The State Board of Equalization (Board) hired Rafi Kourounian as a tax auditor in 1989. He received two promotions: once in 2001 to “associate tax auditor” and again in the fall of 2012 to “business tax specialist”. The latter promotion included a one-year probationary period.
In mid-October of 2012, supervisors Doris Chiang and Warren Klomp provided him with a taxpayer’s complaint to investigate. The complaint alleged that a co-worker, Silva Saghbazarian, had discriminated against a taxpayer due to his age. Following his investigation, Kourounian found the co-worker had in fact discriminated against the taxpayer based on his age and criticized the chain of command, which included Chiang, for not following required procedures. He reported his findings back to both Chiang and Klomp.
On January 22, 2013, Kourounian was placed under Saghbazarian’s direct supervision. As her direct supervisor was Chiang, Kourounian was now being supervised by the two individuals he had criticized in his investigative report. In March 2013, Kourounian filed an EEO complaint that alleged that Saghbazarian had spied on him and sabotaged his job performance. Kourounian alleged that Saghbazarian’s conduct was retaliation because of his findings in the taxpayer complaint investigation. Chiang then became Kourounian’s direct supervisor. After allegedly experiencing similar instances of sabotage, Kourounian filed a second EEO complaint in May 2013, alleging retaliation for filing the first EEO complaint. In August or September 2013, while still on probation for the position of a business tax specialist, he was officially rejected for the promotion and returned to his previous position.
Kourounian administratively appealed the decision to rescind his promotion and a settlement was reached; the Board would return him to his position of Associate Tax Auditor and remove all documentation involving the rejection pending probation from his personnel file, and in exchange, Kourounian released all claims for the same, except for both claims of retaliation filed with the EEO.
When Kourounian returned to work, the similar mistreatment by management continued, and subsequently, Kourounian filed a complaint alleging retaliation with the California Department of Fair Employment and Housing (now California Civil Rights Department).
At trial, the court admitted evidence regarding Saghbazarian’s alleged conduct before the March 2013 EEO complaint and the jury ultimately found for Kourounian, awarding him over $425,000. The Board appealed.
The California Court of Appeal found the trial court abused its discretion by admitting evidence of Saghbazarian’s actions before the EEO complaint. The Court reasoned that FEHA only protects against retaliation for protected activities, and an investigation of a taxpayer complaint was not protected activity. Here, the only protected activities were the March and May EEO complaints. Therefore, adverse actions taken before a protected activity cannot constitute retaliation.
The Court of Appeal found that the trial court further abused its discretion by admitting hearsay evidence that negatively impacted the jury’s perception of the entire case. The Court of Appeal reasoned that the hearsay evidence prevented the Board from having a fair trial, and thus the Court reversed the judgment entirely.
Kourounian v. California Department of Tax and Fee Administration, 2023 WL 3612540 (Cal Ct. Appeal).