The court of appeal examined recent California Supreme Court authority and decided that Myers should be permitted to proceed against Trendwest. Myers' supervisor, Damlahki, engaged in conduct Myers claimed created a hostile work environment. The most serious allegations, however, occurred away from the workplace. Damlahki and plaintiff were on a job assignment and went to Damlahki's house. In the garage, Damlahki groped plaintiff etc. Another incident occurred at a social outing.
Trendwest's main argument was that it could not be liable for harassment that occurred outside the scope of Damlahki's employment. Trendwest argued it did not approve of the job assignment away from work, nor did it sponsor social drinking activities other than its holiday party. The Court of Appeal said that under recent case law,
The trial court erred because, in order for the employer to avoid strict liability for the supervisor’s actions under the FEHA, the harassment must result from a completely private relationship unconnected with the employment. Otherwise, the employer is strictly liable for the supervisor’s actions regardless of whether the supervisor was acting as the employer’s agent.The employee's failure to complain, the company's anti-harassment policy, and the employee's agreement to accompany the supervisor on a weekend to Las Vegas (which did not occur), were all irrelevant. The fact that the incident in the garage occurred as the outcropping of a work-related drive was sufficient to confer liability on Trendwest. This standard is much broader than is applicable under traditional claims asserted against employers for conduct by employees. Employers must educate managers that they do not check their supervisory status at the plant gates and that their conduct away from work involving other employees may give rise to liability.