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California Supreme Court Makes Recovery of Damages More Difficult In Bias Cases

By Joanne Deschenaux  2/11/2013
 

The California Supreme Court issued a unanimous opinion on Feb. 7, 2013, that has “far-reaching implications for employment cases throughout the state” by requiring judges to give juries mixed-motive instructions in bias cases, Anthony Oncidi, an attorney in Proskauer’s Los Angeles office told SHRM Online.

The state’s highest court set forth a new legal standard that an employee must meet to prevail in a jury trial. Employees can no longer win by proving that discrimination was simply "a motivating reason" for the adverse job action. An employee must now show that discrimination was a "substantial factor motivating his or her termination." Further, even when the employee meets this burden, if the employer shows that it would have made the same decision absent any bias, the court may not award damages, back pay or reinstatement. The employee may, however, obtain an injunction against the employer prohibiting further discrimination, and he or she may also recover reasonable attorney's fees.

This case “has a significant practical impact for how these cases get tried,” said Linda Shostak, an attorney with Morrison & Foerster in San Francisco.This has been an issue percolating around trial courts for 20 years: How do you acknowledge that a mixture of motives might have been in play” when an employment decision was made?  

“As a result of this opinion, some employees will not be able to recover any form of monetary damages even if they can prove they were the victims of discrimination,” Oncidi said. He added that the case will “make it more difficult for plaintiffs' lawyers to find clients who are willing to go the distance in prosecuting a discrimination case, because those people may end up with no monetary recovery.”

Pregnant Bus Driver Fired by City

Wynona Harris was hired by the City of Santa Monica as a bus driver trainee in October 2004. During her training period, she had a “preventable accident” where she cracked the glass on the bus’s back door. After completing her training, Harris was promoted to probationary part-time driver.

During the three-month probationary period, Harris was involved in a second “preventable accident” in which she sideswiped a parked car. In February 2005, she reported late to work and received her first “miss-out.” Under the city’s job performance guidelines, a miss-out is defined as a driver’s failure to give his or her supervisor at least one hour’s notice that the driver will not be reporting to an assigned shift. In March 2005, Harris received a written performance evaluation covering her first three months as a probationary driver. Her supervisor gave her a rating of “further development needed.”

The next month, Harris incurred another miss-out. According to Harris, the stress from attending her daughter’s juvenile court hearing that day caused her to forget to notify the dispatcher that she would be late for her shift. Bob Ayer, the transit services manager, investigated the circumstances and later, after reviewing her personnel file, told the bus company’s assistant director that Harris was not meeting the city’s standards for continued employment. On May 12, Harris told her supervisor that she was pregnant. Four days later, her employment was terminated. Harris sued the city, claiming that she was fired because of her pregnancy in violation of the California Fair Employment and Housing Act (FEHA).

At trial, the city maintained that Harris was fired for poor job performance and asked the court to instruct the jury with a mixed-motive instruction. The instruction stated: “If you find that the employer‘s action, which is the subject of plaintiff‘s claim, was actually motivated by both discriminatory and nondiscriminatory reasons, the employer is not liable if it can establish by a preponderance of the evidence that its legitimate reason, standing alone, would have induced it to make the same decision.” The trial judge refused to give this instruction. Instead, the jury was instructed that the city should be held liable if Harris’ pregnancy was a “motivating factor/reason for [her] discharge.” The jury found in favor of Harris and awarded her $177,905 in damages and $410,187 in attorney's fees and costs. The city appealed the decision.

The California Court of Appeal reversed the award in favor of Harris and held that the jury should have been told that evidence showing the city was motivated by mixed factors in terminating Harris would entitle the city to a complete defense.

Supreme Court Takes Middle Ground

The high court noted that FEHA grounds liability on discrimination “because of” a protected trait and found three possible meanings of that phrase: proof that bias was the “but-for” cause, a “substantial factor” or a “motivating factor” in the challenged employment decision. At the trial court, Harris had argued for “a motivating factor” jury instruction, while the city sought an instruction requiring “but-for” causation. The court rejected both positions and found some middle ground.

The high court said that if discrimination was a "substantial" factor in a worker's termination, an employer shouldn't escape all liability, even if the firing was tied to legitimate shortcomings. "We believe that allowing a same-decision showing to immunize the employer would tend to defeat the purposes of" FEHA, the court said. "Such discrimination, even if not a 'but-for' cause of the disputed employment action, would breed discord and resentment in the workplace if allowed to be committed with impunity."

The court also rejected the request of Harris and employee groups who submitted “friend-of-the-court” briefs in her favor to award damages, reinstatement and back pay in these types of cases.

"Although such remedies might help to 'prevent and deter unlawful employment practices,' they would do so only at the cost of awarding plaintiffs an unjustified windfall and unduly limiting the freedom of employers to make legitimate employment decisions," the court said.

The end result of the position taken by the high court is that, even if an employee shows bias, once the employer demonstrates that it would have made the same decision absent any illegal motive, the court may not award damages, back pay or reinstatement. The employee, however, may obtain an injunction against the employer prohibiting further discrimination and may recover reasonable attorney's fees.

“I think it is interesting that the court went its own way and did something different” from what was requested by the parties, Shostak said.

Oncidi noted that although the mainstream press “is saying no one won” because of the middle ground taken by the court, that wasn’t entirely true.

“These cases are usually about money,” he said. They are not usually “about a policy or righting a wrong.”

Harris v. City of Santa Monica, Calif., No. S181004 (Feb. 7, 2013).

Joanne Deschenaux, J.D., is SHRM’s senior legal editor.

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