Jun 30, 2006
In This Issue
In 2003 the California Legislature added specific language to the Fair Employment and Housing Act (“FEHA”) which stated that employers are responsible for the acts of nonemployees that constitute sexual harassment of employees in the workplace if the employer (or its agents or supervisors) knew or should have known of the conduct and failed to take “immediate and appropriate corrective action.” (Cal. Gov. Code Section 12940, subd. (j)(1).) As part of this enactment, the Legislature stated in an uncodified section that “It is the intent of the Legislature in enacting this act to construe and clarify the meaning and effect of existing law and to reject the interpretation given to the law in Salazar v. Diversified Paratransit, Inc. (2003) 103 Cal. App. 4th 131.” In the Salazar case, a bus passenger sexually harassed a female bus driver, but the appellate court ruled that the FEHA did not impose liability on the employer for the third party’s conduct.
The question as to whether this addition to the FEHA would apply prospectively only, or would also apply to cases arising prior to the date of the 2003 enactment, was recently settled in the case of Carter v. California Department of Veterans Affairs. In Carter, Plaintiff Helga Carter worked as a nurse for the California Department of Veterans Affairs (“the VA”). Typical residents of that facility were veterans over 62 years of age or those suffering from a disability that impeded their ability to earn a living independently. Starting in 1996, Carter began providing nursing care for a live-in resident, Elber Scott Brown, who was recovering from surgery. Carter developed a friendly relationship with Brown. Brown, however, began making suggestive remarks to Carter, such as “You’ve really got nice breasts” and “You’ve got a great ass.” Brown’s behavior progressively worsened over a period of time. He told Carter that he wanted to sleep with her. He threatened to tell others that she had slept with him, and Carter, in fact, overheard Brown telling others in the clinic that he had had sexual encounters with Carter at a nearby Motel 6. Despite Carter’s repeated requests to Brown to stop his behavior, and her complaints to her supervisor about the behavior, Brown continued the harassment. While Carter’s supervisor instructed Carter to avoid Brown and provided counseling to Brown, Brown was not evicted from the facility. After Brown tried to ram Carter with his electric scooter, Carter went on an administrative stress leave. She subsequently filed a lawsuit against the VA for sexual harassment.
While the trial court entered judgment in favor of Carter, the Court of Appeal reversed, concluding that the FEHA did not, at the time the case was heard, impose liability on an employer when its customers or clients sexually harassed its employees. The Court of Appeal declined to apply the 2003 amendment retroactively, as it believed it would be a violation of due process to do so.
The California Supreme Court was required to determine if the 2003 amendment to the FEHA merely clarified existing law, which would allow application to pre-2003 matters, or actually changed existing law, thereby making it unfair to apply it retroactively to employers. The California Supreme Court noted that the Legislature’s assertion that the amendment clarified existing law, and therefore should be given immediate effect to cases preceding its enactment, would be considered but was not determinative. Rather, the Supreme Court examined the provisions of the FEHA that preceded the 2003 enactment. In an earlier uncoded portion of the FEHA, the Legislature had declared the intent to establish procedures to address harassment allegations by not only agents, supervisors and nonsupervisors but also by “clientele.” Section 12940, subd. (j)(1) also prohibits an employer or “any other person” from harassing an employee. The Supreme Court ultimately concluded that the 2003 amendment merely clarified existing law. Accordingly, it ruled that claims of third-party harassment that arose prior to 2003 could be pursued by employees. Because the Supreme Court concluded that the meaning of the FEHA on this point had not changed over the years, no issue of retroactivity or due process was raised. The Supreme Court, accordingly, reversed the Court of Appeal decision and sent the matter back to the Court of Appeal for further proceedings.
This case serves as a reminder to employers that potential liability from claims of harassment may emanate not only from current or former employees, but also from clients, vendors, and other third parties that regularly come into contact with company employees. While such situations may pose especially difficult issues regarding the negative impact on economic relationships, the same prompt and effective employer response must be vigorously pursued. In determining an employer’s liability in such circumstances, the courts will consider the “extent of the employer’s control and any other legal responsibility which the employer may have with respect to the conduct of those nonemployees.” Cal. Gov. Code Section 12940, subd.(j)(1).
Sandra R. King Ms. King’s practice focuses on all aspects of employment law and related litigation. She represents companies in state and federal proceedings regarding discrimination, harassment, wrongful discharge and related tort claims, privacy, workplace violence, wage and hour, unfair competition, medical and disability leave, health and safety matters and contract claims. Ms. King represents companies in a variety of industries including financial services, healthcare, transportation, insurance, manufacturing and the service industry.
Esra A. HudsonPartner
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