CALIFORNIA SUPREME COURT RULES THAT INDIVIDUALS MAY NOT BE HELD PERSONALLY LIABLE FOR RETALIATION

The California Supreme Court ruled in Jones v. The Lodge At Torrey Pines Partnership that individuals cannot be held personally liable for retaliation under the Fair Employment and Housing Act (“FEHA”).

Background:

In Torrey Pines, the plaintiff sued his employer (the Lodge at Torrey Pines) and his supervisor for retaliation. The jury returned a verdict for plaintiff against both the Lodge and the supervisor. The Court of Appeal agreed with the jury and held that individuals can be liable for retaliation. The California Supreme Court disagreed.

The Decision:

In reaching its decision, the Court considered the now well-settled rule that while individuals can be held liable for harassment under the FEHA, they cannot be held personally liable for discrimination. The Court held that the rationale for not subjecting individuals to liability for discrimination applies equally to retaliation.

In particular the Court noted that: (1) supervisors can avoid engaging in harassment, but cannot avoid making the personnel decisions upon which claims of retaliation are typically based, as such decisions are a required part of the supervisory function; (2) holding individual supervisors liable for retaliation would be inconsistent with FEHA’s small employer exemption, which excludes employers with less than 5 employees from FEHA’s discrimination provisions; (3) allowing individual liability for retaliation would place supervisors in direct conflict with the employer and would chill effective management; (4) assessing individual blame for retaliation is unwarranted in the corporate context where employment decisions are often made on a collective basis; and (5) it is bad policy to subject supervisors to the threat of a lawsuit every time they make a personnel decision.

What the Torrey Pines decision means for employers:

While this decision is good news for individual supervisors and managers, it is also good news for employers. In most circumstances employers are required to provide a defense/indemnify supervisors facing claims of retaliation. Given the Torrey Pines decision, such claims are less likely to be asserted, and when they are, should now be subject to quick disposal. In addition, this decision means that supervisors can now manage their employees without the threat of facing individual liability for personnel decisions. That being said, employers must still be vigilant in training supervisors about discrimination and retaliation, because as supervisors, their actions can subject employers to liability for such claims.