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September 2008

Liability of Supervisors For Discrimination and Retaliation

In 1998, the California Supreme Court in Reno v. Baird (1998) 18 Cal.4th 640, decided that non-employer individuals could not be personally liable for claims of discrimination under California's Fair Employment and Housing Act (FEHA).

This year, the California Supreme Court extended that ruling to FEHA retaliation claims in the case of Jones v. The Lodge at Torrey Pines (2008) 42 Cal.4th 1158. The Jones Court held that even when an employer is liable for retaliation under the FEHA, non-employer individuals are not personally liable for their role in that retaliation.

In both Reno and Jones, the Court determined that sound reasons existed for not imposing individual liability, including that: (1) supervisors can avoid harassment, but they cannot avoid personnel decisions; (2) it is incongruous to exempt small employers from discrimination and retaliation claims, but not non-employer individuals; (3) public policy favors avoiding conflicts of interest and the chilling of effective management; (4) employers often make decisions collectively; and (5) policy does not support subjecting supervisors to liability or to the threat of litigation every time they make a personnel decision.

Notwithstanding these rulings, two Justices wrote strong dissenting opinions in Jones arguing that the plain language of the FEHA's retaliation provision (California Government Code section 12940(h)) imposes liability on any employer, labor organization, employment agency or "person" who retaliates. Thus, the dissents contend the statute unambiguously imposes liability on any individual who retaliates. As a result of the strong dissenting opinions in Jones, the United States District Court for the Southern District of California recently limited the application of Jones in Boone v. Carlsbad Community Church (2008) 2008 U.S. Dist. LEXIS 44675. In Boone, the court cited the Jones dissenting opinions and declined to extend the limitation against individual liability for FEHA retaliation to retaliation claims under the California Labor Code. Rather, the court ruled that Jones does not exclude individual liability under California Labor Code section 6310.1

However, courts are generally following the Jones decision. In Gordon v. Prudential Financial, Inc. (2008) 2008 U.S. Dist. LEXIS 56941, the United States District Court for the Southern District of California followed Jones and granted the individual defendants' motion for summary judgment on plaintiff's FEHA discrimination and retaliation claims. In Miklosy v. The Regents of the University of California (2008) 2008 Cal. LEXIS 9370, the California Supreme Court followed the Jones decision and held that a non-employer individual cannot be liable for the tort of wrongful discharge in violation of public policy.2

Accordingly, the law appears to be clear. Non-employer individuals cannot be held liable for discrimination or retaliation under the FEHA, and cannot be held liable for the common law tort of wrongful termination in violation of public policy. Although Boone declined to expand Jones to certain whistleblower claims under the California Labor Code, even that court reserved its right to re-examine the issue as the California courts continue to interpret California laws in light of Jones. We fully expect other California courts to do just that, and will keep you informed.

This article provides a brief summary of California law regarding the liability of supervisors for retaliation in light of Jones. Please call one of our employment lawyers for a more detailed discussion of the FEHA, Jones, and their potential impact on your business.

1California Labor Code ยง6310 precludes retaliation in employment against an individual that has made a complaint regarding health or safety to a governmental agency.
2It should be noted that this has been the law since Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 176 held that "when an employer's discharge of an employee violates fundamental principles of public policy, the discharged employee may maintain a tort action and recover damages [against the employer]." Thus, as far back as 1980, Courts have held that there can be no cause of action for wrongful termination in violation of public policy without the prior existence of an employment relationship between the parties.

Employment Law

Employment Law