In a significant decision for California employers, the Second District Court of Appeal clarified that an employer is not strictly liable under the Fair Employment and Housing Act (FEHA) for harassment by an employee who supervises others but has no supervisory authority over the plaintiff. Doe v. Wells Fargo Bank, N.A., No. B344642 (Oct. 5, 2026).
The Decision
The plaintiff, a Wells Fargo wealth advisor, alleged that a senior investment strategist sexually harassed and assaulted her during a business trip. Although the alleged harasser exercised significant influence within Wells Fargo and provided input concerning the performance of other employees, the plaintiff conceded that he was not her supervisor. Wells Fargo successfully moved for summary judgment, arguing that it could not be strictly liable because the alleged harasser did not supervise the plaintiff and, alternatively, that Wells Fargo was not negligent in responding to the alleged harassment.
On appeal, the plaintiff argued that FEHA’s strict liability standard applies whenever the alleged harasser is a “supervisor,” regardless of whether that individual supervises the particular plaintiff. The Court of Appeal expressly rejected that sweeping interpretation.
FEHA distinguishes between harassment by a supervisor and harassment by a nonsupervisory employee. Under FEHA, employers are strictly liable for harassment by a supervisor, while liability for harassment by a nonsupervisory employee depends on whether the employer knew or should have known of the harassment and failed to take immediate and appropriate corrective action. (See State Dept. of Health Services v. Superior Court (2003) 31 Cal.4th 1026, 1040–1041.) The court in Doe clarified and limited the meaning of “supervisor” in proving strict liability for harassment.
Specifically, the court held that strict liability applies only when the alleged harasser is the plaintiff’s supervisor and is acting in a supervisory capacity when the harassment occurs. An employee who supervises other workers but has no supervisory authority over the plaintiff is, as to that plaintiff, a coworker.
The court emphasized that this interpretation is consistent with the rationale underlying strict liability: Harassment by a plaintiff’s supervisor presents a distinct power imbalance and implicates the employer’s delegation of authority. Extending strict liability to every employee who happens to supervise someone else would produce arbitrary results, including potentially imposing strict liability when a lower-level supervisor harasses a higher-level employee.
What Employers Should Know
Doe provides employers with a useful defense against efforts to expand FEHA strict liability. Employers should consider it important guidance in defending FEHA harassment claims, particularly in large or complex organizations where employees may exercise supervisory authority over some workers but not others.
First, job titles are not determinative. Employers should examine the alleged harasser’s actual authority over the plaintiff, including the ability to direct work, assign responsibilities, discipline, or otherwise exercise supervisory power.
Second, organizational hierarchy matters. Doe reinforces that the critical relationship is between the alleged harasser and the alleged victim, not whether the harasser supervises anyone else.
Third, and finally, developing the supervisory relationship in discovery is invaluable. Evidence concerning reporting structures, delegated authority, performance evaluations, discipline, assignments, and the parties’ respective roles may be critical to determining whether the FEHA’s strict liability standard applies and in evaluating the likelihood of success on summary judgment.
For questions or guidance on takeaways from this decision, please do not hesitate to reach out to your GRSM attorney or a member of GRSM’s Employment team for assistance.