• California Appeals Court Dismisses Harassment Suit As To Employer, But Reinstates Action As To Co-worker
  • December 1, 2003 | Author: Helene J. Wasserman
  • Law Firm: Ford & Harrison LLP - Los Angeles Office
  • In a decision that may have a significant impact on California employers, a California Appeals Court has just issued the first opinion holding that California's 2000 amendments to the Fair Employment and Housing Act (FEHA), which impose individual liability on co-workers for illegal harassment, are retroactive. In McClung v. Employment Development Department and Manual Lopez, the California Court of Appeals for the Third Appellate District affirmed in part and reversed in part the decision of the Sacramento County Superior Court and held that while the employer was not liable to the plaintiff for creating or failing to remedy a hostile work environment or for intentional infliction of emotional distress, the plaintiff's co-worker may be.

    McClung and Lopez were co-workers and worked as auditors for the Employment Development Department (EDD.) Both were assigned to work on an audit in San Diego, which required them to travel together. While Lopez was assigned as the "lead" auditor on the project, he did not have any authority over McClung's compensation, benefits, or other terms or conditions of her employment. He also did not evaluate her performance. As the "lead" auditor, he was responsible for formulating the audit plan and for instructing the other auditors about their jobs and responsibilities. Essentially, he was the most experienced auditor on the team and was responsible for guiding the team to completion of the audit.

    McClung alleged that the harassing conduct took place in San Diego over a period of three days. During that time frame, McClung claimed Lopez subjected her to unwelcome and inappropriate conduct. For example, Lopez discussed his divorce with McClung and inquired as to McClung's personal life. He commented that he thought she was cute. On three occasions, he put his hand on McClung's lower back to guide her through a doorway, even though she told him that made her uncomfortable. He suggested that they share a bottle of wine in one of their hotel rooms. While driving to dinner in San Diego, they drove past a nude dancing establishment. Lopez suggested that they have dinner there, commenting, "men have urges" and he was "sure women do too." Lopez commented that he was a "Latin lover" and asked if McClung's "problem" was that she didn't "like oral sex." Lopez asked McClung about oral sex and how she was in bed. While they were sitting at a bar and McClung was talking with another man, Lopez put his hand on her knee, slid it up her thigh, squeezed it, and then moved it away. Later, Lopez asked McClung in more graphic terms if she wanted to have sex with the man she was talking to. McClung confronted Lopez about the conduct and he again asked McClung, in the same graphic terms, if she wanted to have sex with the man she was talking to at the bar.

    When McClung returned to work in Sacramento, she reported Lopez' conduct to her section chief, complaining that she had been sexually harassed. Her supervisor granted her request to be taken off of the San Diego audit and considered her request to have Lopez' workstation moved. Two days later, McClung filed a written complaint with the EDD's EEO Office. In her complaint she requested that: (1) documentation regarding the EEO department's ultimate findings be placed in Lopez' file, (2) Lopez' workstation be relocated, and (3) she have no future assignments to work with Lopez.

    During the course of the investigation, information or rumors came to light about McClung, including that she may have had relationships with co-workers in the past and may have made sexual harassment complaints in the past. Meanwhile, within four days after the EEO Office sent letters to Lopez and McClung indicating that it would be investigating the allegations, Lopez announced his immediate retirement.

    The EDD did not relocated Lopez' workstation prior to his retirement, but there was evidence that Lopez was not in the Sacramento office during the time period between the investigation and his retirement date. However, McClung was uncomfortable because Lopez' workstation had not been relocated.

    At the conclusion of the investigation, which was nearly four months after it began, the EEO office issued a report supporting McClung's charges and recommending that a letter regarding its findings be placed in Lopez's file, pursuant to McClung's request. The EEO office found that the request to have Lopez' workstation relocated was moot due to Lopez' retirement. McClung indicated that, overall, she was satisfied with the decision.

    McClung filed her civil suit against EDD and Lopez, alleging hostile work environment, failure to remedy harassment, and intentional infliction of emotional distress. Both EDD and Lopez filed summary judgment motions seeking to have the case against each of them dismissed. The trial court granted both motions and dismissed the action as to both defendants.

    The appeals court affirmed the dismissal as to the EDD, but reversed the dismissal as to Lopez.

    In affirming the dismissal as to the EDD, the court first held that Lopez was not McClung's supervisor. As a result, the EDD could not be held strictly liable for his conduct and was entitled to dismissal of McClung's harassment claim. Next, the court addressed McClung's claim that the EDD did not adequately remedy the harassment once she complained. Her claim was based on the fact that Lopez was not immediately transferred away from McClung's work area and the fact that there purportedly were "rumors" spread about her that arose during the course of the investigation. The court noted that no California case has previously analyzed the remedial obligation in detail, but that the United States Court of Appeals for the Ninth Circuit did so in Fuller v. City of Oakland. In Fuller, the Ninth Circuit explained that the effectiveness of remedial action is measured by two purposes: ending the current harassment and deterring future harassment. The McClung court held that the EDD took sufficient immediate and appropriate action that ended the harassment and deterred future harassment, even if it did not transfer Lopez prior to his retirement. McClung argued that the investigation took longer than it should have and, thus, was somehow inadequate. The court rejected that argument, noting that although the investigation took five months to conclude, it commenced immediately after McClung's complaint. Further, McClung neither worked nor was alone with Lopez for the entire period between when she made her complaint and when Lopez retired. As far as McClung's complaint regarding the "rumors" that supposedly were spread during the investigation, the court found the rumors to be gender neutral, based solely on conjecture, and insufficient to raise a material issue of fact regarding whether the EDD created a hostile work environment or failed to remedy it. Finally, with regard to McClung's claim against the EDD for intentional infliction of emotional distress, the court held that under the Tort Claims Act, which was applicable due to McClung's employment with a governmental agency, a public employer cannot be held vicariously liable so long as the acts giving rise to liability are outside the course and scope of the employee's employment. The court held that Lopez' alleged conduct was outside the scope of his employment, thus, the EDD was not liable.

    However, the appeals court reversed dismissal as to Lopez, finding triable issues of material fact sufficient to give rise to liability. In 2000, FEHA was amended to include section 12940 (j)(3), which states: "An employee of an entity subject to this subdivision is personally liable for any harassment prohibited by this section that is perpetrated by the employee, regardless of whether the employer or covered entity knows or should have known of the conduct and fails to take immediate and appropriate corrective action." While the conduct alleged by McClung occurred prior to 2000, the court, after conducting a detailed legislative analysis of the amendment, held that the amendment should be applied retroactively. The court then analyzed whether the conduct alleged by McClung, which admittedly occurred only over a three-day period of time, was sufficiently "severe and pervasive" to withstand dismissal. Lopez argued that conduct was insufficient to raise a triable issue as to whether McClung was subjected to a hostile work environment. The court rejected this argument, noting "repeated harassment is not rendered inactionable because it occurs over a relatively short period" and concluding that the conduct alleged by McClung amounted to "a campaign of harassment." Further, as noted above, because the court found that Lopez' conduct was outside the scope of his employment, the court reversed dismissal of McClung's claim for intentional infliction of emotional distress as to Lopez.

    The significance of this case is tremendous. First, it is essential that all employers have sexual harassment policies in place. The policies required by California law are significantly different than those required by other states. Second, it is essential that all employees, managers and non-managers alike, are provided with sexual harassment training. Here, if Lopez had been deemed a supervisor, then regardless of whether the EDD knew about his conduct in advance, it would have been vicariously liable for his conduct. Even if an employee is not a supervisor under the FEHA, employees need to know that they can and will be held individually responsible for their own conduct. Personal responsibility should be a good deterrence for inappropriate conduct. Finally, it is vital that employers have in place procedures and mechanisms for employees to report complaints of harassment without fear of retaliation and reprisal. However, those procedures are only sufficient if people know what they are and if they work. Complaints must be investigated immediately, and thoroughly, and an appropriate remedy must be fashioned.