Last year, the California Supreme Court made it easier for public employees to sue over job bias by ruling that they can bypass their employers’ internal grievance process and file a discrimination complaint directly with the state Department of Fair Employment and Housing (DFEH). Now a California appeal court has clarified an issue left open by the high court’s ruling, holding that when a public employee asserts a bias claim under the Fair Employment and Housing Act (FEHA) and related nonstatutory claims for wrongful demotion and termination in violation of public policy, the worker can bypass the internal grievance process for those nonstatutory claims, too—but only under certain circumstances.
Employee Disciplined
Michael Williams was a print shop supervisor for the Housing Authority of the city of Los Angeles. Williams received a subpoena to testify in court on a discrimination matter. His managers initially told him to comply with the subpoena, but then a Housing Authority attorney told him not to appear in court. Williams disregarded the attorney’s advice and complied with the subpoena.
Two weeks later, Williams received a “notice of intent to discharge” for insubordination because he didn’t follow the attorney’s advice. Williams wasn’t discharged but was demoted to residence cleaner. When he didn’t report for his new job assignment, he received a second discharge notice—for not reporting to work—and was fired.
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Employee Heads to Court
Both discharge notices informed Williams he could appeal the adverse employment decisions according to the Housing Authority’s internal procedures. Williams did file an appeal over the first notice and his demotion but abandoned it.
Then, after the discharge, Williams filed a complaint with the California DFEH, alleging he was demoted, fired, and retaliated against for complying with the subpoena. After the DFEH issued him a right-to-sue letter, Williams filed a lawsuit alleging retaliation under the FEHA. Plus, he alleged wrongful demotion and constructive termination in violation of public policy, which were nonstatutory claims.
The Housing Authority asked the court to dismiss the public policy claims, arguing that a public employee has to exhaust internal appeal remedies for his non-FEHA claims before heading to court. Williams contended that his nonstatutory claims should “ride to the courthouse” on his FEHA claims.
Close Ties to Bias Claim
The appeals court concluded that the California Supreme Court’s earlier ruling permitting public employees with FEHA claims to bypass internal procedures also applies to FEHA-related nonstatutory claims—but only if the resolution of those claims would decide the FEHA claim, essentially making it moot. The court stressed that just because the FEHA claim and the nonstatutory claims are based on the same set of facts doesn’t decide the matter. The focus is on whether an administrative finding would have a detrimental impact on the FEHA claim. The court said that this clarification will help discourage employees from filing meritless FEHA claims simply to circumvent the requirement to exhaust internal remedies for other types of claims.
For example, suppose a public employee uses his employer’s internal grievance system to challenge his termination on the grounds of race. An administrative finding that the termination was not race-based would likely preclude the employee from suing for race bias or wrongful termination in violation of public policy (the public policy being the FEHA’s proscription against race discrimination). There’s a strong presumption that an administrative agency’s findings are correct, so a court would probably uphold the administrative findings regarding the motives for the termination, thus precluding an FEHA suit on the same matter.
But in this case, the court found that Williams’s nonstatutory claims didn’t meet this “preclusive effect” standard. Thus, he had to exhaust the Housing Authority’s internal remedies before filing those claims in court. That’s because his nonstatutory claims weren’t based on an FEHA violation but rather on adverse employment actions allegedly taken because he complied with a civil subpoena.
Practical Impact
This new ruling allows public employees to tack nonstatutory claims onto a discrimination lawsuit without pursuing the public employer’s internal remedies—but only if the nonstatutory claims are closely tied to the FEHA claim. The court’s decision makes it easier for public workers to sue for such nonstatutory claims. But the requirement that these claims be FEHA-related should discourage public employees from filing meritless FEHA claims simply to circumvent the exhaustion requirement as to other types of claims.
Note that employees with bias claims have a choice of whether to go directly to court or use your internal procedures. Thus, the stronger your internal system, the more likely an employee will choose it over the court system.