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California and the West

Ruling Restricts Job Bias Liability

Ruling: State high court says only employers, not individual managers, can be forced to pay out for discrimination.

July 17, 1998|MAURA DOLAN | TIMES LEGAL AFFAIRS WRITER

SAN FRANCISCO — Workers in California will no longer be permitted to sue their supervisors for job discrimination under a decision Thursday by the state Supreme Court.

The court held unanimously that only employers--not individual managers--can be forced to compensate a worker for illegal job discrimination. The decision was a victory for the state's business community, which feared that managers would be reluctant to take punitive action against a worker if they could be held personally liable for discrimination.

"We do not decide merely whether individuals should be held liable for their wrongdoing," Justice Ming W. Chin wrote for the court, "but whether all supervisors should be subjected to the ever-present threat of a lawsuit each time they make a personnel decision. Litigation is expensive, for the innocent as well as for the wrongdoer."

The court's decision will not prevent workers from suing managers for sexual or other kinds of harassment or for taking retaliation against an employee who complained about discrimination.

"Harassment claims are legitimately distinguished from discrimination claims because they are based on different types of conduct," Chin wrote for the court. "Behavior that gives rise to a harassment claim is not related to performing one's job duties, except insofar as it occurs within the work environment."

For more general discrimination cases, involving accusations of age, race or gender bias, the court declared individual liability off-limits, basing its decision on the language of a state anti-discrimination law and on public policy concerns that such litigation would chill effective management.

Lawyers for employers praised the ruling and predicted that it would have a calming effect on the workplace.

"Managers are not going to have to look over their shoulders and say, 'Down the road, is a jury going to second-guess what I am doing here even though my motivation is lawful?' " said David Miller, a lawyer who represents defendants in employment disputes.

But plaintiffs' lawyers objected that the ruling will make it easier for managers to discriminate. "If managers are aware they have no personal risk from discriminating, they are going to do it more," said Phil Horowitz, who represented Kimberly Reno in the case before the court.

Reno, a Napa pediatric nurse, said she was told in 1992 not to return to her Solano County job at a nurses registry after her supervisors learned she had cancer.

"We feel that a nurse with cancer is inappropriate for a nurse-patient relationship," Reno said she was told. Her mouth cancer is now in remission.

Reno sued the registry for job discrimination, but it had gone out of business. She also sued Marijo Baird, the supervisor of the agency and its owner, and another manager. The supervisors denied that Reno was fired because of her illness and argued that they could not be held individually responsible for a corporation's act. A trial court agreed with them, but a Court of Appeal in San Francisco reinstated the complaint in September.

Federal courts have generally dismissed discrimination suits against supervisors. But prior to 1996, when an appeals court in Orange County barred such complaints, California workers often sued managers in state court and sometimes collected damages at trials or in settlements.

The Supreme Court, faced with two conflicting appellate decisions, reasoned that individuals should not be held responsible for corporate decisions, which are often made collectively by several persons.

"When a collective decision is discriminatory, some participants might have acted innocently, others less so," Chin wrote.

The court also contended that "supervisors will not escape punishment" because of the ruling. "Employers will not condone discriminatory acts by their supervisory employees because the employers must ultimately pay," Chin said.

Lawyers for the plaintiff countered that employers almost always defend their managers in such lawsuits.

"The court is not living in the real world," said Joseph Posner, an Encino employment lawyer. "Employers form the wagons in this circle--first they deny anything bad ever took place, and then they protect the supervisor."

He and other lawyers noted that employees can be individually sued in many other employment contexts. For example, a truck driver whose negligence causes an accident can be sued in addition to the company that hired him to drive the truck.

"If you let individuals off the hook, what do you tell your kids about taking personal responsibility for their own actions?" Posner asked.

Thomas Klein, who represents the Employers Group, an association of 5,000 California businesses, countered that employers often discipline managers who have engaged in discriminatory behavior. If the employer does not act against the manager, "a jury is really going to hammer that employer," Klein said.

But if an innocent manager is sued, that supervisor risks losing his or her home and savings, Klein said.

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