DEPT. OF HEALTH SERVICES v. Superior Court, No. S103487

• Court: United States State Supreme Court (California)
• Writing for the Court: KENNARD, J.
• Citation: 31 Cal.4th 1026,79 P.3d 556,6 Cal.Rptr.3d 441
• Parties: STATE DEPARTMENT OF HEALTH SERVICES, Petitioner, v. The SUPERIOR COURT of Sacramento County, Respondent; Theresa V. McGinnis, Real Party in Interest.
• Docket Number: No. S103487
• Decision Date: 24 November 2003

6 Cal.Rptr.3d 441
79 P.3d 556
31 Cal.4th 1026

STATE DEPARTMENT OF HEALTH SERVICES, Petitioner,
v.
The SUPERIOR COURT of Sacramento County, Respondent;
Theresa V. McGinnis, Real Party in Interest

No. S103487

Supreme Court of California

November 24, 2003

6 Cal.Rptr.3d 443

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, San Rafael, and Deborah G. Leon, Mountain View, 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., Los Angeles, and Katherine C. Huibonhoa, San Francisco, for Los Angeles Unified School District as Amicus Curiae on behalf of Petitioner.

Morgan, Lewis & Bockius, Thomas M. Peterson, Los Angeles, Rebecca D. Eisen, San Francisco; 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, San Francisco, 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, Universal City, Linda Miller Savitt and Christine T. Hoeffner as Amici Curiae on behalf of Petitioner.

No appearance for Respondent.

6 Cal.Rptr.3d 444

Marvin E. Krakow, Los Angeles; Christopher H. Whelan; Quackenbush & Quackenbush and William C. Quackenbush, San Diego, for Real Party in Interest

Patricia A. Shiu, San Francisco, 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, Los Angeles, for California Employment Lawyers Association as Amicus Curiae on behalf of Real Party in Interest.

6 Cal.Rptr.3d 442

KENNARD, J

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.

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, 99 Cal.Rptr.2d 316, 5 P.3d 874.) "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, 99 Cal.Rptr.2d 316, 5 P.3d 874.) 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. 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,

6 Cal.Rptr.3d 445

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 Supreme Court's decisions in Burlington Industries, Inc. v. Ellerth (1998) 524 U.S. 742, 765, 118 S.Ct. 2257, 141 L.Ed.2d 633 (Ellerth) and Faragher v. City of Boca Raton (1998) 524 U.S. 775, 807, 118 S.Ct. 2275, 141 L.Ed.2d 662 (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, 118 S.Ct. 2257; Faragher, supra, at p. 807, 118 S.Ct. 2275.)

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

6 Cal.Rptr.3d 446

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 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, 106 S.Ct. 2399, 91 L.Ed.2d 49 (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...