Discrimination and wrongful termination cases involve high stakes litigation for potentially large judgments, which are generally not covered by liability insurance. Many wrongful termination, discrimination, or harassment in employment lawsuits filed against an employer will also include claims against individuals in their supervisory capacities. Recently, however, courts appear to be limiting the scope of liability of such persons sued in their individual supervisory capacities. In this article we will review recent court decisions which have prescribed limits in this area of the law.
Title VII & FEHA
Discrimination claims form the basis of many wrongful termination suits. The chief among the statutes that protect employees from discrimination are Title VII of the Federal Civil Rights Act of 1964 (42 U.S.C. Sections 2000e - 2003-17); and the California Fair Employment and Housing Act (FEHA) (Government Code Sections 12900-12996).
Title VII, as amended, generally prohibits employment discrimination based on race, color, religion, sex, or national origin. The 9th Circuit Court of Appeal has held that while an employer may be held liable for violating the statute's prohibitions, individual employees (including supervisors) cannot be held liable for discrimination (Greenlaw v. Garrett (9th Cir. 1995) 59 F.3d 994); or for sexual harassment (Miller v. Maxwell's International (9th Cir. 1993) 991 F.2d 583).
FEHA prohibits discrimination and harassment in employment on account of "race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, or sex" (Government Code Section 12940). FEHA also prohibits employment discrimination based upon age in certain circumstances (Government Code Section 12941). Recent case law has noted a distinction between discrimination and harassment when such claims involve the individual liability of a supervisory employee.
Janken v. G.M. Hughes Electronics
The court in Janken v. G.M. Hughes Electronics (1996) 46 Cal.App.4th 55, concluded that it was the intent of the legislature to place individual supervisory employees at risk of personal liability for personal conduct constituting harassment. However, it was not the intent of the legislature to place individual supervisory employees at risk of personal liability for personnel management decisions later considered to be discriminatory.
For example, harassment claims include allegations of verbal epithets, derogatory comments, physical interference with freedom of movement, and unwanted sexual advances. Discrimination claims include personnel management actions such as hiring and firing, job or project assignments, work or work station assignments, promotion or demotion, etc.
Harassment therefore consists of conduct outside the scope of necessary job performance, conduct presumably engaged in for personal gratification, because of meanness or bigotry or for other personal motives. Discrimination claims, by contrast, arise out of the performance of necessary personnel management duties. The Janken court concluded that this differential treatment of harassment claims and discrimination claims is necessary and is based upon the fundamental distinction between harassment as a type of conduct not necessary to a supervisor's job performance. This is contrasted with business or personnel management decision—which might later be considered discriminatory—as inherently necessary to performance of a supervisor's job.
The Janken decision also eliminated a supervisory employee's personal liability when sued on the theory that, in making the challenged personnel decision on behalf of the employer, that he or she "aided and abetted" the employer in discriminating against the claimant.
Similarly the Janken decision eliminated a supervisory employee's personal liability for intentional infliction of emotional distress claims arising out of personnel management decisions, even if improper motivation is alleged. If personnel management decisions are improperly motivated, the remedy is a suit against the employer for discrimination and not one against the individual supervisor in that capacity.
Under Page v. Superior Court (1995) 31 Cal.App.4th 1206, a supervisor who personally engages in harassing conduct is personally liable under FEHA. Under Matthews v. Superior Court (1995) 34 Cal.App.4th 498, if the supervisor participates in the harassment or substantially assists or encourages continued harassment, the supervisor is personally liable under FEHA as an aider and abettor of the harasser. Another recent Court of Appeal decision, however, has imposed some limitation for second-tier supervisor liability in harassment claims. The court in Fiol v. Doellstedt (1996) 50 Cal.App.4th 1318, held that a supervisory employee owes no duty to his or her subordinate to prevent sexual harassment in the work place. That is a duty owed only by the employer. Thus a supervisory employee is not personally liable under FEHA as an aider and abettor of the harasser for failing to take action to prevent the sexual harassment of a subordinate employee.
The foregoing statutory and case authority set forth certain clear rules. In most jurisdictions under Federal Law the supervisory employee may not be held liable for Title VII violations. Under application of California Law, courts have now drawn a distinction between harassment and discrimination claims brought under FEHA. In a discrimination claim as long as a supervisor is acting for the employer, in that capacity, the supervisory employee may not be found personally liable. The Janken decision may provide a foundation for obtaining the dismissal of a supervisor as a defendant in this type of discrimination or wrongful termination litigation.
By contrast, a supervisor who is alleged to have violated the prohibitions of FEHA by personally engaging in harassing conduct or in aiding and abetting such conduct, may still be found personally liable. Where, however, the allegation is made that a supervisory employee failed to take appropriate action to prevent the harassment of a subordinate employee, no personal liability may be imposed. The Fiol decision may provide a basis for obtaining the dismissal of a second-tier supervisory employee in litigation involving this type of harassment claim.