Supervisors Not Personally Liable for Retaliation Under FEHA

On March 3, 2008, the California Supreme Court brought clarity and consistency to the laws of employment discrimination under the California Fair Employment and Housing Act (FEHA). It has been ten years since the California Supreme Court held, in the case of Reno v. Baird (1998) 18 Cal.4th 640, that individual supervisors cannot be held personally liable for acts of discrimination. However, in the intervening decade, courts have been inconsistent in deciding whether to insulate individual supervisors from personal liability for retaliation, for acts taken against employees who have complained of employment discrimination, or participated in investigations or hearings into employment discrimination.

Following the Reno v. Baird decision, some courts reacted by distinguishing between discrimination and retaliation, and have held that the individual exemption from liability for discrimination did not apply to retaliation. Accordingly, there have been numerous instances in the last decade in which employees have sued their employers for both discrimination and retaliation, and individual supervisors, at the same time, for retaliation.

As of March 3, 2008, claims against individual supervisors for retaliation under FEHA are no longer viable. In Jones v. The Lodge At Torrey Pines, 2008 WL 553670, the California Supreme Court remarked that the Reno rationale for not holding individuals personally liable for discrimination applies equally to retaliation. Moreover and more fundamentally, the Court held that there is no reason for making supervisory individuals personally liable for retaliation but not for discrimination.

The Court partly based its decision on concerns that individual exposure to liability will stifle supervisors and managers in performing their job duties; for example, a supervisor "might be particularly afraid to impose discipline" on an employee who has gained a "reputation as a complainer." The Court was also concerned about the overall effect on society and the economy: "It is manifest," the Court held, "that if every personnel manager risked losing his or her home, retirement savings, hope of children's college education, etc., whenever he or she made a personnel management decision, management of industrial enterprises and other economic organizations would be seriously affected.”

The Court also reiterated that it will continue to treat discrimination as different from harassment. Discrimination involves business and personnel management decisions, necessary for performance of a supervisor's job, which might later be construed as discriminatory. Harassment, on the other hand, "consists of conduct outside the scope of necessary job performance, conduct presumably engaged in for personal gratification, because of meanness or bigotry, or for other personal motives." Because of this distinction, and because FEHA calls for personal liability for harassment, individual supervisors may still be subject to personal liability for acts which are construed as harassment.

COUNSEL TO MANAGEMENT:

This case does not change the substantial liability which companies face when charges of discrimination and retaliation are brought. If anything, it may increase exposure in that a jury, knowing that monetary damages cannot be apportioned between the company and individual supervisors, may be inclined to increase damages awards against a company found to have engaged in discrimination or retaliation. Nor should this case be taken as a positive development for individual supervisors: although they may be “off the hook” when it comes to liability in litigation, a supervisor perceived to have engaged in discrimination or retaliation continues to represent a liability to the employer. Some companies eager to head off allegations of discrimination or retaliation may take action against such supervisors, including discipline and discharge. Individual liability for discriminatory harassment remains the law.

Employers must remain as diligent as ever in complying with FEHA and its federal-law counterparts. Full compliance calls for development, under the guidance of experienced counsel, of comprehensive written policies and consistently-implemented practices regarding employment discrimination.

The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, the reader should consult with Saqui & Raimondo at (831) 443-7100 in Salinas, or (916) 782-8555 in Sacramento.