Abramson Church & Stave LLP

Last week, the California Supreme Court decided in Jones v. The Lodge at Torrey Pines Partnership that non-employer individuals, such as corporate officers and directors, supervisors and managers, cannot be held individually liable for retaliation based on discrimination actions.

Jones sued his employer and his supervisor, for, among other things, sexual orientation discrimination and retaliation in violation of the Fair Employment and Housing Act (FEHA). Ultimately, these two claims were heard by a jury. The jury found in favor of Jones, awarding compensatory damages against The Lodge and the supervisor. The trial judge rejected the jury’s verdict because Jones had not presented sufficient evidence of an adverse action for purposes of establishing sexual orientation discrimination or retaliation. Unlike personal liability for harassment, the trial court found that an individual cannot be held liable for retaliation.

The Court of Appeal disagreed with the trial court’s rulings and expressly concluded that, under the FEHA, an individual supervisor can be held personally liable for retaliation.

The Lodge petitioned the California Supreme Court for review and the court agreed to address a single issue: Can an individual be held personally liable for retaliation under the FEHA?

Jones’ argument was that the FEHA clearly states that retaliation is prohibited by “any employer, labor organization, employment agency, or person” (Government Code §12940(h)) and, therefore, an individual can be held personally liable.
The Supreme Court disagreed. In concluding that an individual cannot be held liable in retaliation claims, the court applied the following five-point analysis to support its reasoning:

• Individual supervisors cannot avoid personnel decisions which could give rise to a discrimination claim.
• The FEHA exempts employers with less than five employees from discrimination lawsuits. The California Legislature clearly intended to protect small employers from the burdens of litigation discrimination claims. Consequently, it would be inconsistent to hold individuals financially responsible.
• Permitting personal liability for retaliation could create a conflict of interest between following management policies and being subjected to potential liability.
• Corporate decisions generally are collective rather than individual.
• It is bad public policy to subject individual supervisors to a threat of a lawsuit every time they have to make personnel decisions.

With this case law on their side, supervisors can worry less about potential lawsuits as they perform their jobs. That being said, employers must make sure that their supervisors are not engaging in behavior that could result in a lawsuit for which the employer can be held liable.