CALIFORNIA SUPREME COURT HELPS AND HURTS EMPLOYERS IN RECENT HARASSMENT DECISION

The recent California Supreme Court decision in Roby v. McKesson Corp. (Case No. S149752) provides both good and bad news for employers.

First, the bad news. The court held that allegedly discriminatory personnel decisions, such as employee discipline and work assignments, could be used as evidence to prove claims of hostile work environment sexual harassment. McKesson had argued that, based on a prior California Supreme Court decision, personnel management decisions supported only claims of discrimination (such as discriminatory hiring, firing, discipline, etc.) and did not support hostile work environment claims of harassment.

The court reasoned that personnel decisions are relevant to harassment because the actions themselves may further the manager’s “hostile message,” as well as help prove that a particular manager possesses discriminatory animus.

The good news is that the court determined that, under the facts of the case, the punitive damage award against McKesson could not constitutionally exceed a one-to-one ratio. The court’s decision came after a lengthy and factually specific analysis of multiple factors. The court concluded that a one-to-one ratio was justified primarily because of the relatively low degree of reprehensible conduct by McKesson, combined with the already large noneconomic damage award of $1.3 million.

The court assessed McKesson’s reprehensibility as low because the only two wrongful acts attributable to the company were its decision to adopt an attendance policy that was averse to the disabled, and the failure of its upper-level managers to take action in response to the Plaintiff’s complaint of harassment. The court’s decision aids employers facing punitive damage awards by supporting arguments against double or triple damages in circumstances similar to those before the court in Roby.