California Employment Law Update : Labor and Employment Lawyers & Attorneys : Proskauer Rose Law Firm : Wage & Hour Laws, Disability, Workplace Safety

California Governor Jerry Brown has signed into law a number of bills addressing a wide array of issues that could significantly impact employers in the coming year. Read on for an overview of some of these new laws and their key provisions.

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The number of protected classes under California’s Fair Employment and Housing Act (“FEHA”), Cal. Gov’t Code § 12900 et seq., has risen by one. The FEHA, together with the Unruh Civil Rights Act, Cal. Civ. Code § 51, currently prohibit discrimination in employment, housing, public accommodation, and services provided by business establishments on the basis of various personal characteristics such as sex, race, color, national origin, religion, and disability. Additional protections have been added over time to include within the purview of these anti-discrimination statutes medical condition, marital status, and sexual orientation. Earlier this month, Governor Jerry Brown signed into law Senate Bill 559 (“SB 559”) (pdf), which adds genetic discrimination to the list of prohibited practices in California. “Genetic information” is defined by the bill as (1) the individual’s genetic tests; (2) the genetic tests of family members of the individual; and (3) the manifestation of a disease or disorder in family members of the individual. The bill’s proponents insist that because many genetic disorders are associated with particular racial, social, or ethnic groups, the new law will prevent genetic information from being used to stigmatize or unfairly discriminate against these groups. SB 559 augments the federal Genetic Information and Nondiscrimination Act of 2008, Pub. L. No. 110-233, whose range of protections was deemed by the California Legislature to be “incomplete for Californians.” SB 559, § 1(j). The practical effect of the law on employers remains to be seen, but for now we note that SB 559 touches not only the areas of housing and employment generally, but also licensing boards, life insurance coverage, and state-administered and funded programs.

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Milan v. City of Holtville, 186 Cal. App. 4th 1028 (2010)

Tanya Milan, who worked as a water treatment operator for the City of Holtville, was injured on the job while moving a large piece of metal. After Milan applied for workers’ compensation benefits, a physician who had been retained on behalf of the city, examined her and concluded she would not be able to return to work at the water treatment plant. Shortly thereafter, the city notified Milan that because she would be unable to return to work, it had decided to offer her rehabilitation benefits, which she accepted before taking an online real estate course. Milan continued to receive a regular paycheck from the city until she was notified 18 months after the injury had occurred that the city was terminating her employment. Milan filed this lawsuit against the city, alleging it had violated the Fair Employment and Housing Act by failing to determine whether it could provide effective accommodations for her disability. 

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The California Supreme Court has restricted, if not eliminated the "stray remarks doctrine,"  one of the most common defenses employers rely upon in workplace discrimination cases.  The ruling erects another significant barrier to keeping tenuous discrimination claims from proceeding to trial. 

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Hughes v. Pair, 2009 WL 1886877 (Cal. S. Ct. 2009)

Suzan Hughes, the third wife of Herbalife founder Mark Hughes, sued Christopher Pair, one of the three trustees of Mark’s estate, for sexual harassment under Civil Code § 51.9 (which prohibits sexual harassment in certain business, service and professional relationships) and for intentional infliction of emotional distress. (Although this case does not involve an employment relationship, the California Supreme Court held that the Legislature intended Section 51.9 to be applied in a fashion consistent with the FEHA and Title VII.) The Court affirmed summary judgment in favor of Pair after concluding that Hughes had failed to establish either quid pro quo sexual harassment or conduct that was so severe or pervasive as to constitute sexual harassment. As for the latter form of harassment, the Court noted that Pair had not physically touched Hughes and that Pair’s “vulgar and highly offensive” comments to Hughes were ambiguous and part of an isolated incident. Similarly, the Court held that Pair’s actions were not sufficiently extreme or outrageous and Hughes’s alleged emotional injuries were not severe enough to result in liability for intentional infliction of emotional distress.

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Dominguez v. Washington Mut. Bank, 168 Cal. App. 4th 714 (2008)

Yoko Dominguez, a former temporary employee of Washington Mutual assigned to processing outgoing mail, alleged that a co-worker (Javier Gutierrez) had made crude and offensive comments to her after learning that Dominguez was a lesbian. Dominguez complained about Gutierrez’s comments to her supervisor’s supervisor (who was also a lesbian) as well as to her direct supervisor who “might have given” Gutierrez verbal warnings about his conduct. Shortly thereafter, Dominguez’s supervisor invited her to apply to become a full-time, regular employee, but two days after she applied, she was fired because she was “frequently late for work.” In her lawsuit, Dominguez alleged discrimination, harassment and retaliation in violation of the Fair Employment and Housing Act; the trial court granted defendants’ summary judgment motions on statute of limitations grounds and because Dominguez had no evidence to rebut WaMu’s claim that it fired Dominguez for a legitimate nondiscriminatory reason (her tardiness). The Court of Appeal reversed in part, holding that Dominguez timely filed her administrative complaint with the California Department of Fair Employment and Housing (“DFEH”). Although Gutierrez’s verbal taunts ceased in May of 2002 and Dominguez did not file her DFEH complaint until August of 2003, Gutierrez’s post-May 2002 conduct (e.g., jamming the wheels of Dominguez’s pallet jack, blocking her access to her work stations with heavy boxes and otherwise interfering with the performance of her job) may have constituted a continuing violation that extended through August of 2002 (when her employment was terminated). Further, the Court held that triable issues of fact existed as to whether Gutierrez’s conduct was sufficiently hostile and pervasive and whether the stated reason for terminating Dominguez was a pretext (given the almost contemporaneous invitation to apply for full-time employment with WaMu). Finally, the Court held that Dominguez had waived her punitive damages claim against WaMu by failing to properly address it on appeal and that her retaliation claim against Gutierrez was improper in light of Jones v. The Lodge at Torrey Pines P’ship, 42 Cal. 4th 1158 (2008). Cf. Young v. Exxon Mobil Corp., 168 Cal. App. 4th 1467 (2008) (supervisor whose defense was paid by employer was entitled to recover only $1.00 in attorney’s fees even though employee’s claims against supervisor were frivolous and brought in bad faith).
 

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DeJung v. Superior Court, 2008 WL 5265525 (Cal. Ct. App. 2008)

Theodore DeJung, a former part-time commissioner of the Sonoma County Superior Court, filed a lawsuit alleging age discrimination after he was not selected to become a full-time commissioner. Before DeJung’s application was denied (in favor of a 43 year old), the Court’s presiding judge told him that the executive committee “want[s] somebody younger [for the fulltime commissioner’s position], maybe in their 40’s.” In addition, the presiding judge told DeJung’s former bailiff that “we’re looking for someone younger [than DeJung for the position].” The trial court (the Sonoma County Superior Court) granted the Superior Court’s motion for summary judgment based on the doctrine of discretionary immunity for public employers and because DeJung had failed to raise a triable issue of material fact regarding his claim. The Court of Appeal reversed, holding that discretionary immunity does not apply to discrimination actions brought under the Fair Employment and Housing Act. Further, the Court held that under the “cat’s paw” doctrine, evidence of discriminatory animus by a significant participant in the employment decision (the presiding judge) raised an inference that the employment decision itself was discriminatory, even absent evidence that others in the process harbored such animus.
 

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McDonald v. Antelope Valley Cmty. Coll. Dist., 2008 WL 4694301 (Cal. S. Ct. 2008)

Plaintiffs in this case alleged racial harassment, discrimination and retaliation against the District. The trial court granted summary judgment to the employer with regard to Sylvia Brown’s claims on the ground they were barred by the statute of limitations applicable to claims asserted under the California Fair Employment and Housing Act (“FEHA”). The court of appeal and the California Supreme Court in this opinion reversed the dismissal, holding that the statute of limitations was tolled while Brown was voluntarily pursuing internal administrative remedies against the District.
 

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Nadaf-Rahrov v. Neiman Marcus Group, Inc., 166 Cal. App. 4th 952 (2008)

Forough Nadaf-Rahrov worked as a clothes fitter for Neiman Marcus in Dallas before transferring to San Francisco in the mid- 1990s. She suffered from recurrent back and joint pain and was diagnosed with carpal tunnel syndrome and osteoarthritis. In November 2003, she commenced a requested family medical leave of absence, which was extended at least four times over the following nine months. By the time Neiman Marcus terminated Nadaf-Rahrov’s employment, after several leave extensions, she did not have a release from her doctor to perform her job duties, and she had exhausted her remaining sick and vacation benefits. After her termination, Nadaf-Rahrov sued Neiman Marcus for disability discrimination under the California Fair Employment and Housing Act (“FEHA”) and for wrongful termination in violation of public policy. Although the trial court granted the employer’s motion for summary judgment, the Court of Appeal reversed, holding that there was a triable issue of fact whether Neiman Marcus could have but did not provide her with a reasonable accommodation in the form of a reassignment to a vacant position. Similarly, the Court held the employer may have caused a breakdown in the interactive process by failing to provide information to the employee about available positions that might have assisted her and her physician in preparing a list of workrelated medical restrictions. The Court affirmed dismissal of the employee’s claim for retaliation, but reversed dismissal of her claims for national origin and ethic discrimination and ruled that she was entitled to additional discovery responses concerning available positions. Cf. Mangano v. Verity, Inc., 84 Cal. Rptr. 3d 526 (Cal. Ct. App. 2008) (employer that served plaintiff with a Code of Civ. Proc. § 998 settlement offer before obtaining summary judgment of disability discrimination claims was properly awarded its expert witness fees, but it was not entitled to recover its attorneys’ fees); Anthony v. City of Los Angeles, 166 Cal. App. 4th 1011 (2008) (prevailing plaintiff in FEHA retaliation case was properly awarded expert witness fees).
 

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Johnson v. Riverside Healthcare Sys., 516 F.3d 759 (9th Cir. 2008)

Christopher Lynn Johnson alleged he was discriminated against on the basis of his race and sexual orientation and asserted claims under 42 U.S.C. § 1981, the Unruh Civil Rights Act and the California Fair Employment and Housing Act. The district court granted defendants’ motion to dismiss, and the Ninth Circuit affirmed, holding that Johnson had failed to plead a hostile work environment because the two incidents he alleged (only one of which he witnessed) were isolated in time and occurred over a 28-month period. The Court affirmed dismissal of Johnson’s Unruh Act claim on the ground that he was more like an employee than a customer and his FEHA claim on the ground that it was barred by the applicable statute of limitations. See also Surrell v. California Water Serv. Co., 2008 WL 638369 (9th Cir. Mar. 11, 2008) (summary judgment affirmed for employer in race and disability discrimination case in absence of evidence to support claims); Williams v. The Boeing Co., 2008 WL 509229 (9th Cir. Feb. 27, 2008) (Section 1981 compensation discrimination claim was subject to four-year statute of limitations); compare Hammond v. County of Los Angeles, 2008 WL 740375 (Cal. Ct. App. Mar. 20, 2008) (nursing instructor’s claims of race discrimination and harassment under FEHA were improperly dismissed and were not barred by the statute of limitations).
 

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Bradley v. California Dep’t of Corrections & Rehabilitation, 158 Cal. App. 4th 1612 (2008)

Sallie Mae Bradley worked temporarily at a California prison as a licensed clinical social worker. Bradley sued the California Department of Corrections (“CDC”) for sexual harassment directed at her by the prison’s Muslim chaplain, Omar Shakir. The jury awarded her $300,000 in non-economic damages and $139,000 in past and future economic damages. The Court of Appeal held that Bradley was a special employee of the CDC within the meaning of the Fair Employment and Housing Act. Further, the Court held that the jury’s conclusion that the CDC did not take immediate corrective action to end Shakir’s harassment was supported by substantial evidence. The Court noted that “Shakir was engaged in classic stalking behavior, terrorizing, intimidating and humiliating Bradley and taking full advantage of his free access to her at work to accomplish his inappropriate goals. The sum total of CDC’s [inadequate] response was to refer the complaint to a bogged-down investigative process and to caution Bradley to protect herself.” Cf. Fichman v. Media Ctr., 512 F.3d 1157 (9th Cir. 2008) (directors of a non-profit organization are not employees within the meaning of the ADEA and ADA).
 

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Ross v. Ragingwire Telecommunications, Inc., 42 Cal. 4th 920 (2008)

In accordance with the Compassionate Use Act of 1996 (Proposition 215), Gary Ross had a physician’s recommendation to use marijuana for his chronic back pain. Ragingwire offered Ross a job as a lead systems administrator subject to his passing a drug test, which he failed when he tested positive for THC (the active chemical found in marijuana). Ragingwire terminated Ross’ employment because he failed the drug test. Ross sued Ragingwire for disability discrimination (on the theory that marijuana use is a reasonable accommodation for his back pain), wrongful termination in violation of public policy and breach of contract. The Court of Appeal affirmed dismissal on demurrer of Ross’ complaint, holding that an employer need not accommodate a disability by allowing an employee to use a drug that is illegal under federal if not state law. Similarly, the Court held there was good cause as a matter of law to terminate Ross’ employment. The California Supreme Court affirmed. Cf. Dible v. City of Chandler, 515 F.3d 918 (9th Cir. 2008) (police officer’s First Amendment rights were not violated when he was terminated for participating in a sexually explicit website with his wife).
 

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