Does California Law Protect Partners Who Report Employee Harassment?

A California trial court recently held that a partner doesn’t have the right to file a claim for retaliation for reporting sexual harassment of employees under the state’s Fair Employment and Housing Act (FEHA). That decision was appealed. But a California appeals court reinstated the case; read on to find out more.

The case analysis is courtesy of Cathleen Yonahara of Freeland Cooper & Foreman, LLP.

Partner Sues General Partnership for Retaliation

California Emergency Physicians Medical Group (CEP) is a California general partnership consisting of about 700 partners working in emergency rooms throughout California.

The partnership is governed by a nine-member board of directors. The board appoints a medical director to supervise the emergency room doctors at each hospital and a regional director to supervise the hospitals within each designated region. 

Mary Fitzsimons, an emergency physician, became a CEP member in 1985. In 1987, she became the medical director at Sutter Medical Center in Antioch. Two years later, she became regional director for the four hospitals in her region, while continuing to work as an emergency physician at Sutter Medical Center.

In November 2003, Fitzsimons was elected to serve on the board. In October 2004, her appointment as a regional director was terminated, but she remained on the board and continued to work as an emergency physician at Sutter Medical Center.

In May 2006, Fitzsimons sued CEP for retaliation in violation of the FEHA and public policy. She alleged it created a hostile working environment and removed her as regional director in retaliation for reporting that certain male officers and agents had sexually harassed female employees of CEP’s management and billing subsidiaries.

Harassment, wage/hour, and everything else you need to know—in one complete desk reference for California employers. 

Before trial, the court ruled that if Fitzsimons was a bona fide partner in CEP, she lacked the right to assert a claim for retaliation under the FEHA because the law covers employees, not partners.

Accordingly, the jury trial was divided into two stages so the jury could first decide whether Fitzsimons was an employee or partner. Because the jury found that she was a partner, the trial court dismissed her claim. Fitzsimons appealed.

Does FEHA Prohibit Retaliation Against Partners?

The FEHA prohibits several “employment practices,” such as discrimination, harassment, and retaliation for complaining about such conduct. If CEP isn’t in an employment relationship with Fitzsimons because she is a partner, she would have no right to sue the partnership for harassment against her.

The FEHA also doesn’t protect a partner from discrimination by a fellow partner. However, the issue was not whether she could sue for harassment against her but whether she could sue CEP for retaliation because she reported the harassment of its employees, harassment that is expressly prohibited by the FEHA.

What California Law Says

Under Government Code Section 12940(h), it is an unlawful employment practice for “any employer, labor organization, employment agency, or person to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part.” Section 12925(d) defines “person” to include partnerships.

Fitzsimons argued that based on the plain language of Section 12940(h), the FEHA prohibits partnerships from retaliating against any person, including a partner, who opposes the sexual harassment of an employee.

However, relying on the California Supreme Court’s 2008 decision in Jones v. Lodge at Torrey Pines Partnership, the trial court held that Section 12940(h) doesn’t apply to retaliation by a partnership against a partner because partners aren’t in an employer-employee relationship.

In the Torrey Pines case, the California Supreme Court held that supervisors aren’t personally liable for discrimination despite the language of Section 12940(h) making it unlawful for any “person” to retaliate. The trial court interpreted the Torrey Pines ruling to have “effectively written ‘person’ out of the statute.”

The trial court reasoned that since a partnership is not the “employer” of its partners, under the Torrey Pines ruling, the partnership couldn’t be liable to Fitzsimons despite the fact that the statute defines a “person” to include a partnership.

Tomorrow, we’ll look at the final ruling by the California Court of Appeal—and what it means for you.

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