California Supreme Court Limits Liability of Individuals for Retaliation Under FEHA

On March 3, 2008, the California Supreme Court issued a decision significantly limiting the liability of individuals and supervisory employees under the California Fair Employment and Housing Act ("FEHA"). In Jones v. The Lodge at Torrey Pines Partnership, No. S151055, __ Cal. 4th __ (March 3, 2008), the Court held that individuals cannot be held liable under FEHA for most forms of retaliation. The Jones decision thus brings liability for retaliation into line with claims for discrimination, which have long excluded individual liability. SeeReno v. Baird, 18 Cal. 4th 640 (1998).

The 4-3 majority explained that, as with discrimination claims, retaliation claims are frequently based on decisions that are at the core of a supervisor's or manager's regular responsibilities. The Court thus concluded that the policy rationales underlying the Reno decision applied equally to retaliation claims, specifically, supervisors can avoid harassment but cannot avoid personnel decisions, supervisors may not terminate or discipline employees when needed because they fear retaliation claims, it is unfair to hold individual supervisors liable when others in management are often involved in the pertinent decisions, and it is bad policy to subject supervisors to the threat of a lawsuit every time they make a personnel decision. The Court further noted that the benefit to a plaintiff of obtaining an individual supervisor’s liability would be comparatively minimal, because financial recovery from the supervisor would likely add little beyond the amount recoverable from the employer. The Court therefore reversed the decision of the Court of Appeal.

In a sharp dissent, Justice Moreno emphasized the relationship between section 12940(h) of FEHA, which addresses retaliation, and section 12940(j), which imposes individual liability on supervisors for harassment. When the California Supreme Court initially determined that supervisors were not liable for harassment in Carrisales v. Department of Corrections, 21 Cal. 4th 1132 (1999), the legislature swiftly abrogated the Carrisales holding and enhanced subsection (j) to explicitly provide individual liability for harassment.

The Jones majority recognized this unique treatment of harassment claims and declined to decide the question of whether an individual can be liable for retaliation when the retaliation flows from a complaint of harassment or after an employee has opposed harassment. But while that question remains open, the Jones decision provides good news for employers and much-needed clarity on the limitation of individual liability for retaliation. The Jones decision further brings California law more into line with Title VII, which does not impose liability on individuals.