• California Supreme Court Clarifies Steps Employers Can Take to Minimize Risk of Damages from Supervisor Sexual Harassment
  • December 23, 2003 | Author: Joanna L. Blake
  • Law Firm: Atkinson, Andelson, Loya, Ruud & Romo, [incorporation phrase format]A Professional Corporation - Cerritos Office
  • In November, the California Supreme Court ruled in Department of Health Services v. Superior Court (McGinnis) that while employers may be held strictly liable for hostile environment sexual harassment by supervisors, employers may be able to reduce the victim's potential damages if the victim failed to exercise reasonable effort to avoid injury.

    Theresa McGinnis, an employee of the California Department of Health Services ("DHS"), alleged that her supervisor, Cary Hall, created a sexually hostile work environment from early 1996 to late 1997 when he continually made inappropriate comments to her and touched her.

    McGinnis waited to report Hall's conduct to DHS for almost two years. When she finally did complain, DHS promptly investigated and concluded that Hall had violated its policies. DHS disciplined Hall, who later retired from DHS. Nevertheless, McGinnis sued DHS for sexual harassment under California's Fair Employment and Housing Act (the "FEHA").

    DHS argued during the trial court phase of the case that McGinnis' claims should be dismissed because McGinnis' failure to utilize DHS' preventive and corrective procedures provided DHS with a "complete defense" to her claims. DHS argued that California courts should permit an employer to apply an affirmative defense to a FEHA supervisor sexual harassment claim by adopting the United States Supreme Court's 1998 interpretation of Title VII of the Civil Rights Act of 1964 as stated in Burlington Industries, Inc. v. Ellerth ("Ellerth") and Faragher v. City of Boca Raton ("Faragher"). In Faragher and Ellerth, the U.S. Supreme Court held that if the employer took reasonable care to avoid harassment and the employee failed to take advantage of the employer's procedures, the employer may avoid liability for the sexually harassing conduct of a supervisor. Here, however, the trial court refused to dismiss McGinnis' case. The California Court of Appeal affirmed the trial court's decision, ruling that the language of the FEHA differed significantly from the language in Title VII and the affirmative defense set out in the Faragher and Ellerth decisions, therefore, did not apply.

    The California Supreme Court has now also refused to directly apply the Faragher/Ellerth affirmative defense to McGinnis' FEHA claim. The Court held that employers are strictly liable under the FEHA for hostile environment sexual harassment by a supervisor. However, the Court also ruled that a doctrine known as "avoidable consequences" may apply to these cases. Specifically, the Court wrote, "recoverable damages do not include those damages that the plaintiff could have avoided with reasonable effort and without undue risk, expense or humiliation."

    Therefore, in order for California employers to take advantage of this "avoidable consequences" defense and reduce the potential damages suffered by a sexual harassment victim, (1) the employer must take reasonable steps to prevent and correct workplace sexual harassment, (2) the employee must unreasonably fail to use the employer's preventive and corrective measures, and (3) the employer must establish that had the employee made reasonable use of the employer's procedures, he/she would have prevented at least some of the harm suffered.

    The most important message for employers arising out of the McGinnis case is that employers must develop, implement and communicate their anti-harassment policies and enforcement procedures to all employees. Employers must include in their policies information about how employees can and should report complaints of harassment. They must also reassure employees that no retaliation will occur for reporting harassment and describe to employees how the employer will address reports of harassment, including maintaining employee confidentiality where possible. Finally, employers must consistently and firmly enforce their policy at all times and take action to stop harassment when it is reported.

    Importantly, the California Supreme Court recognizes in this decision that, "an employer, no matter how conscientious, cannot take action to stop improper conduct without some reason to suspect that sexual harassment is occurring." Nevertheless, employers must take affirmative steps to ensure that employees are aware of and even encouraged to use the reporting mechanisms available to them.