Lloyd W. Aubry, Jr.
Employment + Labor and Litigation
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Employees have many legal protections in the private workplace, including the right to work in an environment free from harassment. Employees also have certain free speech rights in the private workplace. Yet there are times when these free speech rights and harassment laws collide. This article will discuss conflicts between free speech protections and harassment laws in the private workplace and the implications of these conflicts for employers. The article will begin with an overview of free speech protections and harassment laws. The article will then discuss three cases where California courts have harmonized free speech rights and harassment laws. Finally, the article will provide advice for employers in dealing with these competing interests.
Free Speech Protections
Freedom of speech is a central principle in a free and democratic society. The First Amendment to the United States Constitution provides, "Congress shall make no law … abridging the freedom of speech." The California Constitution provides, "Every person may freely speak, write and publish his or her sentiments on all subjects, being responsible for the abuse of this right. A law may not abridge liberty of speech or press." Article I, section 2, subdivision (a). The California Constitution’s free speech protections are "more definitive and inclusive than the First Amendment." Wilson v. Superior Court (1975) 13 Cal.3d 652, 658.
Freedom of speech is a civil liberty that courts are hesitant to infringe upon. They are reluctant to order prior restraints, or content-and viewpoint-based restrictions on speech. Prior restraints preemptively forbid future speech rather than punishing speech that has already been spoken. The original purpose of the guarantee of the freedom of speech was to prevent prior restraints on speech. Near v. Minnesota (1931) 283 U.S. 697, 713. Prior restraints must be narrowly tailored to fulfill a compelling government interest. Content-and-viewpoint based restrictions forbid speech because of the message or content of the speech. Content- based restrictions "must burden no more speech than necessary to serve a significant government interest." Madsen v. Women’s Health Center Inc. (1994) 512 U.S. 753, 765.
While California values the right of its citizens to speak freely, there are compelling government interests such as those noted above and, as will be seen below, creating harassment-free workplaces, that justify the Legislature and courts in placing restrictions on speech.
Harassment laws help "protected groups" obtain equality in the workplace. In California, harassment claims are based on the Fair Employment and Housing Act ("FEHA") and Title VII of the Civil Rights Act of 1964 ("Title VII"). FEHA provides, "It is hereby declared as the public policy of this state that it is necessary to protect and safeguard the right and opportunity of all persons to seek, obtain, and hold employment without discrimination or abridgment on account of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation." (Cal. Gov. Code § 12920). The U.S. Supreme Court declared that both quid pro quo harassment and the existence of a hostile work environment are violations of Title VII. Harris v. Forklift Systems, Inc. (1993) 510 U.S. 17; Meritor Savings Bank, FSB v. Vinson (1986) 477 U.S. 57.
Most scholars agree that quid pro quo harassment is unprotected by the First Amendment in the same manner as threats and extortion. This article will discuss hostile work environment claims where a severe and pervasive environment of harassment creates a situation that violates Title VII or FEHA. Generally, a single racial or sexual epithet is not considered severe and pervasive. See e.g. the plurality opinion in Aguilar v. Avis (1999) 21 Cal.4th 121, at 146, fn. 9, which noted in dictum, "a single use of a racial epithet, standing alone, would not create a hostile working environment." See also Etter v. Veriflo Corp. (1998) 67 Cal. App. 4th 457, 467, which held racial harassment cannot be "occasional, isolated, sporadic, or trivial." On the other hand, a single, very severe incident can constitute harassment. See e.g. Etter v. Veriflo Corp., at 467, which noted a very severe incident could constitute harassment, citing several cases such as Vance v. Southern Bell Tel. and Tel. Co., 863 F.2d 1503 (11th Cir. 1989) (two incidents in which a noose was hung over the employee’s work station were sufficiently severe to constitute harassment); and Doe v. Capital Cities (1996) 50 Cal. App. 4th 1038, 1045 (a single violent sexual assault constituted harassment). If several employees make comments that are offensive to a protected group, then the accumulation of those statements can create a hostile work environment. The statements do not have to be made by the same employee or supervisor. See e.g. Marigny v. Mercury Air Center, 2003 WL 21978622 (Cal. App. 2 Dist.) (unpublished decision), where an employee stated a claim for harassment after being subjected to several harassing incidents, including: a racial slur uttered by a trainee in the presence of a supervisor; repeated use of racial slurs and stereotypes by co-employees and low-level managers; and the failure of the Human Resources Director to investigate a claim of racial harassment.
Harassment laws require private employers to restrict speech or literary matter in the private workplace, and therefore harassment laws may conflict with the free speech rights of employees.
How Have Free Speech and Harassment Laws Been Harmonized?
The Fifth Circuit Court of Appeals noted, "Where pure expression is involved, Title VII steers into the territory of the First Amendment. It is of no use to deny or minimize this problem because, when Title VII is applied to sexual harassment claims founded solely on verbal insults, pictorial or literary matter, the statute imposes content-based, viewpoint-discriminatory restrictions on speech … whether such applications of Title VII are necessarily unconstitutional has not yet been fully explored." DeAngelis v. El Paso Municipal Police Officers Association, 51 F.3d 591, 596-597 (5th Cir. 1995). As the quoted passage from DeAngelis explains, conflicts arise between free speech rights and harassment laws. Courts address these conflicts by balancing the right of employees to be free from harassment and the right of employees to speak freely.
The California Supreme Court dealt with a conflict between free speech and harassment laws in Aguilar v. Avis, 21 Cal.4th 121. In Aguilar, Latino employees claimed they were subject to harassment in the workplace when their supervisor directed racial slurs at them. The supervisor was sued for harassment, and the employer was sued for failing to prevent the harassment. The court determined that the racial slurs were illegal, harassing speech. The court awarded monetary damages to the plaintiffs in amounts varying from $15,000 to $25,000. The employer was held jointly liable for the harassment because the company knew or should have known about the harassment and failed to do anything about it. The court also imposed an injunction forbidding the supervisor from uttering racial slurs which included a list of words that the supervisor was prohibited from speaking at any time in the workplace. Avis, as the employer, was held responsible for ensuring that the supervisor did not speak the forbidden words. The injunction ordered the employer to "cease and desist from allowing the defendant to commit any of these acts described in [the injunction] under which circumstances it knew or should have known of such acts." Id. at 128. Failure to comply with the injunction could cause the employer to be in contempt of court.
The court in Aguilar dealt extensively with the conflict between free speech and harassment laws. The California Supreme Court found the injunction forbidding specified words from the workplace was constitutional because the injunction forbade the perpetuation of illegal activity. Id. at 147. A concurring opinion suggested the majority too easily assumed harassing workplace speech is exempt from First Amendment protections, but the concurring judge still found that because of the captive audience; the time, place, and manner of the restriction; and the availability of alternate forums for speech, the injunction did not violate state or federal constitutional protections. Id. at 148. The injunction in Aguilar was a very broad restriction on speech. Although a single racial epithet will rarely be declared a hostile work environment, the court found that any mention of the racial slurs, even if they were spoken outside the hearing of the plaintiffs, was forbidden. The court allowed a prohibition of racial epithets even when they were spoken outside the hearing of the plaintiffs because "continual use of racial epithets poisons the atmosphere of the workplace, even when some of the invective is not directed at or even heard by the victims." Id. at 145. Because the specific words prohibited by the injunction had been declared harassing, the court found these words could be forbidden in the future. The court harmonized free speech rights and harassment laws by claiming that an injunction on speech was warranted because of the compelling government interest in forbidding the perpetuation of illegal activity.
The Ninth Circuit also recently dealt with a conflict between free speech and harassment laws. In Peterson v. Hewlett Packard, 358 F. 3d 599 (9th Cir. 2004), an employee claimed that he was unjustly fired after exercising freedom of religion and freedom of speech. In Peterson, the employee was fired for refusing to take down Bible verses from his cubicle. The employee claimed that he was offended by the employer’s diversity posters which condoned homosexuality. The employee stated, "as long as Hewlett Packard is condoning [homosexuality] I’m going to oppose it." Id. at 602. The Bible verses were unprotected by the First Amendment because the words were intended to be offensive to gay and lesbian employees. The court claimed that subjective offense is a necessary part of harassment but still dismissed the employee’s claim that the diversity posters were offensive to him. The court pointed out the diversity campaign was meant to promote tolerance, and not intended to create offense. 358 F. 3d at 604. The court decided that the Bible verses were not protected speech, partially because the employee admitted that the verses were meant to be hurtful and to convince homosexual coworkers to change their behavior. The court noted, "an employee’s opposition to a policy of the employer or his advocacy regarding a controversial public issue invokes different considerations than his expressive activity intended to demean or degrade coworkers." Id. at 605. It is unclear whether the Bible verses would have been protected if the employee had been intending to express his views in a non-hurtful manner. The content and purpose of the speech, as well as the identity of those offended by it, were important elements for the court in deciding whether the speech was protected by the First Amendment.
The Ninth Circuit also harmonized harassment laws and free speech in Bodett v. Coxcom, Inc., 366 F.3d 736 (9th Cir. 2004), where the court found that a woman could be fired for making statements that were disapproving of homosexuality. The supervisor told a gay subordinate "the relationship she was in, was probably the cause of turmoil in her life," and that "God’s design is for a relationship between a man and a woman" and that "homosexuality is a sin." The supervisor also prayed with the subordinate, invited the subordinate to church, and expressed disappointment if the subordinate entered into a homosexual relationship. The court noted, "[the employer] is entitled under Title VII to create an internal harassment policy designed to equally protect its employees’ rights. [The supervisor] may only freely exercise her First Amendment rights as long as such exercise does not infringe on the rights of others by manifesting discrimination prohibited by [the employer’s] policy." The court noted First Amendment rights may only be freely exercised as long as the speech does not violate a harassment policy.
Advice for Employers
Case Studies — Employer Liability, Including Injunctive Relief
Allowing harassing speech in the workplace can lead to liability. Regardless of whether the employer agrees with the statements made, or contributes to the harassment, the employer is required to prevent harassing speech in order to avoid liability. Employers can be subject to compensatory damages, punitive damages, and injunctions on future employee speech.
A case which demonstrates the danger of allowing "too much" speech in the workplace is Marigny v. Mercury Air Center, an unpublished California Court of Appeal decision. In Marigny, the Director of Human Resources told an African-American employee that "everyone has the right to express themselves" after a trainee, in the presence of a supervisor, called the employee a "skinny N___," called him "boy," and threatened to "whoop" him. 2003 WL 21978622, at *2 (unpublished decision). The court described the employer’s statement that "everyone has the right to express themselves" as "brushing off" the complaint by the employee. Ibid. The employer was held liable for many offenses, including negligently failing to prevent harassment, and intentional infliction of emotional distress. The employee was awarded $15,000 in compensatory damages for intentional infliction of emotional distress. The Marigny court granted the employee a new trial to determine a new damages award. The Marigny court reversed the lower court’s finding that there was insufficient proof of malice to warrant punitive damages, because there was evidence that management dealt with the employee’s complaints in a "negative and dismissive" manner, including the statement that the harassing employees were "expressing" their views. Id. at *5. Because the new award will include punitive damages and because the jury will be allowed to hear the actual harassing words uttered by the supervisor, the new award for damages could well exceed $15,000, assuming the case does not settle prior to trial.
Given the current state of the law, the best advice for employers is to forbid all speech that is or may be perceived as harassing to any protected group. The accumulation of several different incidents by different employees can create a hostile work environment. Because it is impossible for an employer to know how many subjectively offensive statements will create liability, the better approach is not to tolerate any harassing speech. Employers should have clear policies forbidding workplace harassment, including a place for employees to go if they are feeling harassed, uncomfortable, threatened, or intimidated. The Marigny case demonstrates that statements such as "everyone has the right to express themselves" will not be viewed favorably by California courts. Id. at *2. Employers should take seriously every complaint by an employee of harassment in the workplace.
At least one California court has imposed a speech-based injunction on an employer and instructed the employer to prevent future harassing speech in the workplace. In Aguilar, under the terms of the injunction, the employer can be held in contempt of court if the employer is unable to stop an employee from saying certain words. The California Supreme Court in Aguilar found that speech that was defined as "harassing" could be prohibited in the future and was not protected by the First Amendment.
There is more than one method of obtaining speech-based injunctions in California. Besides an Aguilar injunction obtained in a FEHA case, California allows a person, or an employer on behalf of an employee, to seek an injunction from harassing or threatening speech or conduct. Cal. Code of Civil Procedure (C.C.P.) § 527.6, § 527.8. California law allows a person who has suffered "harassment" to seek a temporary restraining order and an injunction prohibiting future harassment. Cal. Code of Civil Procedure (C.C.P.) § 527.6. The statute defines "harassment" as "unlawful violence, a credible threat of violence, or a knowing and willful course of conduct directed at a specific person that seriously alarms, annoys, or harasses the person and that serves no legitimate purpose." Petitioners are allowed to obtain section 527.6 injunctions to prevent future harassment as long as "constitutionally protected activity is not included." Cal. C.C.P. § 527.6(b)(3). This exemption of "constitutionally protected" speech does not define which actions or words are protected by the constitution. Injunctions that are too broad would presumably include "constitutionally protected" speech.
If an employer is served with an injunction requiring the employer to prevent future harassing speech in the workplace (as in Aguilar), the employer could challenge the injunction on First Amendment grounds. California courts (such as in Aguilar) have found that injunctions forbidding future harassing speech violate the First Amendment if the injunctions are overbroad or are not narrowly tailored. An injunction to quell future speech is clearly a state action, and therefore when a speech-based injunction is issued, free speech concerns must be addressed. To survive a constitutional challenge, the injunction may not be overbroad or vague, and there must be alternative avenues for the employees to express their views. An example where a California court struck down parts of an injunction on free speech grounds is Krell v. Gray (2005) 24 Cal. Rptr. 3d 764. In Krell, a § 527.6 injunction was sought by a principal against a former employee. The former employee was picketing outside the school with signs containing derogatory statements about the principal. The court found the provisions of the injunction which prohibited the former employee from including the name of the principal on any signs, and prevented him from picketing within 100 yards of the school, were overbroad and not narrowly tailored and therefore those clauses were unconstitutional. Id. at 778-779. An employer facing a court-imposed injunction could argue that injunctions on speech are overbroad prior restraints that are content-and viewpoint-based. These arguments will trigger strict scrutiny, and the court will have to ensure the injunction is narrowly tailored.
Is There a Free Speech Defense?
As shown above, an employer can be sued and enjoined for failing to prevent harassing speech in the workplace. The employers in Aguilar and Marigny were both held liable for failing to do so. There is very little case law on a free speech defense, but many scholars have suggested employers can assert free speech defenses to Title VII and FEHA lawsuits. If an employer is sued for failing to prevent harassing speech, these scholars suggest the employer could argue the speech was permissible and protected free speech.
Courts are hesitant to restrain "core political speech," and sometimes the harassing speech might arguably be political in nature. If that is so, some scholars suggest the employer may be able to defend a practice of not quelling speech on First Amendment grounds in a case where the allegedly harassing speech could be defined as "core political speech." Core political speech includes political opinions, religious views, or views of a protected group. A free speech defense will have more chance of success if a limited number of statements were made, the statements "expressed political views about a controversial political issue," and the statements were not directed at the plaintiff or not meant to hurt the plaintiff. Peterson, 358 F.3d at 605.
Perhaps more guidance to this defense will be offered by the California Supreme Court in a pending case, Lyle v. Warner Brothers, a depublished Court of Appeals opinion at 117 Cal. App. 4th 1164 (2004), which addresses whether "creative necessity" is a defense to a hostile work environment claim. In Lyle, plaintiff was a writers’ assistant present during writers’ conferences on the TV show "Friends" and was subjected to a stream of sexually coarse and vulgar language. After her termination, she filed a claim for sexual harassment. Defendants asserted a "creative necessity" defense which the Court of Appeals did not fully accept. The Supreme Court accepted review limited to the following: "(1) does the use of sexually coarse and vulgar language in the workplace constitute harassment, and (2) does potential imposition of liability for sexual harassment for such speech violate defendant’s rights of free speech." With the issue presented this way, the Lyle case should provide some answers to the questions posed in this article.
Harassing speech and free speech rights are sometimes in conflict with each other. Harassing speech (and harassment claims) in the workplace can be very expensive for employers. While it is interesting to consider First Amendment defenses to certain types of speech in the workplace, it is unclear how much First Amendment protection exists for speech that occurs in the workplace, though the California Supreme Court should soon provide some guidance on the issue. In order to avoid liability, employers should seek to have workplaces free from clearly harassing speech regardless of the potential for First Amendment defenses.
Morrison & Foerster gratefully acknowledges the assistance of Natalie A. Fleming, a summer association in the firm's San Francisco office, for her assistance in the preparation of this bulletin.
1 The court noted, "Mercury had a duty under the FEHA ‘not only to prevent harassment, but once it became aware of harassment to take reasonable steps to prevent it.’ Courts have interpreted this provision as creating a tort sounding in negligence with the usual elements of breach of duty, causation and damages." Marigny at *4.
2 The original trial court would not allow the jury to hear the actual harassing words spoken by the supervisor because the court allowed the employer to concede that the words were inappropriate. The Marigny court noted that if the jury had heard the actual harassing words, "it is reasonably probable that the jury would have awarded a greater sum in damages for intentional infliction of emotional distress." Marigny at *12.
Three California Supreme Court Decisions: Not All Good News
Miller v. Department of Corrections -- Sexual favoritism can lead to liability
On July 18, 2005, the California Supreme Court entered its decision in the case entitled Miller v. Department of Corrections (2005) 36 Cal.4th 446. The decision significantly expands potential employer liability for sexual harassment claims. In short, employees in California may now sue employers for sexual harassment if a sexual affair between a supervisor and a subordinate creates a hostile work environment for employees not involved in the affair.
Two employees, Edna Miller and Frances Mackey, sued the Department of Corrections under the FEHA for, among other things, sexual harassment, sexual discrimination, and retaliation. Plaintiffs’ claims stemmed from their tenure under Lewis Kuykendall, who served as the chief deputy warden at the first prison facility where plaintiffs were employed, and later as the warden at a second facility where they worked. Kuykendall was having concurrent consensual sexual affairs with his secretary and two other subordinates. These affairs were not concealed from other employees. On the contrary, the three women with whom Kuykendall was involved sometimes publicly squabbled over him while at work.
One of the plaintiffs knew of these affairs and was denied promotions to positions that were awarded to one of Kuykendall’s lovers. Plaintiffs expressed concern about Kuykendall’s behavior. As a result of the complaints, one of the plaintiffs’ supervisors, a friend of Kuykendall’s, became abusive towards plaintiffs.
Considering the record de novo, the court found that Kuykendall had engaged in favoritism towards each of his paramours by securing their transfer to the new facility where he worked, by assisting in certain promotions, and by awarding them workplace privileges. The court also found that another supervisor (the foregoing friend of Kuykendall’s) had physically assaulted one of the plaintiffs after she had complained about Kuykendall. Plaintiff Miller resigned her employment after her complaints failed to result in better working conditions. Plaintiff Mackey also resigned after her supervisor repeatedly questioned her regarding her participation in an internal investigation into Kuykendall’s behavior.
A Sacramento trial court entered summary judgment in favor of defendants on the grounds that evidence of Kuykendall’s sexual favoritism did not constitute discrimination or harassment under the FEHA. The Court of Appeal affirmed, concluding that a supervisor who grants favorable employment opportunities to a person with whom the supervisor is having a sexual affair does not, without more, commit sexual harassment toward other, nonfavored employees. Notably, the Court of Appeal found that plaintiffs were in the same position as male employees who had failed to acquire the benefits secured to the three paramours of Kuykendall, and thus the challenged conduct disfavored both female and male employees.
In a forty-page opinion, the California Supreme Court reversed. The court relied heavily on a 1990 policy statement issued by the EEOC addressing employer liability under Title VII for sexual favoritism. The policy statement explains that if favoritism based upon the granting of sexual favors is widespread in a workplace, both male and female colleagues who do not welcome this conduct can establish a hostile work environment, regardless of whether any objectionable conduct is directed at them and regardless of whether those who were granted favorable treatment willingly bestowed the sexual favors. An employee can establish a violation if the conduct is sufficiently severe or pervasive to alter the conditions of employment and create an abusive working environment. Significantly, the court found the EEOC’s statement consistent with prior California case law finding a hostile work environment through the creation of a work atmosphere that demeans women.
Applying this standard, and analogizing to a workplace riddled with racist comments, the court found that plaintiffs had established a prima facie case of sexual harassment. The court emphasized that while isolated instances of favoritism towards an employee with whom a supervisor is engaged in a consensual affair do not ordinarily constitute sexual harassment, the court held that a "hostile work environment" can exist where the atmosphere is so severe that it demeans women as "management’s sexual playthings" and conveys the message that "the way to career advancement is to sleep with the boss." Here, not surprisingly, the court found that much more than an isolated act of favoritism towards a paramour had occurred. Critically, Kuykendall had caused his sexual paramours to be transferred to his new facility, had granted another supervisor the ability to abuse those who complained about his affairs, and had ensured that advancement was based upon sexual favors. The court found that this evidence collectively created an issue of triable fact as to whether the message was implicitly conveyed that management viewed women as "sexual playthings," noting that "it is clear under California law that a plaintiff may establish a hostile work environment without demonstrating the existence of coercive sexual conduct directed at the plaintiff or even conduct of a sexual nature."
The Miller decision makes it clear that California employers should take every measure to ensure that any conduct that could be construed as sexual favoritism is handled with caution. These measures may include implementation of detailed, narrowly-tailored anti-harassment, nonfraternization, and/or anti-nepotism policies. In addition, employers should ensure that their supervisors are aware of Miller’s implications when conducting supervisor sexual harassment prevention training pursuant to AB 1825, and that supervisors understand that a sexual relationship need not be coerced in order to result in potential liability for the employer.
From this point forward, employer liability will turn on the fine distinction between isolated sexual favoritism and widespread sexual favoritism. In practical terms, this vague standard virtually guarantees that any action taken by a supervisor with regard to his or her lover in the workplace could expose the employer to lawsuits filed by non-favored employees. In fact, this decision opens the door to lawsuits by any employee challenging the employment decisions by a supervisor engaged in, or believed to be engaged in, an office romance. Quite simply, any employee who knows about an office romance and receives some adverse employment action can potentially file a lawsuit.
The real world importance of this decision cannot be overstated. For example, a recent survey conducted this year by Vault, Inc., found that 58% of employees had dated someone at work, up from 46% two years ago. Among the 600 respondents, the survey found that 14% had dated a boss or supervisor, while 19% dated a subordinate. Careerbuilder.com also conducted a survey this year that found that, among 1,300 respondents, 75% believed that employees should be able to date anyone they wish at work.
Thus, not only are office affairs becoming more widespread in the workplace, employees arguably continue to find nothing wrong with such conduct.
Koebke v. Bernardo Heights Country Club–An Expansion of Domestic Partner Rights
On August 1, 2005, the California Supreme Court issued its decision in Koebke v. Bernardo Heights Country Club (2005) 2005 Cal.LEXIS 8359. The unanimous ruling was the court’s first on California’s Domestic Partner Act, which took effect on January 1, 2005, and furnished registered partners most of the rights of spouses under state law. Not surprisingly (in light of the recently passed Domestic Partner Act), the court ruled that California businesses must treat registered domestic partners the same as married couples. (For a complete review of this legislation, see our September 2004 Employment Law Commentary available at http://www.mofo.com/docs/PDF/ELC0904.pdf.)
Koebke involved a lesbian couple who were registered domestic partners. They sued the defendant country club to which one of them belonged, claiming the club’s refusal to extend to them certain benefits it extended to married members of the club constituted marital status discrimination under California’s Unruh Civil Rights Act (California Civil Code section 51), which requires businesses to treat customers equally. The club argued the strong public policy favoring marriage categorically precluded recognition of marital status discrimination under the Unruh Act. Further, the club asserted that extending spousal benefits to "members’ friends" might lead to overuse of its facilities, disincentivize such friends to apply for membership, and discourage the club’s "legitimate goal of creating a family-friendly environment by welcoming the immediate family of married members."
Lower courts ruled in the club’s favor, holding that the Unruh Act did not forbid discrimination based on marital status. The state Supreme Court, however, disagreed, stating that marital status discrimination is categorically prohibited when the customers are registered domestic partners. Indeed, California’s high court unanimously decided, "A business that extends benefits to spouses it denies to registered domestic partners engages in impermissible marital status discrimination." Thus, because a chief goal of the Domestic Partner Act is to equalize the status of registered domestic partners and married couples, the Unruh Act barred the club from granting married couples benefits denied to individuals registered as domestic partners under the Domestic Partner Act.
Notably, the Domestic Partner Act, initially passed in 2000, provided only limited benefits at first. However, the 2005 version includes far more expansive rights and is arguably the broadest such measure in the nation, effectively granting spousal status, except for joint tax filing under state law and the numerous rights of married couples under federal law. And, after Koebke, domestic partners now enjoy equal treatment by businesses.
Yanowitz v. L’Oreal USA, Inc.– Retaliations Suits Become Even More Perilous
In the wake of Yanowitz v. L’Oreal USA, Inc. (August 11, 2005) Cal.LEXIS 8594, California employers now face greater exposure to retaliation suits brought under the Fair Employment and Housing Act (FEHA). Quite simply, Yanowitz significantly expands employees’ rights to sue for retaliation, and in so doing, further opens the courthouse doors to these already problematic lawsuits.
In order to establish a claim for retaliation, an employee must establish that he or she engaged in "protected activity"(i.e., opposed unlawful conduct); that he or she sustained an "adverse employment action" because of that activity; and that he or she suffered damages. In Yanowitz, the California Supreme Court: (i) clarified the standard for opposing unlawful conduct; (ii) resolved a conflict among the lower courts about how to define an "adverse employment action"; and (iii) held that the "continuing violations" doctrine is applicable to retaliation claims. The general consequences flowing from the court’s resolution of the foregoing issues, discussed below, are to make it correspondingly more difficult for employers to dispose of retaliation claims prior to trial.
In Yanowitz, the plaintiff served as a Regional Sales Manager employed by L’Oreal USA, Inc. She alleged that a male supervisor repeatedly ordered her to terminate a female sales associate who, in the superior’s view, was not sufficiently attractive. The plaintiff asked for an "adequate justification" before she would terminate the associate. No other justification was given, and plaintiff refused to comply with the termination order. In her lawsuit, plaintiff alleged that she refused the order because she felt it was sex discrimination. Critically, however, plaintiff never told her superior, nor anyone else at L’Oreal, about her belief the order was discriminatory. After refusing to comply with the order, plaintiff alleged she received heightened scrutiny and increasingly hostile adverse treatment. This treatment included management soliciting negative information about plaintiff from her subordinates and increased verbal and written criticism of plaintiff’s performance. Prior to this incident, however, plaintiff received universally good reviews and awards.
In its decision, the California Supreme Court first reaffirmed the established principle that "protected activity" includes complaints or opposition to conduct that the employee "reasonably" and in "good faith" believes to be unlawful, even if the conduct is not actually prohibited by the FEHA. In probably the most far-reaching portion of its decision, the California Supreme Court went on to hold that it is not necessary in all cases for an employee to expressly indicate to the employer that he or she believes the challenged conduct is discriminatory. Instead, according to the court, protected activity occurs "when the circumstances surrounding an employee’s conduct are sufficient to establish that an employer knew that an employee’s refusal to comply with an order was based on the employee’s reasonable belief that the order is discriminatory … [and] the employee [need] not explicitly inform the employer that she believed the order was discriminatory." While a wholly unarticulated belief that an employer is engaging in discrimination will not suffice to establish protected activity, according to the Supreme Court, the relevant question is not whether a formal accusation of discrimination is made, but whether the employee’s communications to the employer sufficiently conveyed the employee’s reasonable concerns that the employer has acted or is acting in an unlawful discriminatory manner.
Thus, the court concluded that plaintiff’s requests for an "adequate justification" before she would terminate the employee, were sufficient to raise a triable issue of fact whether she had engaged in protected activity, even though plaintiff never explicitly mentioned that she thought the termination order was discriminatory. In reaching that conclusion, the Supreme Court found it significant that the employer had never inquired what plaintiff meant by the use of the term "adequate justification." The troubling aspect of this conclusion, as pointed out by the dissent, is that in some circumstances, employers will have the burden of investigating and/or discovering the underlying basis (i.e., a feeling that improper conduct is occurring) for seemingly benign requests from subordinates regarding business practices.
In Yanowitz, the court also resolved a dispute among the lower courts as to the definition of an "adverse employment action." The court agreed with the view taken by two California appellate courts, and most federal circuit courts under Title VII, that an adverse employment action is one that "materially" impacts a plaintiff’s terms and conditions of employment. While the court adopted the "materiality test" over the "deterrence test" for purposes of a FEHA retaliation claim, the court gave the concept of "materiality" an expansive reading. Borrowing from federal "harassment" law, the Yanowitz court indicated that a "material impact" does not require that an employee suffer an economic detriment or psychological injury. While mere offensive utterances or petty social slights are not actionable, the Supreme Court held that FEHA’s anti-retaliation language protects employees from "the entire spectrum of employment actions that are reasonably likely to adversely and materially affect an employee’s job performance or opportunity for advancement in his or her career."
Further, and perhaps more importantly, the court noted there is no requirement that an employer’s retaliation "constitute one swift blow, rather than a series of subtle, yet damaging, injuries." Thus, according to the court, the proper approach is not to look at each alleged retaliation action individually to see if it meets the "materiality" standard. Rather, courts should look at the totality of the employer’s actions to see if they collectively rise to the level of having a material impact on the employee.
Finally, the court also held that an employee can bring a claim for retaliation based on conduct that occurred years earlier as long as the employee alleges that it is part of a pattern of retaliatory conduct. Under the FEHA, an employee generally has one year to make a claim for retaliation with the state agency. Defendants argued that many of the acts plaintiff relied on had occurred years earlier. The court rejected the argument and held that where an employee alleges a retaliatory course of conduct (as compared to discrete acts), the "continuing violations" doctrine applies and the statute of limitations does not begin to run on any of the related alleged retaliatory acts until the adverse employment action acquires some degree of permanence or finality.
Without belaboring the obvious, this conclusion is also terrible news for employers. Previously, employers could reliably (and at a minimal cost) dispose of meritless actions that did not fall within the one-year statutory period. Now, however, future plaintiffs (and their counsel) facing a problematic statute of limitations issue in a contemplated action can plead around this jurisdictional bar by alleging there has been a pattern of retaliatory conduct such that any perceived statute of limitations problem is cleansed by the continuing violations doctrine. As a result, the employer will have lost an effective and straightforward defense to the lawsuit.
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