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HARASSMENT AND RETALIATION:
Two New California Supreme Court Cases Increase
Your Risks; How to Protect Your Company
Audio Conference
Thursday, September 15, 2005
10:30 a.m. – noon PDT
Presented by:
Mark Kanelos
Peter Rukin
Mary L. Topliff
99410500_0509_handout
© 2005 EMPLOYER RESOURCE INSTITUTE
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Peter Rukin of Rukin Hyland Doria & DuFrane in San Francisco has litigated class action
and individual employment cases in California and across the United States. He is the author
of the section on Rule 23(b)(1) class actions in the upcoming BNA treatise Class Actions in
Employment Law, and he has published numerous articles on employment issues in national
and state bar publications. Peter has served as counsel of record in various state and federal
reported decisions, including as counsel for amici Mexican American Legal Defense and
Education Fund et al in Kolstad v. American Dental Association, 119 S.Ct. 2118 (1999). He has
also been appointed class counsel in various class action cases since forming his own firm in
March 2003.
Peter graduated from New York University School of Law in 1991 and served as law clerk to
U.S. District Court Judge Harry D. Leinenweber in Chicago. Following his clerkship, Peter practiced at employee-side firms in Chicago (Stowell & Friedman) and New York (Vladeck Waldman
Elias & Engelhard) and served as Of Counsel in the Employment Law Department at Paul,
Hastings, Janofsky & Walker in San Francisco before starting his own firm.
Peter is admitted to the State Bars of California and New York, the bars of various federal district
courts, the Ninth Circuit Court of Appeals, and the United States Supreme Court. He is a member of the California Employment Lawyer’s Association and the National Lawyers Guild, and regularly volunteers his pro bono services to the Lawyers’ Committee for Civil Rights. Peter is “AV”
rated by Martindale Hubbell.
Peter Rukin
Rukin Hyland Doria & DuFrane LLP
100 Pine Street, Suite 725
San Francisco, CA 94111
phone: 415-421-1800
fax: 415-421-1700
peterrukin@rhddlaw.com
© 2005 EMPLOYER RESOURCE INSTITUTE
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Mary L. Topliff, of the Law Offices of Mary L. Topliff in San Francisco, specializes in employment law counseling, training, and compliance. Her proactive approach to employee relations
issues offers practical solutions consistent with legal requirements and good management principles. She regularly advises business owners and human resources professionals on all aspects of
workplace issues. She also drafts and negotiates employment and separation agreements on
behalf of executives. Ms. Topliff designs and implements customized training and resource tools
on various subjects, including harassment prevention, employment law for managers,
exempt/nonexempt job classifications, disability accommodations, and leaves of absence.
Ms. Topliff is a frequent speaker on practical applications of workplace legal issues and recent
legal/legislative developments. She has been an adjunct faculty member with San Francisco State
University’s College of Extended Learning since 1999. Her courses include Employee Relations
and Legal Aspects of Human Resources Management. She has also taught the Employment Law
course at California State University at Hayward College of Continuing Education.
Ms. Topliff is the statewide Legislative Director for the Society of Human Resource Management,
and she is the past chair of the Legislative Affairs Committee for the Northern California Human
Resources Association. She is on the Board of Directors of the Financial Women’s Association
and is a member of the Board of Trustees and Chair of the Human Resources Committee of the
Fort Mason Foundation in San Francisco. She is an active member of the Labor and Employment
Law sections of the Bar Association of San Francisco, the American Bar Association, and the
State Bar of California. She serves as an arbitrator for the Bar Association of San Francisco’s
Attorney Fee Dispute Panel.
She was admitted to the California State Bar in 1988. Ms. Topliff received her Juris Doctorate
from The Ohio State University in 1988 and her Bachelor of Science in Business Administration
with an emphasis on Human Resource Management from Bowling Green State University in
1982. Prior to attending law school, Ms. Topliff was a human resources practitioner for the
United States Court of Appeals for the Tenth Circuit.
Law Offices of Mary L. Topliff
One Embarcadero Center, Suite 2300
San Francisco, CA 94111
home: 415-398-9597
fax: 415-398-9599
w: www.joblaw.com
© 2005 EMPLOYER RESOURCE INSTITUTE
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Mark Kanelos is ERI’s audio conference producer; he coordinates and moderates many ERI
audio conferences. Prior to joining ERI, he was a partner with the law firm of Kanelos, Kanelos,
and Tichenor, P.C., where he handled numerous cases dealing with various aspects of employment law. He earned his J.D. from the John Marshall Law School and his B.S. from Roosevelt
University.
© 2005 EMPLOYER RESOURCE INSTITUTE
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I. Miller v. Department of Corrections
A. Case Summary
• Issue Presented to the Court: Whether favoritism by a supervisor toward a female
employee with whom the supervisor is conducting a consensual sexual affair can
create a hostile environment for co-workers in violation of the Fair Employment and
Housing Act?
• The events in this case took place from 1994 to 1998. Plaintiff Edna Miller was a correctional officer. The male warden at a women’s correctional facility had sexual affairs
with three women co-workers at various times. One of the women interviewed for a
promotional position, was initially not selected by the interviewing panel, although
the warden interceded to ensure the promotion. The paramour in question bragged
that she could get what she wanted due to her sexual relationship with the warden.
Later, Miller and another of the “paramours” compete for a promotion, who informed
Miller that she was assured the promotion due to her relationship. Again, the paramour received the promotion, despite the interviewing panel’s conclusion that Miller
was more qualified. Following the plaintiffs’ internal complaint, an internal affairs
investigation was conducted in which it noted that the staff viewed the sexual relationships as creating a hostile environment and unethical.
• Plaintiff Frances Mackey was a records manager at the same facility who desired to be
promoted to a correctional counselor. One of the warden’s paramours believed that
Mackey had complained about the affair and thereafter engaged in retaliatory conduct. Mackey felt powerless to take any action after witnessing another employee
being fired after complaining about the warden’s conduct. Following the internal
affairs investigation, the warden reduced her responsibilities and denied her access to
work experience she would need to be promoted.
• The court noted that hostile environment claims are evaluated based on the totality of
the circumstances as to whether the conduct was severe or pervasive enough to alter
the conditions of employment. It relied on an EEOC Policy Guidance on Employer
Liability under Title VII for Sexual Favoritism, which was issued under thenCommissioner Clarence Thomas. That guidance notes that widespread sexual
favoritism may create a hostile work environment by sending the demeaning message
that managers view female employees as “sexual playthings” or that the way for
women to get ahead in the workplace is by engaging in sexual conduct.
• Posture of the case: Summary judgment entered in the employer’s favor by the trial
court was affirmed by the Court of Appeal, meaning that the court found there to be
no issue for the jury to decide. The Supreme Court’s reversal of the lower courts’
decisions means the case will go back to the trial court for a jury trial. One of the
plaintiffs died before the case was decided by the Supreme Court.
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B. What Does This Case Mean?
• Expect more favorable cases for employees by the California Supreme Court
• Favoritism cases likely to be favorable for plaintiffs in front of a jury
• Case should not be a surprise, especially given the facts
• Difficult to defend these types of cases (e.g., arguing that this type of behavior is
acceptable)
• Legal Standard requires more than isolated instance of favoritism
C. Action Steps for Employers
• Harassment prevention policies are only effective if carried out
• Never a good practice for a manager to have sexual relationships with direct reports
• Important to conduct neutral internal investigations and taking remedial action
• Hold managers accountable for their own personal behavior
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II. Yanowitz v. L’Oreal
A. Case Summary
• Issue Presented to the Court: Whether an employee’s refusal to follow a supervisor’s
order that she reasonably believed to be discriminatory constitutes protected activity
under FEHA and that an employer may not retaliate against the employee on the basis
of that conduct when the employer knows the employee’s belief even when she has
not explicitly objected?
• Plaintiff had been a regional sales manager since 1986. After a reorganization in 1997,
her job responsibilities expanded to include responsibility for the Ralph Lauren sales
force and marketing campaigns. That year, her new manager toured different stores
with her and later instructed her to terminate a dark-skinned female associate because
he did not find her to be sufficiently attractive. He also told her to “get me somebody
hot.” On a return trip to the store, the manager noticed that the employee was still
there and he told Yanowitz again to terminate her. Yanowitz asked him to provide
adequate justification for dismissing the associate. Although she did not ever terminate
the associate, she never explicitly told the manager that she believed it to be discriminatory. In April 1998, the VP of Sales for the division began soliciting negative information about Yanowitz from her subordinates. This led to a meeting with Yanowitz to
discuss her performance and later a detailed memorandum. Two days after a meeting
in which these performance deficiencies were discussed, Yanowitz went on a stress
leave of absence from which she did not return.
• To establish a claim of retaliation under FEHA, plaintiff must show that she engaged
in a protected activity, the employer subjected the employee to an adverse employment action and a causal link between the protected activity and the employer’s
action.
• The Court notes that “protected activity” for retaliation purposes includes an employee’s opposition to conduct that the employee reasonably believes to be unlawful,
whether or not it is ultimately found to be so. Further, “a rule that permits an employer to retaliate against an employee with impunity whenever the employee’s reasonable
belief turns out to be incorrect would significantly deter employees from opposing
conduct they believe to be discriminatory.”
• The Court focused not on whether a formal accusation of discrimination had been
made by Yanowitz but whether her communications to the employer sufficiently conveyed her reasonable concerns that the employer had acted in an unlawful discriminatory manner. It found that her refusal to carry out the termination order and request
for a valid reason to do so was sufficient.
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The other issue in the case involved whether Yanowitz suffered an “adverse employment action.” The Court adopted the standard that this requires either a showing of
a tangible employment action, such as termination or demotion, or adverse treatment
that is reasonably likely to impair a reasonable employee’s job performance or
prospects for advancement. Yanowitz’s evidence included unwarranted criticism of
her performance and her manager’s gathering of negative feedback. The Court held
that this was sufficient to be decided by the jury.
• Posture of the case: Summary judgment entered in the employer’s favor by the trial
court was reversed by the Court of Appeals, meaning that the court found there to
be issues for the jury to decide. The Supreme Court affirmed the Court of Appeals’
decision and the case will go back to the trial court for a jury trial.
•
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B. What Does This Case Mean?
• Very favorable decision for plaintiffs who could wait until after they leave the company
to raise these types of issues.
• Difficult from practical perspective to guard against these types of claims.
• Case had unfavorable facts for employer, including other potentially retaliatory conduct
(e.g., fishing expedition for co-worker and subordinate complaints about plaintiff).
C. Action Steps for Employers
• Important to train managers regarding appropriate hiring practices and what constitutes
unlawful discrimination
• Encourage employees at all levels to report concerns about discrimination and
retaliation
• Ensure that performance criticisms are valid; discourage “fishing expeditions” for negative feedback
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III. Closing Thoughts and Tips
© 2005 EMPLOYER RESOURCE INSTITUTE
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Thank You
We hope you’ve found this conference valuable. CD recordings of this conference can
be ordered by calling 1-800-695-7178.
You can also go to www.employeradvice.com/audio for information about CD recordings of this and past conferences, as well as information about our upcoming audio
conferences. We hope you’ll consider joining us again soon.
Please be sure to complete and return your program evaluation. Evaluations will be
e-mailed to participants shortly after the conference.
© 2005 EMPLOYER RESOURCE INSTITUTE
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HARASSMENT AND RETALIATION:
Two New California Supreme Court Cases Increase
Your Risks; How to Protect Your Company
Supplemental Materials
1. Sexual Harassment: Workplace Romance May Now Lead to Harassment Claims by
Co-Workers Alleging “Sexual Favoritism”; How to Protect Yourself
© Employer Resource Institute
2. Discrimination: New Decision Makes It Easier for Employees to Sue for Retaliation
When They Oppose Workplace Bias; 4 Protection Measures
© Employer Resource Institute
3. Sexual Harassment: Employer Fights Off Big Punitive Damages Award; What Went
Wrong and How to Protect Yourself
© Employer Resource Institute
4. Sexual Harassment: High Court Clarifies Law on Constructive Discharge in
Harassment Cases; Lawsuit Prevention Strategies
© Employer Resource Institute
5. Employee Dating: Court Upholds Employer’s Nonfraternization Policy After
Supervisor Terminated for Dating Subordinate
© Employer Resource Institute
6. Miller v. Department of Corrections, Calif. Supreme Court No. S114097, 2005
This case is available at www.courtinfo.ca.gov/opinions/documents/S114097.PDF.
7. Yanowitz v. L’Oreal, Calif. Supreme Court No. S115154, 2005
This case is available at www.courtinfo.ca.gov/opinions/documents/S115154.PDF.
Every month, the California Employer Advisor provides all the news California employers
need to know in an information-packed eight-page newsletter. We combine breaking case
news, government regulations, and new legislation with practical tips to keep you in the loop
and out of court. For more information on subscribing to this valuable resource, go to
www.employeradvice.com.
© 2005 EMPLOYER RESOURCE INSTITUTE
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Sexual Harassment:
Workplace Romance May Now Lead to Harassment Claims by
Co-Workers Alleging “Sexual Favoritism”; How to Protect Yourself
SEPTEMBER 2005
In a significant expansion of harassment law, the California Supreme Court has ruled that
when a boss grants promotions or other favorable treatment to a sexual paramour, that “sexual
favoritism” can give rise to a hostile work environment sex harassment claim by colleagues who
weren’t the target of sexual advances. Until now, sexual harassment suits had been confined to
those who had been actual harassment victims. Unfortunately for employers, the new ruling will
likely open the floodgates to harassment claims based on sexual favoritism. We’ll explain the
decision and the steps all employers should take to help limit their risk.
Boss’s Affairs Lead to Lawsuit
Edna Miller and Frances Mackey, who worked for the California Department of Corrections
at Valley State Prison for Women in Chowchilla, charged that warden Lewis Kuykendall had
ongoing sexual relationships with several of their female co-workers, and that these women
received preferential treatment, including promotions. They contended that the very public
nature of Kuykendall’s amorous relationships with these co-workers created a hostile work
environment, and that they were retaliated against when they complained.
A California appeals court threw out the lawsuit (see CEA April 2003), ruling that any unfair
treatment Miller and Mackey may have experienced wasn’t based on their gender.
Sexual Favoritism Can Create Hostile Work Environment
But the California Supreme Court has reversed the earlier ruling.1 According to the high court,
employees who are not the target of sexual advances can sue for sexual harassment if a supervisor’s favoritism that is based on the granting of sexual favors is widespread in the workplace,
creating a hostile work environment for colleagues. This is true even when the sexual favors
are given consensually, as occurred here.
Borrowing from an Equal Employment Opportunity Commission policy statement on employer
liability for sexual favoritism, the court said that when such conduct is widespread, a message
is implicitly conveyed that managers view women as sexual playthings, which creates a
demeaning atmosphere for women in the workplace. What’s more, supervisors who engage
in sexual favoritism send a message that the way to get ahead in the workplace is to sleep
with the boss.
Green Light for Trial
The court concluded that a reasonable jury could find that the favoritism was sufficiently widespread to create a hostile work environment for Miller and Mackey, in light of the “considerable
flaunting” of the sexual relationships between Kuykendall and his various paramours and
because the favoritism appeared to be on “public display.” This was reflected, for example,
in Kuykendall’s permitting a paramour to abuse Miller and Mackey, and in his awarding a
sequence of promotions to a flame. Thus, said the court, Miller and Mackey can now take
their case to a jury.
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Decision’s Impact
This ruling opens the door for sexual harassment claims from employees—both female and
male—whenever bosses are involved in office romances. Whether you can be held liable
will depend on whether any sexual favoritism resulting from the relationship is widespread or
merely isolated—but this will likely be a difficult determination to make.
The knee-jerk reaction for many employers might be to completely prohibit supervisors from
having consensual affairs with employees. But, cautions Wendy Woldt, a lawyer with Woldt &
Associates in Torrance, such an across-the-board ban may violate privacy rights, as well as a
California law that bars employers from taking adverse action against an employee based on
the employee’s legal off-duty conduct.
However, it is clear that employers will need to take serious measures to ensure that office
romances, which are inevitable, don’t create a hostile work environment for others in the
workplace. Here are some proactive steps to take:
1. Consider adopting a nonfraternization policy. A nonfraternization policy informs employees
that if a personal relationship creates conflicts of interest, causes workplace disruptions, or
engenders a negative or hostile work environment, one or both individuals involved may be
asked to transfer or resign. The conflict of interest component can bar managers from participating
in employment decisions if they have a romantic or other close relationship with the employee.
These policies can also require employees to inform you of office relationships.
2. Expand sexual harassment policy and training. Woldt suggests adding language to your
antiharassment policy regarding sexual favoritism. A sample policy is available in the Subscriber
Resources section of our website. Also, make sure this topic is discussed in the sexual harassment
training you conduct for all employees, as well as during the mandatory A.B. 1825 training for
managers and supervisors.
3. Take complaints seriously. If an employee claims a supervisor is engaging in sexual
favoritism, make sure to follow up on the complaint immediately, just as you would for any
other sexual harassment complaint.
1 Miller v. Department of Corrections, Calif. Supreme Court No. S114097, 2005
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Discrimination:
New Decision Makes It Easier for Employees to Sue for Retaliation
When They Oppose Workplace Bias; 4 Protection Measures
OCTOBER 2005 (IN PRESS)
The California Supreme Court has expanded the rights of employees to sue for retaliation when
they oppose workplace discrimination. The court’s ruling concludes that retaliation protections
are available under the state’s antibias law even if an employee’s opposition to conduct perceived as discriminatory is silent. We’ll explain the ruling and provide guidance on how you can
avoid these types of claims.
Supervisor Ordered to Replace Employee Over Looks
Elysa Yanowitz received consistently high performance ratings during her career at cosmetics
company L’Oréal USA Inc., although there was some criticism of her communication and listening skills. She was eventually promoted to regional sales manager.
Problems began when L’Oreal general manager John Wiswall told Yanowitz to fire a darkskinned female sales associate at a San Jose Macy’s store because she was “not good-looking
enough.” Wiswall also reportedly said that Yanowitz should instead get him “somebody hot.”
When Wiswall later discovered the sales associate hadn’t been dismissed, he allegedly again told
Yanowitz to fire the associate. Then, referring to an attractive blond woman nearby, Wiswall said
to Yanowitz, “God damn it, get me one that looks like that.”
Manager Refuses Order
Yanowitz refused to terminate the sales associate, who was among the top fragrance salespeople
at the Macy’s store. However, Yanowitz never complained to anyone at L’Oreal that Wiswall was
pressuring her to fire the sales associate. When Wiswall, on several occasions, asked why the
sales associate hadn’t been dismissed, Yanowitz asked him to provide “adequate justification” for
the termination.
From that point on, Wiswall and Yanowitz’s immediate supervisor allegedly subjected Yanowitz
to heightened scrutiny, including baseless audits of her travel expenses and hostile evaluations.
She went out on stress leave and was eventually replaced.
Yanowitz sued, contending she was retaliated against because she opposed sex discrimination
under the California Fair Employment and Housing Act (FEHA). L’Oréal countered that
Yanowitz’s refusal to carry out the order wasn’t protected activity for purposes of an FEHA retaliation claim. A California appeals court ruled Yanowitz could take her case to a jury (see CEA
May 2004), and L’Oreal appealed.
Silence Doesn’t Defeat Retaliation Claim
Now the California Supreme Court has weighed in. The court explained that to prove retaliation
under the FEHA, the employee must demonstrate that they were subjected to an adverse
employment action because they engaged in a “protected activity.” Protected activity includes
complaints or opposition to conduct the employee reasonably and in good faith believes to be
illegal under the FEHA, even if it turns out the conduct isn’t actually prohibited by the FEHA.
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The court said that an employee doesn’t have to explicitly inform the employer that they believe
the challenged conduct is discriminatory--the employee’s opposition is protected so long as the
circumstances surrounding the employee’s actions are sufficient to convey to the employer the
employee’s concerns that the employer has engaged in discrimination. A jury could find that
Wiswall was on notice that Yanowitz declined to follow his order because it was discriminatory,
in light of the nature of his order and that Yanowitz repeatedly requested an “adequate justification.” Plus, there was evidence that Yanowitz reasonably believed that requiring a certain physical attractiveness was sex discrimination—and, the court added, the FEHA does bar such
requirements when they’re not gender-neutral.
What’s an Adverse Action?
The supreme court also addressed the definition of an “adverse employment action.” According
to the court, it is one that materially impacts a worker’s terms and conditions of employment.
This encompasses ultimate employment actions such as termination or demotion, but also
actions that are reasonably likely to adversely and materially affect an employee’s job performance or opportunity for advancement, although mere offensive statements or petty social slights
wouldn’t qualify. The court rejected a broader definition—embraced by the EEOC and the federal
appeals court that covers California—that includes any action that is reasonably likely to deter
employees from engaging in protected activities.
The court ruled that Yanowitz was subjected to a pattern of conduct that, taken as a whole,
could qualify as an adverse employment action. This included the negative performance
evaluations and unwarranted criticism, as well as the company’s refusal to permit her to respond
to these actions.
Protection Measures
The key risk for employers in the aftermath of this decision is that employees will claim retaliation even though they never openly complained about discrimination or harassment in the first
place. Here are some measures that can help manage this risk and avoid retaliation charges:
1. Review policies. Make sure you have strong policies prohibiting bias and harassment, and
that you have spelled out a comprehensive system that makes it easy for employees to complain
about problems, including having multiple avenues for an employee to raise issues of concern.
Be sure to distribute the policy, at least annually, and conduct training for all employees.
2. Train managers. In the required A.B. 1825 training (see CEA November 2004), make sure to
address the issue of retaliation, including what amounts to an adverse employment action.
3. Be proactive. If there’s even a hint that an employee may be opposing conduct that could
be perceived as biased—even if the employee hasn’t expressly said so--make efforts to followup with the employee to determine the basis for their actions, such as refusing a manager’s
orders.
4. Build in review. As the court noted, adverse employment actions can encompass many
types of workplace decisions. To help ensure that management actions aren’t retaliatory, consider having the HR department or a higher-level supervisor review adverse decisions or actions,
including negative performance reviews or warnings that will become part of an employee’s file.
1 Yanowitz v. L’Oréal USA Inc., Calif. Supreme Court No. S115154, 2005
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Sexual Harassment:
Employer Fights Off Big Punitive Damages Award; What Went Wrong
and How to Protect Yourself
JULY 2005
Diane Gober worked at a Ralphs Grocery Co. store in Escondido managed by Roger Misiolek.
Gober’s husband complained to Ralphs management that Misiolek harassed Gober and other
female employees by touching them inappropriately, using profanity, commenting on their sex
lives, and throwing objects at them. A sexual harassment lawsuit ensued, and now Ralphs is
fighting off a staggering punitive damages verdict that was fueled by evidence that the company
knew about Misiolek’s propensity for misconduct but took no action.
Discipline Not Effective
Ralphs moved Misiolek out of the store while it investigated Gober’s complaint and eventually
concluded the allegations had merit. Misiolek was given a written memo concerning the harassment, stating that failure to improve could lead to further discipline, including termination.
Misiolek was then transferred to a store in Mission Viejo, which was farther from his home;
Ralphs intended the longer commute to be a form of punishment. Ralphs never told the Mission
Viejo operations manager why Misiolek was transferred there. Misiolek’s misconduct continued
at the new store and, as a result, he was demoted to a clerk position.
Second Time’s Not a Charm
Gober and five female employees who had worked with Misiolek at the Escondido store sued
Ralphs for sexual harassment. A jury found Ralphs didn’t take reasonable steps to prevent the
harassment and awarded $550,000 in compensatory damages, plus another $3.3 million in
punitive damages.
Ralphs won a new trial on the punitive damages amount. But the second time around, a jury
awarded each woman a whopping $5 million in punitive damages. The trial judge reduced the
damages and told the women they could choose between another new trial or accepting the
lesser punitive damages. Some women accepted, but the others appealed. Ralphs also appealed
the entire award.
Prior Misconduct Admissible
Now, a California appeals court has ruled that evidence supported a punitive damages award,
but Ralphs can have another trial to determine the proper amount of such damages.1 To do so,
the appeals court made clear, the new jury can consider evidence of harassment by Misiolek
that occurred prior to his assignment to the Escondido store, as this could demonstrate that
Ralphs knew about problems with Misiolek but allowed the harassment to occur.
But the court also ruled that evidence of harassment occurring after Misiolek left Escondido
wasn’t relevant. That’s because it had no bearing on Ralphs’ knowledge at the time the wrongful acts at the heart of the lawsuit took place—those occurring while Misiolek worked at the
Escondido store. However, such evidence can come in to play if Ralphs opens the door by
arguing that it “’cleaned up’ its act when it first learned of Misiolek’s misconduct.”
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Take Prompt Action on Complaints
This case is a cautionary tale of the consequences that can result from not taking prompt and
decisive action when harassment occurs. Misiolek had apparently engaged in harassment even
before the incidents involving Gober and others at the Escondido store—and there was evidence that Ralphs knew about these prior problems but still gave him a position of authority as
the Escondido store manager earlier in article. As a result, Ralphs is facing punitive damages and
mountains of legal bills.
For details on how to properly respond to harassment problems, see the newly revised CEA
Special Report, “The Step-by-Step Sexual Harassment Prevention Guide for California Employers.”
You can read the new decision in the Subscriber Resources section of our website.
1 Gober v. Ralphs Grocery Co., Calif. Court of Appeal (4th Dist.) No. D040473, 2005
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Sexual Harassment:
High Court Clarifies Law on Constructive Discharge in Harassment
Cases; Lawsuit Prevention Strategies
AUGUST 2004
The U.S. Supreme Court has ruled that a constructive discharge—in which the work environment
becomes so intolerable that an employee is forced to quit—can amount to an adverse employment action in a hostile environment sexual harassment case. And, depending on the circumstances, you could be held automatically liable in this situation if the harasser is a supervisor.
We’ll explain the new ruling and why having a strong anti-harassment program is more
important than ever.
Harassed Employee Asks for Help, Then Quits
Nancy Drew Suders was a dispatcher for the Pennsylvania State Police (PSP). She claimed her
bosses continually subjected her to severe sexual harassment, including sexual comments and
obscene gestures. Suders requested help from PSP’s equal employment opportunity officer but
didn’t feel she received an adequate response. A few days later, she resigned.
Employee Sues
Suders sued PSP for sexual harassment, claiming PSP should be held automatically liable for the
harassment because the perpetrator named in her suit was a supervisor.
PSP said it wasn’t liable and pointed to a defense of supervisor harassment that the U.S.
Supreme Court established several years ago. Specifically, employers can escape liability—
provided no tangible employment action was taken against the employee if 1) the employer
exercised reasonable care to prevent and correct harassing behavior, and 2) the employee
didn’t take advantage of the employer’s corrective or preventive opportunities or otherwise
failed to avoid harm. (This employer defense does not apply in California, however. See
below for more.) PSP argued that Suders didn’t avail herself of PSP’s internal antiharassment
procedures.
Suders responded that the defense didn’t apply because she was constructively discharged or, in
other words, was the victim of a tangible employment action.
Employers Automatically Liable for “Official Actions”
The Supreme Court explained in this case that to establish constructive discharge, the employee
must demonstrate that the abusive working environment became so intolerable that her
resignation was a fitting response.
What’s more, said the court, a constructive discharge can qualify as a tangible employment
action, eliminating the employer defense to supervisor harassment. In particular, an employer
will be automatically liable if an employee quits in reasonable response to an employer-sanctioned action that “officially” changes the person’s employment status or situation. The court’s
examples of such actions include a humiliating demotion, extreme cut in pay, or transfer to a
position in which the employee would face unbearable working conditions. If no such official
act occurs, the employer defense will be available in a constructive discharge case.
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The court was not absolutely clear about what an official action is. Nor did the court reach
a conclusion as to whether Suders was subjected to an official action that resulted in her
constructive discharge. The high court returned Suders’s case to a lower court for trial, which
will determine whether PSP was entitled to use the employer defense.1
Protect Yourself
The Supreme Court’s decision is a mixed victory for employers. On the one hand, the ruling
establishes that you may be able to avoid automatic liability for supervisor sexual harassment
when a constructive discharge is involved. On the other hand, if the employee can tie his or her
resignation to an official adverse action by the supervisor, you will be held strictly liable for the
harassment.
Smart employment practices include a strong anti-harassment policy, comprehensive complaint
and investigation procedures, and a thorough training program for all employees and managers.
For more details on preventing harassment, see the CEA Special Report, “The Step-by-Step
Sexual Harassment Prevention Guide for California Employers.”
California Rules Different
It is important to keep in mind that under California law, the employer defense relied on in
the Suders case won’t absolve the employer of liability for supervisor harassment. Rather, the
employer remains automatically liable but can limit the victim’s damages by showing that she
failed to avail herself of the employer’s antiharassment program to avoid harm. (See CEA January
2004 for details.)
1 Pennsylvania State Police v. Suders, U.S. Supreme Court No. 03-95, 2004
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Employee Dating:
Court Upholds Employer’s Nonfraternization Policy After Supervisor
Terminated for Dating Subordinate
FEBRUARY 2004
Given how much time employees spend at work, it’s no surprise that romantic liaisons often
develop. Many turn into happy relationships, but some end in disaster—for both the participants
and their employer. This is particularly true when one person has direct or indirect control over
the other at work, which can lead to allegations of sexual harassment if the relationship sours.
To prevent these problems, some employers have adopted nonfraternization policies. Now, a
new California appeal court ruling demonstrates how these policies can protect you.
Supervisor Dates Sales Worker
Robert Barbee, the national sales manager for Household Automotive Finance Corp. (HAFC),
began dating Melanie Tomita, a member of HAFC’s sales force.
Because relationships between employees may raise a conflict of interest, HAFC has a conflictof-interest policy that requires a supervisor in a relationship with a subordinate to bring the
situation to management’s attention “for appropriate action (i.e., possible reassignment to avoid
a conflict of interest).”
Supervisor Given Ultimatum
When rumors of Barbee’s relationship with Tomita reached company CEO John Vella, he and
the company’s HR director, Pat Boney, met with Barbee to tell him the relationship raised a
potential conflict of interest. They told Barbee he could either end the relationship or he or
Tomita could resign. Barbee was given the weekend to decide.
The following Monday, Barbee told Vella and Boney that he and Tomita wanted to keep their
jobs. Based on this conversation, Vella and Boney allegedly assumed that Barbee chose to end
his relationship with Tomita. But soon after, Barbee attended several basketball games with
Tomita using tickets given to him by an HAFC customer. When Vella and Boney learned of this,
Barbee was terminated.
Supervisor Sues
Barbee sued HAFC, claiming that being terminated because of his personal relationship was an
invasion of his privacy. He also charged he was wrongfully discharged in violation of a public
policy barring employers from taking adverse action against an employee for lawful conduct
during nonworking hours away from the employer’s premises.
No Invasion of Privacy
A California appeal court ruled the termination didn’t violate Barbee’s right to privacy. According
to the court, supervisors don’t have a reasonable expectation of privacy in pursuing an intimate
relationship with employees who work for them. That’s because employers have legitimate
interests in avoiding conflicts of interest between work-related and family-related obligations,
in reducing favoritism issues, and in preventing family conflicts from affecting the workplace.
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Plus, HAFC limited Barbee’s privacy expectation by issuing a policy regarding the potential for
conflict of interest in these situations.
The appeal court also rejected Barbee’s wrongful termination claim. The court explained the law
Barbee relied on that bars employers from interfering with employees’ outside activities doesn’t
set forth a public policy. That’s because this law, Labor Code section 96(k), doesn’t actually
give employees any rights but merely sets up a procedure for the labor commissioner to assert
constitutional protections on behalf of employees. Thus, said the court, to rely on Labor Code
section 96(k) for a wrongful termination claim, Barbee would first have to show that the discharge violated a constitutional interest, such as his right to privacy, which he didn’t do.1
Practical Impact
This ruling endorses the use of nonfraternization policies as a way to avoid conflicts of interest
in the workplace that can arise out of supervisor-subordinate personal relationships. These
policies can be an important part of your efforts to prevent sexual harassment complaints.
It’s also important to note this is the first published opinion to look at Labor Code section 96(k),
which bars interference with an employee’s outside activities. The court limited the scope of that
law’s protection for employees by ruling employees could only sue under the law if the employer’s actions violated a constitutional right. But future decisions could tip the law more favorably
toward employees—which could mean greater restrictions on when you can limit what an
employee does on his or her own time. That’s because, as this court noted, another Labor Code
provision incorporates the prohibitions on employer interference delineated in section 96(k). The
court didn’t delve into the scope of this other law because neither Barbee nor HAFC raised it.
1 Barbee v. Household Automotive Finance Corp., Calif. Court of Appeal No. D040421, 2003
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