Discrimination by Supervisors: Is It Actionable?


Employers often need to make difficult business and personnel decisions in running their businesses. Accordingly, personnel managers are hired, human resources departments are created and administrators are assigned various tasks pertaining to hiring and firing, job placement, project assignments, office or work station assignments, promotion and demotion, performance evaluations, and the like. These are the type of actions that are routinely necessary to carry out the duties of business and personnel management. In fulfilling these job duties, supervisory personnel can reasonably be expected to exercise considerable discretion. Underlying any such management decision, is the question of whether it can expose

Until fairly recently, it was somewhat unclear whether the exercise of said discretion could subject individual supervisors or co-workers to personal liability for unlawful discrimination if it turned out that any particular personnel decision was motivated by discriminatory animus. As a result, it has not been uncommon for employees to challenge an employer's personnel decision by filing a civil suit for wrongful termination based on unlawful discrimination against not only the employer, but the offending supervisor as well. Such a suit normally seeks recovery for loss of earnings, emotional distress, punitive damages, and attorney's fees.

Strategic Choice of Defendants

There are also strategic reasons why plaintiffs may name individuals, as well as their employers, as defendants. Specifically, the naming of individuals may keep an action out of federal court based on diversity, which is typically a preferred forum for defendants in such actions. Also, naming individuals increases the defense fees, particularly where separate legal representation for the employer and the supervisory employee is required due to a conflict. Finally, many individuals have been named as defendants in such suits simply because they are perceived by the plaintiff as the "wrongdoers" since they were the perpetrators who participated in the allegedly offensive conduct.

Irrespective of the factual merits or strategy reasons for naming an individual supervisor in an employment discrimination case, a recent line of cases in California over the past several years has made it abundantly clear that individual supervisory employees cannot and should not be named as defendants in wrongful termination lawsuits based on discrimination. Instead, only the actual employer should be named, assuming that the employer falls within the definition of "employer" set forth in the anti-discrimination statute upon which the suit is based.

These principles were recently enunciated in Le Bourgeois v. Fireplace Manufacturers, Inc. (Dec. 22, 1998) 68 Cal.App. 4th 1049, 80 Cal.Rptr.2d 660, which is the first California state court case to hold that individual supervisors cannot be liable for disability discrimination in violation of the Americans with Disabilities Act ("ADA"). In Le Bourgeois, the plaintiff suffered an on the job injury in March 1992, while working as a credit manager for Fireplace Manufacturers, Inc. ("FMI"). The injury resulted from a slip and fall accident requiring surgery on the plaintiff's shoulder. As a result, he went on an extended medical leave. In November 1992, the plaintiff's supervisor inquired as to how he was progressing and his anticipated date of return to work. He responded that he was not progressing well and did not know when he would be able to return. As a result, FMI decided to fill the credit manager position with another person.

Six months later, in May 1993, the plaintiff called his supervisor, told her he had a doctor's release and that he was ready to return back to his position as credit manager. He also pointed out that he had certain restrictions due to his injury which precluded him from lifting or carrying more than 25 pounds, performing overhead work or typing on the computer for longer than 20 minutes per hour. His supervisor told him to report to the human resources administrator with his paperwork and medical release information.

The human resources administrator then explained to the plaintiff that his job had been filled and that there were no comparable job openings. However, she advised him that the company was attempting to create a job for him in light of his limitations. In the meantime, she directed him to seek vocational rehabilitation and retraining at FMI's expense pending either the creation of a new job for him or until an existing job became available. He was advised of his right to continue medical benefits at his own expense. The plaintiff was unhappy with the company's response, however, and assumed he had been fired because of his disability. He quickly hired an attorney and filed a discrimination complaint with the Equal Employment Opportunity Commission charging FMI and the subject supervisor with disability discrimination.

In the interim, FMI designed a new marketing coordinator position for the plaintiff in an effort to accommodate him. However, he would not return calls and did not respond to FMI's inquiries. The plaintiff's attorney advised FMI that he had no interest in returning to work at FMI. Rather, he preferred to pursue a civil suit which he filed in the Orange County Superior Court in September, 1993, alleging among other things, wrongful termination based on discrimination in violation of the ADA as well as wrongful termination in violation of public policy based on the California Fair Employment and Housing Act ("FEHA"). The plaintiff's claims were made against not only FMI, but his supervisor as well. The plaintiff sought damages against FMI and his supervisor for loss of earnings and emotional distress as well as punitive damages.

In April 1995, the supervisor sought to dismiss the action pursuant to a motion for summary judgment based on the legal argument that individuals cannot be held liable for disability discrimination because they are not "covered entities" within the meaning of the ADA. In this regard, the supervisor argued that although the ADA is intended to eliminate discrimination against the disabled, for important policy reasons, not everyone is subject to its remedial provisions. Rather, under the ADA, a "covered entity," is defined as "an employer, employment agency, labor organization, or joint labor-management committee." (42 U.S.C. Section 12111(2).) An "employer" is defined as "a person... who has fifteen or more employees... and any agent of such a person." (42 U.S.C. Section 12111(5)(A).) Thus, the supervisor argued that individuals do not fall within the statutory definition because it would undermine the requirement that an employer have fifteen or more employees. The plaintiff, on the other hand, countered that a supervisor is an "agent of" the employer within the meaning of the ADA and therefore may be held personally liable.

At the time that the motion for summary judgment was heard, no California state court case had squarely addressed the issue. However, the supervisor cited an analogous federal court decision, Miller v. Maxwell's Intern. Inc. (9th Cir. 1993) 991 F.2d 583, 587-588, which held that the definitions of "covered entities" and "employer" under Title VII of the Civil Rights Act do not include individuals and the term "agent" was designed to incorporate respondeat superior liability into the statute. According to the court in Miller, the rationale for the exemption of small employers is: "Congress did not want to burden small entities with the costs associated with litigating discrimination claims." (Id. at 587.)

The supervisor in Le Bourgeois urged the trial court to rely on Miller because the decision was soundly reasoned, the definitions of "employer" were the same and the ADA expressly incorporated the powers, remedies, and procedures set forth in the enforcement provisions of Title VII. (Id. at 587-588.) The trial court agreed and granted the supervisor's motion for summary judgment. The plaintiff filed a notice of appeal in June 1995.

During the pendency of the appeal in Le Bourgeois, several relevant cases were decided which established a firm consensus that supervisors cannot be held personally liable for discrimination no matter how malicious or discriminatory their conduct. For example, in June 1996, in Janken, et al v. GM Hughes Electronics et al. (1996) 46 Cal.App.4th 55, 53 Cal.Rptr.2d 741, the California Court of Appeal for the Second District conducted an extensive analysis of the "employer" language and purpose of the FEHA, the ADA, Title VII, and the Age Discrimination in Employment Act ("ADEA"), and arrived at the well-reasoned conclusion that:

  • it would be incongruous (and thus not the statutory intent) to exempt small employers from liability for discrimination and yet hold individual non-employers liable, and
  • imposing personal liability on supervisory employees would create conflicts of interest and chill effective management while providing little or no additional protection to victims of discrimination. (Id. at 69-76.)

A License to Discriminate?

In Janken, the court was confronted with the assertion that individual supervisors and management personnel should be held personally accountable for their discriminatory conduct, words and actions or else renegade personnel managers will have a license to commit discrimination with impunity. However, the Janken court rejected this "parade of horribles" argument as "Chicken Little-esque," reasoning that employers who are vicariously liable for any discriminatory conduct will undoubtedly take appropriate disciplinary action against offending employees. According to the court, "[T]hat discipline may include a `free pass' to the unemployment line, a result that would seem particularly likely if the employee engages in repeated acts of intentional discrimination against fellow employees." (Id. at 76-77.) Based thereon, the court rejected the contention that the "agent" language contained in the FEHA subjects supervisors to liability for personnel decisions in discrimination cases.

Following the decision in Janken, and while the appeal in Le Bourgeois was still pending, in 1998, the California Supreme Court rendered the decision in Reno v. Baird, supra, 18 Cal.4th 640, 76 Cal.Rptr.2d 499, wherein the court expressly approved of the holding and reasoning in Janken. The Reno court held that supervisors cannot be held personally liable for discrimination claims under the FEHA because it would be unfair to exempt small employers from discrimination claims while allowing the same claims to proceed against supervisorial employees of larger employers. The court in Reno also found that subjecting supervisors and personnel managers to personal liability would create a conflict of interest every time a supervisor was asked to make an important personnel decision. The court was deeply concerned that fear of personal liability would have a negative chilling effect and would deter supervisors from doing their jobs. Notably, the court in Reno distinguished acts of "harassment" from acts of "discrimination," and held that supervisors may continue to be personally liable for harassment.

When it finally came time for the decision by the Court of Appeal in Le Bourgeois in December 1998, there was no room for debate: since the California Supreme Court in Reno held that a supervisor cannot be personally liable for discrimination under the FEHA, then by the same token, a supervisor cannot be held liable under the ADA because the rationale and cited decisions are identical. For the same reason, the court in Le Bourgeois held that the plaintiff's cause of action against the supervisor for wrongful termination in violation of public policy under the FEHA was also precluded. (Le Bourgeois, supra, 68 Cal.App.4th at 665-666, 80 Cal.Rptr.2d 660.)

The foregoing line of cases illustrates that unless the California State Legislature or Congress makes significant changes to the "employer" and "covered entities" language contained within the various discrimination statutes (which is unlikely), it is no longer legally tenable to name individuals as defendants in wrongful termination cases based on discrimination. If individuals continue to be named as defendants in the face of the foregoing line of authorities, then it is likely that such suits will be effectively countered with motions to dismiss, demurrers and motions for summary judgment. In addition, filing discrimination suits against supervisors in the face of the foregoing case law, can very well subject a plaintiff and his or her counsel to severe sanctions or even a meritorious action for malicious prosecution. Therefore, practitioners should tread cautiously in this area.