Defense Available In Federal Sexual Harassment Cases Is Not Available In State Cases Under FEHA

In Department of Health Services v. The Superior Court of Sacramento, 113 Cal. Rptr. 2d 878 (Cal. Ct. App., 3d App. Dist., 2001), the California Court of Appeal declined to apply a defense that is used in Title VII cases to FEHA sexual harassment claims.

Theresa McGinnis sued her employer, the Department of Health Services (DHS), under California’s Fair Employment and Housing Act (FEHA), claiming that her supervisor sexually harassed her beginning in 1995. When McGinnis first reported the supervisor’s behavior to management in 1997, DHS investigated the matter and disciplined the supervisor.

In McGinnis’ lawsuit, DHS attempted to use a defense that the United States Supreme Court adopted in two sexual harassment cases based on hostile work environment. The Supreme Court analyzed the circumstances under which an employer might be held vicariously liable under Title VII (federal anti-discrimination law) for a supervisor’s harassing conduct. The Court held that, when a supervisor makes a tangible employment decision (i.e., one that constitutes a significant change in employment status, such as hiring, firing, failing to promote, reassignment, significant change in benefits), the decision becomes the act of the employer and the employer may be held liable. However, when the supervisor does not make a tangible employment decision, an employer may defend against a sexual harassment lawsuit by showing (a) that the employer promptly exercised reasonable care to prevent and correct any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer. (This defense is not available when the supervisor makes a tangible employment decision.)

DHS asked the California Court of Appeal to determine whether this defense applies in FEHA sexual harassment cases as well. The Court of Appeal declined to do so, because FEHA differs from Title VII in one very important respect. The Court of Appeal focused on section 12940(j)(1) of FEHA, which states:

Harassment of an employee . . . by an employee other than an agent or supervisor shall be unlawful if the entity, or its agents or supervisors, knows or should have known of this conduct and fails to take immediate and appropriate corrective action.

According to the Court of Appeal, this language “clearly indicates that, while an employer’s knowledge and action may be relevant in assessing employer liability for harassment by a nonsupervisory employee, these factors are irrelevant when determining employer liability for harassment by a supervisor.” In other words, an employer is strictly (always) liable for harassment by a supervisor, even though the employer did not know, and did not have reason to know, of the supervisor’s conduct.

This concept of “strict liability” for actions of supervisors is not recognized in Title VII cases. Therefore, FEHA and Title VII differ in this important respect. Because of this, the Court of Appeal determined that allowing the defense recognized by the Supreme Court would undermine the strict liability concept – it would allow employers to escape liability that has been strictly imposed on them. The Court also noted that any change in this area of the law should come from the Legislature, not the courts.