Yanowitz v. L'Oreal Usa, Inc.

• Decision Date: 11 August 2005
• Docket Number: No. S115154.,S115154.
• Citation: 36 Cal.4th 1028,32 Cal.Rptr.3d 436,116 P.3d 1123
• Court: California Supreme Court
• Parties: Elysa J. YANOWITZ, Plaintiff and Appellant, v. L'OREAL USA, INC., Defendant and Respondent.

32 Cal.Rptr.3d 436

36 Cal.4th 1028

116 P.3d 1123

Elysa J. YANOWITZ, Plaintiff and Appellant, v. L'OREAL USA, INC., Defendant and Respondent.

No. S115154.

Supreme Court of California

August 11, 2005.

Herbert W. Yanowitz, San Francisco, and Joseph R. Grodin, Berkeley, for Plaintiff and Appellant.

William R. Tamayo, San Francisco, Eric S. Dreiband, Lorraine C. Davis, Vincent Blackwood, Washington, DC, and Elizabeth E. Theran for U.S. Equal Employment Opportunity Commission as Amicus Curiae on behalf of Plaintiff and Appellant.

Law Offices of Jeffrey K. Winikow and Jeffrey K. Winikow, Los Angeles, for California Employment Lawyers Association as Amicus Curiae on behalf of Plaintiff and Appellant.

Charlotte E. Fishman, San Francisco, for Equal Rights Advocates, Asian Law Caucus, California Women's Law Center, Disability Rights Education and Defense Fund, Inc., The Impact Fund, The Legal

Aid Society-Employment Law Center, Mexican American Legal Defense and Education Fund, The National Women's Law Center and Women's Employment Rights Clinic as Amici Curiae on behalf of Plaintiff and Appellant.

Morgenstein & Jubelirer, William J. Carroll and David H. Bromfield, San Francisco, for Defendant and Respondent.

Mitchell Silberberg & Knupp, Lawrence A. Michaels and Suzanne M. Steinke, Los Angeles, for California Employment Law Council as Amicus Curiae on behalf of Defendant and Respondent.

Ballard, Rosenberg, Golper & Savitt, Linda Miller Savitt, John J. Manier and Christine T. Hoeffner, Universal City, as Amici Curiae on behalf of Defendant and Respondent.

Pillsbury Winthrop, George S. Howard, Jr., and Brian L. Johnson, San Diego, for Employers Group as Amicus Curiae on behalf of Defendant and Respondent.

GEORGE, C.J.

Plaintiff Elysa J. Yanowitz was a regional sales manager employed by defendant L'Oreal USA, Inc. (L'Oreal), a prominent cosmetics and fragrance company. Yanowitz alleges that after she refused to carry out an order from a male supervisor to terminate the employment of a female sales associate who, in the supervisor's view, was not sufficiently sexually attractive or "hot," she was subjected to heightened scrutiny and increasingly hostile adverse treatment that undermined her relationship with the employees she supervised and caused severe emotional distress that led her to leave her position. In bringing this action against L'Oreal, Yanowitz contended, among other matters, that L'Oreal's actions toward her constituted unlawful retaliation in violation of the provisions of Government Code section 12940, subdivision (h) (section 12940(h)), which forbids employers from retaliating against employees who have acted to protect the rights afforded by the California Fair Employment and Housing Act (FEHA) (Gov.Code, § 12900 et. seq).¹

Section 12940(h) makes it an unlawful employment practice for an employer "to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part or because the person has filed a complaint, testified, or assisted in any proceeding under this part." In this case, we are presented with an array of issues regarding the proper legal standards to apply in determining whether an allegedly retaliatory action by an employer is actionable under section 12940(h). First, we must decide whether an employee's refusal to follow a supervisor's order (to discharge a subordinate) that the employee reasonably believes to be discriminatory constitutes "protected activity" under the FEHA for which the employee may not properly be subjected to retaliation, when the employee objects to the supervisor's order but does not explicitly tell the supervisor or the employer that she (the employee) believes the order violates the FEHA or is otherwise discriminatory. Second, we must decide how the term "adverse employment action" — a term of art that generally is used as a shorthand description of the kind of adverse treatment imposed upon an employee that will support a cause of action under an employment discrimination statute — should be defined for purposes of a retaliation claim under the FEHA, and whether, in evaluating whether or not an employee was subjected to an adverse employment action under the appropriate standard, each individual sanction or punitive measure to which the employee was subjected must be evaluated separately or instead collectively through consideration of the totality of the circumstances. On a related point, we must decide whether a plaintiff may invoke the continuing violations doctrine to rely upon allegedly retaliatory acts that occurred outside the limitations period when such acts are related to acts that occur within the limitations period prescribed by the FEHA. Finally, in light of our conclusions on the foregoing issues, we must determine whether, under the circumstances disclosed by the record in this case, the Court of Appeal properly concluded that the trial court erred in granting summary judgment in favor of the employer.

For the reasons set forth below, we conclude that an employee's refusal to follow a supervisor's order that she reasonably believes to be discriminatory constitutes protected activity under the FEHA and that an employer may not retaliate against an employee on the basis of such conduct when the employer, in light of all the circumstances, knows that the employee believes the order to be discriminatory, even when the employee does not explicitly state to her supervisor or employer that she believes the order to be discriminatory. Second, we conclude that the proper standard for defining an adverse employment action is the "materiality" test, a standard that requires an employer's adverse action to materially affect the terms and conditions of employment (see Akers v. County of San Diego (2002) 95 Cal.App.4th 1441, 1454-1457, 116 Cal.Rptr.2d 602), rather than the arguably broader "deterrence" test adopted by the Court of Appeal in the present case. We further conclude that in determining whether an employee has been subjected to treatment that materially affects the terms and conditions of employment, it is appropriate to consider the totality of the circumstances and to apply the "continuing violation" doctrine that we recently adopted in Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798, 111 Cal.Rptr.2d 87, 29 P.3d 175 (Richards). Finally, applying these general principles to the record that was before the trial court on the summary judgment motion, we conclude the Court of Appeal properly determined that the trial court erred in granting summary judgment in favor of the employer.

Accordingly, we shall affirm the judgment of the Court of Appeal, which reversed the summary judgment entered in favor of defendant.

I.

A

Because this case comes before us after the trial court granted a motion for summary judgment, we take the facts from the record that was before the trial court when it ruled on that motion. (State Department of Health Services v. Superior Court (2003) 31 Cal.4th 1026, 1034-35, 6 Cal.Rptr.3d 441, 79 P.3d 556.) "We review the trial court's decision de novo, considering all the evidence set forth in the moving and opposing papers except that to which objections were made and sustained." (Id. at p. 1035, 6 Cal.Rptr.3d 441, 79 P.3d 556.) We liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142, 12 Cal.Rptr.3d 615, 88 P.3d 517.)

Yanowitz began her employment with the predecessor of L'Oreal as a sales representative in 1981² and was promoted to regional sales manager for Northern California and the Pacific Northwest in 1986. As regional sales manager, Yanowitz was responsible for managing L'Oreal's sales team and dealing with the department and specialty stores that sold L'Oreal's fragrances. From 1986 to 1996, Yanowitz's performance as a regional sales manager consistently was judged as "Above Expectation" and in some instances fell close to "Outstanding," the highest possible rating, although her reviews over this period also consistently contained some criticism of her "listening" and "communication" skills.

In early 1997, Yanowitz was named L'Oreal's regional sales manager of the year (for 1996). She received a Cartier watch and a congratulatory note from human resources manager Jane Sears praising her leadership, loyalty, motivation, and ability to inspire team spirit. Yanowitz's bonuses for the years 1996 and 1997 were the highest paid to any regional sales manager in her division.

Beginning in 1996, Yanowitz's immediate supervisor was Richard Roderick, the vice-president of sales for the designer fragrance division. Roderick reported directly to Jack Wiswall, the general manager of the designer fragrance division. Roderick and Wiswall worked out of New York, and Yanowitz was based in San Francisco.

In June 1997, Roderick wrote a memorandum to Yanowitz's personnel file in which he criticized Yanowitz's listening skills and characterized her attitude as "negative." He also noted that he had received complaints about Yanowitz's attitude from several retailers. In August 1997, Roderick wrote a memorandum to Sears, L'Oreal's human resources manager, in which he again criticized Yanowitz for her listening skills and her "negative" attitude, noting that several accounts also had complained about Yanowitz's attitude. Roderick stated in this memorandum that "Elysa does a terrific job as a regional manager, however, she must become a better listener and she must not put a gun to the heads of the retailers in order to get them to do what needs to be done."

In the fall of 1997, L'Oreal restructured the designer fragrance division, merging the division with the Ralph Lauren fragrance division. Although some regional sales managers were laid off after the restructuring, L'Oreal retained Yanowitz...