California Fair Employment and Housing Council Regulations Effective April 1, 2016 Require Employers to Change EEO Policies Now

The California Fair Employment and Housing Council is issuing revised regulations regarding discrimination, harassment and the like under the Fair Employment and Housing Act.  Shaw Valenza will be publishing a more detailed article in the next couple of weeks, which I'll post here.

The full text of the revised regulations, with redline and strikeout to show the changes is here. 

Some of the changes will not affect how employers do business, but will affect liability in litigation if courts adopt the Council's view.  But there are several new provisions that employers will have to deal with by amending policies and procedures.

The most urgent issue for employers to deal with - right now - is the Council's new, specific requirements for anti-harassment, discrimination and retaliation policies:   Employers already have a duty to distribute a DFEH brochure or alternative document that complies with Govt Code section 12950. But now, the Council requires much more. This is from section 11023(b) of the new regulations:

In addition to distributing the Department’s DFEH-185 brochure on sexual harassment, or an alternative writing that complies with Government Code section 12950, an employer shall develop a harassment, discrimination, and retaliation prevention policy that: 

(1) Is in writing; 

(2) Lists all current protected categories covered under the Act; 

(3) Indicates that the law prohibits coworkers and third parties, as well as supervisors and
managers, with whom the employee comes into contact from engaging in conduct prohibited by the Act; 

(4) Creates a complaint process to ensure that complaints receive:

(A) An employer’s designation of confidentiality, to the extent possible;(B) A timely response; (C) Impartial and timely investigations by qualified personnel; (D) Documentation and tracking for reasonable progress; (E) Appropriate options for remedial actions and resolutions; and (F) Timely closures.

(5) Provides a complaint mechanism that does not require an employee to complain directly to his or her immediate supervisor, including, but not limited to, the following:

(A) Direct communication, either orally or in writing, with a designated company representative, such as a human resources manager, EEO officer, or other supervisor; and/or

(B) A complaint hotline; and/or

(C) Access to an ombudsperson; and/or

(D) Identification of the Department and the U.S. Equal Employment Opportunity Commission (EEOC) as additional avenues for employees to lodge complaints.

(6) Instructs supervisors to report any complaints of misconduct to a designated company representative, such as a human resources manager, so the company can try to resolve the claim internally. Employers with 50 or more employees are required to include this as a topic in mandated sexual harassment prevention training, pursuant to section 11024 of these regulations.  

(7) Indicates that when an employer receives allegations of misconduct, it will conduct a fair, timely, and thorough investigation that provides all parties appropriate due process and reaches reasonable conclusions based on the evidence collected.

(8) States that confidentiality will be kept by the employer to the extent possible, but not indicate that the investigation will be completely confidential 

(9) Indicates that if at the end of the investigation misconduct is found, appropriate remedial measures shall be taken. 

(10) Makes clear that employees shall not be exposed to retaliation as a result of lodging a complaint or participating in any workplace investigation.

These are all good ideas for employers to follow. But these now must be included in a written policy disseminated to all employees.  

The new regulations also explain how the policy must be disseminated:

Dissemination of the policy shall include one or more of the following methods:

(1) Printing and providing a copy to all employees with an acknowledgment form for the employee to sign and return;

(2) Sending the policy via e-mail with an acknowledgment return form;

(3) Posting current versions of the policies on a company intranet with a tracking system
ensuring all employees have read and acknowledged receipt of the policies;

 (4) Discussing policies upon hire and/or during a new hire orientation session; and/or (5) Any other way that ensures employees receive and understand the policies.

(d) Any employer whose workforce at any facility or establishment contains 10 percent or more of persons who speak a language other than English as their spoken language shall translate the policy into every language that is spoken by at least 10 percent of the workforce.

So, multi-state employers, no more "or any other characteristic protected by state law" in your policies. Please review EEO policies and revise them ASAP.  

It is also critical to ensure there are systems in place for addressing complaints should they arise that are consistent with the policy - such as translation if needed, dissemination of the policy and record keeping, investigations, complaint procedures, etc.

Court of Appeal Addresses Motivation in Retaliation Cases and the Role of Investigations

Mendoza was a long-term nurse for Western Medical Center - Santa Ana.  His performance had been excellent.  Mendoza claimed his new boss was harassing him.  Erdmann, the boss, claimed that Mendoza was sexually inappropriate to him.  The employer investigated and determined that both employees engaged in misconduct.  The employer fired both of them.

Mendoza sued for wrongful termination, claiming the hospital employer fired him for complaining about Erdmann's conduct.  He reasoned that the hospital would not have learned about any complaints about Mendoza had he not complained about Erdmann. An expert testified the hospital's investigation was not as thorough as it could have been, although the expert conceded he did not know of any facts that a "better" investigation would have uncovered.

A jury found in favor of Mendoza and awarded about $238,000 in economic and non-economic damages.  But the jury was instructed that it could find retaliation if an unlawful motive was "a" motivating reason. The Court of Appeal reversed and ordered a new trial:

It is therefore clear that the court erred in its instruction of the jury. The court should have instructed the jury to determine whether Mendoza’s report of sexual harassment was a substantial motivating reason for Mendoza’s discharge. Following Harris and Alamo, we conclude this error was prejudicial. The jury’s verdict in favor of Mendoza was extremely close (a nine to three vote). No other instructions provided to the jury could have cured the erroneous instruction with regard to the contested element. Viewing the evidence “in the light most favorable” to defendants (Huffman v. Interstate Brands Corp. (2004) 121 Cal.App.4th 679, 692), there is a reasonable probability that the
instructional error prejudicially affected the verdict.

The hospital claimed there was insufficient evidence of retaliation to support any verdict and asked the appellate court to direct a judgment in its favor.  The court of appeal ordered a retrial.  Bolstered by case law and law review articles, the court offered its thoughts (not evidence, but a basis for a plaintiff's argument) on why the jury might have found a retaliatory motive, which is the interesting part of this opinion for employers and HR professionals:

Retaliation, if it occurred, was not motivated out of a desire to protect Erdmann or punish Mendoza for harming Erdmann as such. But the protection of a specific supervisor is not the only logical reason an employer would retaliate against an employee reporting sexual harassment.. . .  . Perhaps defendants were substantially motivated by a desire to rid themselves of an individual who had become problematic by reason of his reporting sexual harassment, without regard to the accuracy of his accusations. . . . There is sufficient evidence in the record for the jury to conclude that a substantial motivating reason for Mendoza’s firing was his report of sexual harassment. Defendants terminated an excellent, long term employee soon after he reported sexual harassment by a recent hire, Erdmann. . . . Accepting Mendoza’s testimony as true (as we must for this purpose), Mendoza was not complicit in sexual misconduct at the hospital. Instead, Erdmann harassed Mendoza while Erdmann was acting as Mendoza’s supervisor at the hospital. After being confronted by defendants, Erdmann confirmed part of Mendoza’s story (i.e., that improper activity occurred) but accused Mendoza of being the instigator
and willing participant. With nothing to go on besides their respective statements, defendants claim they chose to believe Erdmann’s characterization of the incidents rather than Mendoza’s complaint.

So far, so good. But then, perhaps without taking into consideration the standard of employment at will (as it is not mentioned in the opinion), the Court seemed to impose a very high standard on at-will employers who discharge at-will employees.   

Importantly, in combination with the foregoing facts, Mendoza’s expert witness testified that there were numerous shortcomings in the investigation conducted by defendants following Mendoza’s complaint. (See Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 278-283 [inadequate investigation is evidence of pretext].) The lack of a rigorous investigation by defendants is evidence suggesting that defendants did not value the discovery of the truth so much as a way to clean up the mess that was uncovered when Mendoza made his complaint. Defendants point to the expert’s
concession that additional facts would not necessarily have been discovered had the alleged flaws in the investigation been addressed. But the question for the jury was defendants’ subjective motivation in deciding to fire Mendoza, not whether defendants actually had all available material before them. Moreover, a more thorough investigation might have disclosed additional character and credibility evidence for defendants to consider before making their decision.

The Court then dropped a footnote to drive the point home re the importance of investigations in "he said-he said (or he said/she said) cases:

At oral argument, defense counsel asked (perhaps rhetorically) just what employers were expected to do when faced with a scenario in which two employees provide conflicting accounts of inappropriate conduct. Our answer is simple: employers should conduct a thorough investigation and make a good faith decision based on the results of the investigation. Here, the jury found this did not occur. Hopefully, this opinion will disabuse employers of the notion that liability (or a jury trial) can be avoided by simply firing every employee involved in the dispute.

To be sure, a thorough, competent investigation is a good preventive measure that can result in better decisions.  However, there is no legal duty to investigate before firing an employee at will. The sole issue here was whether the employer fired Mendoza for a lawful reason or not.  As the courts always say, the employer need not be "wise or correct" in making its decision.  And they also say: The court does not sit as a "super-personnel department" either. 

Perhaps if the employer seeks rehearing in this case (hint hint) , it will argue that the investigation duty the Court imposed applies only in the case of employment "for cause."  The proper standard for at-will employees is as follows:

"Where the employment contract itself allows the employer to terminate at will, its motive and lack of care in doing so are, in most cases at least, irrelevant." (Guz, supra, 24 Cal.4th 317, 351; cf. Cruey v. Gannett Co. (1998) 64 Cal.App.4th 356, 365 [76 Cal.Rptr.2d 670].) Since an employer does not require good cause to terminate an at-will employee, in the normal course of events an employer need not either articulate or substantiate its reasons, except to provide an advance refutation for any inference that the true reason was illegal. Unless at-will employers are to be held to a good-cause standard for termination, no inference of discrimination can reasonably be drawn from the mere lack of conclusive evidence of misconduct by the employee.
* * *
As to the investigation being flawed and biased, Employee complains that he was not informed of the charges against him by Employer or Mistry. But he cites no provision of his employment contract or employment law in general entitling an at-will employee to advance notice and a hearing before termination. His employment contract provided that he could be terminated without notice.

McGrory v. Applied Signal Technology, Inc., 212 Cal. App. 4th 1510 (2012).  (emphasis added)

This case is Mendoza v. Western Medical Center, Santa Ana, and the opinion is here.

Court of Appeal: Discharge of Executive Uncooperative in Investigation

is perfectly legal.

Applied Signal fired John McGrory.  One of his reports, Dana Thomas, complained to human resources that McGrory harassed / discriminated against her because of her sex / sexual orientation.  Applied hired an outside investigator.   McGrory did not like the investigator, but she exonerated him of mistreating Thomas.  She did find, though, that McGrory was untruthful and uncooperative during the investigation.  She also found that McGrory violated the company's anti-harassment policy because he made off-color jokes related to sex and national origin.

Applied fired McGrory, not for discrimination or harassment against Thomas, but for his lack of cooperation and deception during the investigation.  He sued Applied Signal, claiming not only wrongful termination, bur also sex discrimination and defamation.  He believed he was disfavored because of his male sex, that even at-will employees are entitled to notice of an investigation, and more.

McGrory argued Allied could not fire him for participating in the investigation, “'The public policy of California is to shield anyone participating in an investigation of discrimination from the possibility of retaliation,' presumably even if the participant is uncooperative and untruthful."

Wrong.  I have come across people who refused to participate in investigations without their lawyer, or simply were uncooperative.  I have heard some people question whether it is OK to fire someone for refusing to cooperate in an investigation.  (They don't read the blog, but maybe they should. Just sayin').

Anyway, the court of appeal has laid that issue to rest:

refusing to participate in or cooperate with an investigation into a discrimination claim is not participation or assistance and is not a protected activity. (Alack v. Beau Rivage Resorts, Inc. (S.D. Miss. 2003) 286 F.Supp.2d 771, 775; Bray v. Tenax Corp. (E.D. N.C. 1995) 905 F.Supp. 324, 328.)

Here's another news flash to those employees who lie during an investigation. They have no protection, either:

The participation immunity does not prohibit an employer from imposing discipline for an employee‟s misbehavior during an internal investigation, such as attempting to deceive the investigator. (Cf. Vasconcelos v. Meese, supra, 907 F.2d 111, 113.) “Lying in an internal investigation is disruptive of workplace discipline.” (Hatmaker, supra, 619 F.3d 741, 746.) “[W]hether to fire an employee for lying to the employer in the course of the business‟s conduct of an important internal investigation is basically a business decision; this decision, as with most business decisions, is not for the courts to second-guess as a kind of super-personnel department.” (Total System Services, supra, 221 F.3d 1171, 1176.)

McGrory also argued that the employer could not lawfully rely on fear of litigation with the accuser as a basis for firing him.  Really?  The Court of Appeal held that fear of liability also is a legitimate, non-discriminatory reason for firing an accused harasser:

Employee also argues that his “relatively innocent behavior” could not justify “a sexual harassment claim.” Employee provides no authority requiring an Employer to retain an at-will employee until his conduct creates civil liability. 

The court also held that the VP of HR's explanation to another employee that McGrory was fired for being uncooperative was privileged and made without malice. No slander for you.

This is a significant case about the meaning of employment at will and the employer's freedom to discipline and discharge those who violate policies.

The opinion is McGrory v. Applied Signal Tech. and the opinion is here.

Court of Appeal Upholds SLAPP Against Accused Harasser's Counterclaim

Aber sued Comstock for sexual harassment among other things.  This did not sit well with Comstock, who sued Aber back, claiming defamation among other things.

Aber then filed a motion to strike Comstock's cross-claim. She claimed his lawsuit was a "SLAPP" or a retaliatory action against Aber.  The trial court agreed and the Court of Appeal affirmed.

If someone sues you and you return the favor, your lawsuit may be subject to a motion to strike as a "SLAPP" (strategic lawsuit against public participation).  To overcome the anti-SLAPP motion, you have to prove that you have a good chance of winning your case.   Comstock apparently did not do that, which is why his suit was dismissed.  If you file a lawsuit that is dismissed as a SLAPP, you owe the other side attorney's fees.   So, be careful before filing cross claims. It's probably wise to win your case first and then sue for malicious prosecution.

Anyway, what makes this case even more interesting is that  the Court of Appeal held that the harassment victim's pre-litigation statements made to company HR investigators were covered by the anti-SLAPP statute as protected conduct.  That means, for example, that if an employee participates in a sexual harassment investigation and reports misconduct against another employee, any defamation lawsuit will be examined as a potential SLAPP.  Even witnesses who report to HR likely will be protected from retaliatory defamation lawsuits brought by the accused harasser.  While that is good news for witnesses and victims of discrimination or harassment, it is bad news for those who are wrongly accused of harassment, who will have a tougher time protecting themselves from career-ending accusations.

This case is Aber v. Comstock and the opinion is here.

Court of Appeal Protects Investigator During Litigation

Bessie Gallanis-Politis sued her employer, LA County, for discrimination. During the litigation, a couple of supervisors investigated certain issues, purportedly to help prepare the discovery responses. They also took a number of other, incidental, actions, including requiring Gallanis-Politis to change her attendance records to "unapproved absence" when she attended depositions. She amended her complaint, suing the individual supervisors for retaliation. The Court of Appeal held that the supervisors' conduct arose from the litigation and were protected by California's anti-SLAPP law. In other words, the court said that Gallanis-Politis retaliated against the supervisors in violation of the statute. This case protects employees from employee-plaintiffs who attempt to sue managers involved in the defense of the case, and employee-plaintiffs who attempt to shield themselves from neutral policies during litigation. The case is Gallanis-Politis v. Medina, and the opinion is here.