California Supreme Court: No Individual Liability for Retaliation Under FEHA

Years ago, lower courts held that individual managers may be held liable for "retaliation," i.e, taking negative action against an employee for his or her engaging in protected activity. At the same time, the courts decided individual managers could not be held liable for "discrimination," i.e., taking adverse action based on an employee's membership in protected groups. Back in 1998, the California Supreme Court ruled in Reno v. Baird that supervisors could not be held liable for discriminatory decisions amounting to "personnel actions."

The difference in the courts' treatment of these two types of actions apparently was based on differences in language between the statute barring "discrimination" and the section prohibiting "retaliation." However, a primary policy underlying Reno - permitting managers to manage without fear of personal liability - was inconsistent with holding managers personally liable for retaliation. That is, a manager's "retaliatory" decision is based on an unlawful motivation, just as a "discriminatory" decision.

The California Supreme Court finally reviewed the issue of individual liability for managers based on allegations of retaliation in violation of FEHA. In Jones v. Lodge at Torrey Pines, the Court decided that Reno's rationale controlled the question and that individuals could not be held personally liable. The opinion is here.

The Legislature has never overturned Reno. When the Supreme Court held in Carrisales v. Dept. of Corrections that individual non-supervisors could not be held personally liable for harassment, the Legislature moved quickly and specifically passed a law imposing such liability.

Perhaps the Legislature will seek to do so again. However, as the Court pointed out, a manager facing personal liability for normal personnel actions (demotion, termination, failure to promote, compensation, discipline, etc.) will face a conflict of interest every time he or she faces the issue of whether to take adverse action against an employee. With harassment, on the other hand, a manager may avoid liability simply by refraining from engaging in conduct that may amount to "harassment." Hopefully, the Legislature will consider that issue carefully before seeking to overturn Reno or Jones.