Opinion ID: 1275413
Heading Depth: 2
Heading Rank: 3

Heading: Counterarguments

Text: Plaintiff and the Court of Appeal in this case criticize Janken in several respects that we find, in sum, unpersuasive. The Court of Appeal here noted that, without analysis and discussion, earlier Court of Appeal decisions allowed plaintiffs to sue agent employees as well as employers. We made essentially the same statement in Caldwell v. Montoya, supra, 10 Cal.4th at pages 978-979, footnote 3, 42 Cal.Rptr.2d 842, 897 P.2d 1320. We also observed that no decision had directly considered the question, and we expressly reserved it. ( Ibid. ) Janken was the first court to consider it. As we implied in Caldwell, the earlier decisions provide no authority for what they did not consider. The Court of Appeal found the Janken court's attempt to differentiate harassment from discrimination claims to be untenable. It stated that any supervisor forced to interact with other employees risks harassment claims, just as any supervisor forced to make personnel decisions risks discrimination claims. It observed that employers cannot allow supervisors to discriminate unlawfully any more than to harass; they may only delegate the responsibility to make employment decisions based on lawful factors. However, the Legislature has already distinguished between discrimination and harassment. Whatever similarities there may be between the two, the employer ultimately does the former; coworkers and supervisors do the latter. Harassment claims are legitimately distinguished from discrimination claims because they are based on different types of conduct. Behavior that gives rise to a harassment claim is not related to performing one's job duties except insofar as it occurs within the work environment. Behavior that gives rise to a discrimination claim, on the other hand, is often indistinguishable from performing one's job duties. Thus, the Legislature properly tailored the FEHA in order to address these distinct claims. Plaintiff claims the distinction between harassment and discrimination is unworkable. She argues that Janken, in effect, [says] that an agent of an employer could be personally liable for hanging a pin-up calendar and offending an employee but could not be held liable if the same agent were to shout out loud `I refuse to hire black people' and then proceed to do just that. Shouting out loud, however, as distinct from making personnel decisions, might be deemed actionable harassment. It is not the type of conduct an employer could properly delegate; making a supervisor liable for that conduct would not create a conflict of interest between the supervisor and the employer. For the reasons the Janken court stated, the Legislature reasonably could, and did, distinguish between harassment and discrimination claims. The Court of Appeal interpreted Janken as concluding that the agent language merely incorporated respondeat superior principles. It criticized that conclusion on the basis that the FEHA would be found to incorporate those principles even without that language. Therefore, it said, if the agent language merely articulated the rule of respondeat superior, it was unnecessary. Thus, under the Janken court's interpretation, the definition of employer ... was surplusage, violating the rule of statutory construction to `give meaning to every word of a statute if possible' ( Arnett [v. Dal Cielo (1996) 14 Cal.4th 4,] 22 [56 Cal.Rptr.2d 706, 923 P.2d 1]). We disagree that the agent language is surplusage under any interpretation. The issue in this case is individual liability for discrimination. Therefore, we express no opinion on the scope of employer liability under the FEHA for either discrimination or harassment. We specifically express no opinion on whether the agent language merely incorporates respondeat superior principles or has some other meaning. We need not because, whatever that language means precisely, it is not surplusage. The Legislature may reasonably have chosen to define the scope of employer liability expressly rather than to leave it to judicial interpretation. It is a maxim of statutory construction that Courts should give meaning to every word of a statute if possible, and should avoid a construction making any word surplusage. ( Arnett v. Dal Cielo (1996) 14 Cal.4th 4, 22, 56 Cal.Rptr.2d 706, 923 P.2d 1.) But surplusage in this context means surplusage as to other statutory language, not as to some possible judicial interpretation. For example, in the case the Court of Appeal cited, the statutory language at issue was a reference to discovery or subpoena. ( Ibid. ) We held that an interpretation that discovery included subpoena should be avoided because that interpretation would render the word subpoena surplusage to the word discovery. ( Ibid. ) The rule avoiding surplusage does not apply here. Although the Legislature would not need to refer to discovery or subpoena if the former included the latter, the Legislature may choose to state all applicable legal principles in a statute rather than leave some to even a predictable judicial decision. Express statutory language defining the scope of employer liability is not surplusage. Rather, it may eliminate potential confusion and avoid the need to research extraneous legal sources to understand the statute's full meaning. Legislatures are free to state legal principles in statutes, even if they repeat preexisting law, without fear the courts will find them unnecessary and, for that reason, imbued with broader meaning. The Court of Appeal questioned the Janken court's reliance on federal cases interpreting federal statutes in two respects. First, it stated, The federal courts have not reached consensus regarding a supervisor's individual liability, and the United States Supreme Court has yet to rule on this question. It noted that the First Circuit Court of Appeals has not resolved the issue and cited two recent district court decisions criticizing the circuit court decisions. ( Ruffino v. State Street Bank and Trust Co. (D.Mass.1995) 908 F.Supp. 1019, 1047-1048; Ostrach v. Regents of the University of California (E.D.Cal. 1997) 957 F.Supp. 196, 199-200.) It also suggested that the Fifth Circuit's rulings have been inconsistent by compar[ing] Stults v. Conoco, Inc. (5th Cir.1996) 76 F.3d 651, 654-655 [no individual liability] with Garcia v. Elf Atochem North America (5th Cir.1994) 28 F.3d 446, 451 [supervisors are individually liable].) The two cases are not inconsistent. Garcia v. Elf Atochem North America (5th Cir.1994) 28 F.3d 446, effectively disapproved on other grounds in Oncale v. Sundowner Offshore Services, Inc. (1998) 523 U.S. 75, ___, 118 S.Ct. 998, 1001, 140 L.Ed.2d 201, indicated that individuals may be sued for harassment in their official capacity as agents of the employer. However, citing Grant v. Lone Star Co. (5th Cir. 1994) 21 F.3d 649, it also said that Title VII liability does not attach to individuals acting in their individual capacity. ( Garcia, supra, 28 F.3d at p. 451, fn. 2.) Although the high court has not yet ruled on this question, the federal circuits courts support the Janken ruling overwhelmingly. Indeed, the Sixth Circuit Court of Appeals recently joined the majority of our sister circuits that have addressed this issue [and] have held that an employee/supervisor, who does not otherwise qualify as an `employer,' cannot be held individually liable under Title VII and similar statutory schemes. ( Wathen v. General Elec. Co. (6th Cir.1997) 115 F.3d 400, 404; see id. at p. 405.) A clear consensus now exists. We find the cases concluding supervisory employees are not individually liable persuasive in both number and reasoning. The Court of Appeal here also concluded the federal cases do not apply because of the significant differences between the federal statutes and the FEHA.... It relied on certain differences in remedy, the aiding and abetting language of section 12940, and language indicating the Fair Employment and Housing Commission (FEHC) may issue a written accusation against the accused  person [or] employer.... (§ 12965, subd. (a), italics added; see also §§ 12965, subd. (b), 12970, subds. (a), (b).) None of these points convince us. In general, The language, purpose and intent of California and federal antidiscrimination acts are virtually identical. Thus, in interpreting FEHA, California courts have adopted the methods and principles developed by federal courts in employment discrimination claims arising under the federal acts. ( Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383, 1386, 15 Cal.Rptr.2d 53.) The general rule applies to the issue in this case. The substance of the relevant language involved hereincluding the agent provisionis found in each of the analogous federal statutes. Any differences in remedy and the aiding and abetting language do not persuade us the Legislature intended a rule regarding individual liability unlike the federal rule. The general language allowing the FEHC to issue an accusation against a person does not mean that all the FEHA provisions apply to persons as well as employers. The accusation provisions apply generally. Some of the FEHA provisions, such as those involving harassment, do, indeed, apply to individual persons as well as employers. (E.g., § 12940, subd. (h)(1) [prohibiting any other person from harassing an employee].) Therefore, in general, the FEHC may issue accusations against persons as well as employers. The discrimination provisions, however, apply only to employers. General language permitting the FEHC to issue accusations against persons in some situations does not mean it may issue them in all. The Court of Appeal specifically noted that in 1992, the Legislature amended section 12965, subdivision (b), to include the following language: `If the person claiming to be aggrieved does not request a right-to-sue-notice,... [a] city, county, or district attorney in a location having an enforcement unit... for the purpose of prosecuting AIDS/HIV discrimination claims, may also bring a civil action under this part against the person, employer, labor organization, or employment agency named in the notice.' (Italics added [by the Court of Appeal].) This particular language is not before us because no enforcement unit is seeking to bring an action against anyone for AIDS/HIV discrimination; accordingly, we need not decide whether the reference to person imposes personal liability on individuals not otherwise qualifying as employers or merely allows an enforcement unit to sue persons in their representative capacities. We do not, however, believe this narrow language referring to a civil action by an enforcement unit for a specific type of discrimination was intended to create individual liability under the FEHA for any discrimination claim brought by anyone. The Court of Appeal also relied on the FEHC's administrative decisions. We assign great weight to the interpretations an administrative agency like the FEHC gives to the statutes under which it operates, although ultimately statutory interpretation is a question of law the courts must resolve. ( Robinson v. Fair Employment & Housing Com. (1992) 2 Cal.4th 226, 234-235, 5 Cal. Rptr.2d 782, 825 P.2d 767 & fn. 6 ( Robinson ); Carmona v. Division of Industrial Safety (1975) 13 Cal.3d 303, 310, 118 Cal. Rptr. 473, 530 P.2d 161.) The Court of Appeal found that the FEHC has consistently held supervisors individually liable as agents of the employer for their acts of discrimination and harassment. (See, e.g., Dept. Fair Empl. & Hous. v. Bee Hive Answering Service (1984) No. 84-16, FEHC Precedential Decs.1984-1985, CEB 8, p. 23 [employer and individual supervisor liable for sexual discrimination and harassment]; Dept. Fair Empl. & Hous. v. Del Mar Avionics (1985) No. 85-19, FEHC Precedential Decs.1984-1985, CEB 16, p. 25 [FEHC found employer and supervisor liable for race and sex discrimination and harassment]; Dept. Fair Empl. & Hons. v. Madera County (1990) No. 90-03, FEHC Precedential Decs.1990-1991, CEB 1, p. 26 [`The Department asserts that respondent Gordon is personally liable [for sexual harassment] as an employer under the Act because he acted as an agent of Madera County.'].) Although these decisions do state what the Court of Appeal asserts, on examination, they do not provide strong support for plaintiffs position. None considered the differing statutory treatment of harassment and discrimination. More importantly, they rested solely on now-outdated federal authority. The first decision finding individual liability, Dept. Fair Empl. & Hous. v. Bee Hive Answering Service (1984) No. 84-16, FEHC Precedential Decs.1984-1985, CEB 8, pages 14-16, 23, did not itself examine the question of individual liability but only cited the then existing federal rule. Since neither the [FEHA] nor our regulations define the term, `agent,' and since Title VII also defines employer by extending coverage to any agent of the larger employing entity (and similarly fails to define `agent'), we have examined Title VII law on this point. Inasmuch as we find that Title VII precedent is applicable here, we have chosen to be guided by it. ( Id. at p. 14, italics added.) The decision then merely cited early federal district court decisions that found individual liability. ( Id. at p. 15.) Later FEHC decisions simply cited earlier decisions. None ever considered the question on its own merits. As discussed above, federal circuit court decisions now overwhelmingly find no individual liability. The older district court decisions which the FEHC cited are obsolete. The question arises, to what part of the FEHC interpretation should we give great weight? Its conclusion that title VII precedent applies? Or its reliance on now obsolete Title VII precedent? Under the circumstances, the FEHC conclusion that individuals are personally liable is entitled to but little consideration. We must decide the question ourselves. In a similar vein, the Court of Appeal also found that legislative inaction in the face of the FEHC interpretation and earner appellate court decisions indicates acquiescence. (See Robinson, supra, 2 Cal.4th at p. 235 & fn. 7, 5 Cal.Rptr.2d 782, 825 P.2d 767.) As noted, appellate court decisions before Janken did not directly consider the question. The same question arises regarding the FEHC decisions. In what, exactly, is the Legislature supposed to have acquiesced? In the conclusion that federal precedent controls? Or in the reliance on now obsolete federal precedent? In this situation, especially, legislative inaction is a ``weak reed upon which to lean.'' ( Harris v. Capital Growth Investors XIV (1991) 52 Cal.3d 1142, 1156, 278 Cal.Rptr. 614, 805 P.2d 873.) The Court of Appeal here also disagreed with the Janken court's discussion of the FEHA's purposes. It was concerned that shielding supervisory employees who commit discriminatory acts from liability undermines the FEHA's policy and does not ensure that the law bar all modes of discrimination. However, as the Janken court pointed out ( Janken, supra, Cal.App.4th at pp. 76-77, 53 Cal.Rptr.2d 741), employers will not condone discriminatory acts by their supervisory employees, because the employers must ultimately pay. Furthermore, supervisors will not escape punishment. They will merely escape the cost of defending suit. Supervisors guilty of engaging in unlawful discrimination, and thus causing their employers to incur monetary liability, will often suffer demotion or unemployment. Their reputation with potential future employers will also be affected. Until the Legislature provides for punishing individual employees, we should leave that task to the employers. The Court of Appeal also noted the reality that corporate entities are comprised of individuals and can act only through individuals. The point is obviously correct but does not address the question of who is liable: the corporation, the individuals, or both. It is settled that the corporation can be held liable. The question here is whether to impose liability also on the individuals. Corporate decisions are often made collectively by a number of persons. Different individuals might have differing levels of awareness and participation in the decisions. When a collective decision is discriminatory, some participants might have acted innocently, others less so. Assessing individual blame might be difficult, in contrast to simply placing blame on the corporation, on whose behalf the individuals acted. Moreover, to make collective decisions possible, individuals often must rely on information or evaluations that others supply. Imposing individual liability for collective decisions might place the individuals in an adversarial position to each other (as well as to the corporation). Individuals might fear to act in reliance on input from others. Some might fear that a potentially controversial but, so far as they can know, correct and necessary collective decision might be misconstrued and give rise to a discrimination action. Out of caution, they might feel compelled to dissent from that decision, or attempt to disassociate themselves from it, merely to protect their pocketbooks. For these reasons, imposing liability on the corporate whole rather than each individual who participated in the corporate decision is sensible. The Court of Appeal stated that, contrary to what the Janken court found, Concern over litigation costs was not the principal reason for the small employer exemption in the FEHA. The court relied on our discussion of the act's purposes in Robinson, supra, 2 Cal.4th at page 240, 5 Cal.Rptr.2d 782, 825 P.2d 767, which did not mention protecting small employers. The issue in Robinson was the reach of the FEHC's jurisdiction under the FEHA We viewed the issue from the perspective of the FEHC and discussed the act's purposes solely in terms of how the FEHC could operate most effectively. Our discussion of the act's purposes was not intended to be exhaustive or to preclude a finding that the act was also intended to protect small entities. We find persuasive the Janken court's discussion of the incongruity between exempting small employers and imposing liability on individual supervisors. ( Janken, supra, 46 Cal.App.4th at pp. 71-72, 53 Cal.Rptr.2d 741.) We do not decide merely whether individuals should be held liable for their wrongdoing, but whether all supervisors should be subjected to the ever-present threat of a lawsuit each time they make a personnel decision. Litigation is expensive, for the innocent as well as the wrongdoer. By limiting the threat of lawsuits to the employer itself, the entity ultimately responsible for discriminatory actions, the Legislature has drawn a balance between the goals of eliminating discrimination in the workplace and minimizing the debilitating burden of litigation on individuals. The Court of Appeal was also concerned that, although ordinarily the employer will be the deep pocket defendant, sometimes a plaintiff will be unable to recover from the employer and will turn to the individual. Plaintiff states that the business employers she has sued are now defunct, and she must look to Baird personally for recovery. The Court of Appeal stated that, if that is the case, it would be unfair to bar Reno from recovering against Baird. We agree with the Janken court's response to a similar concern. ( Janken, supra, 46 Cal.App.4th at p. 75, 53 Cal.Rptr.2d 741.) We do not believe the Legislature intended a legal regime in which individual supervisory employees were personally liable after bankruptcy of the employer.... ( Ibid. ) For these reasons, we conclude that individuals who do not themselves qualify as employers may not be sued under the FEHA for alleged discriminatory acts.