California Appellate Court Disallows Faragher/Ellerth Affirmative Defense

In Burlington Industries v. Ellerth, 524 U.S. 742 (1998) and Faragher v. City of Boca Raton, 524 U.S. 775 (1998) the United States Supreme Court outlined an affirmative defense available to an employer sued for sexual harassment under Title VII of the Civil Rights Act of 1964. See Supreme Court Clarifies Standards for Employer Liability for Sexual Harassment by Supervisors. Specifically, if no tangible employment action is taken against the employee, the employer may defend against a harassment claim by demonstrating that (1) the employer exercised reasonable care to prevent and promptly correct harassing behavior, and (2) the plaintiff employee unreasonably failed to take advantage of the corrective or preventive opportunities provided by the employer. Employers have used the Faragher/Ellerth defense with great effect, particularly where an employee has failed to report offensive conduct through a company’s internal complaint procedures. See Application of the Ellerth/Faragher Affirmative Defense in Harassment Cases in the Second and Ninth Circuits.

Until recently, it was widely assumed that the Faragher/Ellerth defense was equally available to employers sued under California’s primary anti-discrimination statute, the Fair Employment and Housing Act (“FEHA”). Indeed, in April of 2001, the U.S. Court of Appeals for the Ninth Circuit conducted a lengthy analysis of the issue and concluded that “there is no reason for us to believe that the California Supreme Court would deviate in this instance from its usual practice of construing FEHA in conformity with Title VII.” Kohler v. Inter-Tel Technologies, 244 F.3d 1167, 1176 (9th Cir. 2001). See Ninth Circuit Applies Title VII Harassment Defense To Claims Under California Law.

However, in Department of Health Services v. Superior Court, 2001 Cal. App. LEXIS 2675 (Cal. Ct. App. Nov. 29, 2001), the California Court of Appeal squarely considered the applicability of the Faragher/Ellerth defense to the FEHA, and disagreed with the Ninth Circuit.

The plaintiff in Health Services alleged that she was sexually harassed by her supervisor over an extended period of time beginning in mid-1995. The inappropriate conduct, according to the plaintiff, ranged from suggestive comments to offensive physical touching. Although the plaintiff confided in a coworker regarding these incidents, she did not report her supervisor’s behavior to management until November 1997. After the complaint was made, the employer, the Department of Health Services (“DHS”), investigated the claim and “retired” the harassing supervisor.

The plaintiff then filed a complaint against the supervisor and DHS that alleged causes of action for sexual harassment and sex discrimination. DHS moved for summary judgment arguing in part that the Faragher/Ellerth defense applied.

Specifically, DHS had developed and circulated an employee manual describing its policy against sexual harassment and its complaint procedure. DHS had also provided sexual harassment training programs for its employees. DHS argued that (1) since no adverse action had been taken against the plaintiff, (2) it had developed a comprehensive policy and program to prevent and combat sexual harassment, and (3) the plaintiff had not availed herself of those measures in a timely manner, DHS should not be held vicariously liable for its supervisor’s harassing conduct. The plaintiff responded that the Faragher/Ellerth defense available in Title VII cases should not be judicially grafted onto cases brought under FEHA.

Agreeing with the plaintiff, the trial court refused to apply the defense and consequently denied DHS’s motion for summary judgment. DHS filed an immediate appeal seeking a declaration that the Faragher/Ellerth defense in fact applies to FEHA cases. However, the Court of Appeal disagreed. The Court ruled that whether or not an employer knows about harassment is relevant only when the alleged harassment occurs between co-workers. But, said the Court, employers are strictly liable for the harassing conduct of supervisors, even though the employer did not know, and did not have reason to know, of the conduct. Hence, because an employer’s knowledge simply is not at issue in a supervisor harassment case under the FEHA, the Faragher/Ellerth defense (which focuses on whether or not an employee took advantage of the employer’s internal harassment policy by reporting the alleged harassment) is not available.

Also, it should be noted that the Health Services Court did not specifically hold that the Faragher/Ellerth defense is available in harassment arising between co-workers. That issue was not presented for decision, since the case involved alleged harassment by a supervisor.

The California Supreme Court granted review of this case on February 13, 2002. Pending a definitive ruling from the high court, California employers should be aware that the FEHA and Title VII may differ in their treatment of supervisory harassment. New York employers should also note that New York courts have not yet had occasion to decide whether the Faragher/Ellerth standard is applicable to cases brought under applies the state’s discrimination statute, the Human Rights Law. However, under existing New York law, an employer can be held liable for discrimination or harassment by an employee or supervisor only if the plaintiff proves that the employer “encouraged, condoned or approved” the conduct; and even then, the employer may avoid liability by showing that it conducted a reasonable investigation and took corrective action. Therefore, if an employer can establish its Faragher/Ellerth defense under Title VII, it almost always will have a valid defense to a claim under the Human Rights Law as well.