In this issue:
- Court Rules That Non-Supervisors Cannot Be Personally Liable For Harassment Under California Law, And That Supervisors Cannot Be Liable For Mere Failure To Take Appropriate Corrective Actions
- California Supreme Court Rules That Plaintiffs Can Base Wrongful Termination Lawsuits On Administrative Regulations
- California Court Holds That Privilege Shields Managers From Liability Arising From Termination Of At-Will Employees
- Job Applicant Who Delays Test Until After Hire May Be Terminated For Failing To Pass Drug Screen
Court Rules That Non-Supervisors Cannot Be Personally Liable For Harassment Under California Law, And That Supervisors Cannot Be Liable For Mere Failure To Take Appropriate Corrective Actions
A California appellate court has further curtailed the personal liability of employees for sexual harassment claims by ruling that supervisors who do not sexually harass an employee, and do not assist or encourage the harassment, cannot be held personally liable for failing to take reasonable and appropriate corrective action, and that non-supervisory employees cannot be held personally liable for sexual harassment at all under California's Fair Employment and Housing Act. Carrisales v. Department of Corrections, 65 Cal.App.9th 1492 (1998).
Maryann Carrisales and Dave Selkirk worked at the Department of Corrections. Carrisales complained that Selkirk sexually harassed her. The harassment allegedly included unwelcome touching of her breasts, buttocks, and inner thighs. A coworker first reported this harassment to a supervisor, Rose Del Valle, who then counseled Selkirk but failed to document the incident. After Del Valle was replaced by Denise Powell, the coworker also informed Powell that Carrisales had a "problem" with Selkirk. After speaking to Carrisales, Powell counseled Selkirk. Shortly thereafter, Selkirk emerged from a restroom with his pants around his thighs, announced to Carrisales that he was losing his britches, and invited her to help him pick them up. Selkirk was ultimately terminated.
Carrisales later filed suit against the Department, Del Valle, Powell and Selkirk, but the trial court granted summary judgment motions in favor of all four defendants.
The appellate court found that although Del Valle and Powell took corrective action, a jury could have found that their response was not adequate, and reversed the trial court's decision with respect to the Department. Del Valle failed to document her actions, noted the court, which reasoned that a jury might conclude that when Powell merely counseled Selkirk a second time, a more aggressive action should have been taken. This, the court ruled, was sufficient to entitle Carrisales to present her case against her employer to the jury.
The court then found that while their inaction might be sufficient to support a claim against the Department, Del Valle and Powell could not be held personally liable for allegedly failing to take reasonable and appropriate corrective action in response to Selkirk's action. Extrapolating from the California Supreme Court's recent decision in Reno v. Baird, the court pointed out that decision-making with respect to what corrective action to take, if any, is an "inherent and unavoidable part of the supervisory function," which the Court in Reno found was not an appropriate basis to hold individual supervisors liable.
In deciding that the action against Selkirk should be dismissed, the court construed the language of the FEHA to require a supervisory relationship to exist between the harasser and the worker in order for personal liability to be imposed on the harasser by the statute. "Any other interpretation," wrote the Court, "would wrench FEHA free from its employment discrimination emplacement, leaving it a loose cannon careening about the legal deck." The court noted that a worker harassed by another worker, however, might have recourse to other remedies against the employee, such as claims for assault or infliction of emotional distress, based upon similar conduct.
California Supreme Court Rules That Plaintiffs Can Base Wrongful Termination Lawsuits On Administrative Regulations
In a decision that might expand potential grounds for new lawsuits, the California Supreme Court in Green v. Ralee Engineering Co., 78 Cal. Rptr. 2d 16 (1998), ruled that plaintiffs may allege a cause of action for wrongful termination in violation of public policy where the public policy implicated in the termination is located in an administrative regulation. In so holding, the Court overruled its previous decision in Gantt v. Sentry Insurance, 1 Cal. 4th 1083 (1992), where the Court had stated that the source of the public policy must be located within constitutional or statutory provisions.
Realizing the potential for its holding to invite frivolous lawsuits based upon minor administrative regulations, the Court was careful to mandate that in order to support a wrongful discharge claim, the regulations must manifest "important" and "fundamental" public policies and that they must be sufficiently "tethered to fundamental policies delineated in a statutory or constitutional provision." Of course, it is difficult for an employer to determine in advance which regulations are sufficiently "important" and "tethered" to a statutory or constitutional provision such that they will form the basis for a wrongful termination claim. Ralee Engineering, however, makes clear that Federal Aviation Agency (FAA) regulations promulgated to address safety concerns meet these two tests.
In Ralee Engineering, an at-will employee of a company which manufactures parts for civilian and military aircraft, Richard Green, was terminated after he expressed his concern to other company employees that the company was shipping airplane parts that had failed inspections. Green filed a complaint for wrongful termination in violation of public policy, claiming that the company fired him in retaliation for his complaints about the supposedly defective parts. No statute or constitutional provision supported the public policy claim; however, FAA regulations provide inspection guidelines to insure the safety of aircraft components. The Court reviewed the language of the Federal Aviation Act, which provides that the FAA "shall promote safe flight of civil aircraft in air commerce by prescribing minimum standards required in the interest of safety for the design, material, construction, quality of work, and performance of aircraft," and found that the FAA regulations concerning inspections were sufficiently "tethered" to the Act. Furthermore, the Court reasoned, "[p]romoting airline safety- the subject of the federal regulations - constitutes a policy of sufficient public importance" to support Green's claim.
Among other arguments, Ralee argued that Green had not established that a violation of the FAA regulations actually occurred. Nevertheless, the Court confirmed that "an employee need not prove an actual violation of the law; it suffices if the employer fired him for reporting his reasonably based suspicions of illegal activity." The Court concluded that its landmark holding will "effectively guarantee that employers do not exercise their right to terminate their employees at will in a way that undermines more important safety objectives."
It is difficult to anticipate what immediate impact this case may have on employers. The difficulty in assessing its impact stems from the number of regulations promulgated by various agencies, and the uncertainty in knowing what a court will deem "important" and "tethered" to a particular goal. Certainly, employers operating in any heavily regulated industry where safety is an underlying concern must be very conscious of any complaints raised by employees which may relate to the performance of a regulatory obligation.
California Court Holds That Privilege Shields Managers From Liability Arising From Termination Of At-Will Employees
Addressing the task of "unravel[ing] the knot of authority regarding the proper application of the manager's privilege," a California court of appeal recently determined that managers enjoy an absolute privilege from liability for the tort of interference with contract arising where the manager terminates an at-will employee. Halvorsen v. Aramark Uniform Services, Inc., 77 Cal. Rptr. 2d 383 (1998). Previous decisions provided only a qualified privilege for managers, holding that courts must look at whether the manager's motive was "proper" (to benefit the employer) and/or whether the proper motive predominates over any improper motives that a manager might have had to terminate an employee. Rejecting this line of authority, the Halvorsen court observed,
"Since there is no reason to cause disruption of the business enterprise by investigating the employer's reasons and motives for terminating an employee when the employment is at will, there is little justification for causing essentially the same disruption to discern the motives of management and the communications of management with the employer." Given the fact of at-will employment, the Court reasoned that where no underlying public policy is involved, a manager's motive is irrelevant, and "plaintiffs are also precluded from pleading around at-will employment contracts by challenging the motives of management, which, in effect, would require management ... to have good cause to terminate."
The plaintiff, Boyd Halvorsen, alleged that a manager interfered with his contractual relationship with his employer by recommending his termination. Halvorsen believed that the manager fired him in order to save his own job, after Halvorsen disclosed to superiors that the manager had approved the purchase of specialty items which resulted in a loss to the company. The court, however, found that the manager was insulated from liability for interfering with the employment contract based upon the absolute manager's privilege. Employers and managers should bear in mind that the absolute privilege addressed in Aramark protects managers from claimed torts of contractual interference. Individual managers can still face liability for unlawful harassment and retaliation against certain protected activities.
Job Applicant Who Delays Test Until After Hire May Be Terminated For Failing To Pass Drug Screen
A California appellate court adopted a fact-based test for distinguishing between "applicants"and "employees" for purposes of employer drug testing in its recent decision, Pilkington Barnes Hind v. Superior Court, 77 Cal. Rptr. 2d 596 (1998). In Pilkington, the plaintiff, John Visbal, was offered a job contingent upon taking and passing a drug test prior to commencing employment. Visbal put off taking the drug test in order to look for housing. As a result of Visbal's delay, he was already on the payroll and had been an "employee" for four days prior to taking the drug test. The employer subsequently terminated Visbal's employment when he failed the drug test.
Visbal sued his former employer for wrongful discharge, alleging that a post-employment drug test given without any individualized suspicion violated public policy under the California Supreme Court's decision in Loder v. City of Glendale, 14 Cal. 4th 846 (1997). In determining whether drug testing is permissible, the Court in Loder decided that employers may administer drug tests to an applicant without any individualized suspicion that he or she is using drugs; on the other hand, the Court ruled employers may test an employee only where the employer has a reasonable suspicion that the individual employee is using drugs. The Loder Court reasoned that employers do not have an opportunity to observe applicants over a period of time, and the "the hiring of a new employee represents a considerable investment on the part of an employer."
After reviewing Loder, the Pilkington court determined that although Visbal was technically an "employee" at the time that his drug test was administered, he was nevertheless an "applicant" for purposes of the Loder distinction between pre- and post-employment drug testing. The employer did not have an opportunity to observe Visbal over a period of time as it would a longer term employee; moreover, the court noted, the delay in administering the test was wholly caused by Visbal. For this reason, it found that the suspicionless drug test given to Visbal did not violate public policy. The court issued a writ of mandate compelling the trial court to grant summary judgment for the employer.
This decision should be read with caution. It should not be read to permit employers to delay pre-employment drug testing after employment commences. Rather, employers should continue to conduct all pre-employment drug testing prior to the employee's first day of work. Pilkington appears to provide employers with a limited right to administer a drug screen without individualized suspicion if the employee causes the test to be delayed until after employment commences, and the employer acts swiftly in correcting its oversight, before it has had the opportunity to observe the employee at work sufficient to give rise to an individualized suspicion of drug use.