Individuals Not Held Liable

According to California Supreme Court in Jones v. The Lodge at Torrey Pines, individual supervisors cannot be held individually liable for retaliation under FEHA.

From Shaw Valenza:

The California Supreme Court continued a trend on Monday, March 3, 2008, when it held in Jones v. The Lodge at Torrey Pines that supervisors cannot be held individually liable for retaliation under California’s Fair Employment and Housing Act (FEHA). The Court has consistently shielded individual supervisors from various other forms of employment related claims. For example, the Supreme Court ruled in Reynolds v. Bement, a 2005 decision, that individual corporate agents, including officers, directors, and shareholders, could not be personally liable for an employer’s failure to pay wages to its employees. Similarly, in 2000, the Court held in Carrisales v. Department of Corrections that individual, non-supervisory employees could not be held liable for harassment.

Jones, Reno, and Individual Liability for Personnel Actions

The Jones decision itself is a logical extension of the Court’s 1998 decision in Reno v. Baird, where the Court decided that individual employees could not be held liable for discrimination under the FEHA. Justice Chin wrote the majority opinion in Jones, relying heavily on the Court’s rationale in Reno. A primary policy underlying Reno permitting supervisors to manage without fear of personal liability supported the finding that supervisors should not be personally liable for retaliation. As the Court pointed out, a supervisor facing personal liability for normal personnel actions (demotion, termination, failure to promote, compensation, discipline, etc.) will face a conflict of interest every time he or she considers whether to take adverse action against an employee. With harassment, on the other hand, a supervisor may avoid liability simply by refraining from engaging in conduct that may amount to harassment.

Despite the Court’s ruling in Reno, lower California courts and federal courts consistently have held that, unlike in discrimination cases, individuals may be liable for retaliatory decisions. The difference in the court’s treatment of individual liability for discrimination and retaliation, according to Justice Chin, was based on differences in language between the section of the FEHA barring discrimination and the section prohibiting retaliation.Justice Chin concluded that the differences in the language between the two statutory sections did not evince a legislative intent to impose personal liability.

Also, to Shaw Valenza’s credit, they warn employers that this decision is solely under FEHA.

Despite the trend of court decisions protecting supervisors’ personnel actions, individual employees can still be liable for various statutory violations that specifically provide for individual liability. For example, as mentioned above, the FEHA imposes individual liability for harassment. In a 1998 Court of Appeal decision, Sheppard v. Freeman, the court allowed a pilot terminated from Southwest Airlines to pursue claims against his coworkers for libel. The Court there reasoned that individuals may be held personally liable for any violation of a statute that imposes liability against individuals. Other examples of claims that may result in individual liability include fraud, assault, and battery.

The Workers’ Compensation Act (Act) generally precludes individual liability for most co-worker claims. But employees who engage in intentional conduct with a specific intent to injure a co-worker may be held personally liable because such conduct is outside the scope of the Act.

California employers also should be mindful of federal law, which may differ from state law on similar issues. For example, while California law does not hold supervisors personally liable for wage and hour violations, individuals can be liable for violations of the federal Fair Labor Standards Act (FLSA) for wage and hour violations because the relevant statute defines employer as any person who acts, directly or indirectly, in the interest of the employer. The federal district court for the Central District of California in Mercer v. Borden used the same definition of employee to extend liability to individual employees for violations of the Family and Medical Leave Act (FMLA).

In other words, “If the thunder don’t get you, then the lightning will”.