Case Title: State Dept. of Health v. Super. Ct.

Citation: 

Docket Number: S103487

State: california

Court: California Supreme Court

Date: 2003-11-24T00:00:00Z

Document:
1
Filed 11/24/03 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
STATE DEPARTMENT OF 
) 
HEALTH SERVICES, 
) 
 
 
) 
 
Petitioner, 
) 
 
 
) 
S103487 
 
v. 
) 
 
 
) 
Ct.App. 3 C034163 
THE SUPERIOR COURT OF  
) 
SACRAMENTO COUNTY, 
) 
 
 
) 
Sacramento County 
 
Respondent; 
) 
Super. Ct. No. 98AS02085 
 
 
) 
THERESA V. McGINNIS, 
) 
 
 
) 
 
Real Party in Interest. 
) 
___________________________________ ) 
 
California’s Fair Employment and Housing Act (Gov. Code, § 12900 et 
seq.)1 (the FEHA) prohibits sexual harassment in the workplace.  At issue here is 
whether, under the FEHA, an employer is strictly liable for hostile environment 
sexual harassment by a supervisor and whether the damages a plaintiff may 
recover from the employer in such a case include damages that the plaintiff could 
have avoided by reporting incidents of harassment to the employer. 
                                             
 
1  
All further section references are to the Government Code unless otherwise 
indicated. 
 
 
 
2
We conclude that an employer is strictly liable under the FEHA for sexual 
harassment by a supervisor.  We further conclude that the avoidable consequences 
doctrine applies to damage claims under the FEHA, and that under that doctrine a 
plaintiff’s recoverable damages do not include those damages that the plaintiff 
could have avoided with reasonable effort and without undue risk, expense, or 
humiliation. 
The avoidable consequences doctrine is well established and broadly applied, 
and nothing in the FEHA’s language and structure indicates that the Legislature 
intended to abrogate this fundamental legal principle.  On the contrary, failure to 
apply the avoidable consequences doctrine to FEHA sexual harassment claims 
could undermine a basic goal of the FEHA—to make employers the first line of 
defense against sexual harassment in the workplace.  A rule making employers 
liable even for those damages that an employee could have avoided with 
reasonable effort and without undue risk, expense, or humiliation would 
significantly weaken the incentive for employers to establish effective workplace 
remedies against sexual harassment. 
I.  FACTS AND PROCEDURAL HISTORY 
Because this case comes before us after the trial court denied a motion for 
summary judgment, we take the facts from the record before the trial court when it 
ruled on that motion.  (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65.)  
“We review the trial court’s decision de novo, considering all the evidence set 
forth in the moving and opposition papers except that to which objections were 
made and sustained.”  (Id. at pp. 65-66.)  We take the facts from the Court of 
Appeal’s opinion. 
Plaintiff Theresa V. McGinnis began working for the Department of Health 
Services (DHS) in 1992.  In August 1995, plaintiff was transferred to the Maternal 
and Child Health Branch, where she worked under the supervision of Cary Hall.  
 
3
Plaintiff has alleged that Hall sexually harassed her from early 1996 until late in 
1997.  Hall’s behavior toward plaintiff allegedly included both inappropriate 
comments and unwelcome physical touching.  At a deposition, for example, 
plaintiff described an incident in July 1997 when Hall, after calling her into his 
office, said he would overlook her attendance problems if she would let him touch 
her vagina and then proceeded to grab her crotch. 
In 1996, plaintiff told a coworker about Hall’s behavior, but she did not 
formally report it to management until November 1997, when she reported Hall’s 
harassing conduct to one of Hall’s supervisors.  The supervisor conveyed these 
allegations to DHS’s Office of Civil Rights, which investigated plaintiff’s 
allegations and later determined that Hall had violated DHS’s sexual harassment 
policy.  DHS began disciplinary action against Hall, prompting Hall to retire. 
Plaintiff brought this action against Hall and DHS in superior court, alleging, 
among other things, sexual harassment and sex discrimination in violation of the 
FEHA.  DHS answered with a general denial and the assertion of various 
affirmative defenses, including allegations that DHS “had exercised reasonable 
care by promulgating, instituting and disseminating throughout its workplace 
policies and procedures, offering training courses, and other methods designed to 
preclude and prevent any sexually harassing behavior and to correct against its 
reoccurrence if it did occur” and that “plaintiff, despite her knowledge of these 
policies and procedures, and participation in training courses, unreasonably failed 
to take advantage of them, and she unreasonably failed to otherwise avoid the 
alleged harm and damages for which she seeks relief . . . .” 
DHS moved for summary judgment, arguing, in part, that plaintiff’s failure to 
promptly use the policies and procedures it had put in place to eliminate sexual 
harassment in the workplace provided it with a complete defense to the sexual 
harassment claims.  In support of this argument, DHS relied on the United States 
 
4
Supreme Court’s decisions in Burlington Industries, Inc. v. Ellerth (1998) 524 
U.S. 742, 765 (Ellerth) and Faragher v. City of Boca Raton (1998) 524 U.S. 775, 
807 (Faragher).  Under these decisions, in an employee’s action under title VII of 
the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.) (Title VII) seeking 
damages for workplace sexual harassment not involving a “tangible employment 
action,” such as demotion or termination,2 an employer may establish a partial or 
complete defense by proving:  “(a) that the employer exercised reasonable care to 
prevent and correct promptly any sexually harassing behavior, and (b) that the 
plaintiff employee unreasonably failed to take advantage of any preventive or 
corrective opportunities provided by the employer or to avoid harm otherwise.”  
(Ellerth, supra, at p. 765; Faragher, supra, at p. 807.) 
The trial court denied DHS’s motion for summary judgment, finding that the 
Ellerth/Faragher defense was inapplicable to sexual harassment claims under the 
FEHA.  The court acknowledged the persuasiveness of the United States Supreme 
Court’s reasoning in fashioning the defense, but it concluded that “in the absence 
of appellate authority, the application of that same reasoning to a FEHA 
harassment claim . . . is a policy decision best left for the Legislature.” 
DHS then petitioned the Court of Appeal for a writ of mandate, arguing that 
the Ellerth/Faragher defense applied to the FEHA-based claim and entitled it to 
summary judgment.  The Court of Appeal denied the petition, holding that the 
FEHA imposes strict liability on employers for sexual harassment by their 
supervisors, and that application of the Ellerth/Faragher defense would be 
                                             
 
2  
A recent decision by a federal appellate court explores the distinction, in 
Title VII actions, between sexual harassment that creates a hostile work 
environment and sexual harassment that causes or threatens to cause a tangible 
employment action.  (Holly D. v. California Institute of Technology (9th Cir. 
2003) 339 F.3d 1158.)  That distinction is not at issue here. 
 
5
inconsistent with the statutory language and the legislative intent of the FEHA.  
We granted DHS’s petition for review. 
II.  DISCUSSION 
A. Federal Law 
1.  Title VII 
Title VII prohibits certain forms of employment discrimination, including 
sexual discrimination.  Title VII states, in part:  “It shall be an unlawful 
employment practice for an employer . . . [¶] . . . to discriminate against any 
individual with respect to his compensation, terms, conditions, or privileges of 
employment, because of such individual’s . . . sex . . . .”  (42 U.S.C. § 2000e-
2(a)(1).)  Title VII does not specifically mention sexual harassment.  Title VII 
defines “employer” to include any “agent” of an employer.  (Id. § 2000e(b).) 
The United States Supreme Court has construed these Title VII provisions in 
a series of decisions, three of which are relevant here. 
2.  The Meritor decision 
In Meritor Savings Bank v. Vinson (1986) 477 U.S. 57 (Meritor), an 
employee brought an action in federal district court under Title VII against her 
employer, seeking damages for sexual discrimination.  At the trial, she testified 
that her supervisor had “made repeated demands upon her for sexual favors,” had 
“fondled her in front of other employees,” had “exposed himself to her,” and 
“even forcibly raped her on several occasions.”  (Meritor, supra, at p. 60.)  She 
admitted that she had never reported the supervisor’s conduct to any of his 
superiors and had never tried to use the employer’s complaint procedures.  (Id. at 
p. 61.) 
The federal district court denied relief.  Of relevance here, the district court 
relied both on a conclusion that the employee’s relationship with the supervisor 
 
6
was “ ‘a voluntary one having nothing to do with her continued employment . . . 
or her advancement or promotions’ ” and on the employee’s failure to report the 
supervisor’s conduct to any of his superiors or to use the employer’s complaint 
procedures.  (Meritor, supra, 477 U.S. at p. 61.) 
The United States Supreme Court held “that a plaintiff may establish a 
violation of Title VII by proving that discrimination based on sex has created a 
hostile or abusive work environment” (Meritor, supra, 477 U.S. at p. 66), if the 
harassment was “sufficiently severe or pervasive ‘to alter the condition of [the 
victim’s] employment and create an abusive working environment’ ” (id. at p. 67).  
It rejected the argument that an employee suing under Title VII for sexual 
harassment based on a hostile work environment must prove a resulting economic 
loss.  (Meritor, at pp. 67-68.)  It also found that in determining whether the 
supervisor’s sexual advances had constituted harassment prohibited by Title VII, 
“[t]he correct inquiry is whether [the employee] by her conduct indicated that the 
alleged sexual advances were unwelcome, not whether her actual participation in 
sexual intercourse was voluntary.”  (Meritor, at p. 68.) 
The United States Supreme Court declined “to issue a definitive rule on 
employer liability,” but it noted that “Congress’ decision to define ‘employer’ to 
include any ‘agent’ of an employer, 42 U.S.C. § 2000e(b), surely evinces an intent 
to place some limits on the acts of employees for which employers under Title VII 
are to be held responsible.”  (Meritor, supra, 477 U.S. at p. 72.)  It added, 
however, that “absence of notice to an employer does not necessarily insulate that 
employer from liability.”  (Ibid.)  The court identified a flaw in the employer’s 
grievance procedure that could explain the employee’s failure to use it.  The 
employer’s grievance procedure “apparently required an employee to complain 
first to her supervisor,” who in this instance was the alleged perpetrator of the 
harassment.  (Id. at p. 73.)  As the court remarked:  “[The employer’s] contention 
 
7
that [the employee’s] failure should insulate it from liability might be substantially 
stronger if its procedures were better calculated to encourage victims of 
harassment to come forward.”  (Ibid.) 
3.  The Ellerth and Faragher decisions 
The United States Supreme Court treated Ellerth, supra, 524 U.S. 742, and 
Faragher, supra, 524 U.S. 775, as companion cases, issuing opinions authored by 
different justices on the same day.  In each case, a female employee had quit her 
job and filed an action in federal district court claiming hostile environment sexual 
harassment by a male supervisor in violation of Title VII.  (Ellerth, supra, at 
pp. 747-748; Faragher, supra, at pp. 781-782.)  In each case, the employee had 
not complained to management before resigning.  (Ellerth, supra, at pp. 748-749; 
Faragher, supra, at p. 782.)  The employer in Faragher had adopted a sexual 
harassment policy, but had failed to effectively communicate it to the department 
in which the employee and her supervisors had worked.  (Faragher, supra, at 
pp. 781-782.) 
In Ellerth, the federal district court found that the supervisor’s conduct had 
created a hostile work environment, but it nonetheless granted summary judgment 
for the employer because the employer “neither knew nor should have known 
about the conduct.”  (Ellerth, supra, 524 U.S. at p. 749.)  In Faragher, the district 
court found the employer liable and awarded the employee one dollar in nominal 
damages.  (Faragher, supra, 524 U.S. at p. 783.) 
In both cases, the United States Supreme Court announced in identical 
language this standard of employer liability:  “An employer is subject to vicarious 
liability to a victimized employee for an actionable hostile environment created by 
a supervisor with immediate (or successively higher) authority over the 
employee.”  (Ellerth, supra, 524 U.S. at p. 765; Faragher, supra, 524 U.S. at p. 
 
8
807.)  But the court recognized a defense that the employer could assert in this 
situation:  “When no tangible employment action is taken, a defending employer 
may raise an affirmative defense to liability or damages, subject to proof by a 
preponderance of the evidence . . . .  The defense comprises two necessary 
elements:  (a) that the employer exercised reasonable care to prevent and correct 
promptly any sexually harassing behavior, and (b) that the plaintiff employee 
unreasonably failed to take advantage of any preventive or corrective 
opportunities provided by the employer or to avoid harm otherwise.”  (Ellerth, 
supra, at p. 765; Faragher, supra, at p. 807.) 
The high court concluded that this affirmative defense was consistent with 
agency principles, which the court inferred that Congress had intended courts to 
apply to determine the scope of an employer’s vicarious liability under Title VII 
for acts of a supervisor.  (Ellerth, supra, 524 U.S. at pp. 754-762; Faragher, 
supra, 524 U.S. at pp. 793-804.)  The court also concluded that Title VII 
incorporated the common law doctrine of avoidable consequences, and that the 
affirmative defense was consistent with this doctrine.  (Ellerth, supra, at p. 764; 
Faragher, supra, at pp. 806-807.)  Finally, as support for its recognition of the 
affirmative defense, the court relied on an analysis of the purposes underlying 
Title VII.  The court observed that Title VII’s primary purpose was “not to provide 
redress but to avoid harm.”  (Faragher, supra, at p. 806.)  Giving employers an 
incentive to make reasonable efforts to prevent workplace harassment would 
implement this legislative purpose.  (Ibid.)  And the court found in Title VII a 
design “to encourage the creation of antiharassment policies and effective 
grievance mechanisms.”  (Ellerth, supra, at p. 764.) 
In Ellerth, the high court directed that the matter be remanded to the federal 
district court for further proceedings.  (Ellerth, supra, 524 U.S. at p. 766.)  In 
Faragher, the district court’s judgment for the employee was affirmed.  
 
9
(Faragher, supra, 524 U.S. at p. 810.)  As a matter of law, the high court held that 
the employer in Faragher could not invoke the affirmative defense because it “had 
entirely failed to disseminate its policy against sexual harassment among” the 
affected employees and had “made no attempt to keep track of the conduct of 
supervisors.”  (Id. at p. 808.)  
B. State Law:  The FEHA and Sexual Harassment 
Like Title VII, California’s FEHA prohibits employment discrimination 
based on sex (§ 12940, subd. (a)).  Unlike Title VII, the FEHA expressly and 
separately prohibits workplace harassment based on sex.  (§ 12940, subd. (j)(1).)  
As here relevant, this provision reads:  “It shall be an unlawful employment 
practice . . .  [¶]  [F]or an employer . . . , because of . . . sex . . . to harass an 
employee . . . .  Harassment of an employee . . . by an employee other than an 
agent or supervisor shall be unlawful if the entity, or its agents or supervisors, 
knows or should have known of this conduct and fails to take immediate and 
appropriate corrective action.  An entity shall take all reasonable steps to prevent 
harassment from occurring.  Loss of tangible job benefits shall not be necessary in 
order to establish harassment.”  (Ibid, italics added.) 
For purposes of the prohibition against workplace harassment, the FEHA 
defines “employer” to include “any person acting as an agent of an employer, 
directly or indirectly.”  (§ 12940, subd. (j)(4)(A).) 
The FEHA makes it a separate unlawful employment practice for an 
employer to “fail to take all reasonable steps necessary to prevent discrimination 
and harassment from occurring.”  (§ 12940, subd. (k).) 
In another section, the FEHA requires employers to distribute educational 
material to their employees regarding sexual harassment law and company 
 
10
procedures.  (§ 12950; see Farmers Ins. Group v. County of Santa Clara (1995) 
11 Cal.4th 992, 1015, fn. 11.) 
The FEHA is to be construed liberally to accomplish its purposes.  (§ 12993.) 
C. Analysis 
California courts often look to Title VII in interpreting the FEHA.  (Reno v. 
Baird (1998) 18 Cal.4th 640, 647.)  But we have stated that “[o]nly when FEHA 
provisions are similar to those in Title VII do we look to the federal courts’ 
interpretation of Title VII as an aid in construing the FEHA.”  (Johnson v. City of 
Loma Linda, supra, 24 Cal.4th at p. 74.)  Moreover, this court has observed that 
explicit differences between federal law and the FEHA “diminish the weight of 
the federal precedents.”  (Commodore Home Systems, Inc. v. Superior Court 
(1982) 32 Cal.3d 211, 217.)  
The FEHA’s provisions concerning employment discrimination by sexual 
harassment differ significantly from the provisions of Title VII.  Indeed, Title VII 
does not specifically address sexual harassment at all.  It is because Title VII lacks 
specific language on sexual harassment that the United States Supreme Court has 
been forced to infer not only a prohibition on sexual harassment in the workplace, 
but also a standard of employer liability and an affirmative defense to liability.  
Given this significant difference in wording, we give little weight to the federal 
precedents in this area.  Nonetheless, as explained below, we find that an 
independent analysis of the FEHA’s antiharassment provisions using state law 
principles leads to conclusions similar to those of the United States Supreme Court 
in Ellerth, supra, 524 U.S. 742, and Faragher, supra, 524 U.S. 775. 
The FEHA imposes two standards of employer liability for sexual 
harassment, depending on whether the person engaging in the harassment is the 
victim’s supervisor or a nonsupervisory coemployee.  The employer is liable for 
 
11
harassment by a nonsupervisory employee only if the employer (a) knew or should 
have known of the harassing conduct and (b) failed to take immediate and 
appropriate corrective action.  (§ 12940, subd. (j)(1).)  This is a negligence 
standard.  (See Brown v. Superior Court (1988) 44 Cal.3d 1049, 1059, fn. 4.)  
Because the FEHA imposes this negligence standard only for harassment “by an 
employee other than an agent or supervisor” (§ 12940, subd. (j)(1)), by implication 
the FEHA makes the employer strictly liable for harassment by a supervisor.  This 
court and the Courts of Appeal have so stated.  (See Carrisales v. Department of 
Corrections (1999) 21 Cal.4th 1132, 1136; Murillo v. Rite Stuff Foods, Inc. (1998) 
65 Cal.App.4th 833, 842; Weeks v. Baker & McKenzie (1998) 63 Cal.App.4th 
1128, 1146; Fiol v. Doellstedt (1996) 50 Cal.App.4th 1318, 1328; Doe v. Capital 
Cities (1996) 50 Cal.App.4th 1038, 1046; Kelly-Zurian v. Wohl Shoe Company, 
Inc. (1994) 22 Cal.App.4th 397, 415-416; Fisher v. San Pedro Peninsula Hospital 
(1989) 214 Cal.App.3d 590, 608, fn. 6.) 
The applicable language of the FEHA does not suggest that an employer’s 
liability for sexual harassment by a supervisor is constrained by principles of 
agency law.  Had the Legislature so intended, it would have used language in the 
FEHA imposing the negligence standard of liability on acts of harassment by an 
employee “other than an agent,” “not acting as the employer’s agent,” or “not 
acting within the scope of an agency for the employer.”  By providing instead in 
section 12940, subdivision (j)(1), that the negligence standard applies to acts of 
harassment “by an employee other than an agent or supervisor” (italics added), the 
Legislature has indicated that all acts of harassment by a supervisor are to be 
exempted from the negligence standard, whether or not the supervisor was then 
acting as the employer’s agent, and that agency principles come into play only 
 
12
when the harasser is not a supervisor.3  To the extent the United States Supreme 
Court derived the Ellerth/Faragher defense from agency principles, therefore, its 
reasoning is not applicable to the FEHA. 
The legislative history of the FEHA’s antiharassment provisions gives further 
support for our conclusion that an employer is strictly liable for all acts of sexual 
harassment by a supervisor.  Documents in the legislative record show that section 
12940, which contains the antiharassment provisions, and which was adopted in 
1982 (Stats. 1982, ch. 1193, § 2, pp. 4258-4260), was based in part on then 
existing federal regulations promulgated by the federal Equal Employment 
Opportunity Commission.  (See Assem. Com. on Labor and Employment, Conf. 
Com. Rep. on Assem. Bill No. 1985 (1981-1982 Reg. Sess.) Aug. 20, 1982.)  A 
conference committee report observed that “federal and state regulations make it 
an unlawful employment practice for an employer, labor organization, or 
employment agency, or their agents or supervisors, to harass an applicant or an 
employee on a basis enumerated in the fair employment laws.”  (Ibid., italics 
added.)  The then applicable federal regulations imposed liability on employers for 
all acts of sexual harassment by a supervisory employee “regardless of whether the 
specific acts complained of were authorized or even forbidden by the employer 
and regardless of whether the employer knew or should have known of their 
occurrence.”  (29 C.F.R. § 1604.11(c), rescinded in 1999; see 29 C.F.R. § 1604.11 
appen. A (2003) [stating that the Equal Employment Opportunity Commission 
rescinded 29 C.F.R. § 1604.11(c) in light of Ellerth, supra, 524 U.S. 742, and 
                                             
 
3  
Of course, this analysis assumes the supervisor is acting in the capacity of 
supervisor when the harassment occurs.  The employer is not strictly liable for a 
supervisor’s acts of harassment resulting from a completely private relationship 
unconnected with the employment and not occurring at the workplace or during 
normal working hours.  But instances of such harassment must be rare. 
 
13
Faragher, supra, 524 U.S. 775]; see also Oppenheimer, Exacerbating the 
Exasperating:  Title VII Liability of Employers for Sexual Harassment Committed 
by Their Supervisors (1995) 81 Cornell L.Rev. 66, 150-151.) 
Thus, we conclude that under the FEHA, an employer is strictly liable for all 
acts of sexual harassment by a supervisor.  But strict liability is not absolute 
liability in the sense that it precludes all defenses.  (Daly v. General Motors 
Corporation (1978) 20 Cal.3d 725, 733.)  Even under a strict liability standard, a 
plaintiff’s own conduct may limit the amount of damages recoverable or bar 
recovery entirely.  (Id. at p. 737.) 
The FEHA permits individual suits for damages to enforce its provisions, but 
it does not specify what damages are recoverable.  (See § 12965, subds. (b)-(c).)  
This court has concluded that, in an action seeking damages for sexual harassment 
under the FEHA, the plaintiff may recover those damages “generally available in 
noncontractual actions.”  (Commodore Home Systems, Inc. v. Superior Court, 
supra, 32 Cal.3d at p. 221; accord, Murillo v. Rite Stuff Foods, Inc., supra, 65 
Cal.App.4th at p. 848; see also Farmers Ins. Group v. County of Santa Clara, 
supra, 11 Cal.4th at p. 1014.)  In civil actions generally, the right to recover 
damages is qualified by the common law doctrine of avoidable consequences. 
The Restatement Second of Torts states the doctrine this way:  “[O]ne injured 
by the tort of another is not entitled to recover damages for any harm that he could 
have avoided by the use of reasonable effort or expenditure after the commission 
of the tort.”  (Rest.2d Torts, § 918, subd. (1).)  The comment explains that this rule 
“applies only to the diminution of damages and not to the existence of a cause of 
action.”  (Id., com. a, p. 500.)  The doctrine is applied in the law of contracts as 
well (see 5 Corbin on Contracts (1964) Damages § 1044, p. 275; Brandon & Tibbs 
v. George Kevorkian Accountancy Corp. (1990) 226 Cal.App.3d 442, 460) and is 
recognized as a rule of damages with wide application in civil cases generally.  
 
14
The avoidable consequences doctrine has been applied to workplace torts.  
(Parker v. Twentieth Century-Fox Film Corp. (1970) 3 Cal.3d 176, 181; Rabago-
Alvarez v. Dart Industries, Inc. (1976) 55 Cal.App.3d 91, 97-99.) 
Although courts explaining the avoidable consequences doctrine have 
sometimes written that a party has a “duty” to mitigate damages, commentators 
have criticized the use of the term “duty” in this context, arguing that it is more 
accurate to state simply that a plaintiff may not recover damages that the plaintiff 
could easily have avoided.  (See Green v. Smith (1968) 261 Cal.App.2d 392, 396; 
McCormick on Damages (1935) p. 128; Riffer and Barrowman, Recent 
Misinterpretations of the Avoidable Consequences Rule:  The “Duty” to Mitigate 
and Other Fictions (1993) 16 Harv. J. Law & Pub. Policy 411.)  A federal 
appellate court explained the guiding principle this way:  “[T]he community’s 
notions of fair compensation to an injured plaintiff do not include wounds which 
in a practical sense are self-inflicted.”  (Ellerman Lines, Ltd. v. The Steamship 
President Harding (2d Cir. 1961) 288 F.2d 288, 290; see also Parker v. Twentieth 
Century-Fox Film Corp., supra, 3 Cal.3d 176, 185 (dis. opn. of Sullivan, Acting 
C.J.) [stating that “the familiar rule requiring a plaintiff in a tort or contract action 
to mitigate damages embodies notions of fairness and socially responsible 
behavior which are fundamental to our jurisprudence”].) 
Under the avoidable consequences doctrine as recognized in California, a 
person injured by another’s wrongful conduct will not be compensated for 
damages that the injured person could have avoided by reasonable effort or 
expenditure.  (Green v. Smith, supra, 261 Cal.App.2d at p. 396; accord, Albers v. 
County of Los Angeles (1965) 62 Cal.2d 250, 271-272; Valencia v. Shell Oil Co. 
(1944) 23 Cal.2d 840, 844; Schultz v. Town of Lakeport (1936) 5 Cal.2d 377, 383-
385; Thrifty-Tel, Inc. v. Bezenek (1996) 46 Cal.App.4th 1559, 1568; Shaffer v. 
Debbas (1993) 17 Cal.App.4th 33, 41; Hunter v. Croysdil (1959) 169 Cal.App.2d 
 
15
307, 318; see also Davies v. Krasna (1975) 14 Cal.3d 502, 515 [“victims of legal 
wrongs should make reasonable efforts to avoid incurring further damage”]; 6 
Witkin, Summary of Cal. Law (9th ed. 1988) Torts, § 1382, p. 852.)  The 
reasonableness of the injured party’s efforts must be judged in light of the 
situation existing at the time and not with the benefit of hindsight.  (Green v. 
Smith, supra, 261 Cal.App.2d at p. 396.)  “The standard by which the 
reasonableness of the injured party’s efforts is to be measured is not as high as the 
standard required in other areas of law.”  (Id. at p. 397.)  The defendant bears the 
burden of pleading and proving a defense based on the avoidable consequences 
doctrine.  (Burrows v. State of California (1968) 260 Cal.App.2d 29, 33.) 
Application of the avoidable consequences doctrine to hostile environment 
sexual harassment suits against an employer is consistent with the two main 
purposes of the FEHA—compensation and deterrence.  (§ 12920.5; see Flannery 
v. Prentice (2001) 26 Cal.4th 572, 582-583.)  The doctrine encourages preventive 
action by both the employer and the employee while affording compensation to 
the employee for harms that neither party could have avoided through reasonable 
care.  Nothing in the language of the FEHA precludes application of the avoidable 
consequences doctrine to an employee’s action under the FEHA seeking damages 
for hostile environment sexual harassment by a supervisor.  Accordingly, to the 
extent the United States Supreme Court grounded the Ellerth/Faragher defense in 
the doctrine of avoidable consequences (see Ellerth, supra, 524 U.S. at p. 764; 
Faragher, supra, 524 U.S. at p. 806), its reasoning applies also to California’s 
FEHA. 
We hold, therefore, that in a FEHA action against an employer for hostile 
environment sexual harassment by a supervisor, an employer may plead and prove 
a defense based on the avoidable consequences doctrine.  In this particular 
context, the defense has three elements:  (1) the employer took reasonable steps to 
 
16
prevent and correct workplace sexual harassment; (2) the employee unreasonably 
failed to use the preventive and corrective measures that the employer provided; 
and (3) reasonable use of the employer’s procedures would have prevented at least 
some of the harm that the employee suffered.  
This defense will allow the employer to escape liability for those damages, 
and only those damages, that the employee more likely than not could have 
prevented with reasonable effort and without undue risk, expense, or humiliation, 
by taking advantage of the employer’s internal complaint procedures appropriately 
designed to prevent and eliminate sexual harassment.  Deciding when a harassed 
employee has first suffered compensable harm and when a reasonable employee 
would have reported the harassment will in many and perhaps most instances 
present disputed factual issues to be resolved by application of practical 
knowledge and experience.  Employees may be reluctant to report their 
supervisors to higher management and an employee will often attempt informal 
negotiation with a supervisor, make efforts to avoid encounters with the 
supervisor, or resort to other informal strategies.  Delay that results from an 
employee’s initial resort to such nonconfrontational means of dealing with 
supervisor harassment will have to be carefully evaluated to determine whether it 
was reasonable in a particular employment setting. 
We emphasize that the defense affects damages, not liability.  An employer 
that has exercised reasonable care nonetheless remains strictly liable for harm a 
sexually harassed employee could not have avoided through reasonable care.  The 
avoidable consequences doctrine is part of the law of damages (see McCormick on 
Damages, supra, p. 128); thus, it affects only the remedy available.  If the 
employer establishes that the employee, by taking reasonable steps to utilize 
employer-provided complaint procedures, could have caused the harassing 
conduct to cease, the employer will nonetheless remain liable for any compensable 
 
17
harm the employee suffered before the time at which the harassment would have 
ceased, and the employer avoids liability only for the harm the employee incurred 
thereafter. 
We stress also that the holding we adopt does not demand or expect that 
employees victimized by a supervisor’s sexual harassment must always report 
such conduct immediately to the employer through internal grievance 
mechanisms.  The employer may lack an adequate antiharassment policy or 
adequate procedures to enforce it, the employer may not have communicated the 
policy or procedures to the victimized employee, or the employee may reasonably 
fear reprisal by the harassing supervisor or other employees.  Moreover, in some 
cases an employee’s natural feelings of embarrassment, humiliation, and shame 
may provide a sufficient excuse for delay in reporting acts of sexual harassment by 
a supervisor.  The employee’s conduct is judged against a standard of 
reasonableness, and this standard “is not as high as the standard required in other 
areas of law.”  (Green v. Smith, supra, 261 Cal.App.2d at p. 397.) 
In other words, to take advantage of the avoidable consequences defense, the 
employer ordinarily should be prepared to show that it has adopted appropriate 
antiharassment policies and has communicated essential information about the 
policies and the implementing procedures to its employees.  In a particular case, 
the trier of fact may appropriately consider whether the employer prohibited 
retaliation for reporting violations, whether the employer’s reporting and 
enforcement procedures protect employee confidentiality to the extent practical, 
and whether the employer consistently and firmly enforced the policy.  Evidence 
potentially relevant to the avoidable consequences defense includes anything 
tending to show that the employer took effective steps “to encourage victims to 
come forward with complaints of unwelcome sexual conduct and to respond 
effectively to their complaints.”  (Grossman, The First Bite Is Free:  Employer 
 
18
Liability for Sexual Harassment (2000) 61 U.Pitt. L.Rev. 671, 696.)  “[I]f an 
employer has failed to investigate harassment complaints, [or] act on findings of 
harassment, or, worse still, [has] retaliated against complainants, future victims 
will have a strong argument that the policy and grievance procedure did not 
provide a ‘reasonable avenue’ for their complaints.”  (Id. at p. 699.) 
The Court of Appeal here rejected application of the Ellerth/Faragher 
defense to this FEHA supervisor harassment case because it concluded that the 
wording of the FEHA and Title VII are materially different.  The court did not 
consider whether the basic elements of the Ellerth/Faragher defense already exist 
in California law under the doctrine of avoidable consequences and whether that 
doctrine applies in actions under the FEHA.  The court appeared to assume, 
incorrectly, that any defense based on the plaintiff employee’s own fault or lack of 
due care would be incompatible with the imposition of strict liability on the 
defendant employer.  As we have explained, this is not so.  Strict liability does not 
preclude defenses based on the injured party’s failure to exercise reasonable care 
to avoid the harm or to prevent exacerbation of the harm.  (Daly v. General 
Motors, supra, 20 Cal.3d at p. 737.) 
Plaintiff McGinnis argues that recognizing an avoidable consequences 
defense is inconsistent with an administrative regulation that reads:  “An employee 
who has been harassed on the job by a co-employee should inform the employer 
. . . of the aggrievement; however, an employee’s failure to give such notice is not 
an affirmative defense.”  (Cal. Code Regs., tit. 2, § 7287.6, subd. (b)(4).)  We 
perceive no inconsistency.  The regulation applies to harassment by a coworker, 
not harassment by a supervisor.  Moreover, as we have explained, an employee’s 
failure to report a supervisor’s harassment to management, by itself, is insufficient 
to establish an avoidable consequences defense.  To establish the defense, the 
employer must also show that the employee’s failure to report the harassment was 
 
19
unreasonable under the circumstances and that, more likely than not, using the 
employer-provided internal remedies would have prevented at least some of the 
employee’s claimed damages from occurring. 
Plaintiff also argues that applying the avoidable consequences doctrine to 
FEHA sexual harassment claims would interfere with the Legislature’s decision to 
place on employers the burden to prevent harassment and correct its effects.  We 
disagree.  As we have explained, in this context the avoidable consequences 
doctrine merely requires a harassment victim, when it is reasonable to do so, to use 
employer-provided grievance procedures and, if the employee fails to do so, 
denies recovery of only those damages that could have been avoided by using the 
employer’s procedures.  The underlying goal of the legislative scheme is to 
provide effective measures to prevent workplace harassment.  In furtherance of 
this goal, the FEHA requires employers to establish and promulgate anti-
harassment policies and to set up and implement effective grievance procedures.  
Insofar as the avoidable consequences doctrine encourages employees to use these 
procedures, it advances the legislative goal. 
Plaintiff also argues that the FEHA is a no-fault system, like worker’s 
compensation, and that the avoidable consequences doctrine does not apply to no-
fault systems.  We need not decide here whether or to what extent employer 
liability under the FEHA is comparable to employer liability under worker’s 
compensation, because the plain language of Labor Code section 4056 belies 
plaintiff’s claim that the avoidable consequences doctrine is inherently 
incompatible with a no-fault system like worker’s compensation and cannot be 
used to defeat “full compensation.”  As relevant here, that section provides that 
“[n]o compensation is payable in case of the death . . . of an employee when his 
death is caused . . . by an unreasonable refusal to submit to medical treatment, or 
to any surgical treatment, if the risk of the treatment is, in the opinion of the 
 
20
appeals board, based upon expert medical or surgical advice, inconsiderable in 
view of the seriousness of the injury.”  (Ibid.)  Thus, under the circumstances 
specified in Labor Code section 4056, an employee’s failure to take reasonable 
steps to avoid further injuries can provide the employer with a partial or complete 
defense to a worker’s compensation claim.  If the avoidable consequences doctrine 
may be applied to a no-fault system like worker’s compensation (and Labor Code 
section 4056 shows that it can), then there is nothing inconsistent or anomalous in 
applying it also to FEHA harassment claims.  In structuring the FEHA, the 
Legislature has not expressly incorporated or excluded the avoidable 
consequences doctrine, thus leaving its application to be determined by the courts.  
Although full compensation of workplace harassment victims is an important 
FEHA goal, preventing workplace harassment is a FEHA goal of equal and 
perhaps even greater importance.  By encouraging prompt resort to employer-
provided remedies, application of the avoidable consequences doctrine can stop 
workplace harassment before it becomes severe or pervasive. 
An amicus curiae supporting plaintiff McGinnis argues that the avoidable 
consequences doctrine should not be construed as imposing a requirement that an 
employee exhaust an employer’s internal remedies.  Nothing in this opinion 
suggests that the avoidable consequences doctrine operates in this manner.  Using 
the employer’s internal procedures will not be a prerequisite to filing a FEHA 
claim or bringing a FEHA action against the employer; it will merely be a fact 
relevant in determining the merits of an avoidable consequences defense if the 
employer chooses to assert such a defense. 
The parties and the organizations that have submitted briefs as amici curiae 
have devoted much effort to debating whether allowing or disallowing the 
Ellerth/Faragher defense would better serve the FEHA’s goal of eliminating 
sexual harassment from the workplace.  DHS and the amici curiae supporting it 
 
21
argue that the defense provides needed incentives for the employer to establish 
and vigorously enforce antiharassment policies, and for harassed employees to 
make use of the employer-provided remedies.  On the other hand, plaintiff 
McGinnis and the amici curiae supporting her argue that strict liability without an 
affirmative defense gives employers the maximum incentive to establish and 
enforce antiharassment policies in order to reduce the incidence of harassment.  
They also argue that harassed employees will use convenient and effective 
employer-provided complaint procedures if they believe it is safe to do so, and 
that employees require no additional incentive to use procedures that promise an 
end to the nightmare of harassment.  We need not decide which party has the 
better argument on this point.  This is an empirical question of fact better suited to 
legislative investigation and determination, and we decline to speculate on the 
correct answer. 
What is not speculative is that, in enacting and amending the FEHA, the 
Legislature wanted employers to establish effective policies and complaint 
procedures to stop workplace sexual harassment, that it wanted employees 
victimized by workplace sexual harassment to utilize the employer’s complaint 
procedures to the extent practicable, and that it wanted the courts to compensate 
the victims of workplace sexual harassment with the damages generally available 
in noncontractual actions.  Our holding is fully consistent with each of these 
purposes.  Accordingly, we anchor our holding in the language of the FEHA, its 
underlying policies, and an established principle of the law of damages. 
III.  CONCLUSION AND DISPOSITION 
Sexual harassment in the workplace by a supervisor is a nightmarish 
experience for any employee.  The employee wants a prompt end to the harassing 
conduct, but being known as a harassment victim can be personally humiliating, 
and reporting acts of harassment by a supervisor carries risks that are both 
 
22
professional and economic.  When deciding whether to report a supervisor’s 
harassment to an employer, the harassment victim, who may already feel 
vulnerable and defenseless, is likely to wonder:  Will my employer believe me?  
Will my employer fire me, demote me, label me a troublemaker, or transfer me to 
a position with no future? 
Whether these fears are baseless depends on the employer’s conduct.  If the 
employer has established antiharassment policies, has communicated those 
policies to its staff, has consistently enforced its policies, has sought to preserve 
confidentially, and has prevented retaliation against those who report harassment, 
the employee is more likely to promptly report harassment.  A conscientious 
employer will quickly stop the misconduct of which it becomes aware.  Prompt 
employer intervention not only minimizes injury to the victim, but also sends a 
clear message throughout the workplace that harassing conduct is not tolerated.  
Employers who take seriously their legal obligation to prevent harassment are an 
employee’s best protection against workplace harassment.  But an employer, no 
matter how conscientious, cannot take action to stop improper conduct without 
some reason to suspect that sexual harassment is occurring. 
A generally recognized principle of the law of damages is that “a party must 
make reasonable efforts to mitigate damages, and recovery will not be allowed for 
damages that a party should have foreseen and could have avoided by reasonable 
effort without undue risks, expense, or humiliation.”  (Home Life Ins. Co. v. Clay 
(1989) 13 Kan.App.2d 435, 445 [773 P.2d 666, 674].)  This principle applies 
broadly to many different sorts of legal claims, including claims based on strict 
liability, and we conclude that it applies also to employee actions under the FEHA 
for hostile environment sexual harassment by a supervisor.  An employer may 
invoke this principle by proving that the plaintiff employee unreasonably failed to 
make use of employer-provided antiharassment remedies and that it is more likely 
 
23
than not that at least some of the employee’s damages would have been avoided 
by reasonable use of these internal procedures.  The trial court and the Court of 
Appeal erred in concluding otherwise.  Whether DHS here presented sufficient 
evidence in support of its motion for summary judgment to establish the defense 
and, if so, whether the defense it established is partial or complete, are 
predominately factual questions that are not before us and on which we venture no 
opinion. 
We reiterate the limits of our holding.  An employer continues to be strictly 
liable for hostile environment sexual harassment by a supervisor.  An employee’s 
failure to report harassment to the employer is not a defense on the merits to the 
employee’s action under the FEHA, but at most it serves to reduce the damages 
recoverable.  And it reduces those damages only if, taking account of the 
employer’s anti-harassment policies and procedures and its past record of acting 
on harassment complaints, the employee acted unreasonably in not sooner 
reporting the harassment to the employer. 
The Court of Appeal’s judgment is reversed, and the matter is remanded to 
that court for further proceedings consistent with this decision. 
 
 
 
 
 
 
 
 
KENNARD, J. 
 
WE CONCUR: 
 
GEORGE, C.J. 
BAXTER, J. 
WERDEGAR, J. 
CHIN, J. 
BROWN, J. 
MORENO, J.
1 
 
 
 
 
 
 
 
CONCURRING OPINION BY MORENO, J. 
 
 
As the majority states:  “In structuring the [Fair Employment and Housing 
Act (FEHA)], the Legislature has not expressly incorporated or excluded the 
avoidable consequences doctrine, thus leaving its application to be determined by 
the courts.”  (Maj. opn., ante, at p. 20.)  I agree with this statement, and with the 
majority opinion in general.  But I would also add that the Fair Employment and 
Housing Commission (FEHC) may also have a role to play in determining how the 
avoidable consequences doctrine is to be applied under the FEHA. 
The Legislature has authorized the FEHC to “adopt, promulgate, amend, 
and rescind suitable rules, regulations, and standards (1) to interpret, implement, 
and apply all provisions of this part [i.e., the FEHA] . . . .”  (Gov. Code, § 12935, 
subd. (a).)  The majority assumes that application of the avoidable consequences 
doctrine to the supervisorial sexual harassment context is appropriate and 
workable.  I have no reason to doubt these conclusions, but the FEHC may have a 
different perspective, based on its own regulatory experience, that would usefully 
supplement our own opinion based on general legal principles.  This point is in 
special need of emphasis because we did not have the benefit of an FEHC amicus 
curiae brief, no doubt at least in part because the State of California is the 
defendant in this case.  I do not understand anything in the majority opinion to 
preclude the FEHC from issuing regulations pursuant to Government Code section 
12935, subdivision (a), that further refine, adapt and even narrow the avoidable 
2 
consequences defense in order to fit it to the unique context of sexual harassment 
in the workplace. 
 
 
 
 
 
 
 
 
MORENO, J.  
1 
See last page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion State Department of Health Services v. Superior Court 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 94 Cal.App.4th 14 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S103487 
Date Filed: November 24, 2003 
__________________________________________________________________________________ 
 
Court: Superior 
County: Sacramento 
Judge: John R. Lewis 
 
__________________________________________________________________________________ 
 
Attorneys for Appellant: 
 
Bill Lockyer, Attorney General, Davis S. Chaney and Jacob Appelsmith, Assistant Attorneys General, 
James M. Schiavenza, Barbara J. Seidman, Barbara A. Morris, Nina Thompson and Tracy S. Hendrickson, 
Deputy Attorneys General, for Petitioner. 
 
Lloyd W. Pellman County Counsel (Los Angeles), Steven J. Carnevale, Assistant County Counsel, Alan K. 
Terakawa and Mary E. Reyna, Deputy County Counsel, for Los Angeles County Metropolitan 
Transportation Authority as Amicus Curiae on behalf of Petitioner. 
 
Liebert Cassidy Whitmore, Richard S. Whitmore and Deborah G. Leon for California League of Cities’ 
Legal Advocacy Committee and the California State Association of Counties as Amici Curiae on behalf of 
Petitioner. 
 
Paul, Hastings, Janofsky & Walker, Nancy L. Abell, Paul W. Crane, Jr., and Katherine C. Huibonhoa for 
Los Angeles Unified School District as Amicus Curiae on behalf of Petitioner. 
 
Morgan, Lewis & Bockius, Thomas M. Peterson, Rebecca D. Eisen; Brobeck, Phleger & Harrison and 
Jennifer A. Kearns for The Employers Group as Amicus Curiae on behalf of Petitioner. 
 
Heller Ehrman White & McAuliffe, Patricia K. Gillette and Greg J. Richardson for The California 
Employment Law Council and The California Bankers Association as Amici Curiae on behalf of 
Petitioner. 
 
Ballard Rosenberg Golper & Savitt, John B. Golper, Linda Miller Savitt and Christine T. Hoeffner as 
Amici Curiae on behalf of Petitioner. 
__________________________________________________________________________________ 
 
Attorneys for Respondent: 
 
No appearance for Respondent. 
 
2 
 
 
 
 
 
Page 2 - counsel continued - S103487: 
 
 
Attorneys for Real Party in Interest: 
 
Marvin E. Krakow; Christopher H. Whelan; Quackenbush & Quackenbush and William C. Quackenbush 
for Real Party in Interest. 
 
Patricia A. Shiu, Claudia Center and Shelley A. Gregory for The Legal Aid Society-Employment Law 
Center, The Impact Fund and California Women’s Law Center as Amici Curiae on behalf of Real Party in 
Interest. 
 
Law Offices of Jeffrey K. Winikow and Jeffrey K. Winikow for California Employment Lawyers 
Association as Amicus Curiae on behalf of Real Party in Interest. 
 
 
3 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Tracy S. Hendrickson 
Deputy Attorney General 
1300 I Street 
Sacramento, CA  94244-2550 
(916) 323-7363 
 
Marvin E. Krakow 
1801 Century Park East, Suite 1520 
Los Angeles, CA  90067 
(310) 229-0900