LAVELLE v. BANKAMERICA CORPORATION (1998)

Plaintiff Nancy Lavelle sued BankAmerica Corporation (BAC), Bank of America National Trust and Savings Association (Bank of America), and her supervisor, Keith Wirtz, (collectively defendants) for employment discrimination.   Plaintiff alleged three causes of action:  (1) age and sex discrimination in violation of California's Fair Employment and Housing Act (FEHA) (Gov.Code, § 12900 et seq.);  (2) breach of the implied covenant of good faith and fair dealing in her employment contract;  and (3) tortious “refusal to return Plaintiff to work following her leave of absence” in violation of public policy.

Plaintiff challenges two separate trial court rulings granting summary judgment to the two corporate defendants.   The first ruling granted summary judgment to Bank of America, which is a national banking association, on the ground the National Bank Act (Bank Act) (12 U.S.C. § 21 et seq.) preempts all of plaintiff's state law claims.   The trial court concluded the Bank Act specifically permits a national banking association to dismiss its officers at pleasure, thereby preempting any and all state causes of action arising out of the termination of its officers.   The second ruling granted summary judgment to BAC-a bank holding company-on the ground it has no liability to plaintiff because:  (1) it was not her employer;  and (2) it did not incur any liability to plaintiff as a result of its relationship with its wholly owned subsidiary (and plaintiff's true employer) Bank of America.   After the trial court entered separate judgments in favor of BAC and Bank of America, plaintiff filed this timely appeal.¹

We partially reverse the judgment in favor of Bank America because we conclude the Bank Act does not preempt plaintiff's statutory cause of action for employment discrimination under the FEHA to the extent federal law also prohibits such discrimination (Marques v. Bank of America (1997) 59 Cal.App.4th 356, 69 Cal.Rptr.2d 154).   However, we agree the Bank Act preempts plaintiff's non-FEHA contract and tort claims against Bank of America.   We also agree with the trial court that, as a matter of law, plaintiff was not an employee of BAC, and BAC is not derivatively liable to plaintiff.   Consequently, we permit plaintiff to proceed with her FEHA claim against Bank of America only, but otherwise affirm the summary judgments.

I

FACTS

Plaintiff was hired by Security Pacific National Bank (Security Pacific) in 1980.   She worked there as an Investment Officer.

In April 1992, Security Pacific merged with Bank of America.   At that point Security Pacific ceased to exist and all employees of Security Pacific, including plaintiff, became employees of Bank of America.

Both before and after the merger, plaintiff was a Senior Portfolio Manager or Section Manager in the Financial Management & Trust Services Department (Trust Services Department) for Security Pacific and then later Bank of America.   Her primary duties were to manage the investment portfolios of numerous trust accounts, and to supervise other portfolio managers.   During her entire tenure with Bank of America, Bank of America (not BAC) was responsible for paying plaintiff's salary, deducting federal, state and social security taxes from her wages, paying unemployment taxes on her behalf, and providing plaintiff with workers' compensation insurance.

On May 21, 1992, the board of directors made plaintiff a vice-president of Bank of America.   At that time, plaintiff was a senior portfolio manager in Bank of America's Trust Services Department.   Plaintiff held this position until September 9, 1992, when she announced her intention to begin an extended leave of absence the next day due to job related stress, allegedly as a result of sex and age discrimination.

When plaintiff returned to work on October 27, 1993, she was told that another employee had filled her former position.   Although plaintiff believed there were open positions that were the same or similar to those she had held, her supervisor, Keith Wirtz, refused to place her in any of those positions.   Plaintiff was informed she was free to look for another position with the Bank, but if she failed to find another position, her employment would be terminated.   On February 4, 1994, plaintiff was formally placed in the Employee Transition Program for a 60-day period during which Bank of America paid her full salary while she looked for another position and considered whether to accept an enhanced severance package.   Plaintiff did not find another position and her employment with Bank of America terminated on April 5, 1994, at the end of the 60-day transition period.   Bank of America's board of directors formally ratified plaintiff's termination at its regularly scheduled meeting on May 2, 1994.

After she was terminated, plaintiff filed a complaint for employment discrimination alleging three causes of action.   The first cause of action alleged a violation of the FEHA (Gov.Code, § 12900 et seq.) in that plaintiff “has been subjected to a continuous pattern of [employment] discrimination based on her sex and age.”   Among other things, plaintiff, who is over forty years of age, alleged she received less pay than male employees with comparable experience, did not receive other privileges of employment granted to male and younger female workers, and was subject to a sexually hostile working environment.   In addition, plaintiff alleged that as part of the continuing pattern of sex and age discrimination against her, in the Spring of 1992 her supervisor, Wirtz, devised a scheme to demote her and to install a favored male employee in her position as manager.   She became despondent over the continuing discriminatory treatment and took a stress leave of absence in September of 1992.   Although the defendants had taken steps to preserve the positions of male employees who were on medical leave of absence, they made no such efforts on her behalf.   When plaintiff returned to work on October 27, 1993, defendants refused to appoint her to any positions, although openings existed for which she was qualified.   Plaintiff alleged “the failure and refusal of Defendants to return Plaintiff to work was due in material part to her sex, age, and her opposition to being discriminated against․”

Plaintiff's second cause of action was for breach of the covenant of good faith and fair dealing in her employment contract.   Here she alleged that, in addition to the facts specified above, defendants had a contractual duty to take all steps reasonably necessary to find a new position for plaintiff, but defendants failed to take reasonable steps to preserve her position or to return her to another comparable position.

Finally, in her third cause of action, plaintiff alleged defendants had tortiously refused to find her a new position “in violation of public policy.”   The gist of this cause of action is that plaintiff had complained to management that the Bank was imposing excess fees on trust accounts.   When management did not act on these complaints, plaintiff communicated these allegations to a reporter with the San Francisco Chronicle who wrote a series of articles challenging the fees Bank of America charged its trust customers.   Plaintiff alleged “[o]ne of the motivating factors in Defendants' refusal to return Plaintiff to work after her leave of absence, despite her years of experience, the openings and needs of Defendants, and the policies of Defendants, was that Defendants believed that Plaintiff had or was potentially a source of information” to the San Francisco Chronicle reporter.²

Bank of America and BAC filed separate motions for summary judgment against plaintiff.   Neither motion challenged the substance of plaintiff's allegations.   Instead, Bank of America argued the dismissal-at-pleasure provision of the Bank Act preempted all state law causes of action arising from the termination of a bank officer.   BAC, on the other hand, argued plaintiff was never its employee and that it had no liability to plaintiff as a result of its relationship with its wholly owned subsidiary-and plaintiff's true employer-Bank of America.   The trial court granted both motions on the grounds stated in the motions.

II

DISCUSSION

A “motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”  (Code Civ. Proc., § 437c, subd. (c).)  A defendant “has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action ․ cannot be established, or that there is a complete defense to that cause of action.   Once the defendant ․ has met that burden, the burden shifts to the plaintiff ․ to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto․”  (Id. subd. (o)(2).)   In reviewing an order granting summary judgment, we examine the facts presented to the trial court and independently determine their effect as a matter of law.  (Parsons v. Crown Disposal Co. (1997) 15 Cal.4th 456, 464, 63 Cal.Rptr.2d 291, 936 P.2d 70.)

A. The Action Against Bank of America

We first consider plaintiff's action against Bank of America, which is a national banking association.   As indicated, we conclude plaintiff may maintain her first cause of action against Bank of America, but that the Bank Act preempts her second and third causes of action.

1. The Bank Act Does Not Bar Plaintiff's FEHA Claim For Age and Sex Discrimination.

 We first consider whether the Bank Act preempts plaintiff's state FEHA claim for age and sex discrimination.   We conclude that a fired bank officer may bring a discrimination claim under the FEHA in state court, but only on grounds that would be actionable under federal law.   That is, a fired bank officer may maintain an FEHA action in state court but may only seek redress for discriminatory conduct that is also prohibited under federal law.   In the context of bank officer terminations, the FEHA cannot be a source of independent substantive rights separate from federal law.

While this appeal was pending, the Court of Appeal, First Appellate District, Division Two, held in Marques v. Bank of America, supra, 59 Cal.App.4th 356, 69 Cal.Rptr.2d 154, that the Bank Act does not preempt wrongful termination claims brought under the FEHA that allege sex or age discrimination.   The Supreme Court denied review in Marques on March 11, 1998, and we subsequently gave the parties an opportunity to brief the issues that case raises.   We have reviewed the parties' briefs, and conclude we should follow Marques.   Consequently, we reverse the judgment in favor of Bank of America to the extent it dismisses plaintiff's first cause of action (the FEHA claim).

The Bank Act gives a national banking association the power “[t]o elect or appoint directors, and by its board of directors to appoint a president, vice-president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places.”  (12 U.S.C. § 24, Fifth, italics added [hereafter § 24, Fifth].)  The trial court concluded undisputed evidence showed Bank of America is a national banking association and plaintiff was an officer (vice-president) whose termination was ratified by the board of directors (see Wells Fargo Bank v. Superior Court (1991) 53 Cal.3d 1082, 1103, 282 Cal.Rptr. 841, 811 P.2d 1025 (Wells Fargo )).   It therefore ruled that section 24, Fifth preempted all of her state based claims against Bank of America.

However, in Marques, supra, the court held that the Bank Act does not preempt wrongful termination actions brought under the FEHA to the extent they allege race, sex or age discrimination that are also prohibited under federal law.   The Marques court reasoned that the FEHA parallels the federal employment anti-discrimination law (Title VII) in banning sex and race discrimination in employment and the federal Age Discrimination in Employment Act (ADEA) in banning age discrimination in employment.  (59 Cal.App.4th at pp. 362-363, 69 Cal.Rptr.2d 154.)   The Marques court concluded that, in light of the federal anti-discrimination legislation, the FEHA does not conflict with the Bank Act's dismissal-at-pleasure provision to the extent the FEHA prohibits employer conduct that is also prohibited by the federal legislation.  (Id. at pp. 361-362, 69 Cal.Rptr.2d 154.)   As the court put it:  “The national standard enunciated by Congress in Title VII and the ADEA forbids dismissal on the basis of age, sex, and national origin, precisely the three types of discrimination alleged here․  [¶] ․ Since, under federal law, a national bank may no longer exercise the power to dismiss at pleasure an officer who can show her termination was discriminatory [on the basis of age or sex], state anti-discrimination statutes prohibiting such terminations are not preempted.”  (Id. at p. 363, 69 Cal.Rptr.2d 154, italics added.)

Nothing in this case distinguishes it from Marques.   Bank of America's counsel conceded as much at oral argument.   Nevertheless, Bank of America urges us not to follow Marques on the ground it was wrongly decided.   We have carefully reviewed that case and its underlying authorities and conclude that Marques is correct.

The thrust of Bank of America's attack on Marques is that the court misapplied the doctrine of repeal by implication.   In a nutshell, the Bank argues that repeal by implication is disfavored;  we must “harmonize” conflicting statutes whenever possible to avoid repeal by implication;  we can harmonize the Bank Act's dismissal-at-pleasure provision and Title VII and the ADEA by creating the most narrow exception possible to the dismissal-at-pleasure provision (namely, an exception for federal Title VII and ADEA claims only );  and it is illogical to conclude that just because Title VII and ADEA claims are allowed, parallel state (i.e. FEHA) claims are also allowed.³  (See Astoria Federal S. & L. Assn. v. Solimino (1991) 501 U.S. 104, 109, 111 S.Ct. 2166, 115 L.Ed.2d 96 [“[S]uperior, values of harmonizing different statutes and constraining judicial discretion in the interpretation of the laws, prompt the ․ rule that legislative repeals by implication will not be recognized, insofar as two statutes are capable of coexistence, ‘absent a clearly expressed congressional intention to the contrary.’ ”];  Kennedy Wholesale, Inc. v. State Bd. of Equalization (1991) 53 Cal.3d 245, 249-250, 279 Cal.Rptr. 325, 806 P.2d 1360 [“ ‘[T]he law shuns repeals by implication․’  [Citation.]  ․ Thus, to avoid repeals by implication ‘we are bound to harmonize ․ provisions' that are claimed to stand in conflict.”];  Wolfe v. Dublin Unified School Dist. (1997) 56 Cal.App.4th 126, 135, 65 Cal.Rptr.2d 280 [“ ‘[W]here two statutes treat of the same subject, one being special and the other general, unless they are irreconcilably inconsistent, the latter, although latest in date, will not be held to have repealed the former, but the special act will prevail in its application to the subject matter as far as coming within its particular provisions․' ”].)

However, upon a close reading of Marques and its underlying cases-primarily Aalgaard v. Merchants Nat. Bank, Inc. (1990) 224 Cal.App.3d 674, 274 Cal.Rptr. 81-we believe Bank of America has misconstrued the significance of the “repeal by implication” doctrine in the Marques court's analysis.   In particular, we conclude that Bank of America's final assertion-that it is illogical to conclude that because Title VII and ADEA claims are allowed, parallel state claims are also allowed-is simply incorrect.   This is because the present case involves more than a simple issue of “repeal by implication” between federal statutes.   Here, the primary issue is whether, under current law, Congress intended to preempt state anti-discrimination laws barring age and sex discrimination in cases involving bank officers.   Looking at Congress' full intent, as evidenced in Section 24, Fifth, Title VII and the ADEA, we conclude Congress did not intend to bar state law actions involving claims of age or sex discrimination.

 Although Bank of America attempts to cast Marques as primarily a “repeal by implication” case involving a conflict between federal statutes, Marques is, first and foremost, a preemption case involving a potential conflict between state and federal legislation.   In preemption cases of this sort, the burden is on the party claiming preemption (i.e., Bank of America) to prove that a federal law (section 24, Fifth of the Bank Act) was intended to preempt state law (here the FEHA).  (Perdue v. Crocker National Bank (1985) 38 Cal.3d 913, 937, 216 Cal.Rptr. 345, 702 P.2d 503.)   The rules on federal preemption were set out in Aalgaard, supra, and are worth reading carefully:

“ ‘The pre-emption doctrine, which has its roots in the Supremacy Clause, U.S. Const., Art. VI, cl. 2, requires [the reviewing court] to examine congressional intent.   Pre-emption may be either express or implied, and “is compelled where Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose.”   Absent explicit pre-emptive language, Congress' intent to supersede state law altogether may be inferred because “[t]he scheme of federal regulation may be so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,” because “the Act of Congress may touch a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject,” or because “the object sought to be obtained by federal law and the character of obligations imposed by it may reveal the same purpose.”  [¶] Even where Congress has not completely displaced state regulation in a specific area, state law is nullified to the extent that it actually conflicts with federal law.   Such a conflict arises when “compliance with both federal and state regulations is a physical impossibility,” or when state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” ’ ”  (Aalgaard v. Merchants Nat. Bank, Inc., supra, 224 Cal.App.3d at p. 686, 274 Cal.Rptr. 81, quoting Fidelity Federal Sav. & Loan Assn. v. de la Cuesta (1982) 458 U.S. 141, 152-153, 102 S.Ct. 3014, 73 L.Ed.2d 664.)

 Thus, there are three general types of preemption:  (1) express preemption (where the federal legislation expressly states it is intended to preempt state legislation);  (2) implied preemption through occupation of the field;  and (3) implied preemption by actual conflict.   We note that in the first two types of preemption, all state laws (whether consistent or inconsistent with federal legislation) are preempted.   However, the third type of preemption-preemption by conflict-only preempts those state laws that actually conflict with the federal legislation by undermining its purpose.

 This case does not involve express preemption and Bank of America does not contend it does.   Moreover, in Aalgaard, the court concluded that the Bank Act is not a comprehensive statutory scheme occupying the entire field relating to national banks.   Consequently, state anti-discrimination statutes have not been preempted by a comprehensive federal statutory scheme that occupies the field relating to national banks.  (224 Cal.App.3d at p. 688, 274 Cal.Rptr. 81.)   Bank of America does not contend otherwise.⁴  “ ‘Where Congress has not preempted the entire field, a state law will be upheld if it does not conflict with, or is authorized by, the federal statute.’ ”  (Ibid.)

 The Aalgaard court consequently turned to the issue of whether there was an actual conflict (as opposed to preemption by occupation of the field) between the Bank Act's dismissal-at-pleasure provision and the FEHA's prohibition against firing a person because of their age.   The Aalgaard court noted that an actual conflict “ ‘will be found when the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” ’  (International Paper Co. v. Ouellette (1987) 479 U.S. 481, 491-492, 107 S.Ct. 805, 93 L.Ed.2d 883․)   The ‘controlling principle’ then is that ‘any state legislation which frustrates the full effectiveness of federal law is rendered invalid by the Supremacy Clause.’  (Perez v. Campbell (1971) 402 U.S. 637, 652, 91 S.Ct. 1704, 29 L.Ed.2d 233.)”  (224 Cal.App.3d at p. 688, 274 Cal.Rptr. 81.) ⁵  In our view, these are the central principles that guided the Aalgaard court, the Marques court,⁶ and should guide this court in deciding the preemption issue.

The Aalgaard court examined in detail the purpose of the Bank Act's dismissal-at-pleasure provision, since it had to determine whether the FEHA would interfere with that purpose.   The court noted that “at the heart of this inviolable dismissal provision is a linkage with public policy protecting the financial stability and fiscal integrity of banks by making it beyond the powers of bank directors to enter into any contract restricting their ability to respond expeditiously to financial threats posed by bank officers.  [Citations.]”  (Aalgaard, supra, 224 Cal.App.3d at p. 689, 274 Cal.Rptr. 81.)

The Aalgaard court went on to summarize cases where bank employees had attempted to rely on state law (not just private contracts) to overcome the “dismissal-at-pleasure” provision in the Bank Act and similar laws.   The Aalgaard court concluded that the cases it had summarized “support[ ] the proposition that employment rights of officers of national banking associations which conflict with the right of the board of directors to dismiss them at pleasure are preempted by section 24 (Fifth) whether those rights arise by virtue of an agreement or are imposed by state law, and whether framed as contractual or tortious causes of action.”  (224 Cal.App.3d at p. 692, 274 Cal.Rptr. 81.)

Thus, the court concluded that, as a general proposition the FEHA age discrimination cause of action was preempted by section 24, Fifth.  (224 Cal.App.3d at p. 692, 274 Cal.Rptr. 81.)

Importantly, the employee in Aalgaard made a similar (though distinguishable) argument to the one the Marques court later considered.   In Aalgaard, the plaintiff contended the preemption doctrine could not be applied to his state age discrimination claim because Congress had enacted a comparable anti-discrimination statute;  namely, the ADEA, which only applies to employers with 20 or more employees.  (224 Cal.App.3d at pp. 693-694, 274 Cal.Rptr. 81.)   The Aalgaard court admitted that “[t]he federal age discrimination act provides no exception for national banks (or any other form of federally chartered financial institution) and since it was enacted long after the National Bank Act it may well be that under ‘familiar statutory interpretation, when there is such a conflict, the most recent and more specific congressional pronouncement will prevail over a prior, more generalized statute.’  [Citations.]   But even if preemption can no longer be applied to those large banks, it does not follow that Congress intended that small national banks exempted from the provisions of the federal age discrimination statute because of size should be bound by more sweeping state statutes.   By implication, Congress arguably has decreed that national banks with 20 or more employees are bound by the federal age discrimination statute.   But as to national banks with less than 20 employees, the National Bank Act and the federal discrimination statute are not irreconcilable․   Consequently, the extant federal statute prevails and a conflicting state statute cannot be applied to small national banks having less than 20 employees.  (See, e.g., E.E.O.C. v. County of Santa Barbara (9th Cir.1982) 666 F.2d 373, 378.)”   (Id. at p. 694, 274 Cal.Rptr. 81, italics added.)

Thus, the Aalgaard court ultimately decided that the federal legislation did not apply to the small bank before it and thus the ADEA had no bearing on the preemption issue.

Marques begins where Aalgaard left off.  (Marques, supra, 59 Cal.App.4th at pp. 360-361, 69 Cal.Rptr.2d 154.)   In Marques, unlike Aalgaard, the pertinent federal anti-discrimination statutes-Title VII(sex) and the ADEA (age)-unquestionably applied to the defendant (Bank of America).  (59 Cal.App.4th at p. 361, fn. 2, 69 Cal.Rptr.2d 154;  see fn. 3, ante.)   Although the Marques court makes a reference to the doctrine of “repeal by implication,” (59 Cal.App.4th at p. 362, & fn. 3, 69 Cal.Rptr.2d 154, ante ) this doctrine, which exists to resolve conflicts between federal statutes, was of secondary importance to the central issue before the court:  whether, in light of section 24, Fifth as it has been modified by Title VII and the ADEA, Congress intended to preempt parallel state anti-discrimination actions involving bank officers.   On this central issue the Marques court reasoned:  “Since, under federal law, a national bank may no longer exercise the power to dismiss at pleasure an officer who can show her termination was discriminatory, state antidiscrimination statues prohibiting such terminations are not preempted.  [¶] ․ The bank concedes that, of the three routes to preemption (express preemption, occupation of the field, and preemption by conflict), it can prevail only via the latter.  Section 24, Fifth ․ necessarily conflicts with the FEHA, it maintains.   But, at least as to the subjects of the discrimination dealt with in both Title VII and the FEHA (and we reemphasize that this case concerns only such), the enactment of Title VII in 1964 [and the ADEA subsequently] effectively vitiated any such conflict.   Subsequent to that enactment, there is simply no conflict between federal law (considered in its fullest sense) and California's FEHA.” (59 Cal.App.4th at pp. 363-364, 69 Cal.Rptr.2d 154, italics added, footnotes omitted.)

 In other words, the Marques court found that, viewed in the light of the restrictions Title VII and the ADEA place on a bank's power to dismiss its officers on the basis of age or sex, the FEHA does not “ ‘stand [ ] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’ ”  (International Paper Co. v. Ouellette, supra, 479 U.S. at pp. 491-492, 107 S.Ct. 805, italics added.)   To determine Congress' full purpose and objectives, we must look not only at section 24, Fifth, but also at Title VII and the ADEA which modify that provision.   Looking at all three federal statutes it is clear that Congress' “full purpose and objectives” are not violated by permitting state actions grounded on proscribed discriminatory dismissals that are also prohibited under federal law.

In summary, a fired bank officer may bring a discrimination claim under the FEHA in state court, but only on grounds that would be actionable under federal law.   The FEHA cannot supply an independent source of substantive law to protect bank officers who have been fired.   Consequently, there is no preemption of the FEHA claim to the extent plaintiff has alleged sex and age discrimination that would also be prohibited under federal law.⁷

2. The Bank Act Bars Plaintiff's Contract And Public Policy Causes of Action Against Bank Of America.

 Although plaintiff may maintain her FEHA cause of action against Bank of America, the trial court properly granted summary judgment in favor of Bank of America on her contract and tortious violation of public policy causes of action.   There is no question that section 24 Fifth of the Bank Act preempts all state law causes of action by a bank officer for breach of an employment agreement, including breach of the covenant of good faith and fair dealing.  (Wells Fargo, supra, 53 Cal.3d 1082, 1087-1088, 282 Cal.Rptr. 841, 811 P.2d 1025;  Inglis v. Feinerman (9th Cir.1983) 701 F.2d 97, 99;  Mardula v. Rancho Dominguez Bank, supra, 43 Cal.App.4th at p. 791, 51 Cal.Rptr.2d 63.)   In addition, the cases indicate section 24 also preempts an officer's cause of action alleging tortious discharge in violation of public policy.  (Inglis v. Feinerman, supra, 701 F.2d at p. 99 [construing similar language under the Federal Reserve Act, court held that dismissal-at-pleasure provision preempted vice-president's claim that he was fired for “his insistence that the Bank conform its practices to federal law”];  Walleri v. Federal Home Loan Bank of Seattle (9th Cir.1996) 83 F.3d 1575, 1582;  Mardula v. Rancho Dominguez Bank, supra, 43 Cal.App.4th at p. 793, 51 Cal.Rptr.2d 63 [section 24 bars officers from claiming discharge constituted “breach of a state law principle forbidding discharge on grounds that contravene public policy”];  Aalgaard v. Merchants Nat. Bank, Inc., supra, 224 Cal.App.3d at p. 692, 274 Cal.Rptr. 81;  see also, Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330;  Stevenson v. Superior Court (1997) 16 Cal.4th 880, 888-889, 66 Cal.Rptr.2d 888, 941 P.2d 1157;  Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 669-670, 254 Cal.Rptr. 211, 765 P.2d 373.)

 Plaintiff essentially concedes that, as a general proposition, the Bank Act's dismissal-at-will provision bars an officer's action for breach of an employment agreement or tortious discharge in violation of public policy.   She contends, however, that section 24 of the Bank Act does not bar her contract or tort causes of action because Bank of America failed to meet that section's procedural requirements.   We reject this argument.

 In order to invoke section 24 Fifth's protection, a national banking association's board of directors must take action to dismiss the bank officer.  (Wells Fargo, supra, 53 Cal.3d 1082, 1103, 282 Cal.Rptr. 841, 811 P.2d 1025.)   Thus, in Wells Fargo, the Supreme Court held that “section 24 does not preempt state law causes of action for wrongful discharge by a former national bank officer unless the officer was dismissed by the bank's board of directors itself or the discharge was approved or ratified by the board.”  (Id. at p. 1103, 282 Cal.Rptr. 841, 811 P.2d 1025.)   Despite this rather clear directive, plaintiff contends section 24 does not preempt state causes of action where a lower level bank manager-such as Mr. Wirtz-makes the actual decision to terminate an officer, and the board of directors merely ratifies that decision in a subsequent meeting.   She contends board of director ratification is only effective where a committee of board members, which the entire board has authorized to take such action, initially approves the discharge.   We do not agree.

Plaintiff's argument is based on a strained reading of Wells Fargo.   That argument-which covers some five pages-is premised on a misinterpretation of cases that Wells Fargo cites in its discussion on the non-delagable nature of the board's ultimate decision to terminate an officer.   However, to put it plainly, plaintiff's strained interpretation of those cases does not support her position that our Supreme Court concluded the board of directors (or a committee thereof) must make the initial decision to terminate the officer.   To the contrary, our Supreme Court specifically stated “section 24 does not preempt state law causes of action for wrongful discharge by a former national bank officer unless the officer was dismissed by the bank's board of directors itself or the discharge was approved or ratified by the board.”  (53 Cal.3d at p. 1103, 282 Cal.Rptr. 841, 811 P.2d 1025, italics added.) ⁸  Moreover, the Supreme Court specifically rejected the argument that such ratification would be a mere “rubber stamp” of actions recommended by senior officers.   The court noted “Board action of many kinds is often a ratification of recommendations by senior management.   But the board remains responsible for performing its statutory [duty] and other functions.   We will not presume it will undertake those duties lightly.”  (53 Cal.3d at p. 1100, 282 Cal.Rptr. 841, 811 P.2d 1025.)

The critical error in plaintiff's analysis is her assumption that, because the board's power to dismiss is nondelegable, it must be the board that initiates the termination.   However, explicit ratification of a senior management decision is sufficient to make the decision the board's own, thus satisfying the requirement that the board-not a manager-dismiss the officer.  (1 Marsh & Finkle, Marsh's Cal. Corporation Law (3d ed.1990) § 9.28, p. 650.) ⁹

 In sum, we conclude board of director ratification of a manager's decision to terminate an officer is sufficient to invoke section 24 Fifth preemption.  (See also Marques v. Bank of America, supra, 59 Cal.App.4th at p. 359, 69 Cal.Rptr.2d 154 [“undisputed evidence showed Bank of America is a national banking association of which Marques was an officer whose termination was ratified by the board of directors”].)

3. The Federal Court's Denial of Summary Judgment has no Collateral Estoppel Effect in this Case.**

B. The Action Against BAC.**

III

DISPOSITION

The judgment in favor of Bank of America is reversed to the extent it dismisses plaintiff's first (FEHA) cause of action, and the matter is remanded to the trial court for further proceedings consistent with the views expressed in this opinion.

The judgment in favor of BAC is affirmed.

The parties shall pay their own costs on appeal.

FOOTNOTES

1.   After the court granted the motions for summary judgment, but before filing her notice of appeal, plaintiff voluntarily dismissed the action as to Wirtz.

2.   Plaintiff filed a parallel action in federal court alleging causes of action for discrimination on the basis of sex (Title VII) and for age discrimination under the Age Discrimination in Employment Act and for a state law claim for termination in violation of public policy.   The federal district court denied Bank of America's motion for summary judgment in that action.

3.   Bank of America concedes that federal anti-discrimination legislation, and in particular Title VII and the ADEA, limit its power under section 24, Fifth to dismiss its officers “at pleasure.”   The case law supports this concession.  (Marques,supra, 59 Cal.App.4th at p. 363, 69 Cal.Rptr.2d 154;  Mardula v. Rancho Dominguez Bank (1996) 43 Cal.App.4th 790, 793, 51 Cal.Rptr.2d 63 [noting that section 24, Fifth and similar provisions do not bar claims that the discharge violated federal anti-discrimination statutes];  Mueller v. First Nat. Bank of the Quad Cities (C.D.Ill.1992) 797 F.Supp. 656, 660 [ADEA and ERISA (Employee Retirement Income Security Act of 1974) claims not barred];  Scott v. Federal Reserve Bank of New York (S.D.N.Y.1989) 704 F.Supp. 441, 447-448 [Title VII claim not barred];  Moodie v. Federal Reserve Bank of New York (S.D.N.Y.1993), 831 F.Supp. 333 [Title VII];  Moodie v. Federal Reserve Bank of New York (S.D.N.Y.1993) 835 F.Supp. 751 [same].)

4.   Although Bank of America does not allege that the FEHA is preempted by the Bank Act's occupation of the field, we note that we agree with the Aalgaard court's analysis of this issue.   That court stated:  “As applied to national banks, the United States Supreme Court ‘has often pointed out that national banks are subject to state laws, unless those laws infringe the national banking laws or impose an undue burden on the performance of the banks' functions.’  [Citations.]”  (224 Cal.App.3d at p. 687, 274 Cal.Rptr. 81.)   The Aalgaard court then quoted our Supreme Court's opinion in Perdue v. Crocker National Bank, supra, 38 Cal.3d 913, 216 Cal.Rptr. 345, 702 P.2d 503:  “While nationally chartered banks are subject to the paramount authority of the United States, Congress has declined to provide an entire system of federal law to govern every aspect of national bank operations.   Consequently, national banks have traditionally been ‘governed in their daily course of business far more by the laws of the State than of the Nation.   All their contracts are governed and construed by State laws.’   As explained in National State Bank, Elizabeth, N.J. v. Long [3d Cir.1980] 630 F.2d 981, ‘[w]hatever may be the history of federal-state relations in other fields, regulation of banking has been one of dual control since the passage of the first National Bank Act in 1863․   In only a few instances has Congress explicitly preempted state regulation of national banks.   More commonly, it has been left to the courts to delineate the proper boundaries of federal and state supervision.  [¶] The judicial test has been a tolerant one.  [National banks'] right to contract, collect debts, and acquire and transfer property are all based on state law.’  (P. 985.)   Thus the rule is that state laws apply, ‘the exception being the cessation of the operation of such laws whenever they expressly conflict with the laws of the United States or frustrate the purpose for which the national banks were created, or impair their efficiency to discharge [their] duties․' ” (Perdue, supra, 38 Cal.3d at pp. 937-938, 216 Cal.Rptr. 345, 702 P.2d 503 [fns. & citations omitted].)

5.   In a footnote, the Aalgaard court noted that the case before it did not involve a blatant conflict where compliance with both federal and state law is a “physical impossibility.”  (Aalgaard, supra, 224 Cal.App.3d at p. 688, fn. 10, 274 Cal.Rptr. 81.)

6.   (See Marques v. Bank of America, supra, 59 Cal.App.4th 356, 360, 69 Cal.Rptr.2d 154 [quoting this passage from Aalgaard.].)

7.   Because we conclude the Bank Act does not preempt plaintiff's first cause of action (the FEHA claim), we do not address plaintiff's alternative argument that her first cause of action survives because the Bank Act only preempts claims for discriminatory termination, but not claims of discriminatory harassment.   In plaintiff's words, “the preemptive effect of Section 24 has no application to discrimination claims of gender and age harassment, which make up the bulk of the first cause of action.”   Since we conclude plaintiff may proceed with her entire first cause of action against Bank of America, we need not address this argument.

8.   In distinguishing a federal case that held a bank may discharge an officer through an “executive committee,” the Wells Fargo court also noted the federal court “was not confronted with and did not purport to uphold terminations like those in this case, which were carried out through an elaborate chain of delegations and subdelegations and which were never subjected to board approval or ratification.”  (53 Cal.3d at p. 1101, 282 Cal.Rptr. 841, 811 P.2d 1025, italics added, distinguishing Mackey v. Pioneer Nat. Bank (9th Cir.1989) 867 F.2d 520.)

9.   As a leading treatise on California Corporations law explains:  “A corporation may be bound by the acts of its officers or other agents under the doctrine[ ] of ratification․   In general, ratification refers to the subsequent adoption and affirmance by the corporation of an act which an individual has assumed to do as agent of the corporation without previous authority․  [¶] Normally, a ratification will take the form of an express assent by the corporation to be bound by the agreement [or act].”  (1 Marsh & Finkle, Marsh's Cal. Corporation Law, supra, § 9.28, p. 650.)

FOOTNOTE.   See footnote *, ante.

PARRILLI, Associate Justice.

PHELAN, P.J., and CORRIGAN, J., concur.