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Sometimes even having a big-name lawyer doesn’t do any good. Oracle Corp. found that out on Feb. 7, when it lost a wrongful discharge case despite being represented by Shirley Hufstedler, a senior of counsel in Morrison & Foerster’s Los Angeles office. Hufstedler, a one-time 9th U.S. Circuit Court of Appeals judge and the secretary of education under former President Jimmy Carter, argued her heart out for Oracle on Jan. 30 before California’s 1st District Court of Appeal in San Francisco, only to see the case go against her exactly one week later. The court, in a ruling written by Justice Lawrence Stevens, held that there was “substantial evidence” that executives at Redwood Shores, Calif.-based Oracle had discriminated against former Vice President Sandy Baratta when they fired her in 1999. Specifically, the court held that there was evidence that Oracle had terminated Baratta from her $250,000-a-year job because she was pregnant and had blown the whistle on possibly illegal activity by the company. “We need not hold that Oracle or its employees actually violated [the law],” Stevens wrote, “only that Baratta reasonably suspected Oracle had done so.” Justices Barbara Jones and Mark Simons concurred. At oral argument, the justices showed due respect for Hufstedler — who also sat on the state appeal court bench for two years — but they didn’t hesitate to hammer her with questions. For example, Simons interrupted when Hufstedler argued that Baratta had discussed her worries about Oracle’s supposedly anti-pregnancy views in only four “innocuous conversations” — with a human resources manager, a male supervisor and two women employees. “And you don’t think that adds up to substantial evidence and a basis to believe that a company is unhappy with a pregnant woman?” he asked. “Why isn’t that substantial evidence?” Oracle had argued that Baratta was fired because of “excessive ambition” and her alleged mistreatment of a subordinate employee, but the appeal court ruled that there was strong evidence that the company fired her partly because she had expressed concerns about second-class treatment for pregnant employees. “After Baratta voiced concerns regarding possible pregnancy discrimination by Oracle,” Justice Stevens wrote, “her performance evaluation was lowered, her job responsibilities were reduced and she was abruptly fired, without warning or the opportunity to respond to her critics.” The justices also ruled that it appeared that Oracle had retaliated against Baratta for expressing concerns that the company was stealing trade secrets from its German strategic partner SAP. “There is substantial evidence supporting the jury’s finding that Baratta’s suspicions of illegal activity were not unreasonable,” the court held, “even though Oracle suggests these seemingly unlawful acts were lawfully performed within the scope of employment at Oracle.” Hufstedler had argued at oral argument that there was no causal relationship between Baratta’s termination and an e-mail she sent a company official on April 29, 1999 — the day she was let go — warning about possible illegalities. That, she said, was because Baratta’s firing was already under way. “There is no causal relationship,” Hufstedler argued, “when a proceeding of termination is already in progress. And I think that’s the situation here. The sign-off hadn’t occurred.” The court dismissed that argument sharply. “Even Oracle’s own in-house counsel,” Justice Stevens wrote, “immediately suspected, based upon the unusual timing and sequence of these events, that there was a causal link between the discharge and Baratta’s inquiries regarding a possible unauthorized SAP computer access.” Even so, Oracle officials continued to deny guilt and, in a shades-of-Enron style, argued that Baratta’s discussions, questions and e-mails about her concerns were simply insufficient to put her bosses on notice that the company might be stealing secrets from SAP. The court again didn’t bite. “It was not necessary that the communications cite code sections, use technical terms such as ‘misappropriation,’ or explicitly threaten to report such actions to the authorities, in order to place Oracle on notice of the potential violations of law,” the court said. “This issue was for the jury to determine, and we conclude substantial evidence supports its finding on this topic.” The jury’s findings were affirmed across the board. The prevailing attorney was Rudy, Exelrod & Zieff partner Alan Exelrod of San Francisco.

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