Kristina Raines and Darrick Figg sued on behalf of themselves and a class of conditional offer of employment recipients. They alleged that they received offers of employment that were conditioned on pre-employment medical screenings that U.S. Healthworks Medical Group (USHW) performed. USHW conducted the medical screens as agents of the prospective employers. Raines and Figg claimed that USHW violated the California Fair Employment and Housing Act (FEHA) by requiring job applicants to complete a written health history questionnaire that included numerous questions that had no bearing on the applicant’s ability to perform job functions.
Government Code Section 12940 of the FEHA makes it an “unlawful employment practice” for an employer of five or more persons “to make any medical or psychological inquiry of an applicant.” The FEHA only allows these inquires “after an employment offer has been made but prior to the commencement of employment duties, provided that the examination or inquiry is job related and consistent with business necessity and that all entering employees in the same job classification are subject to the same examination or inquiry.”
The federal district court dismissed the FEHA claim, finding that FEHA does not impose liability on agents of an employer. Raines and Figg appealed the dismissal to the U.S. Court of Appeals for the Ninth Circuit.
The Ninth Circuit heard oral argument and then asked the California Supreme Court to answer this question: “Does California’s [FEHA], which defines ‘employer’ to include ‘any person acting as an agent of an employer,’ …, permit a business entity acting as an agent of an employer to be held directly liable for employment discrimination?”
The California Supreme Court answered yes. The FEHA’s plain meaning and legislative history, as well as federal antidiscrimination laws and public policy, all support the conclusion that an employer’s business-entity agents that have at least five employees and that “carr[y] out FEHA-regulated activities on behalf of an employer” can fall within FEHA’s definition of “employer” and may be directly liable for FEHA violations. The Court specifically stated that it was not deciding the significance of any employer control over the agent’s acts that gave rise to the FEHA violation, nor whether its decision applied to business-entity agents with fewer than five employees.
Raines v. U.S. Healthworks Medical Group, 2023 Cal. LEXIS 4619.
Note: This ruling significantly expands the scope of FEHA liability to an employer’s business-entity agents that employ five or more people. Although this case does not involve the employers who extended the conditional offers, the case also does not immunize an employer from liability for delegating FEHA regulated functions to business agents. As a result, nonprofit organizations should carefully vet prospective agents to confirm that their practices are FEHA-compliant.