California Supreme Court Finds No Individual Liability for Retaliation Under the Fair Employment and Housing Act (FEHA)

March 13, 2008
Introduction

The California Supreme Court recently decided in Jones v. The Lodge at Torrey Pines, Case No. S151022 (March 3, 2008) that the Fair Employment and Housing Act (FEHA) does not impose liability on individual employees or supervisors for retaliation in violation of FEHA. Liebert Cassidy Whitmore’s Managing Partner Melanie Poturica successfully argued at oral argument before the Supreme Court in this case on behalf of the League of California Cities as Amicus Curiae to support The Lodge at Torrey Pines’ prevailing position.

In deciding the issue of individual liability for retaliation, the Court considered an area to which Courts had recently directed substantial attention. As codified under California Government Code section 12940, FEHA principally regulates three types of unlawful conduct in the workplace: (1) Discrimination, (2) Harassment, and (3) Retaliation.

In 1998, the California Supreme Court decided in Reno v. Baird (1998) 18 Cal. 4th 640 that no individual liability existed under FEHA for employees or supervisors who engage in unlawful discrimination. The following year in 1999, the California Supreme Court extended this reasoning to find that FEHA also did not provide for individual liability for employees or supervisors who engage in unlawful harassment. Carrisales v. Dept. of Corrections (1999) 21 Cal. 4th 1132.

In 2000, the Legislature overrode the Court’s ruling in Carrisales, and amended FEHA to provide for individual liability for co-workers and employees who engage in unlawful harassment in the workplace. However, the Legislature did not modify the provisions in FEHA regarding discrimination or retaliation. Therefore, under Reno, FEHA was still interpreted not to impose individual liability for unlawful discrimination. However, absent any prevailing caselaw on the issue, this still left open the issue of whether individual liability for unlawful retaliation existed under FEHA. The Jones case settles this uncertainty for the time being by clarifying that FEHA does not provide for individual liability against co-workers and supervisors for unlawful retaliation.

Underlying Facts in the Jones Case

In this case, Plaintiff Scott Jones, an employee of Defendant The Lodge at Torrey Pines, alleged he was subjected to sexual orientation discrimination and retaliation in violation of FEHA. Jones alleged that following his protests of the sexual harassment of female employees at the Lodge, his supervisor, Defendant Jean Weiss, began retaliating against him for his actions. The alleged retaliation consisted of unfair performance evaluations and formal and informal reprimands that resulted in Jones voluntarily terminating his employment. A trial of the matter resulted in a verdict awarding Jones $1,395,000 from Defendant The Lodge at Torrey Pines and $155,000 from individual Defendant Weiss. The award against Weiss was based solely on her alleged retaliation against Jones in violation of FEHA.

The trial court granted Defendants' post trial motions for judgment notwithstanding the verdict, and, alternatively, a new trial. Plaintiff Jones appealed, and the Court of Appeal reinstated the jury verdict, holding among other things that the evidence was sufficient to support the jury's finding that Jones had suffered an adverse employment action, and that an individual supervisor could be held liable for retaliation under FEHA. Defendants appealed that decision and the California Supreme Court granted review only on the issue of whether FEHA authorizes individual liability for unlawful retaliation.

California Supreme Court’s Analysis Denying Individual Liability for Retaliation Under FEHA

In a 4-3 opinion by Justice Ming W. Chin, the California Supreme Court held that FEHA does not authorize liability for individual employees who engage in unlawful retaliation. First, the Court confronted Plaintiff’s principal argument that individual liability for unlawful retaliation exists under FEHA by arguing that FEHA makes it an unlawful employment practice for any "person" to retaliate. This is because the wording governing retaliation in FEHA - unlike that governing discrimination - applies not just to employers but to any "person[s]" who engage in prohibited conduct. The "person" language led many courts to hold that the FEHA imposes individual liability for retaliation.

In contrast, the Court held that the "person" language does not clearly impose individual liability, but merely describes what type of conduct the statute prohibits. The Court contrasted the "person" language in FEHA regarding retaliation to the differing language relating to harassment, in which the Legislature describes in detail and under what circumstances individuals can be liable for unlawful harassment.

The Court also noted that there is nothing in the Legislative History of the 1987 FEHA Amendment to indicate that the addition of the term "person" to the language governing retaliation had any intent to establish individual liability for unlawful retaliation. As a result, the Court likened the retaliation language in FEHA to that governing discrimination and reasoned that the language should be analyzed in the same manner - therefore not authorizing individual liability for unlawful retaliation.

The Court then evaluated the similarities between discrimination and retaliation, and how they both involved actions generally within the course and scope of employment. It contrast, the Court noted how harassment does not involve actions within the course and scope of employment:

[H]arassment consists of a type of conduct not necessary for performance of a supervisory job. Instead, harassment consists of conduct outside the scope of necessary job performance, conduct presumably engaged in for personal gratification, because of meanness or bigotry, or for other personal motives. Harassment is not conduct of a type necessary for management of the employer’s business or performance of the supervisory employee’s job.>/blockquote>

The Court observed that presenting supervisors and other individuals with the risk of liability for making required personnel decisions could have severe adverse public policy consequences. Quoting an earlier appellate court decision, the majority observed:

[I]t is manifest that if every personnel manager risked losing his or her home, retirement savings, hope of children’s college education, etc., whenever he or she made a personnel management decision, management of industrial enterprises and other economic organizations would be seriously affected.

Following this, the Court reversed the Court of Appeal decision as it applied to the award against individual Defendant Weiss because no individual liability exists for unlawful retaliation under FEHA.

Conclusion

The Jones case is good news for employers and their supervisors. While this case does not remove any employer liability it should help put supervisors and managers at ease in knowing that standard personnel decisions in the course and scope of employment cannot create individual liability for unlawful retaliation under FEHA.

However, the Jones case does not bring a full resolution to the issue of individual liability for retaliation under FEHA. The Court specifically declined to address whether FEHA provides individual liability for a supervisor who is individually liable for harassment and who simultaneously engages in retaliation against an employee for reporting or opposing that harassment.

As a result, LCW advises that all employers train supervisors and managers to take all harassment complaints seriously and promptly follow up and investigate complaints received. As well, employers should take proactive steps to avoid any inference of retaliation against an employee who reports or opposes harassment.

This article was written by Gage C. Dungy and David A. Urban, attorneys with the labor and employment law firm of Liebert Cassidy Whitmore (LCW). Mr. Dungy is an Associate in the Fresno office and can be reached at (559) 256-7800 or at gdungy@lcwlegal.com. Mr. Urban is Of Counsel in the Los Angeles Office and can be contacted at (310) 981-2045 or Durban@lcwlegal.com. For more information regarding the information above or our firm please visit our website at www.lcwlegal.com, or contact one of our offices below.

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