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Nurses’ Jury Verdict Vacated For Failure To Exhaust DFEH Administrative Remedies
Three nurses, Judy Alexander, Johann Hellmannsberger, and Lisa Harris, worked in the Behavioral Health Unit of the Community Hospital of Long Beach (Community Hospital). Community Hospital contracted with Memorial Psychiatric Health Services (MPHS) to operate its Behavioral Health Unit. Pursuant to the contract, MPHS provided administrative services for the unit and employed and managed its director, Keith Kohl. Community Hospital separately contracted with Memorial Counseling Associates (MCA) to provide physicians for the unit.
One of the nurses complained multiple times to Community Hospital’s Director of Education that Kohl discriminated against her in favor of male staff, particularly gay male staff. The nurse also indicated she wanted to file a formal complaint, but the Human Resources Director told her the last person who complained no longer worked there. The nurse never filed a formal complaint and instead transferred to a different shift to avoid Kohl.
Later, the three nurses were wrongly accused of using a physical restraint on a patient without a doctor’s order. Kohl subsequently terminated the three nurses. While the nurses found new employment, they were terminated from their jobs after the Department of Justice arrested them for the prior incident at Community Hospital. A jury later acquitted them of criminal charges.
Following the nurses’ terminations, a number of other Community Hospital staff complained that Kohl had created a hostile work environment by favoring male employees. Eventually, Community Hospital demanded that MPHS remove Kohl from his position. The three nurses then filed a lawsuit against Community Hospital and MCA for various claims, including violations of the Fair Employment and Housing Act (FEHA). They later amended their civil complaint to name MPHS as a defendant but never filed a Department of Fair Employment and Housing (DFEH) administrative complaint against MPHS.
After testimony regarding Kohl’s conduct and favoritism towards gay, male staff, the jury found against Community Hospital on all of the nurses’ claims, and found in favor of MCA. It also found against MPHS on the nurses’ causes of action for negligent supervision and FEHA violations. The jury awarded damages totaling $4,734,973.
On appeal, MPHS argued that the court should reverse the judgment against it on the FEHA claims. MPHS argued that because the nurses did not mention MPHS in their DFEH complaint, they never exhausted their administrative remedies. Under the FEHA, a person claiming to be aggrieved by an alleged unlawful practice must first file an administrative complaint with the DFEH stating “the name and address” of the employer alleged to have engaged in the unlawful conduct. While the nurses tried to argue for an exception to the exhaustion requirement, the court dismissed their argument. Since the nurses did not mention MPHS in their DFEH complaint, they could not bring a civil lawsuit against MPHS for violations of the FEHA. The court also found insufficient evidence to support the negligent supervision verdict against MPHS.
Community Hospital also appealed the jury verdict. It argued that the trial court made several errors and that there was insufficient evidence to support one of the nurse’s FEHA and wrongful termination claims. The Court of Appeal agreed. The court reasoned that the trial court errors unfairly conveyed to the jury that Community Hospital was liable. The court also concluded that no evidence suggested that Kohl ever targeted one of the nurses who was a heterosexual male, or that the male nurse (Hellmannsberger) witnessed “severe or pervasive” conduct necessary to support a hostile work environment claim. Accordingly, the court determined that the nurse could not establish that the sexual favoritism was so severe or pervasive as to alter his working conditions or create a hostile working environment. Further, the court concluded that insufficient evidence supported the nurses’ other common law claims for defamation and negligent supervision.
Alexander v. Cmty. Hosp. of Long Beach, 2020 WL 1149695 (Cal. Ct. App. Feb. 13, 2020).
This case shows how an employee’s failure to exhaust administrative remedies can eliminate a jury verdict. LCW’s trial and appellate lawyers use this defense and several others to assist our clients.