Khan v. SAP Labs, LLC

Background

Muhammad Khan left a managerial position at SAP in December 2015. Afterward, his former supervisor, Sanjay Shirole, was the subject of alleged workplace harassment and discrimination described in Khan’s second amended complaint. Khan alleged that he reported Shirole’s conduct to SAP human-resources and supervisory personnel, including Jenny Le. He also alleged that SAP subjected him to adverse employment actions, including placing him on unpaid leave, denying work and opportunities, withholding pay, invalidating accrued leave, and constructively discharging him.

Khan also alleged that medical records connected with his criminal arson prosecution were provided to an attorney retained by SAP and later used in connection with the prosecution. His second amended complaint asserted three claims against SAP: retaliation under California Labor Code section 1102.5, common-law invasion of privacy, and violation of the privacy right protected by the California Constitution. Khan did not oppose SAP’s motion to dismiss, but the court explained that failure to respond alone was not enough to dismiss the claims.

Rule 12(b)(6) Standard

SAP moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to state a legally valid and plausible claim. The court generally accepted the complaint’s factual allegations as true and considered the complaint, materials incorporated into it, and matters subject to judicial notice. The court granted SAP’s request for judicial notice of several filings and public records, including earlier pleadings and orders in the action and the felony abstract of judgment showing Khan’s arson conviction.

Retaliation Claim

Section 1102.5 is California’s whistleblower law. It prohibits an employer from retaliating against an employee for reporting illegal conduct to a government or law-enforcement agency, a person with authority over the employee, or another employee authorized to investigate.

The court found that Khan adequately alleged protected activity by reporting Shirole’s alleged discriminatory and harassing conduct to SAP personnel. Khan also adequately alleged adverse employment actions. The court concluded that his allegation that Le placed him on indefinite unpaid leave after Khan complained to her supported a reasonable inference of retaliation. Khan also alleged that Le refused to let him return to work when he asked to do so.

The court found that Khan had not adequately alleged a causal connection between his reports to Prasad, Parkinson, and Priya and the alleged adverse actions imposed by Shirole. Khan did not allege that Prasad or Priya made the decisions denying fellowship or training opportunities, and he did not adequately allege that Shirole knew about his protected reports. The court also found no facts connecting Le to the other alleged employment actions.

The court therefore denied SAP’s motion as to Claim 1, but only to the extent that the claim was based on SAP’s alleged retaliation for Khan’s protected reporting to Le, specifically the alleged placement on unpaid leave. The court stated that this ruling was without prejudice to a later motion for summary judgment if the developed record showed that Khan voluntarily took unpaid leave or that the leave was not retaliatory.

Privacy Claims

For the common-law invasion-of-privacy claim, Khan had to allege an intrusion into a private place, conversation, or matter in a manner highly offensive to a reasonable person. For the California constitutional privacy claim, he had to allege a legally protected privacy interest, a reasonable expectation of privacy, and conduct amounting to a serious invasion.

The court held that Khan’s allegations were insufficient. His references to conduct by “Defendants” were too vague to establish conduct by SAP. Although conduct by SAP’s retained attorney might potentially be attributed to SAP, Khan did not allege the nature of the medical records, how they were transmitted, or facts showing that the attorney acted improperly merely by receiving them. He also alleged that the records were disclosed but did not identify the recipient or the circumstances of the disclosure. The court further concluded that the alleged facts did not meet the high level of seriousness required for either privacy claim.

The court declined to decide SAP’s argument that any invasion was justified by the public interest in prosecuting serious crime because the claims could be dismissed on the pleading deficiencies alone.

Disposition

The court granted SAP’s motion to dismiss in part without leave to amend and denied it in part. It denied the motion as to Claim 1 to the limited extent described above. It granted the motion without leave to amend as to Claims 2 and 3 for invasion of privacy. SAP was ordered to file an answer by August 19, 2020, and the order terminated the motion docketed as ECF 67.