In a much-anticipated decision interpreting California's Fair Employment and Housing Act (FEHA), the California Supreme Court announced on Monday that individual managers and supervisors cannot be held personally liable for retaliation against employees who complain of employment discrimination (Jones v. The Lodge at Torrey Pines Partnership, et al, Dkt. No. S151022, ___ Cal. 4th ___ March 3, 2008). While California law was already consistent with federal law, in that individuals cannot be liable for job discrimination, some California courts had held that FEHA did impose personal liability on supervisors and managers for retaliation. Monday's decision reverses those decisions.

Scott Jones sued both his employer, Torrey Pines, and two of his supervisors for constructive discharge, sexual orientation harassment, sexual orientation discrimination, and retaliation, among other claims. After the trial court dismissed some of the claims, the harassment and retaliation claims against the employer and one supervisor went to trial.

The jury awarded Jones $1.4 million against the employer and $155,000 against the supervisor. The trial court judge reversed the jury verdict, and ruled that the individual supervisor could not be held liable for retaliation under FEHA. The Court of Appeal unanimously reversed the trial court, reinstating the verdict against the supervisor. The state Supreme Court took the case to resolve this important issue.

California Government Code Section 12940(h) makes it unlawful “[f]or any employer . . . or person to discharge, expel, or otherwise discriminate against any person because the person has opposed any [discriminatory] practices . . . or because the person has filed a complaint, testified, or assisted in any proceeding . . .” involving discrimination. In Torrey Pines, the Supreme Court compared this section of FEHA to the section that imposes personal liability on individuals for harassment, which states that “an employee of any entity [engaging in harassment] is personally liable for any harassment prohibited by this section.”

Because the retaliation provision is ambiguous and subject to more than one reasonable interpretation, the Court considered FEHA's purpose, legislative history, and public policy. The Court observed that it is not the purpose of FEHA to expose individual employees to personal liability for making routine personnel decisions. The Court cited Reno v. Baird, (1998) 18 Cal. 4th 640, in which it was determined that individuals could not be personally liable for discrimination, and concluded that this reasoning was equally applicable in the retaliation context. The Court observed that the imposition of individual liability for retaliation would not serve the public good, since supervisors cannot avoid making personnel decisions that might give rise to the perception of retaliation.

Public policy favors permitting supervisors and managers to make objective decisions without the fear of a lawsuit every time they must act. Public policy also requires a recognition that corporate employment decisions are often collective, making it unfair to impose legal responsibility on one person in many instances. The Court found no legislative history contrary to its interpretation, and that the inclusion of the word “person” in Section 12940(h) was an unremarkable drafting anomaly.

It is important to understand what Torrey Pines did not address: whether an individual who is personally liable for harassment under FEHA might also be personally liable for retaliation against an employee who opposed or reported the harassment. While we are now certain that, unless FEHA is amended, individuals cannot be personally liable for retaliation based on protected activity related to discrimination, we do not yet know whether there will be individual liability for protected activity related to harassment.