses, implausiblities, inconsistencies, incoherencies, or contradictions as to allow
the jury to find it unworthy of credence. (Morgan v. Regents of University of California,
supra, 88 Cal.App.4th at p. 75.) Dr. McRae did not meet that burden. She made no
showing that the Department routinely, or indeed ever, punished persons for filing FEHA
complaints by transferring them to other, less favorable, assignments. She did not and
could not show that the Department had no legitimate reason for her transfer. Her
argument, rather, focused on her claim that the Department should have taken some other
action to alleviate her problems at CMF, such as disciplining or transferring the two
nurses. That some other action might have addressed the Department's concerns does not
establish that the Department's stated reasons for the transfer were pretextual. Moreover,
Dr. McRae's problems at CMF were not limited to her confrontation with the two nurses.
Transferring the nurses, accordingly, would have solved some of the Department's
problems, but would not have resolved Dr. McRae's complaints about Dr. Andreasen or
the HEPA filter.

In short, there simply is no reason to conclude from the evidence that the decision
to transfer Dr. McRae was the result of a wish to retaliate against her for filing
grievances, as opposed to the wish to remove her from an environment where she could
not function effectively.

23

Pattern of Conduct

Dr. McRae contends that even if the evidence does not show that any single action
taken by the Department was an adverse employment action, the Department's actions,
taken together, established a pattern of conduct that the jury could have deemed to be an
adverse employment action.

Dr. McRae did not try her case on a theory of hostile work environment, and the
evidence, while reflecting isolated incidents of unpleasantness, does not show the kind of
severe and pervasive harassment that permits recovery on such a theory. (See Aguilar v.
Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 130-131.) Thompson v. Tracor
Flight Systems, Inc. (2001) 86 Cal.App.4th 1156, cited by Dr. McRae, did not involve an
adverse employment action. It was a wrongful discharge case, where the court simply
recognized that conduct amounting to a hostile work environment would support a
finding of constructive discharge. (Id. at pp. 1171-1172.) The court in Akers, supra,
95 Cal.App.4th 1441, found that a negative evaluation and a counseling memorandum,
taken together, had the result of denying the plaintiff any opportunities for promotion. It
followed that the evidence allowed a finding that the plaintiff had suffered an adverse
employment action. (Id. at p. 1456.) It was the denial of the opportunity for promotion,
however, and not the pattern of conduct, that provided a valid basis for the plaintiff's
FEHA claim. Dr. McRae has not shown that the Department's actions, whether taken
alone or in combination, had a similar effect.
CONCLUSION

In conclusion, viewing the evidence in the light most favorable to the jury's
findings, including all reasonable inferences that might be drawn therefrom, we
nonetheless find that Dr. McRae failed to show she suffered an adverse employment
action, whether the conduct she complains of is considered separately or cumulatively.
Because we find that Dr. McRae failed to establish the second prong of the McDonnell
Douglas test, we need not reach the question of whether she produced sufficient evidence
to rebut the Department's showing of legitimate, nondiscriminatory reasons for the
actions it took. Nonetheless, we also find that the Department produced evidence of a

24

valid, nonretaliatory reason for its decision to transfer Dr. McRae to Solano Prison, and
that Dr. McRae did not meet her burden of showing that the Department's reason was
pretextual.

The judgment, therefore, is reversed.

The orders awarding Dr. McRae postjudgment and prejudgment attorney fees are
reversed.

The order awarding costs to the individual defendants is affirmed. The matter is
remanded to the trial court to award costs to the Department, to the extent that those costs
are not duplicative of costs already awarded to the individual defendants.

The defendants are awarded their costs on appeal.

_________________________

STEIN, Acting P.J.

We concur:

_________________________
SWAGER, J.

_________________________
MARGULIES, J.

McRae v. Calif. Dept. of Corrections, etc. (A098073, A098330, A098910, A104701, A100745)

25

Trial Court:
The Superior Court of Alameda County
Trial Judge:
Hon. Horace Wheatley
Counsel for Plaintiff, Appellant, and
Carter & Schear
Respondent Margie McRae:
Stephen D. Schear
Jana Carter

Counsel for Defendant and Appellant
Bill Lockyer
California Department of Corrections;
Attorney General of the State of California
Defendants and Respondents Bruce
Wiltse, Joseph Bick, Richard Burkhart,
Jacob Applesmith
and Donna Wilson
Senior Assistant Attorney General
Miguel A. Neri
Fiel D. Tigno
Supervising Deputy Attorneys General
Marjorie E. Cox
Lyn Harlan
Deputy Attorneys General

McRae v. Calif. Dept. of Corrections, etc. (A098073, A098330, A098910, A104701, A100745)

26