Supervisors from Mars...Employer Defense Attorney, Clifton Smith, Comments on the California Supreme Court's Expansion of Managerial Immunity

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A sharply divided California Supreme Court has decided that supervisors are not personally liable for acts of retaliation under California's Fair Employment and Housing Act (the FEHA), Government Code §§ 12940, et.seq.

For employees who believe that their supervisors are alien life forms, there is now judicial confirmation that supervisors are not considered "persons" against whom liability may be imposed for acts of retaliation under California's Fair Employment and Housing Act (Government Code § 12940(h)). So says a majority of the California Supreme Court. As employees attempt to identify their supervisors' planet of origin, the Court continues to find a way to expand the scope of managerial immunity for personnel decisions under California law.

In the case of Jones v. The Lodge at Torrey Pines Partnership 42 Cal. 4th 1158 (2008), a sharply divided California Supreme Court ruled 4-3 that employers, not individual supervisors, may be held liable for acts of retaliation under California's Fair Employment and Housing Act (the FEHA), California Government Code §§ 12940, et.seq. This ruling expanded existing protections announced a decade earlier in Reno v. Baird, 18 Cal. 4th 640 (1998), in which the California Supreme Court held that employers, not supervisors, may be held liable for acts of discrimination.

As reported in the Court's written decision, Plaintiff, Scott Jones sued the Lodge and two supervisors for various causes of action, including constructive discharge, harassment, discrimination on the basis of sexual orientation and retaliation. Jones, a manager with a history of promotions, was responsible for the restaurant, bar, catering and banquet events at the Lodge. Jones complained of harassment from the food and beverage director, Weiss, who was also his immediate supervisor, and the kitchen manager, Steen. Only two causes of action went to jury trial: A claim for sexual orientation discrimination against the Lodge only, and a claim for retaliation against both the Lodge and Weiss. At trial, Jones reportedly testified that Weiss and Steen engaged in gay-bashing jokes, and made offensive, sexual remarks about female employees and Jones's sexual orientation. Jones also claimed that he was subjected to disciplinary action in retaliation for reporting his claims of harassment. Jones asserted that these retaliatory acts ultimately led to his constructive discharge (forced resignation). The jury found for the Plaintiff, Jones, on both causes of action, awarding compensatory damages of $1,395,000.00 against the Lodge and $155,000.00 against Weiss. On appeal, the California Supreme Court reversed the judgment against Weiss only.

The judicial dividing line in this case was the Court's interpretation of the meaning of the term, "person". Despite the FEHA's use of the term, "person", in its identification of those subject to liability for acts of retaliation (Government Code § 12940(h)), the Court's majority still decided that the Legislature did not intend to impose personal liability against supervisors for decisions characterized as retaliatory acts, a decision sharply criticized by Justice Moreno in his dissenting opinion. In his dissent, Justice Moreno accused the majority of ignoring the plain meaning of the statutory language. Justice Moreno encouraged the Legislature to act to clarify the meaning of the statute.

In a clearly, pro-business stance, the majority reasoned that a supervisor should not be subject to the ever present threat of litigation every time that he/she makes a personnel decision, which is an unavoidable and essential function of supervision. Shielding a supervisor from liability for acts of discrimination or retaliation encourages a supervisor to act to protect an employer's interest, without threat of financial ruin. Otherwise, the Court reasoned, imposing individual liability would have a chilling effect on the exercise of managerial discretion.

Employers should take little solace in this ruling since they remain vicariously liable for the acts of their managing agents, as evidenced by the judgment in excess of one million dollars against the Lodge in this case. Supervisor training to prevent sexual harassment in employment (California Government Code § 12950.1), which is actually mandated for employers with 50 or more employees, offers a cost-effective alternative to reduce the risk of financial loss resulting from violations of California's Fair Employment and Housing Act.

CE Smith Law Firm is the small employer's resource in California, supporting a union-free environment, educating and empowering it clients to effectively manage their employees, insuring that its clients remain labor law compliant and serving as its client's advocate, to advance and protect their interests.

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