The California Supreme Court has ruled that individual employees cannot be held liable for retaliation under FEHA.
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FEHA UPDATE
Cal Supreme Court: Supervisors Not Personally Liable for Retaliation Under FEHA
The California Supreme Court handed a major victory to employers on March 3rd in a case titled Jones v. The Lodge at Torrey Pines.
The decision related to liability under California's Fair Employment and Housing Act ("FEHA"). The California law prohibits discrimination in the workplace, and also prohibits retaliation against an employee who protests illegal discrimination, files a complaint, or testifies in a legal proceeding.
Can an individual supervisor be held personally liable for FEHA retaliation? You might think so if you read the FEHA. Section 12940(h) makes it unlawful for any "employer, labor organization, employment agency, or person" to retaliate against an employee. California intermediate appellate courts have wrestled with the issue for years. Finally, in a decision split 4 to 3 among the justices, our Supreme Court put the matter to rest.
The case involved San Diego's Lodge at Torrey Pines. Scott Jones worked as the "outlet manager" at the Lodge at Torrey Pines, a hotel and restaurant adjacent to San Diego's famous Torrey Pines Golf Course. As outlet manager, Jones was responsible for the restaurant, bar, catering and banquet events, and the beverage cart service to golfers on the golf course. In October 2000 The Lodge hired a new beverage director, Jean Weiss. That is when the alleged problems began.
According to the trial record, Weiss and the kitchen manager developed a habit of telling jokes and making sexual remarks about women employees known as "cart girls." They also made fun of Jones' sexual orientation. Jones complained about this treatment.
Jones alleged that Weiss became hostile and threatened to fire Jones if he reported the matter to human resources. Later in the year Jones did complain to the HR manager. Jones alleged that Weiss subsequently retaliated by writing him up for a laundry list of performance problems. Eventually, Jones filed a DFEH complaint, and later resigned.
A lawsuit ensued against the Lodge and also Weiss individually. Jones alleged sexual orientation discrimination and retaliation for complaining about sexual harassment, among other claims. At trial, the jury awarded Jones $1,395,000 in damages against the Lodge and $155,000 against Weiss.
The trial court subsequently entered judgment in favor of Weiss, holding that an individual cannot be held liable for retaliation under FEHA. On appeal, the Court of Appeal reversed the trial court, finding that an individual can be held liable for retaliation.
The California Supreme Court decided that the trial court got it right in the first instance: individuals cannot be held liable for FEHA retaliation.
The Court had several reasons supporting its decision.
Ten years ago, the California Supreme Court held that individuals cannot be held liable for FEHA discrimination. Only the employer (usually a company) can be liable. The Court reasoned that if an individual cannot be liable for discrimination, she ought not to be held liable for retaliation either.
Although FEHA makes it illegal for a "person" to retaliate, the statute does not expressly make that person liable for his or her own unlawful conduct. The Court interpreted FEHA language to mean that the employer is liable for the conduct of the offending individual.
Individuals can be held liable for sexual harassment and other forms of unlawful harassment. But harassment is a bird of a different feather. "Harassment consists of conduct outside the scope of necessary job performance, conduct engaged in for personal gratification, because of meanness or bigotry, or for other personal motives."
Suing individual supervisors does not do much to increase the victim's ability to collect damages. On the other hand, the threat of a lawsuit could cause managers to make decisions based on what was least likely to lead to a claim of discrimination, rather than what was in the best interest of the company.
The case is a key victory for employers. The result is significant for several reasons.
First, as the Court noted, supervisors will now be free to exercise managerial discretion without fear of personal liability. Of course, employers will want to make sure managers comply with FEHA, lest the employer itself be sued.
Second, employers will save money in defense costs. When supervisors were named in a lawsuit along with the employer, it was sometimes necessary to hire separate counsel to defend them. More lawyers meant higher costs.
Third, the decision should allow more cases to be decided in federal court, where stricter procedures, conservative judges, and a rule requiring unanimous jury verdicts can even the odds for employers. Plaintiff lawyers sometimes strategically named supervisors as a way to keep cases out of federal court. (Under federal diversity jurisdiction rules, an out of state company can remove a case from state court to federal court, but only if there are no local resident defendants (e.g., local California supervisors)).
UPCOMING DISCRIMINATION LAW SEMINAR
Strategies For Keeping The EEOC/DFEH Away
& What To Do If They Show Up
Date: August 13, 2008
Location: TBA San Diego
Time: 8:30-4:30
Click here for more details.
Please contact Chris Olmsted if you have questions regarding employee retaliation or discrimination claims. (cwo@barkerolmsted.com)
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Download entire April Legal Update in PDF format.
This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2008 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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