Court Opinion

ID: 9558193
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:04:11.673834+00
Date Added: 2024-06-11T09:13:10.011186
License: Public Domain

IN THE SUPREME COURT OF
               CALIFORNIA

                KRISTINA RAINES et al.,
                Plaintiffs and Appellants,
                             v.
       U.S. HEALTHWORKS MEDICAL GROUP et al.,
               Defendants and Respondents.

                           S273630

                        Ninth Circuit
                          21-55229

                Southern District of California
                  3:19-cv-01539-DMS-DEB

                       August 21, 2023

Justice Jenkins authored the opinion of the Court, in which
Chief Justice Guerrero and Justices Corrigan, Liu, Kruger,
Groban, and Evans concurred.
    RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                            S273630

              Opinion of the Court by Jenkins, J.

       This case requires us to clarify the meaning of the term
“employer” as used in the California Fair Employment and
Housing Act (FEHA) (Gov. Code,1 § 12900 et seq.). Subject to
specified exceptions, section 12940 of the FEHA makes it an
“unlawful employment practice” for “any employer” “to make
any medical or psychological inquiry of an applicant” (§ 12940,
subd. (e)(1)), and section 12926, subdivision (d) states that, for
purposes of the FEHA, the term “ ‘[e]mployer’ includes any
person regularly employing five or more persons, or any person
acting as an agent of an employer, directly or indirectly . . . .”
(Italics added.) The italicized language might be interpreted as
merely incorporating the common law principle of respondeat
superior, or some variant thereof, into the FEHA’s statutory
liability. Were we to adopt this interpretation of the statutory
language, liability for a violation of the statute would reside
with the employer, not with the employer’s agent.2 Conversely,
the italicized language could also be reasonably interpreted to
mean that an employer’s agents are subject to all the obligations
and liabilities that the FEHA imposes on the employer itself.

1
      All further undesignated statutory references are to the
Government Code.
2
      When we use the term “employer” without any
qualification, we use it in the ordinary common law sense, not
in a sense specially defined by a statute such as the FEHA.

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                  Opinion of the Court by Jenkins, J.

Recognizing this ambiguity, the United States Court of Appeals
for the Ninth Circuit asked this court to answer the following
question: “Does California’s Fair Employment and Housing Act,
which defines ‘employer’ to include ‘any person acting as an
agent of an employer,’ Cal. Gov’t Code § 12926(d), permit a
business entity acting as an agent of an employer to be held
directly liable for employment discrimination?” (Raines v. U.S.
Healthworks Medical Group (9th Cir. 2022) 28 F.4th 968, 969.)
We conclude that an employer’s business entity agents can be
held directly liable under the FEHA for employment
discrimination in appropriate circumstances when the business-
entity agent has at least five employees and carries out FEHA-
regulated activities on behalf of an employer.
          I. FACTS AND PROCEDURAL BACKGROUND
      Plaintiffs Kristina Raines and Darrick Figg, on behalf of
themselves and a putative class, allege that they received offers
of employment that were conditioned on successful completion
of preemployment medical screenings to be conducted by
defendant U.S. Healthworks Medical Group (USHW), who was
acting as an agent of plaintiffs’ prospective employers. Plaintiffs
assert that USHW and its affiliates and successors (collectively,
defendants) are “the nation’s and California’s largest providers
of occupational health.” Plaintiffs claim that as part of its
medical screenings, USHW required job applicants to complete
a written health history questionnaire that included numerous
health-related questions having no bearing on the applicant’s
ability to perform job-related functions. According to plaintiffs,
these questions covered details of the applicant’s health history
including “whether the applicant has and/or has ever had: 1)
venereal disease; 2) painful or irregular vaginal discharge or
pain; 3) problems with menstrual periods; 4) irregular

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         RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

menstrual period; 5); penile discharge, prostate problems,
genital pain or masses; 6) cancer; 7) mental illness; 8) HIV; 9)
permanent disabilities; 10) painful/frequent urination; 11) hair
loss; 12) hemorrhoids; 13) diarrhea; 14) black stool; 15)
constipation; 16) tumors; 17) organ transplant; 18) stroke; or 19)
a history of tobacco or alcohol use.”         In addition, the
questionnaire asked whether the job applicant was pregnant,
sought information regarding medications taken, and required
the job applicant to disclose prior job-related injuries and
illnesses.
      Plaintiff Kristina Raines received an offer from Front
Porch Communities and Services (Front Porch) for a position as
a food service aide, but the offer was conditioned on her passing
the preemployment medical screening conducted by USHW.
Raines alleges that she responded to most of the questions on
the written questionnaire, but she declined to answer the
question about the date of her last menstrual period. She
alleges that the exam was then terminated, and Front Porch
revoked its offer of employment.
      Plaintiff Darrick Figg received an offer from the San
Ramon Valley Fire Protection District to serve as a member of
the volunteer communication reserve, but his offer, too, was
conditioned on his passing the preemployment medical
screening conducted by USHW. Figg alleges that he answered
all the questions, successfully passed the screening, and was
hired for the position.
     Raines filed a state court action against Front Porch and
USHW. After she later filed a first amended complaint that
added additional defendants and class claims, defendants
removed the action to federal court. (See 28 U.S.C. § 1332(d).)

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          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
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There, Raines filed a second amended complaint, adding Figg as
a named plaintiff, dismissing Front Porch as a defendant
(pursuant to a settlement), and adding additional defendants.
Defendants successfully moved to dismiss (see Fed. Rules
Civ.Proc., rule 12(b)(6), 28 U.S.C.), and plaintiffs then filed a
third amended complaint. That complaint, which is the
operative complaint, alleges claims under the FEHA, the Unruh
Civil Rights Act (Civ. Code, § 51 et seq.), unfair competition law
(Bus. & Prof. Code, § 17200 et seq.), and the common law right
of privacy.
      Defendants again moved to dismiss, and the district court
granted the motion with prejudice as to all claims except
plaintiffs’ unfair competition law claim. In dismissing plaintiffs’
FEHA claim, the district court concluded that the FEHA does
not impose liability on the agents of a plaintiff’s employer.
      As to plaintiffs’ unfair competition law claim, the district
court had granted dismissal without prejudice, but plaintiffs
requested an order dismissing the claim with prejudice, and the
district court granted their request. Plaintiffs then appealed the
dismissal of their other claims. After holding oral argument, the
United States Court of Appeals for the Ninth Circuit asked this
court to answer the question quoted on page 2, ante.
                         II. DISCUSSION
      At issue in this case is the proper interpretation of the
definition of “ ‘[e]mployer’ ” in section 12926, subdivision (d). In
part II.A., we discuss our prior decisions interpreting that
provision and conclude that they do not resolve the question the
Ninth Circuit has put before us. In part II.B., we examine the
text of section 12926, subdivision (d); its legislative history; the
interpretation federal courts have given to federal

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          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

antidiscrimination laws that use similar language; and public
policy considerations. Our examination of these indicators of
legislative intent leads us to conclude that the agent-inclusive
language of section 12926, subdivision (d) permits a business-
entity agent of an employer to be held directly liable for violation
of the FEHA when it carries out FEHA-regulated activities on
behalf of an employer. Lastly, in part II.C., we consider and
reject defendants’ arguments in favor of a contrary
interpretation.
      A. The Relevance of Reno v. Baird and Jones v.
         Lodge at Torrey Pines
      As noted on page 1, ante, section 12926, subdivision (d)
provides that, for purposes of the FEHA, the term “ ‘[e]mployer’
includes any person regularly employing five or more persons,
or any person acting as an agent of an employer, directly or
indirectly . . . .” We have explored the meaning of this provision
in two cases: Reno v. Baird (1998) 18 Cal.4th 640 (Reno) and
Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th
1158 (Jones).
      The issue in Reno was whether an employer’s supervisory
employees could be held personally liable under the FEHA for
their acts of employment discrimination. The plaintiff in Reno
alleged discrimination and wrongful discharge, and she sued,
among others, the individual supervisors who, she alleged, were
directly responsible for the alleged discriminatory acts. She
argued that the individual defendants, as agents of her
employers, could be held personally liable under the plain
meaning of section 12926, subdivision (d), which makes “any
person acting as an agent of an employer” into an “ ‘[e]mployer’ ”
for purposes of the FEHA. (See Reno, supra, 18 Cal.4th at pp.
643–644, 647.) We concluded that the agent-inclusive language

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          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
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of section 12926, subdivision (d) does not impose liability on all
agents, including individual employees of the same employer,
and adopting that interpretation of section 12926, subdivision
(d) would be inconsistent with the provision’s express exemption
for employers with fewer than five employees. (Reno, at pp. 647,
650–651.) In so concluding, we noted “ ‘the incongruity that
would exist if small employers [with fewer than five employees]
were exempt from liability while individual nonemployer
supervisors were at risk of personal liability.’ ” (Id. at p. 651,
quoting Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th
55, 71.) We added: “ ‘The Legislature clearly intended to protect
employers of less than five from the burdens of litigating
discrimination claims. [Citation.] . . . [I]t is “inconceivable” that
the Legislature simultaneously intended to subject individual
nonemployers to the burdens of litigating such claims.’ ” (Reno,
at p. 651, quoting Janken v. GM Hughes Electronics, at p. 72.)
      We further explained that imposing personal liability on
supervisory employees would severely damage the exercise of
supervisory judgment because supervisors would fear that their
routine workplace decisions might lead to personal financial
ruin.    Among other things, this possibility would cause
supervisors to have interests in conflict with those of their
employers. (Reno, supra, 18 Cal.4th at pp. 651–653.) In
addition, we noted that corporate decisions are often made
collectively, and therefore assessing individual blame in a
particular case of discrimination might be difficult. Individual
employees might even find themselves pitted against one
another, trying to protect their own interests. (Id. at p. 662.)
Finally, we commented that defending even an unmeritorious
lawsuit can be expensive, and supervisors should not have to
face that cost every time they make a routine personnel decision.

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          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
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(Id. at p. 663.) For these reasons, we concluded in Reno that,
notwithstanding the agent-inclusive language of section 12926,
subdivision (d), “individuals who do not themselves qualify as
employers may not be sued under the FEHA for alleged
discriminatory acts.” (Reno, at p. 663.)
      In Reno, however, we declined to address the question
presented in this case: whether section 12926, subdivision (d)
permits direct liability for other types of agents, such as business
entities acting as independent contractors. (See Reno, supra, 18
Cal.4th at p. 658.)3
       In Jones, we extended Reno’s holding to a claim of
retaliation in violation of section 12940, subdivision (h), holding
that supervisorial employees are not liable under the FEHA for
their retaliatory acts. (Jones, supra, 42 Cal.4th at pp. 1173–
1174.) We reached that conclusion despite the retaliation
provision’s broad wording, which refers not merely to the
“employer” but to “any employer, labor organization,
employment agency, or person.” (§ 12940, subd. (h), italics
added.) Our reasoning closely tracked our analysis in Reno.
Noting, among other things, the FEHA’s exemption for
employers having fewer than five employees (Jones, at p. 1165),
we reasoned that it would be incongruous to hold a supervisor
liable for retaliation while exempting small employers from such
liability (id. at pp. 1167–1168). We said: “All of the[] reasons
[we gave in Reno] for not imposing individual liability for

3
      Because Reno, supra, 18 Cal.4th 640 expressly reserved
the question we are now deciding, we cannot draw any strong
conclusion from the Legislature’s failure to amend the FEHA’s
definition of employer during the more than two decades since
we decided that case.

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          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
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discrimination — supervisors can avoid [doing acts of]
harassment but cannot avoid [making] personnel decisions, it is
incongruous to exempt small employers but to hold individual
nonemployers liable, sound policy favors avoiding conflicts of
interest and the chilling of effective management, corporate
employment decisions are often collective, and it is bad policy to
subject supervisors to the threat of a lawsuit every time they
make a personnel decision — apply equally to retaliation.” (Id.
at p. 1167.) We also noted that section 12940, subdivision (j),
which governs harassment, expressly imposes liability on the
employees who are responsible for the harassment. It provides
(as it did when Jones was decided): “An employee of an entity
subject to this [harassment] subdivision is personally liable for
any harassment prohibited by this section that is perpetrated by
the employee . . . .” (§ 12940, subd. (j)(3).) That provision, in our
view, made it clear that the Legislature used express language
in section 12940 when it wanted to impose personal liability on
employees, and therefore the absence of such language in the
retaliation provision (§ 12940, subd. (h)) supported the inference
that the Legislature did not intend to impose personal liability
on employees for their acts of retaliation. (Jones, at p. 1162–
1163.)4

4
      In deciding Reno, we did not consider subdivision (j)(3) of
section 12940 because the text of that subdivision was first
added to section 12940 after Reno was decided. (See Stats. 2000,
ch. 1047, § 1, p. 7690.) We did, however, note that the term
“employer” is specially defined for purposes of the FEHA’s
harassment provision, omitting the exemption for employers
having fewer than five employees. (See Reno, supra, 18 Cal.4th
at pp. 645, 650.) That and other provisions of section 12940
made clear that section 12940 treats harassment differently

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         RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
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      Although we directly address in part II.B., post, whether
section 12926, subdivision (d) permits FEHA liability for
business-entity agents of employers, it is useful here to highlight
the ways in which the considerations that motivated our
decisions in Reno and Jones are either absent or much
diminished in a case, like this one, involving a business-entity
agent with five or more employees.5 At least in cases involving
a business-entity agent with five or more employees, the
incongruity of imposing liability on the agent while exempting
employers with fewer than five employees does not exist. In
addition, such a business-entity agent will likely perform a
narrowly defined task for multiple clients over the course of
several years. Thus, it more likely can bear the cost of legal
counsel to ensure that its policies and methods meet applicable
statutory and common law standards. As to the potential for
conflicts of interest between the agent and the employer, it is
perhaps true that a business-entity agent’s interest in
minimizing its own liability might sometimes conflict with the
interests of the employer that has hired it. However, a business-
entity agent is more likely than an employee agent to have

from discrimination. (Reno, at pp. 645, 650.) We also noted that
the conduct that might lead to a harassment claim is avoidable,
but a supervisor cannot avoid making personnel decisions
despite the risk that such decisions could lead to a claim of
discrimination. (Id. at pp. 645–646.)
5
      As noted, plaintiffs allege that USHW and its affiliates
and successors (defendants here) are large business enterprises
operating on a national scale, and our analysis takes that
allegation into consideration. The question of whether, and to
what extent, the analysis we apply here would apply to a
business-entity with fewer than five employees is not before us.
Accordingly, we express no view on that question.

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comparable bargaining power to the employer, enabling it to
negotiate such differences at the time that it initiates or renews
its business relationship with the employer. Indeed, such
negotiations might include the question of indemnification
regarding any potential FEHA liability that might arise.
Finally, the role of a business-entity agent is often formally
defined by the terms of its contract with the employer.
Therefore, its fault, if any, for the employer’s actions can be
easily determined.
      In short, in a case involving a business-entity agent, the
competing statutory mandates that we needed to harmonize in
Reno and Jones do not come into play, and the policy arguments
that informed our analysis in those cases apply, if at all, with
much less force. Hence, Reno and Jones do not control the
outcome here. With that in mind, we turn to address the Ninth
Circuit’s question.
      B. Section 12926, Subdivision (d)
         When as here we are interpreting a statutory provision,
“ ‘ “ ‘[o]ur fundamental task . . . is to determine the Legislature’s
intent so as to effectuate the law’s purpose. We first examine
the statutory language, giving it a plain and commonsense
meaning. . . . If the language is clear, courts must generally
follow its plain meaning unless a literal interpretation would
result in absurd consequences the Legislature did not intend. If
the statutory language permits more than one reasonable
interpretation, courts may consider other aids, such as the
statute’s purpose, legislative history, and public policy.’
[Citation.] ‘Furthermore, we consider portions of a statute in
the context of the entire statute and the statutory scheme of
which it is a part, giving significance to every word, phrase,

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          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
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sentence, and part of an act in pursuance of the legislative
purpose.’ ” ’ ” (Brennon B. v. Superior Ct. (2022) 13 Cal.5th 662,
673.) Consistent with this approach, we begin our analysis by
examining the plain meaning of section 12926, subdivision (d).
We conclude that the provision’s most natural reading imposes
FEHA liability on the business-entity agents of employers, but
the provision is not without some ambiguity. Therefore, we
examine the relevant legislative history of the provision, federal
cases interpreting federal antidiscrimination laws that use
similar language, and public policy considerations. These
indicators of legislative intent serve to confirm our conclusion
that section 12926, subdivision (d) can impose direct liability on
the business-entity agents of employers for their FEHA-
regulated activities.
         1. Plain Meaning
      Section 12926, subdivision (d) states that, for purposes of
the FEHA, the term “ ‘[e]mployer’ includes . . . any person acting
as an agent of an employer, directly or indirectly . . . .” The most
natural reading of this language is that a “person acting as an
agent of an employer” is itself an employer for purposes of the
FEHA. Indeed, this interpretation accounts for and reasonably
construes the word “includes” (§ 12926, subd. (d)), a word that,
in this context, can only be intended to broaden the scope of the
term “employer.”          In addition, because “partnerships,
associations, corporations, [and] limited liability companies”
come within the FEHA’s definition of the word “ ‘[p]erson’ ”
(§ 12925, subd. (d)), it follows that a business-entity agent of a

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         RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                 Opinion of the Court by Jenkins, J.

FEHA plaintiff’s employer is, for purposes of the FEHA, an
employer of the plaintiff.6
      Defendants, however, point out that we reached a
different conclusion in Reno, supra, 18 Cal.4th 640, holding that
the agent-inclusive language of section 12926, subdivision (d)
does not extend FEHA liability to agents. Defendants’ argument
misconstrues the scope of our holding in Reno. In Reno, we did
not categorically reject the natural reading of section 12926,
subdivision (d), a reading that supports the conclusion here that
the FEHA can impose liability on certain business-entity
agents. Rather, employing the principle that the provisions of a
statute are to be interpreted in light of their context, we found
it inconceivable that the Legislature simultaneously exempted
from FEHA liability employers of fewer than five employees
while imposing FEHA liability on supervisorial employees.
(Reno, at p. 651.)
      The incongruity we identified in Reno is simply not
present in a case like this one. (See p. 9, ante.) But as Reno
implicitly recognized, the natural reading of section 12926,
subdivision (d) that we have described is not the only possible
interpretation of the provision. (See Reno, supra, 18 Cal.4th at
p. 658 [expressing “no opinion on whether the ‘agent’ language
merely incorporates respondeat superior principles”].)
Therefore, we will examine other indicators of legislative intent
in order to confirm the correct interpretation of the statutory
language.

6
     Section 12926, subdivision (d) creates an express
exception for “religious association[s] or corporation[s] not
organized for private profit.”

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         2. Legislative History
       The FEHA was enacted in 1980 (Stats. 1980, ch. 992, § 4,
p. 3140 et seq.), combining into one act the Fair Employment
Practices Act (FEPA) (Lab. Code, former § 1410 et seq.;
addressing employment discrimination) and the Rumford Fair
Housing Act (Health & Saf. Code, former § 35720 et seq.;
addressing housing discrimination). The FEHA’s definition of
employer came directly from the FEPA, and therefore its
wording dates back to the FEPA’s enactment in 1959. At that
time, the FEPA defined employer as follows: “ ‘Employer,’
except as herein provided, includes any person regularly
employing five or more persons, or any person acting as an agent
of an employer, directly or indirectly; the State or any political
or civil subdivision thereof and cities.” (Lab. Code, former
§ 1413, subd. (d), as enacted by Stats. 1959, ch. 121, § 1, p. 2000,
italics added.) As relevant to our inquiry concerning the liability
of an agent, the italicized part of the FEPA definition of
employer is identical to the FEHA’s present definition of
employer (§ 12926, subd. (d)), and it is, of course, the part of the
definition we must construe in this case.
      Of significance to our analysis, the FEPA’s 1959 definition
of employer took its agent-inclusive language from the National
Labor Relations Act (NLRA) (29 U.S.C. § 151 et seq.), a federal
law that assures fair labor practices and workplace democracy.
At that time, and still today, the NLRA provided that “[t]he term
‘employer’ includes any person acting as an agent of an employer,
directly or indirectly.” (Labor Management Relations (Taft-
Hartley) Act of 1947, Pub.L. No. 80-101 (June 23, 1947) 61 Stat.
136, 137, codified at 29 U.S.C. § 152(2), italics added.) That the
FEPA adopted the NLRA’s agent-inclusive language informs
our analysis because, as amicus curiae Legal Aid at Work points

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out, the National Labor Relations Board (NLRB) had
interpreted the NLRA’s definition of employer to impose
employer status on certain employer agents. (See Hudson Pulp
& Paper Corp. (1958) 121 NLRB 1446, 1450–1451; Hugh J.
Baker & Co. (1955) 112 NLRB 828, 838; The Hearst Corp. (1952)
101 NLRB 643, 648, fn. 3; Western Ass’n of Engineers, Architects
and Surveyors (1952) 101 NLRB 64, 64; J.D. Jewell, Inc. (1952)
99 NLRB 61, 64, fn. 15; Southland Manufacturing Co. (1951) 94
NLRB 813, 829; Jackson Daily News (1950) 90 NLRB 565, 565;
Association of Motion Picture Producers, Inc. (1949) 85 NLRB
902, 903; see also p. 26, fn. 10, post.) The Legislature did not
make an express reference to these NLRB decisions when, in
1959, it adopted the NLRA’s agent-inclusive language into the
FEPA, but the decisions are consistent with the conclusion that
the Legislature intended the FEPA’s agent-inclusive language
to permit direct liability for the agents of an employer in
appropriate circumstances. (Cf. Yamaha Corp. of America v.
State Bd. of Equalization (1999) 73 Cal.App.4th 338, 353
[presumption that the Legislature is aware of long-standing
administrative interpretation of a law that the Legislature is
reenacting]; Coca-Cola Co. v. State Bd. of Equalization (1945) 25
Cal.2d 918, 922–923 [same].) In addition, there is a very strong
presumption that when, in 1980, our Legislature adopted that
language into the FEHA, the language retained the same
meaning. (See Robinson v. Fair Employment & Housing Com.
(1992) 2 Cal.4th 226, 235 [interpreting the FEHA consistently
with the way the FEPA had previously been interpreted];
Buchwald v. Katz (1972) 8 Cal.3d 493, 502 [“ ‘where legislation
is framed in the language of an earlier enactment on the same
or an analogous subject, which has been judicially construed,
there is a very strong presumption of intent to adopt the

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construction’ ”]; see also Union Oil Associates v. Johnson (1935)
2 Cal.2d 727, 734–735.)
       Thus, the legislative history of the agent-inclusive
language of section 12926, subdivision (d) supports an
interpretation of that language as permitting direct FEHA
liability on the business-entity agents of an employer.7
         3. Federal Antidiscrimination Laws
      Also instructive regarding the definition of employer in
section 12926, subdivision (d) are various federal
antidiscrimination laws that define employer in similar terms.
Because these federal laws were enacted after our Legislature
enacted the definition of employer that now appears in section
12926, subdivision (d), they are not, strictly speaking, part of the
legislative history of the latter provision, but the parties rely on
them by way of analogy. We, like the parties, find these
decisions helpful in interpreting the reach of the statutory
language at issue. State courts, when interpreting state law,
commonly find federal court interpretations of federal laws that
use similar language to be persuasive authority. (See Williams
v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 109;
Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 984; Carter
v. California Dept. of Veterans Affairs (2006) 38 Cal.4th 914,
930, fn. 8; State Dept. of Health Services v. Superior Court (2003)
31 Cal.4th 1026, 1040; Johnson v. City of Loma Linda (2000) 24

7
      By contrast, had the Legislature intended the agent-
inclusive language merely to incorporate respondeat superior
into the FEHA, it could have done so explicitly, as it has done in
other provisions. (See, e.g., Civ. Code, §§ 2334 [“A principal is
bound by acts of his agent . . . .”], 2338 [“a principal is
responsible to third persons for the negligence of his agent in the
transaction of the business of the agency”].)

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Cal.4th 61, 74; Romano v. Rockwell International, Inc. (1996) 14
Cal.4th 479, 498.)       More specifically, “ ‘[i]n interpreting
California’s FEHA, California courts often look for guidance to
decisions construing federal antidiscrimination laws, including
title VII of the federal Civil Rights Act of 1964.’ ” (Williams v.
Chino Valley Independent Fire Dist., at p. 109, quoting Chavez
v. City of Los Angeles, at p. 984; see Lyle v. Warner Brothers
Television Productions (2006) 38 Cal.4th 264, 278; Miller v.
Department of Corrections (2005) 36 Cal.4th 446, 463; State
Dept. of Health Services v. Superior Court, at p. 1040; Aguilar v.
Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 129–130
(plur. opn. of George, C. J.); id. at p. 150, fn. 3 (conc. opn. of
Werdegar, J.); Reno, supra, 18 Cal.4th at p. 647; Turner v.
Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1245–1246.)
      Three federal antidiscrimination laws have definitions of
employer that are similar to the definition that appears in
section 12926, subdivision (d). Both title VII of the Civil Rights
Act of 1964 (Title VII) (42 U.S.C. § 2000e et seq.) and the
Americans with Disabilities Act of 1990 (ADA) (42 U.S.C.
§ 12101 et seq.) define “ ‘employer’ ” as “a person engaged in an
industry affecting commerce who has fifteen or more
employees . . . , and any agent of such a person.” (42 U.S.C.
§ 2000e(b); see 42 U.S.C. § 12111(5)(A).) Using nearly identical
language, with a minor difference in the minimum number of
employees required to come within the ambit of the statute, the
Age Discrimination in Employment Act of 1967 (ADEA) (29
U.S.C. § 621 et seq.) defines “ ‘employer’ ” as “a person engaged
in an industry affecting commerce who has twenty or more
employees” and “any agent of such a person.” (29 U.S.C.
§ 630(b).) Like the FEHA, these three federal laws define
employer in a way that includes an employer’s agents.

                                  16
          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

Therefore, all three federal laws raise a similar issue to the one
now before us: Does the agent-inclusive language in these
definitions mean that plaintiffs may sue the agents of their
employers, subjecting the agents to the same liability that the
law imposes on the employers?
       Federal circuit court decisions have arrived at different
conclusions on that question. Several courts have concluded
that the agent-inclusive language merely incorporates
respondeat superior liability into the relevant statutory scheme.
(See, e.g., Birkbeck v. Marvel Lighting Corp. (4th Cir. 1994) 30
F.3d 507, 510 [“we read [the agent language in the ADEA’s
definition of ‘employer’] as an unremarkable expression of
respondeat superior — that discriminatory personnel actions
taken by an employer’s agent may create liability for the
employer”]; Grant v. Lone Star Co. (5th Cir. 1994) 21 F.3d 649,
652 [“the purpose of the ‘agent’ provision in [42 U.S.C.]
§ 2000e(b) was to incorporate respondeat superior liability into
title VII”]; Miller v. Maxwell’s Intern. Inc. (9th Cir. 1993) 991
F.2d 583, 587 [“ ‘[t]he obvious purpose of [the agent language of
Title VII’s definition of employer] was to incorporate respondeat
superior liability into the statute’ ”].) Notably, however, these
decisions all involved the question whether the particular
federal law at issue imposed personal liability on the individual
employee agents of an employer; that is, they addressed the
question we decided in Reno, supra, 18 Cal.4th 640. Moreover,
these decisions embrace the point we made in Reno that
imposing personal liability on supervisorial employees would be
incongruous in light of the exemption these federal laws create
for small employers. (See Birkbeck v. Marvel Lighting Corp., at
p. 510; Grant v. Lone Star Co., at p. 652; Miller v. Maxwell’s
Intern. Inc., at p. 587.) As discussed above (see p. 9, ante), there

                                  17
         RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

is no such incongruity here. Therefore, these decisions are of
little assistance in resolving the precise question we confront
here — whether the agent-inclusive language of the relevant
definition of employer imposes liability on a third party
business-entity agent as opposed to an individual employee
agent.
      Yet other federal decisions have addressed variants of the
issue we now confront and have interpreted the agent-inclusive
language to subject at least some business-entity agents to
direct liability. These courts have often relied on the high
court’s decision in Los Angeles Dept. of Water & Power v.
Manhart (1978) 435 U.S. 702 (Manhart), which involved a class
action challenging the Los Angeles Department of Water and
Power’s (Department) practice of demanding higher retirement
contributions from female employees than from male employees.
This practice was actuarially justified based on the longer life-
expectancy of women, but the high court concluded that it
violated Title VII. The court limited the scope of its decision,
however, saying: “Nothing in our holding implies that it would
be unlawful for an employer to set aside equal retirement
contributions for each employee and let each retiree purchase
the largest benefit which his or her accumulated contributions
could command in the open market.” (Manhart, at pp. 717–718.)
After noting that limitation, the high court commented in a
footnote: “We do not suggest, of course, that an employer can
avoid his responsibilities by delegating discriminatory programs
to corporate shells. Title VII applies to ‘any agent’ of a covered
employer . . . . In this case, for example, the Department could
not deny that the administrative board [that oversaw its pension
plan] was its agent after it successfully argued that the two were
so inseparable that both shared the city’s immunity from suit

                                  18
          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

under 42 U.S.C. § 1983.” (Manhart, at p. 718, fn. 33, citation
omitted.) This footnote is hardly free from ambiguity. It could
be read to say that the employer would bear respondeat superior
liability for the discriminatory programs of the “corporate
shells” (ibid.) that acted as its agents, or it could be read to say
that the corporate shells would themselves bear employer
liability.
      In Spirt v. Teachers Ins. & Annuity Ass’n. (2d Cir. 1982)
691 F.2d 1054 (Spirt), the Second Circuit Court of Appeals read
the Manhart footnote in the latter manner, although it did so in
a case involving an agent that was an independent business
entity, not a corporate shell of the employer. Spirt concluded
that an insurance corporation and investment fund that acted
as an agent to a university, providing retirement benefits to the
university’s employees, came within the agent-inclusive
language of Title VII’s definition of employer and therefore was
liable under Title VII to the university’s employees. The Second
Circuit said: “It is clear that plaintiff’s contract for retirement
benefits is not with [her employer], but with TIAA–CREF, an
independent insurer. Plaintiff clearly is not an employee of
TIAA–CREF in any commonly understood sense. However, it is
generally recognized that ‘the term “employer,” as it is used in
Title VII, is sufficiently broad to encompass any party who
significantly affects access of any individual to employment
opportunities, regardless of whether that party may technically
be described as an “employer” of an aggrieved individual as that
term has generally been defined at common law.’ ” (Spirt, at p.
1063, quoting Vanguard Justice Society, Inc. v. Hughes (D.Md.
1979) 471 F.Supp. 670, 696.) The Second Circuit then discussed
the high court’s comment in Manhart that “ ‘Title VII applies to
“any agent” of a covered employer,’ ” (Spirt, at p. 1063, quoting

                                  19
         RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

Manhart, supra, 435 U.S. at p. 718, fn. 33), and it noted that
many courts “have held Manhart applicable to pension plans
run by third-party insurers.” (Spirt, at p. 1063.) The Second
Circuit therefore concluded that TIAA–CREF, the pension plan
administrator for the plaintiff’s employer, was an “employer” of
the plaintiff for purposes of Title VII. (Spirt, at p. 1063.)
      The First Circuit Court of Appeals, in Carparts Distri. Ctr.
v. Automotive Wholesaler’s (1st Cir. 1994) 37 F.3d 12 (Carparts),
extended the reasoning of Spirt, supra, 691 F.2d 1054 to an ADA
case. The plaintiffs in Carparts were a wholesale distributor of
automotive parts and its sole shareholder and president,
Ronald S. The defendants were the Automotive Wholesaler’s
Association of New England and its administering trust. Since
1977, the parts distributor had participated in a self-funded
medical reimbursement plan offered by the defendants. But in
1990, the defendants capped benefits for AIDS-related illnesses
at $25,000, knowing that Ronald S. was HIV positive. In
response to the cap, the plaintiffs sued the defendants, alleging
discrimination based on disability in violation of the ADA. The
federal district court dismissed the claims, holding that the ADA
did not apply because, among other things, neither defendant
was an “employer” of Ronald S. within the meaning of the ADA.
The First Circuit vacated the district court’s dismissal order and
remanded. (Carparts, at p. 21.) Because, as noted, the
definitions of employer in the ADA and Title VII are, for all
relevant purposes, the same, the First Circuit looked at how
courts had interpreted Title VII’s definition, focusing in
particular on Spirt, supra, 691 F.2d 1054. (See Carparts, at pp.
16–18.) The First Circuit conceded that defendants were not the
employers of Ronald S. in the ordinary sense of the term, but it
nonetheless concluded that there were three valid theories

                                  20
          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

according to which the defendants might be liable to Ronald S.
under the ADA. (Carparts, at p. 16.) Two of those theories are
noteworthy here. “First, defendants would be ‘employers’ [of
Ronald S.] if they functioned as [his] ‘employer’ with respect to
his employee health care coverage, that is, if they exercised
control over an important aspect of his employment.” (Id. at p.
17.) “Second, even if the defendants did not have authority to
determine the level of [Ronald S.’s] benefits, and even if
Carparts retained the right to control the manner in which the
Plan administered these benefits, defendants would still be
rendered ‘employers’ of [Ronald S.] if defendants are ‘agents’ of
a ‘covered entity,’ who act on behalf of the entity in the matter of
providing and administering employee health benefits.” (Ibid.,
italics added.) Thus, the court construed the agent-inclusive
language of the ADA’s definition of employer as imposing direct
ADA liability on an employer’s agents under certain
circumstances. Having announced several theories by which the
defendants might be liable under the ADA, the court concluded
that further development of the record was necessary to
determine whether any of the theories applied. (Carparts, at p.
18.)8

8
      The third theory the Carparts court discussed is
inapplicable here. The court explained that in some Title VII
cases the existence of an employee-employer relationship
between the plaintiff and the defendant has been held to be
unnecessary for purposes of imposing liability. In these cases,
entities that engaged in an industry affecting commerce and had
the requisite number of employees were held liable for their
discriminatory acts toward individuals who made no claim of
being employees of the offending entity. (See Sibley Memorial
Hospital v. Wilson (D.C. Cir. 1973) 488 F.2d 1338, 1341; see also

                                  21
          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

      The Eleventh Circuit Court of Appeals, in Williams v. City
of Montgomery (11th Cir. 1984) 742 F.2d 586 (Williams), applied
the agent-inclusive language of Title VII’s definition of employer
to a municipal entity, concluding, as the court did in Spirt,
supra, 691 F.2d 1054, that an institutional agent of an employer
can be directly liable under Title VII to the employer’s
employees. In Williams, the court upheld a determination that
the Montgomery City-County Personnel Board (the Board) had
discriminated against the plaintiff based on race when it
terminated his employment with the City of Montgomery. The
plaintiff was an employee of the city, not of the Board, but the
Board was the city’s agent and was responsible for the city’s
employment decisions, and therefore, the Eleventh Circuit
concluded, it came within Title VII’s definition of employer and
was directly liable. (Williams, at pp. 588–589.) After quoting
the agent-inclusive language of Title VII’s employer definition
(Williams, at p. 588), the court said: “ ‘Where the employer has
delegated control of some of the employer’s traditional rights,
such as hiring or firing, to a third party, the third party has been
found to be an “employer” by virtue of the agency relationship.’
[Citation.] . . . [¶] . . . [¶] The [provisions of Alabama law]

Association of Mexican-American Educators v. State of
California (9th Cir. 2000) 231 F.3d 572, 581; Christopher v.
Stouder Memorial Hospital (6th Cir. 1991) 936 F.2d 870, 875;
Pardazi v. Cullman Medical Center (11th Cir. 1988) 838 F.2d
1155, 1156; Doe on Behalf of Doe v. St. Joseph’s Hosp. (7th Cir.
1986) 788 F.2d 411, 422; Gomez v. Alexian Brothers Hosp. (9th
Cir. 1983) 698 F.2d 1019, 1021.) The Ninth Circuit’s question to
this court is not concerned with an employer’s potential liability
under the FEHA to nonemployees. Rather, it is expressly
concerned with “liab[ility] for employment discrimination.”
(Raines v. U.S. Healthworks Medical Group, supra, 28 F.4th at
p. 969, italics added.)

                                  22
         RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                 Opinion of the Court by Jenkins, J.

illustrate the Board’s power to exercise duties traditionally
reserved to the employer: establishing a pay plan, formulating
minimum standards for jobs, evaluating employees, and
transferring, promoting, or demoting employees.             These
functions are traditionally exercised by an employer, but the
Board utilizes these powers in the instant case; and, therefore,
the Board is an agent of the City for purposes of Title VII.”
(Williams, at p. 589, italics added.) On that basis, the Eleventh
Circuit affirmed the district court’s judgment holding the Board
liable for the plaintiff’s discriminatory termination. (Id. at p.
590.)
      Finally, in DeVito v. Chicago Park Dist. (7th Cir. 1996) 83
F.3d 878 (DeVito), the Seventh Circuit Court of Appeals
extended the holding of Williams, supra, 742 F.2d 586 to an ADA
case. In DeVito, a park district employee alleged he was
terminated in violation of the ADA. At issue, among other
things, was whether the park district’s personnel board came
within the ADA’s definition of employer. In holding that it
might, the Seventh Circuit expressly relied on the definition’s
agent-inclusive language. The court, however, recognized an
exception for agents that were small entities with few
employees. The court said: “The plain language of the ADA
defines employer as ‘a person engaged’ in an industry affecting
commerce who has 25 or more employees[9] . . . and any agent of
such person.’ [Citation.] Because (as discussed previously) the
[personnel] Board is an agent of the Park District, it seems at

9
     The minimum number of employees set forth in the ADA’s
employer definition dropped to 15 as of July 26, 1994, but the
25-employee minimum applied in DeVito. (See 42 U.S.C.
§ 12111(5)(A).)

                                 23
          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

first glance that the Board should be subject to suit. But . . .
[a]gents are liable under the ADA only if they ‘otherwise meet
the statutory definition of [an] “employer.” ’ [Citation.] For
example, an agent of an employer is not liable under the ADA
unless it has the requisite number of employees and is engaged
in an industry affecting commerce.” (DeVito, at p. 882, fn.
omitted.) Having reached that conclusion, the Seventh Circuit
remanded the case for the district court to conduct the requisite
factfinding to determine whether the park district’s personnel
board qualified as the plaintiff’s “employer” for purposes of the
ADA.
      These federal cases hold that under federal civil rights
law, aggrieved employees may sue, not only their employer, but
also the institutional agents of their employer if those agents
engage in an industry affecting commerce and are responsible
for the civil rights violation at issue. The latter condition, that
the agent be responsible for the violation, is analyzed in
different ways, but the federal courts have generally focused on
whether the agent exercised an administrative function
traditionally exercised by the employer. For example, in Spirt,
the court considered whether the agent exercised a gatekeeper
role that would normally be exercised by the employer and, by
serving in that role, violated the plaintiff’s rights. Specifically,
the court held that it was appropriate to impose direct liability
on an agent where, as was true in Spirt, the agent “ ‘significantly
affects access . . . to employment opportunities.’ ” (Spirt, supra,
691 F.2d at p. 1063.)
      The court in Carparts, supra, 37 F.3d 12 reached a similar
conclusion, noting that the agents in that case affected access to
benefits in a similar way as the agent in Spirt. The court said:
“Just as ‘delegation of responsibility for employee benefits

                                  24
         RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

cannot insulate a discriminatory [retirement benefits] plan from
attack under Title VII,’ Spirt, 691 F.2d at 1063, neither can it
insulate a discriminatory health benefits plan under Title I of
the ADA.” (Carparts, supra, 37 F.3d at pp. 17–18.)
       Similarly, in Williams, the court considered whether the
agent performed functions, typical of the employer, that might
give rise to a civil rights violation. The court noted that the
personnel board that was acting as the employer’s agent in
Williams exercised “ ‘control of some of the employer’s
traditional rights, such as hiring or firing.’ ” (Williams, supra,
742 F.2d at p. 589.) The court further noted the agent’s “power
to exercise duties traditionally reserved to the employer:
establishing a pay plan, formulating minimum standards for
jobs, evaluating employees, and transferring, promoting, or
demoting employees.” (Ibid.) Finally, the court commented that
“[t]hese functions are traditionally exercised by an employer,
but the [employer’s agent] utilizes these powers in the instant
case . . . .” (Ibid.) On that ground, the court held that the agent
bore direct liability for violating the plaintiff’s civil rights.
(Ibid.)
      The holding of DeVito, supra, 83 F.3d 878, which likewise
involved a personnel board of a municipal employer, is to the
same effect. In reaching its holding, the court did not emphasize
the personnel board’s exercise of employer functions, but the
facts of the case make clear that the personnel board had
authority over the termination of the municipal employer’s
employees. (Id. at p. 879.)
      These cases establish that an employer’s agent can, under
certain circumstances, appropriately bear direct liability under
the federal antidiscrimination laws. As noted on pages 15 to 16,

                                  25
         RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

ante, we have long held that “ ‘[i]n interpreting California’s
FEHA, California courts often look for guidance to decisions
construing federal antidiscrimination laws, including title VII of
the federal Civil Rights Act of 1964.’ ” (Williams v. Chino Valley
Independent Fire Dist., supra, 61 Cal.4th at p. 109.) The federal
court decisions in Spirt, supra, 691 F.2d 1054, Carparts, supra,
37 F.3d 12, Williams, supra, 742 F.2d 586, and DeVito, supra,
83 F.3d 878 support the conclusion that a business-entity agent
of an employer can fall within the FEHA’s definition of
employer, and it may be directly liable for FEHA violations, in
appropriate situations. Although the question presented in this
case does not require that we go further and attempt to identify
the specific scenarios in which a business-entity agent will be
subject to liability under the FEHA, we recognize as a necessary
minimum that, consistent with the FEHA’s language and
purpose, a business-entity agent can bear direct FEHA liability
only when it carries out FEHA-regulated activities on behalf of
an employer.10

10
       This interpretation is supported by the NLRB decisions
cited on page 14, ante. In those decisions, the NLRB imposed
liability on business-entity agents only when the agent
performed some NLRA-regulated activity on behalf of the
employer and violated the NLRA in performing that activity.
(See, e.g., Hudson Pulp & Paper Corp., supra, 121 NLRB at pp.
1450–1451 [business entity designated to act as employer’s
agent with respect to “the hiring, discharging, and supervision
of its driver employees” liable as “employer” for NLRA violations
committed in that capacity]; Association of Motion Picture
Producers, Inc., supra, 85 NLRB at p. 903 [association that
“acted as agent of its members in negotiating labor contracts”
liable as “employer” for NLRA violations committed in that
capacity].)

                                  26
         RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

         4. Public Policy
        This reading of section 12926, subdivision (d) also finds
support in the public policy underlying the enactment of the
FEHA. If a business entity contracts with an employer to
provide services that will affect that employer’s employees, and
if, in providing those services, the business-entity agent violates
FEHA’s antidiscrimination policies, causing injury to the
employer’s employees, it is consistent with sound public policy
to treat the business entity as an employer of the injured
employees for purposes of applying the FEHA.                  This
interpretation imposes FEHA liability not only on the employer
but also extends it to the entity that is most directly responsible
for the FEHA violation. Moreover, when, as is often the case,
the business-entity agent has expertise in its field and has
contracted with multiple employers to provide its expert service,
this interpretation extends FEHA liability to the entity that is
in the best position to implement industry-wide policies that will
avoid FEHA violations.
      In addition, reading the FEHA to authorize direct liability
on an employer’s business-entity agents furthers the statutory
mandate that the FEHA “be construed liberally” in furtherance
of its remedial purposes (§ 12993, subd. (a)), including the
purpose of “provid[ing] effective remedies that will both prevent
and deter unlawful employment practices and redress the
adverse effects of those practices on aggrieved persons”
(§ 12920.5). Moreover, the interpretation we advance today will
not impose liability on individuals who might face “ ‘financial
ruin for themselves and their families’ ” were they held directly
liable under the FEHA. (Reno, supra, 18 Cal.4th at p. 653.)

                                  27
          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

      Therefore, we conclude that legislative history, analogous
federal court decisions, and legislative policy considerations all
support the natural reading of section 12926, subdivision (d)
advanced here, which permits business-entity agents to be held
directly liable for FEHA violations in appropriate
circumstances.
      C. Defendants’ Arguments
       Defendants argue that a business-entity agent of an
employer should not be held directly liable under the FEHA
because, according to the law of agency, an agent acts under the
control of its principal, and therefore the principal is the entity
primarily responsible for any inadequate performance by the
agent. Defendants concede that an agent may, at times, be held
directly liable to a third party that it has injured, but defendants
contend that liability may be imposed only if the agent has
breached a duty it owes to that third party, and such duty must
exist independent of the agency relationship.
      At the outset, it is important to note that defendants’
argument relies heavily on the common law of agency. Here,
however, we are interpreting the scope of statutory language
referencing agent liability, and so the common law of agency is
not determinative.11
      In any event, defendants’ arguments assume a degree of
employer control of the agent that has not yet been shown here.
Plaintiffs allege that the degree of employer control over
USHW’s medical screening questionnaire varied from employer

11
      Because the issue here is statutory, we need not address
the extent to which an agent may be held liable at common law
for its misfeasance in performing work done on behalf of its
principal. Accordingly, we express no view on the subject.

                                  28
         RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

to employer,12 and although the district court noted, in the
context of finding the complaint’s agency allegations sufficient,
that plaintiffs alleged employer control over USHW, the precise
extent of that control is unclear.13 More importantly, the basis
of the district court’s dismissal of the FEHA cause of action was
not that USHW lacked responsibility under the FEHA because,
as a factual matter, it acted without any independent control
over the content of the medical screening questionnaire. Rather,
the basis of the district court’s ruling was that the FEHA’s
definition of employer simply does not impose direct liability on
an agent regardless of how much control the agent has.
Accordingly, to answer the Ninth Circuit’s question of whether
a business-entity agent may ever be held directly liable under
the FEHA, we need not express a view on the significance, if
any, of employer control over the acts of the agent that gave rise
to the alleged FEHA violation.
      Defendants also assert that an employer’s obligations
under the FEHA may not be delegated to an agent; it follows,
according to defendants, that an employer’s agent cannot be
held liable under the FEHA. It is true that an employer’s
obligations under the FEHA may not be delegated, thus freeing

12
      The operative complaint asserts that the “[e]mployers
often required that USHW use the employers’ own physical
examination form, rather than USHW’s medical form, in
conducting the physical examination component of the pre-
placement exam.” (Italics added.)
13
      The operative complaint alleges that the “employers . . .
delegated to Defendants employment decisionmaking
authority” and that based on that delegation of authority,
“Defendants . . . approved of, authorized and ratified the use of
the Health History Questionnaire(s) and Impermissible Non-
Job-Related Questions.”

                                  29
         RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

the employer of liability. However, the question we decide here
is not whether an employer may delegate its FEHA obligations
to its business-entity agents, but whether, under the language
of the FEHA, the business-entity agents of an employer can be
liable for violations of their own FEHA obligations. We have
concluded that, by statute, business-entity agents can be
considered “employers” for purposes of FEHA liability, and as
such, they are independently liable for violations of the FEHA.
Stated another way, a business-entity agent’s obligation to
comply with FEHA and its consequent liability for FEHA
violations results from the entity’s own engagement in FEHA-
regulated activities on the employer’s behalf. Thus, a rule
holding that the business-entity agents of an employer can be
held liable for FEHA violations neither delegates the employer’s
FEHA obligations nor abrogates the employer’s FEHA liability.
Nor will it lead to a double recovery for the plaintiff, as
defendants argue; rather, it merely increases the number of
defendants that might share liability for the plaintiff’s damages.
      Last, as discussed (see pp. 9–10, ante), this is not a
situation like the one we considered in Reno, where imposing
FEHA liability on supervisorial employees might lead to a
conflict between the supervisorial employee’s duty to implement
their employer’s policies and the supervisorial employee’s self-
interest in avoiding FEHA liability. At least in a case like this
one, involving a business-entity agent that is alleged to be a
large enterprise with more than five employees, the agent and
the employer are more likely to have comparable bargaining
power, and the agent can use that bargaining power to avoid
contractual obligations that will force it to violate the FEHA.
That fact makes the situation of a large business-entity agent
fundamentally unlike that of an employee agent.

                                  30
          RAINES v. U.S. HEALTHWORKS MEDICAL GROUP
                  Opinion of the Court by Jenkins, J.

      For these reasons, we reject defendants’ arguments.
Simply put, we are not persuaded by defendants’ arguments
that business-entity agents with at least five employees are
categorically exempt from liability for FEHA violations under
section 12926, subdivision (d).
                        III. CONCLUSION
      We answer the Ninth Circuit’s question as follows: The
California Fair Employment and Housing Act, which defines
“employer” to “include[]” “any person acting as an agent of an
employer” (§ 12926, subd. (d)), permits a business entity acting
as an agent of an employer to be held directly liable as an
employer for employment discrimination in violation of the
FEHA in appropriate circumstances when the business-entity
agent has at least five employees and carries out FEHA-
regulated activities on behalf of an employer. We do not decide
the significance, if any, of employer control over the act(s) of the
agent that gave rise to the FEHA violation, and we also do not
decide whether our conclusion extends to business-entity agents
that have fewer than five employees. We base our conclusion on
our interpretation of the FEHA’s definition of employer(§ 12926,
subd. (d)); we express no view of the scope of a business entity
agent’s possible liability under the FEHA’s aider and abettor
provision (§ 12940, subd. (i)).

                                                        JENKINS, J.
We Concur:
GUERRERO, C. J.
CORRIGAN, J.
LIU, J.
KRUGER, J.
GROBAN, J.
EVANS, J.

                                  31
See next page for addresses and telephone numbers for counsel who
argued in Supreme Court.

Name of Opinion Raines v. U.S. Healthworks Medical Group
__________________________________________________________

Procedural Posture (see XX below)
Original Appeal
Original Proceeding XX on request by 9th Circuit (Cal. Rules of
Court, rule 8.548)
Review Granted (published)
Review Granted (unpublished)
Rehearing Granted
__________________________________________________________

Opinion No. S273630
Date Filed: August 21, 2023
__________________________________________________________

Court:
County:
Judge:
__________________________________________________________

Counsel:

Phillips, Erlewine, Given & Carlin, R. Scott Erlewine, Brian S. Conlon
and Kyle P. O’Malley for Plaintiffs and Appellants.

Rob Bonta, Attorney General, Matthew Rodriquez, Chief Assistant
Attorney General, Michael L. Newman, Assistant Attorney General,
Srividya Panchalam, Francisco V. Balderrama and Christopher Paul
Kailani Medeiros, Deputy Attorneys General, for the Attorney General
of California as Amicus Curiae on behalf of Plaintiffs and Appellants.

Alexis Alvarez; and Sachin S. Pandya for AIDS Legal Referral Panel,
Bet Tzedek, California Employment Lawyers Association, Civil Rights
Education and Enforcement Center, Disability Rights Advocates,
Disability Rights California, Disability Rights Education and Defense
Fund, Disability Rights Legal Center, Impact Fund and Legal Aid at
Work as Amici Curiae on behalf of Plaintiffs and Appellants.
Reed Smith, Raymond A. Cardozo, Kathryn M. Bayes; Ogletree,
Deakins, Nash, Smoak & Stewart, Tim L. Johnson and Cameron O.
Flynn for Defendants and Respondents.
Counsel who argued in Supreme Court (not intended for
publication with opinion):

R. Scott Erlewine
Phillips, Erlewine, Given & Carlin LLP
39 Mesa Street, Suite 201
San Francisco, CA 94129
(415) 398-0900

Raymond A. Cardozo
Reed Smith LLP
101 Second Street, Suite 1800
San Francisco, CA 94105
(415) 659-5990