The California Supreme Court has issued two new decisions of importance to
employers.
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In the first ruling, the high court held that officers and directors of a
company cannot be held personally liable to an employee for unpaid wages. The
case involved Steven Reynolds, who filed a class action suit against his
employer, Earl Scheib of California, Inc., for various wage and hour violations.
Reynolds also named in his lawsuit several officers and directors of Earl
Scheib. But now the California Supreme Court has upheld an appellate court’s
dismissal of the action against the individuals, ruling that the definition of
“employer,” as defined by the Labor Code and Wage Orders, doesn’t include
individual officers, directors, or managers.
In the second case, the California Supreme Court ruled that an employee’s
refusal to follow a supervisor’s order that she reasonably believed to be
discriminatory was protected activity under the California Fair Employment
and Housing Act (FEHA), and that an employer may not retaliate against an
employee for such conduct when the employer knows the employee believes the
order is discriminatory.
This case involved Elysa Yanowitz, a sales manager for L’Oreal USA Inc., who
was fired after she refused to carry out a general manager’s order to fire a
female sales associate because she was “not good-looking enough.” The general
manager had also told Yanowitz to instead get him “somebody hot.” Yanowitz
contended she was retaliated against because she opposed sex discrimination.
In reaching its decision, the high court rejected L’Oreal’s argument that the
FEHA doesn’t protect discrimination based on physical appearance so that
Yanowitz’s refusal to carry out the order wasn’t a protected activity. The court
also rejected the employer’s argument that Yanowitz was required to notify a
supervisor that she believed the order was discriminatory in order for her
refusal to be considered a protected activity.
We’ll have full details on both new decisions in an upcoming issue of the
California Employer Advisor.