Clarifying an issue that has long divided lower courts of appeal, the California Supreme Court has ruled that only employers-not individual managers and supervisors-can be forced to pay damages for workplace discrimination claims arising out of routine employment decisions. But supervisors are still at risk for huge damages in cases involving harassment and retaliation-and possibly for federal discrimination claims as well. Here’s an overview of the current state of the law on individual liability, and a look at how to minimize the risks to your organization and employees.
Join us this fall in San Francisco for the California Employment Law Update conference, a 3-day event that will teach you everything you need to know about new laws and regulations, and your compliance obligations, for the year ahead—it’s one-stop shopping at its best.
Supervisors Sued For Discrimination
The case was brought by Kimberly Reno, who worked as a nurse for Baird Health Services in Solano County. Reno claimed she was fired because her supervisors learned she was being treated for cancer.
Reno sued her employer and its owner, Marijo Baird, along with another supervisor for disability discrimination in violation of the state Fair Employment and Housing Act. Baird Health Services went out of business for other reasons, but Reno continued to pursue her lawsuit against the owner and supervisor.
Baird asked the court to throw out Reno’s case, arguing that only employers, not individuals, can be liable for damages under the state anti-discrimination law, and the California Supreme Court agreed.
Risky Personnel Decisions Are Unavoidable
The court reasoned that unlike harassment problems, discrimination claims can stem from the day-to-day performance of a manager’s job. Harassment, by definition, always falls outside normal work duties. But supervisors cannot avoid making decisions involving hiring, firing and promotion-any of which could give rise to a discrimination charge. If every management decision carried the risk of losing your home or savings, the court said, it would inhibit your ability to manage.
Harassment And Retaliation Still Danger Areas
Despite the court’s ruling about discrimination claims, individual managers can still be forced to pay damages out of their own pockets for harassment. And you can be liable not just for sexual harassment, but for any kind of illegal harassment, whether it’s based on age, religion, race, etc. It’s also important to note that you are not entirely immune from discrimination claims either, because managers can still be sued personally if they retaliate against an employee who complains of discrimination.
Federal Law Unsettled
Federal court decisions have come out on both sides of the personal liability issue-although the trend seems to favor protecting managers. Nonetheless, some federal trial courts have imposed personal liability on supervisors in cases involving age discrimination and retaliation. Until the U.S. Supreme Court finally resolves the issue, there’s still a risk that individual supervisors could be held responsible for violations of the federal anti-discrimination laws.
Practical Advice
Of course, just because supervisors are off the hook for state discrimination claims and damages doesn’t mean your organization is too. And the severity of a manager’s misconduct could translate into a bigger damage award to the employee. This means it’s as important as ever to thoroughly train managers on how to avoid discrimination and harassment traps-from interview questions to termination decisions-and to stress the importance of promptly solving workplace problems before they get out of control.
Also, in addition to publicizing your anti-discrimination and harassment policies, continue to remind employees that when it comes to harassment, they could still be subject to an expensive lawsuit and serious financial consequences, including even personal bankruptcy.