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Individual Employees Are Not Liable For Retaliation Under FEHA

On March 3, 2008, the California Supreme Court held that non-employer individuals are not personally liable for retaliation under the California Fair Employment and Housing Act, Cal. Gov. Code, § 12900 et seq. (“FEHA”).  Jones v. Lodge at Torrey Pines (Case No. S151022).

The FEHA makes it unlawful for an employer to harass or otherwise discriminate against any employee based on the employee’s membership in a protected class.  The FEHA also prohibits an employer from retaliating against an employee who has exercised his or her rights under the FEHA.  In 1998, the California Supreme Court held, in Reno v. Baird (1998) 18 Cal.4th 640, that an individual cannot be held personally liable for discrimination under the FEHA. 

Over the past several years, many lower state courts and the Ninth Circuit Court of Appeals distinguished numerous cases from Reno and held individual employees personally liable for retaliation under the FEHA.  See Taylor v. City of Los Angeles Dept. of Water & Power (2006) 144 Cal.App.4th 1216; Walrath v. Sprinkel (2002) 99 Cal.App.4th 1237, 1240-1242; see also Winarto v. Toshiba America Electronics Components (9th Cir. 2001) 274 F.3d 1276.  The California Supreme Court’s decision in Jones reverses these cases, and extends Reno to prohibit lawsuits alleging retaliation in violation of the FEHA against non-employer individuals.

The plaintiff in Jones alleged that he suffered sexual orientation discrimination, and that his supervisor subjected him to sexual orientation harassment, sexually harassed female employees, and retaliated against him when he complained about the harassment.  Although the claims for harassment did not make it to trial, a jury ultimately found in favor of Jones on his claim for sexual orientation discrimination against The Lodge at Torrey Pines (The Lodge).  The jury also found in Jones’s favor against both The Lodge and Jones’ supervisor on his claim for retaliation.  The jury awarded compensatory damages of $1,395,000 against The Lodge and $155,000 against Jones’s supervisor.  The case was appealed and the court of appeal upheld the jury verdict on a number of grounds.  On further appeal, the California Supreme Court accepted review of the case only as to the limited question of whether an individual could be held personally liable for retaliation under the FEHA.

The Court’s decision relies heavily on its prior decision in Reno.  The main difference between the two cases is the fact that the statutory provision prohibiting retaliation (as opposed to discrimination) includes “persons” among the entities that are prohibited from retaliating against an employee.  The plaintiff in Jones argued that the use of the word “person” in the retaliation section of the FEHA demonstrated that the Legislature intended to permit lawsuits against individual employees.  The California Supreme Court disagreed, concluding that this language did not clearly impose individual liability for retaliation.

Specifically, the Court searched the legislative history of the FEHA, and found no indication that the Legislature intended to impose individual liability for retaliation.  The Court also concluded that the reasons for not imposing individual liability for discrimination are likewise compelling with regard to claims for retaliation: (1) individual liability would constrain supervisors’ ability to make personnel decisions because they would be concerned about their personal exposure to a lawsuit; (2) FEHA exempts small employers from liability and it therefore would be incongruous to impose such liability on individuals; and (3) management decisions are often made by a group of people and it would be impossible to establish each individual’s proportional liability. 

Practical Considerations

The law is now settled that the FEHA imposes liability on individual employees for harassment (e.g., sexual harassment), but not for employment discrimination or retaliation.  Keep in mind, however, that employers remain liable for all three of these unlawful employment practices.  Consequently, the Jones decision may reduce the ability of plaintiffs to bring employment lawsuits against individual employees, but should not have much impact on the overall volume of FEHA lawsuits.