Under FEHA, Non-Employer Supervisor May Not Be Held Personally Liable for Acts of Retaliation

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In Jones v. The Lodge at Torrey Pines Partnership (2008) 42 C.4th 1158, 72 C.R.3d 624, 177 P.3d 232, an action under the California Fair Employment and Housing Act (FEHA) (Govt.C. 12900 et seq.; see 8 Summary (10th), Constitutional Law, §915 et seq.), plaintiff sued his employer and his supervisor for retaliation, for complaining about sexual harassment. Although the trial court originally entered judgment on a jury verdict for plaintiff, it subsequently granted both defendants’ motions for judgment notwithstanding the verdict and, alternatively, for a new trial, and entered judgment for defendants. The Court of Appeal reversed the order granting these motions and reinstated the original judgment for plaintiff on the verdict. Both parties appealed.The Supreme Court’s grant of review was limited to the question whether a nonemployer individual may be held personally liable for retaliation under the FEHA. Held, judgment of the Court of Appeal reversed; only the employer may be held liable for retaliation under the FEHA. (42 C.4th 1160, disapproving Walrath v. Sprinkel (2002) 99 C.A.4th 1237, 121 C.R.2d 806, 8 Summary (10th), Constitutional Law, §919, and Taylor v. Los Angeles Dept. of Water & Power (2006) 144 C.A.4th 1216, 51 C.R.3d 206.)

(a) Govt.C. 12940(a) prohibits “an employer” from engaging in specified forms of discrimination. Reno v. Baird (1998) 18 C.4th 640, 76 C.R.2d 499, 957 P.2d 1333, 8 Summary (10th), Constitutional Law, §919, held that, under Govt.C. 12940(a) employers may be held liable for discrimination but that nonemployer supervisors may not be held personally liable for discrimination. Govt.C. 12940(h) prohibits retaliation by “any employer, labor organization, employment agency, or person,” and the issue in this case is whether the word “person” evinces a legislative intent that individuals be held personally liable for retaliation. (42 C.4th 1161.)

(b) Plaintiff argued that the plain meaning of Govt.C. 12940(h) is to make individuals personally liable for retaliation and that other forms of statutory interpretation need not be utilized. This contention is without merit. Govt.C. 12940(h) is a catch-all provision aimed at prohibiting retaliation against an individual who opposes any practices forbidden “under this part” or who assists in any proceeding “under this part.” Govt.C. 12940(h) thus incorporates unlawful employment practices defined in other parts of Govt.C. 12940, and forbids retaliation against anyone opposing an unlawful employment practice. Each of the entities to which Govt.C. 12940(h) applies (employer, labor organization, employment agency, or person) is the subject of one or more other subdivisions of Govt.C. 12940, defining specific unlawful employment practices. It is thus possible that the Legislature merely used each of these terms in subdivision (h) to reflect that the other subdivisions of Govt.C. 12940 use those terms, rather than to impose additional personal liability on nonemployer individuals. Accordingly, it is necessary to engage in statutory interpretation to resolve this ambiguity. (42 C.4th 1162, 1163.)

(c) In concluding that the FEHA does not make individuals personally liable for discrimination, Reno v. Baird reasoned as follows: (1) The FEHA makes at least some individuals liable for harassment, but not for discrimination, because there is a fundamental distinction between harassment, which is a type of conduct not necessary to the performance of a supervisor's job, and business or personnel management decisions, which are inherently necessary to the performance of a supervisor's job and which might later be considered discriminatory. (2) Under the FEHA, small employers (those employing fewer than five employees) may be sued for harassment, but may not be sued for discrimination. Because the Legislature clearly intended to protect small employers from the burdens of litigating discrimination claims, it is highly unlikely that it simultaneously intended to subject individual nonemployers to these burdens. (3) Sound policy favors avoiding conflicts of interest and the chilling of effective management that would result were supervisors to be held personally liable. (4) Corporate employment decisions are often collective. (5) It is bad policy to subject supervisors to the threat of a lawsuit every time they make a personnel decision. All of these reasons for not imposing individual liability for discrimination apply equally to retaliation. Indeed, some may apply even more forcefully to retaliation claims. For example, if an employee gains a reputation as a complainer, supervisors might be particularly afraid to impose discipline on that employee or make other lawful personnel decisions out of fear that the employee might claim retaliation. (42 C.4th 1163, quoting Janken v. GM Hughes Electronics (1996) 46 C.A.4th 55, 53 C.R.2d 741, 8 Summary (10th), Constitutional Law, §919.)

(d) Yanowitz v. L’Oreal USA (2005) 36 C.4th 1028, 32 C.R.3d 436, 116 P.3d 1123, 8 Summary (10th), Constitutional Law, Supp., §940, held that the employment actions that give rise to a claim for retaliation are identical to the employment actions that give rise to a claim for discrimination, despite differences in wording between Govt.C. 12940(h) and Govt.C. 12940(a). Thus, “it is hard to conceive why the Legislature would impose individual liability for actions that are claimed to be retaliatory but not for the same actions that are claimed to be discriminatory.” (42 C.4th 1168, 1169.)

(e) The word “person” was added to Govt.C. 12940(h) in 1987. If plaintiff's claim that this addition made individuals liable for retaliation is correct, then the legislation created individual liability where none had existed previously. The legislative history does not support this conclusion. The bill adding the word “person” made several amendments to the FEHA. The Legislative Counsel's Digest describes several of these amendments but does not mention Govt.C. 12940, and refers to “technical and conforming changes.” A change that created individual liability for retaliation where none existed previously would be substantive, not technical. (42 C.4th 1169, 1170, citing Ailanto Properties, Inc. v. Half Moon Bay (2006) 142 C.A.4th 572, 48 C.R.3d 340.) Plaintiff relies on documents analyzing these legislative changes, both of which documents were dated approximately 13 years after the legislation. They are inherently unreliable, as well as ambiguous. (42 C.4th 1171.)

A dissent by two justices argued that it would be illogical to conclude, as the majority did, that the Legislature intended to expose a supervisor to individual liability for harassing an employee, while shielding that supervisor from liability for retaliating against the employee for opposing that harassment. (42 C.4th 1174.)

Witkin References

On the FEHA generally, see 8 Summary (10th), Constitutional Law, §915 et seq.

On actionable retaliation under the FEHA, see 8 Summary (10th), Constitutional Law, §940

On supervisor's liability for retaliation, see 3 Summary (10th), Agency and Employment, §200; 8 Summary (10th), Constitutional Law, §919

On wrongful termination of employment for retaliation, see 3 Summary (10th), Agency and Employment, §251 et seq.