California Courts Show Willingness to Sanction Plaintiffs Who Pursue Frivolous Employment Discrimination Claims
In 1998, California courts, in two well publicized employment discrimination cases, awarded thousands of dollars in attorneys' fees and costs to prevailing defendants despite the stringent standards against granting such awards. Although it may be premature to describe these cases as a "trend," the cases do represent a break from the courts' traditional reluctance to award attorneys' fees to employers that successfully defend against an employment discrimination action.
Over twenty years ago, the United States Supreme Court in Christiansburg Garment Co. v. Equal Employment Opportunity Commission, 434 U.S. 412 (1978), stated the general rule that a court may "in its discretion award attorneys' fees to a prevailing defendant in a Title VII case upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith." In contrast, a prevailing plaintiff "ordinarily is to be awarded attorneys' fees in all but special circumstances."
The rationale for applying a more stringent standard to defendants than is applied to plaintiffs is twofold. First, "the plaintiff is the chosen instrument of Congress to vindicate 'a policy that Congress considered of the highest priority.'" Second, when a court "awards counsel fees to a prevailing plaintiff, it is awarding them against a violator of federal law." The Supreme Court found that these two policies were not present when a defendant prevails in its defense of a discrimination claim. The Christiansburg rule has since been adopted by California courts in evaluating whether to award attorneys' fees to prevailing defendants in Fair Employment and Housing Act ("FEHA") claims. Cummings v. Benco Building Services, 11 Cal. App. 4th 1383 (1992).
In the face of the growing number of employment discrimination cases that have been filed each year, California courts have recently begun to show a greater willingness to sanction plaintiffs who initiate and maintain frivolous discrimination and harassment claims. Last year, in Guthrey v. State of California, 63 Cal. App. 4th 1108 (1998), the Fifth District of the California Court of Appeal published a decision awarding sanctions to a prevailing defendant for the purpose of alerting "the bar of the serious consequences to the plaintiff, and perhaps to his or her counsel, which might attend the filing and prosecution of employment discrimination cases that are obviously baseless."
In Guthrey, the plaintiff, a male Correctional Counselor for the California Department of Corrections, filed a complaint raising claims for discipline in violation of public policy, employment discrimination, slander, and two counts of invasion of privacy. He named as defendants "the State of California, the California Department of Corrections, the Sierra Conservation Center, CDC's Director James Gomez, and nearly every employee who ever came close to the alleged grievances suffered by Guthrey." During the course of discovery, particularly the plaintiff's deposition, it became clear that the plaintiff did not have any admissible evidence to support his claims that he was being discriminated against on the basis of his gender. Accordingly, the trial court granted the defendants' motion for summary judgment and their subsequent motion for attorneys' fees.
In upholding the trial court's award of attorneys' fees, the Court of Appeal cited the following factors in support of its decision:
- the plaintiff's complete failure to provide any admissible evidence that could support a prima facie case that he was a victim of employment discrimination;
- the plaintiff's "kitchen sink" approach of throwing in almost every possible cause of action into his complaint;
- the inclusion of defendants who were only peripherally involved with the allegations made by the plaintiff;
- the plaintiff's submission of a declaration to contradict his own deposition testimony; and
- the plaintiff's failure to dismiss the action even after it became clear his claims completely lacked merit.
More recently, in a December 7, 1998 order in Martinez v. Maxim Property Management, a San Francisco Superior Court judge awarded $127,000.00 in costs and fees against an employment discrimination plaintiff. According to the San Francisco Recorder, the plaintiff was unable during his deposition to cite any specific incidents that would support his claim that he was discriminated against on the basis of his race.
The clear import of both Guthrey and Martinez is that California courts appear more willing to hold plaintiffs, and possibly their attorneys, accountable for filing and maintaining employment discrimination actions that are frivolous and without merit. These cases underscore the obligations of plaintiff's counsel to candidly advise their clients of the viability of their claims and, if necessary, counsel them to abandon the continued prosecution of frivolous actions. It also counsels that defendants make their position clear in writing early on, that they will seek attorneys' fees if a meritless case is pursued.
Employees May Not Sue Co-Workers For Certain Personnel Decisions
Christopher Sheppard worked at Southwest Airlines for four and one-half years as a first officer pilot, but was fired in June 1994 when he failed to gain a mandatory upgrade to the rank of captain. Sheppard claimed that a flight attendant who strongly disliked him conspired to have him fired, and recruited others to give him negative evaluations. Sheppard then sued Southwest and his co-workers for interference with contract and prospective economic advantage, libel, and infliction of emotional distress. The California Court of Appeals allowed him to pursue his libel claim against the co-workers because the legislature set forth the parameters needed to maintain such a claim, but the court threw out Sheppard's emotional distress and contractual interference claims against his former co-workers In a footnote, the court made clear that it did not intend to preclude coworkers from suing each other for inflicting physical injury. Sheppard v. Freeman, 67 Cal. App. 4th 339 (4th Dist. 1998).
The court held that "employees, regardless of the scope of their employment or personal motives, cannot be individually liable for their acts or words relating to personnel actions unless such liability arises from statute." In reaching its holding, the court in Sheppard relied heavily on the California Supreme Court's recent decision in Reno v. Baird, 18 Cal.4th 640 (1998), where the Court held that individual supervisory employees cannot be held personally liable under the California Fair Employment and Housing Act ("FEHA") or for wrongful termination in violation of public policy for discrimination relating to personnel management decisions. (See Labor Update, July, 1998) The Reno decision was based in part on the Court's observation that litigation "is expensive for the innocent as well as the wrongdoer."
Similarly, the court in Sheppard reasoned that if you had a contrary rule, employees would be encouraged to place their personal interests in avoiding individual liability above their employer's interests in managing its business. Managers would simply not be honest in their evaluations or mete out necessary discipline if they thought they could be sued. The court observed that: "Employees must be allowed to act and speak freely in relation to personnel actions without fear and risk of being sued for doing so." The court added that "[t]his can hardly occur when the individual employees face the prospect of being sued for this conduct." The court concluded that "[t]he interest in allowing all employees the freedom to act and speak in relation to personnel actions without the threat of debilitating litigation outweighs the risk that a few employees will act maliciously and go undetected by their employers."
In short, Sheppard and Reno represent an attempt by California courts to protect employees from being caught in the growing cross-fire of employment litigation between workers and their employers, and are a welcome breath of common sense in this complicated field.