Pollock v. Tri-Modal Distribution Servs., Inc.

• Decision Date: 26 July 2021
• Docket Number: S262699
• Citation: 11 Cal.5th 918,491 P.3d 290,281 Cal.Rptr.3d 498
• Parties: Pamela POLLOCK, Plaintiff and Appellant, v. TRI-MODAL DISTRIBUTION SERVICES, INC., et al., Defendants and Respondents.
• Court: California Supreme Court

11 Cal.5th 918

491 P.3d 290

281 Cal.Rptr.3d 498

Pamela POLLOCK, Plaintiff and Appellant,

v.TRI-MODAL DISTRIBUTION SERVICES, INC., et al., Defendants and Respondents.

S262699

Supreme Court of California.

July 26, 2021

Lipeles Law Group, Kevin A. Lipeles, Thomas H. Schelly, El Segundo, and Julian B. Bellenghi, Newport Beach, for Plaintiff and Appellant.

Larson & Gaston, Daniel K. Gaston and Gloria G. Medel, Pasadena, for Defendants and Respondents Scotts Labor Leasing Company, Inc., and Pacific Leasing, Inc.

Lewis Brisbois Bisgaard & Smith, Jack E. Jimenez, Jeffrey B. Ranen, Los Angeles, Lann G. McIntyre and Tracy D. Forbath, San Diego, for Defendant and Respondent Mike Kelso.

Opinion of the Court by Liu, J.

Plaintiff Pamela Pollock is a customer service representative at defendant Tri-Modal Distribution Services, Inc. (Tri-Modal), a corporation that ships freight by truck. She alleges that Tri-Modal passed her over for several promotions in part because she refused to have sex with defendant Michael Kelso, Tri-Modal's executive vice-president. We granted review to address two questions. First, when does the statute of limitations begin to run in a failure to promote case brought under the harassment provision of the Fair Employment and Housing Act (FEHA) ( Gov. Code, §§ 12940, subd. (j), 12960 )? We hold that such a FEHA claim accrues, and thus the statute of limitations begins to run, at the point when an employee knows or reasonably should know of the employer's allegedly unlawful refusal to promote the employee.

Second, does Government Code section 12965, subdivision (b) ’s directive that a prevailing FEHA defendant "shall not be awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so," apply to an award of costs on appeal? The answer is yes. The Court of Appeal in this case erred in awarding costs on appeal to defendants without first finding that Pollock's underlying claim was objectively groundless.

I.

Kelso initiated a dating relationship with Pollock in 2014. He wanted the relationship to become sexual, but Pollock refused and ended the relationship in 2016. In this action, Pollock alleges that Tri-Modal and Kelso denied her a series of promotions even though she was the most qualified candidate, and that her refusal to have sex with Kelso was a substantial factor motivating those adverse employment actions. On April 18, 2018, she filed an administrative complaint with the Department of Fair Employment and Housing (DFEH), alleging quid pro quo sexual harassment in violation of the FEHA.

Although Pollock's administrative complaint challenged the promotion of several individuals, this appeal concerns the promotion that went to Leticia Gonzalez. Gonzalez received and accepted an offer of promotion in March 2017, and the promotion took effect on May 1, 2017. There is no evidence as to whether or when Tri-Modal notified Pollock that she did not receive the promotion that went to Gonzalez. And there is no evidence that Pollock knew or had reason to know that Gonzalez was offered the promotion and accepted it in March 2017.

The March 2017 and May 2017 dates are relevant because when Pollock filed her administrative complaint, Government Code section 12960, former subdivision (d) required litigants seeking relief under the FEHA to file an administrative complaint with the DFEH within one year "from the date upon which the alleged unlawful practice ... occurred." (All undesignated statutory references are to the Government Code.) If the failure to promote "occurred" on May 1, 2017, as Pollock argues, then her April 2018 administrative complaint was timely filed. If the failure to promote "occurred" in March 2017, as Kelso argues, then her April 2018 administrative complaint was filed one month too late.

The trial court concluded that the failure to promote occurred in March 2017, when Gonzalez was offered the promotion and accepted it. Because Pollock did not dispute that Gonzalez received and accepted the promotion offer in March 2017, the court found no triable issue of fact as to Kelso's statute of limitations defense and granted his motion for summary judgment.

The Court of Appeal agreed that Pollock's claim was time-barred. ( Ducksworth v. Tri-Modal Distribution Services (2020) 47 Cal.App.5th 532, 545–547, 261 Cal.Rptr.3d 108 ( Ducksworth ); the named plaintiff, Bonnie Ducksworth, is not a party to this appeal.) It explained that "[t]he statute of limitations for a failure to promote runs from when the employer tells employees they have been given (or denied) a promotion. That date is key, and not the date when the promoted worker actually starts the new work." ( Id. at p. 546, 261 Cal.Rptr.3d 108.) Construing the term "occurred" in section 12960, the Court of Appeal said that "[l]ogically and thus textually, an employer injures the employee by denying a deserved promotion as an instrument of sexual harassment. That moment ‘occurred’ when Tri-Modal allegedly did not promote the deserving Pollock because of sexual harassment. That was in March 2017. So Pollock's injury ‘occurred’ in March 2017, according to the plain meaning of the word ‘occurred.’ [¶] This definition of ‘occurred’ is simple and straightforward and thus desirable and correct." ( Id. at pp. 546–547, 261 Cal.Rptr.3d 108.)

After concluding that the trial court properly granted Kelso's summary judgment motion and the summary judgment motions of two other defendants, the Court of Appeal awarded costs on appeal to all three defendants. ( Ducksworth , supra , 47 Cal.App.5th at p. 547, 261 Cal.Rptr.3d 108.) The court did not find, as a predicate to awarding costs, that Pollock's underlying claim "was frivolous, unreasonable, or groundless when brought" or that she "continued to litigate after it clearly became so." ( § 12965, subd. (b).) Pollock petitioned for rehearing on the award of costs, and the Court of Appeal summarily denied her petition.

We granted review.

II.

We begin with the statute of limitations. A statute of limitations "does not begin to run until the cause of action accrues," and a cause of action accrues at the moment when the party alleging injury is entitled to " ‘ "begin and prosecute an action thereon." ’ " ( Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 487, 59 Cal.Rptr.2d 20, 926 P.2d 1114 ( Romano ).) An employee who wishes to file suit under the FEHA "must exhaust the administrative remedy provided by the statute by filing a complaint with the" DFEH, "and must obtain from the [DFEH] a notice of right to sue." ( Romano , at p. 492, 59 Cal.Rptr.2d 20, 926 P.2d 1114.) "The timely filing of an administrative complaint" before the DFEH "is a prerequisite to the bringing of a civil action for damages." ( Ibid. )

At the time of the alleged misconduct here, the FEHA provided that no administrative complaint alleging a violation of its provisions could be filed with the DFEH "after the expiration of one year from the date upon which the alleged unlawful practice or refusal to cooperate occurred." ( § 12960, former subd. (d).) The current statute uses virtually identical language but allows for a period of three years. ( § 12960, subd. (e).) This requirement is "[t]he statute of limitations for FEHA actions." ( Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798, 811, 111 Cal.Rptr.2d 87, 29 P.3d 175 ( Richards ).) The question is whether Tri-Modal's allegedly unlawful refusal to promote Pollock "occurred" within the then-applicable one-year statute of limitations period. Pollock says Tri-Modal's failure to promote her occurred on May 1, 2017, the effective date of Gonzalez's promotion. Kelso, echoing the Court of Appeal, says the promotion denial occurred in March 2017, when Tri-Modal offered the promotion to Gonzalez and she accepted. We conclude that neither is correct.

A.

At the outset, we note that Pollock's failure to promote claim was pleaded as a quid pro quo sexual harassment claim under section 12940, subdivision (j), not as a discrimination claim under section 12940, subdivision (a). FEHA discrimination claims focus on the conduct of employers. ( § 12940, subd. (a) [it is an unlawful employment practice "[f]or an employer ... to discriminate against [a] person in compensation or in terms, conditions, or privileges of employment" on the basis of a protected characteristic, subject to certain exceptions].) By contrast, FEHA harassment claims focus on the conduct of employers and the conduct of "any other person." ( § 12940, subd. (j).)

Our precedent explains that the primary difference between discrimination claims and harassment claims is that discrimination claims "address[ ] only explicit changes in the ‘terms, conditions, or privileges of employment’ [citation]; that is, changes involving some official action taken by the employer ." ( Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 706, 101 Cal.Rptr.3d 773, 219 P.3d 749 ( Roby ), italics added by Roby .) "In the case of an institutional or corporate employer, the institution or corporation itself must have taken some official action with respect to the employee, such as hiring, firing, failing to promote, adverse job assignment, significant change in compensation or benefits, or official disciplinary action." ( Ibid . ) Harassment claims, on the other hand, "focus[ ] on situations in which the social environment of the workplace becomes intolerable because the harassment ... communicates an offensive message to the harassed employee." ( Ibid . ) Such conduct becomes actionable as quid pro quo harassment when, as alleged in this case, " ‘ "a term of employment is conditioned upon submission to unwelcome sexual advances ...." ’ " ( Hughes v. Pair (2009) 46 Cal.4th 1035, 1043, 95 Cal.Rptr.3d 636, 209 P.3d 963 ( Hughes ); cf. ibid. [harassing conduct also actionable as hostile work environment when so pervasive or severe that it " ‘ "alter[s] the...