Low, Ball & Lynch's

WEEKLY LAW RESUME

December 4, 2003 Issue By: Raymond Coates

Employment Law - Liability for Sexual Harassment

State Dept. of Health Services v. Superior Court of Sacramento California Supreme Court (November 24, 2003)

Under California law, employers are strictly liable for hostile environment sexual harassment by a supervisor. This case considered whether an employer may have a defense to such a claim by alleging the victim could have reported the incident of harassment to the employer, but did not do so.

Theresa V. McGinnis worked for the Department of Health Services (DHS). She alleged she was sexually harassed by her supervisor from early 1996 until late 1997. She did not report the incident to management until November 1997. Following the report, the DHS began disciplinary procedures against the supervisor.

McGinnis sued her supervisor and DHS for sexual harassment and sexual discrimination in violation of California's Fair Employment & Housing Act (FEHA). As an affirmative defense, DHS alleged that McGinnis failed to report the claim for which she sought damages. DHS filed a motion for summary judgment based on this defense, which was denied by the trial court. DHS then petitioned the Court of Appeal for writ of mandate, and that petition was denied. However, the Supreme Court granted the petition for review.

In a unanimous Supreme Court decision, the Court of Appeal judgment was reversed and the matter remanded to the trial court for further proceedings. The Court started its analysis with a review of federal law which provides a defense for workplace sexual harassment by proving the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior and the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided to avoid the harm. While California often looks to California law for its interpretation of FEHA, the Court noted that the FEHA provisions concerning employment discrimination by sexual harassment differ substantially from the provisions of federal law.

Under FEHA, an employer is strictly liable for harassment by a supervisor. However, that does not preclude all defenses. One defense generally available is the common law doctrine of avoidable consequences. This prohibits a plaintiff from recovering damages that could have easily been avoided. The Court concluded that nothing in the language of FEHA precluded the application of this doctrine.

The Court therefore held that in a FEHA action against an employer for hostile work environment sexual harassment by a supervisor, an employer may plead and prove a defense by showing the employer took reasonable steps to prevent and correct the workplace sexual harassment; the employee unreasonably failed to use the preventive and corrective measures that the employer provided; and reasonable use of the employer's procedures would have prevented at least some of the harm the employee suffered. When the defense is proven, the employer can escape damages that the employee, more likely than not, could have prevented with reasonable effort and without undue risk, expense or humiliation.

The Court emphasized the defense only went to the amount of damages, not the liability, of the employer. Its application depends upon the facts of each case. It will require the employer to show appropriate anti-harassment policies and communication of those policies to its employees. It will also require the employer to show how it has implemented the policy. In this case, because the Court of Appeal and trial court did not consider the application of this doctrine, reversal was required. The matter was therefore remanded to the Court of Appeal for further proceedings consistent with the opinion.

COMMENT

This opinion brings California law closer to the prevailing federal law in this area. The Court decision incorporates a defense of mitigation of damages in hostile environment sexual harassment cases.

Gordon Hansen

(415) 981-6670 x226

ghanse[email protected]

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