A female employee experienced difficulty with the availability and unsanitary conditions of portable toilets at a job site. After she was fired, the woman sued alleging violations of the Fair Employment and Housing Act (“FEHA”). A jury found the corporation liable and awarded the woman damages. However, the jury could not award punitive damages because the trial court had previously granted a summary adjudication motion against punitive damages on the grounds that the project manager and Equal Employment Opportunity Officer at the site were not managing agents of the corporation. The woman appealed this denial of her punitive damages claim. On appeal, the appellate court agreed with the woman and reversed the summary adjudication motion, concluding it was a question of fact for the jury whether the two employees were managing agents of the corporation. (Davis v. Kiewit Pacific Co. (— Cal.Rptr.3d —-, Cal.App. 4 Dist., September 18, 2013.)
Lisa Davis worked as a box grader operator for Kiewit Pacific Co. (“Kiewit”) on a project in Imperial County (“Project”). Kiewit employed more than 100 employees on day and night shifts for the Project, and only one other female besides Davis was on the day shift excavation crew. Davis encountered ongoing problems with portable toilets: they were often placed miles away from the work area, and they were cleaned infrequently, leading to foul conditions. Davis’s foreman, the day shift superintendent, the night shift superintendent, and the safety officer on the project failed to respond to her requests for help with the problem. At one point the foreman suggested she “go find a bush.” Davis then took the problem to Kyle Preedy, Kiewit's project manager and Kiewit's highest ranking employee on the site. Preedy also failed to address the problem.
One morning at the job site, Davis went to the women's portable toilet only to discover excrement smeared on the seat and a pornographic magazine on the toilet paper dispenser. Davis reported the incident to her foreman and the day shift superintendent. Subsequently, Davis’s fellow crew members stopped speaking to her. About a month later, Davis filed a Cal-OSHA complaint regarding Kiewit's failure to provide break time and sanitary toilet facilities. She also complained to Kiewit's equal employment opportunity (EEO) officer, John Lochner.
The following month, Kiewit laid off Davis, along with most of the excavation crew, even though Kiewit was only halfway through excavation for the Project. Over the following three weeks, Kiewit gradually rehired crew members until a full day shift had been reacquired. Davis was not rehired. Davis sued Kiewit in state court, alleging violations of FEHA including discrimination, harassment, retaliation, and failure to prevent discrimination, harassment, and retaliation. She requested punitive damages, and in support of her request she alleged that Kiewit's actions were malicious and oppressive and were committed and/or ratified by its managing agents.
Kiewit motioned for summary judgment of Davis’s claims. It also motioned for summary adjudication of her request for punitive damages, arguing that no officer, director, or managing agent engaged in or ratified in malicious or oppressive conduct, and so by law, punitive damages were not available to Davis. Kiewit asserted that Preedy and Lochner were not managing agents of Kiewit. The trial court denied Kewit’s motion for summary judgment of Davis’s lawsuit, but granted its motion for summary adjudication on punitive damages, ruling that Davis could not be awarded punitive damages.
A jury found Kiewit liable on all four of Davis’s FEHA claims and awarded her a total of $270,000 in damages. Davis appealed the trial court’s denial of her punitive damage request.
The Fourth District Court of Appeal reversed the trial court decision that had granted summary adjudication against Davis’s punitive damage claim. The appellate court concluded that it was not clear that Preedy and Lochner were not managing agents of Kiewit, and so a jury should determine the facts underlying Davis’s claim for punitive damages.
The appellate court explained that punitive damages in a civil lawsuit against a corporation may only be awarded if an officer, director, or managing agent of the corporation participated in or ratified oppressive, fraudulent, or malicious conduct. The term “managing agents” refers to employees who “exercised substantial discretionary authority over significant aspects of a corporation's business.” Determining whether an employee is a managing agent is a question of fact to be decided on a on a case-by-case basis.
The appellate court stated that the declarations provided by Preedy and Lochner to the court in support of the motion for summary adjudication were “simply parroting” the legal standard rather than supplying descriptions of their duties as employees. These “conclusory” declarations did not contain evidence that Preedy and Lochner did not exercise substantial discretionary authority over Kiewit’s business. The appellate court held that because Kiewit failed to meet its burden to present evidence that these employees were not managing agents, the trial court should not have granted the motion for summary adjudication.
The appellate court also found that even if Kiewit had met its evidentiary burden, Davis presented sufficient evidence to raise a factual question as to whether Preedy and Lochner were managing agents, which was an additional reason the trial court erred in granting the motion for summary adjudication.
For example, Davis asserted that Preedy was Kiewit’s top on-site manager for the $170 million Project, supervising 100-plus employees, administering contracts, and working with stakeholders. Regarding Lochner, Davis contended that his duties as Kiewit’s district EEO officer included responsibility for administering the corporation’s policies to prevent discrimination, retaliation, and harassment based on gender. Additionally, he was responsible for conducting trainings and overseeing investigations on employee issues including discrimination, retaliation, and harassment. The appellate court concluded that a jury could infer that the duties of both Preedy and Lochner were a significant part of Kiewit’s business, and that both exercised substantial discretionary authority.
The appellate court sent the case back to the trial court to reconsider Davis’s claim for punitive damages.
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