BILL ANALYSIS
AB 1856
Page 1
Date of Hearing: April 11, 2000
ASSEMBLY COMMITTEE ON JUDICIARY
Sheila James Kuehl, Chair
AB 1856 (Kuehl) - As Amended: April 4, 2000
SUBJECT : WORKPLACE HARASSMENT; EMPLOYEE LIABILITY
KEY ISSUE : SHOULD NON-SUPERVISORY EMPLOYEES WHO UNLAWFULLY
HARASS THEIR COWORKERS BE HELD PERSONALLY LIABLE FOR THEIR
MISCONDUCT, ALONG WITH ANY LIABILITY IMPOSED ON THEIR EMPLOYERS,
AS HAD BEEN THE LAW PRIOR TO A RECENT COURT CASE?
SUMMARY : Clarifies that all employees (whether supervisors or
non-supervisors) can be held personally liable under the Fair
Housing and Employment Act (FEHA) for unlawful harassment
perpetrated by the employee. A recent California Supreme Court
decision said this is not the case.
EXISTING LAW :
1)Makes it an unlawful employment practice for an employer or
other covered entity to harass an employee or other covered
individual because of race, religious creed, color, national
origin, ancestry, physical disability, mental disability,
medical condition, marital status, sex, age or sexual
orientation. (Government Code Section 12940(h)(1). All
further statutory references are to this code.)
2)Provides that harassment of an employee or other covered
individual by an employee other than an agent or supervisor is
unlawful if the employer knew or should have known of the
conduct and failed to take immediate and appropriate
corrective action. (Section 12940(h)(1).)
3)Makes employers and supervisors statutorily liable under FEHA
to the harassed party for damages from unlawful harassment.
( Page v. Superior Court (1995) 31 Cal.App. 4th 1206, 1212,
interpreting Government Code Section 12940(h).)
4)Provides that a non-supervisory employee who sexually harassed
a coworker cannot be held personally liable under FEHA.
( Carrisales v. Department of Corrections (1999) 21 Cal. 4th
1132, 1140, interpreting Government Code Section 12940(h).)
Prior to this decision, the cases that considered this issue
AB 1856
Page 2
held that non-supervisory employees could be held personally
liable for their harassing conduct under FEHA. ( Page v.
Superior Court (1995) 31 Cal.App. 4th 1206; Matthews v.
Superior Court (1995) 34 Cal.App. 4th 598; Department of Fair
Employment and Housing v. Lake County Department of Health
Services (1998) No. 98-11, FEHC Precedential Decs. 1998-1999
CEB __; Department of Fair Employment and Housing v. Madera
County (1990), FEHC Dec. No. 90-03, 1990-91, CEB 1.)
FISCAL EFFECT : Unknown
COMMENTS : This bill, sponsored by the California Employment
Lawyers Association (CELA), expressly provides in FEHA that
non-supervisory employees may be held liable under FEHA for
unlawful harassment of coworkers. According to the author, the
bill is needed to address the recent decision of the California
Supreme Court in Carrisales v. Department of Corrections (1999)
21 Cal. 4th 1132. In Carrisales , the Supreme Court narrowly
read the language of FEHA to hold that a non-supervisory
employee who sexually harassed a coworker could not be held
personally liable under FEHA - even though his employer and
supervisors could be.
In commenting on the need for this measure, the author made the
following statement:
FEHA already sends a strong message to employers and
workplace supervisors that harassment of employees will not
be tolerated by holding them liable for workplace
harassment. AB 1856 takes the next logical step by
clarifying that errant employees face the same threat of
legal sanctions. By making certain that harassers are not
let off the hook merely because of a job title, this bill
will help stamp out harassment in the workplace.
AB 1856 does not change existing law as to what constitutes
harassment. People will not be able to sue their coworkers
for any little thing they find offensive. In order to
create liability under FEHA, the harassment must be so
severe that it produces an abusive working environment.
This bill does nothing to change that standard . It
provides only that the individual doing the harassing
should be one of the parties held liable for the conduct.
Furthermore, before the Carrisales decision came down, most
AB 1856
Page 3
people, including many discrimination experts, believed
that individual employees may be held liable for harassing
conduct under FEHA. AB 1856 ensures that the individual who
is personally responsible for the unlawful harassment can
also be held personally liable .
Background on Harassment Claims Under FEHA : FEHA prohibits
employment discrimination based on race, religious creed, color,
national origin, ancestry, physical disability, mental
disability, medical condition, marital status, sex, age or
sexual orientation. The practices made unlawful under FEHA
include discrimination in hiring, compensation, or promotion,
retaliation against an employee for the employee's opposition to
unlawful employment practices, and discriminatory harassment.
Under Government Code section 12940(h), FEHA's proscription
regarding unlawful harassment covers harassment by an "employer,
labor organization, employment agency, apprenticeship training
program or any training program leading to employment, or any
other person ." (Government Code Section 12940(h), emphasis
added.) It was this language that brought courts to hold and
practitioners, scholars, and others to believe that individual
employees were included as one of those who could be held liable
for harassment under FEHA.
Indeed, California Employment Law, a treatise on employment law,
provides:
"Under the FEHA, employees may be individually liable for
harassing conduct . That liability flows from two statutory
provisions. First, Government Code Section 12940(h)(1) not
only prohibits employers, labor organizations, employment
agencies, and training programs from engaging in
harassment, but also prohibits 'any other person' from
engaging in such behavior. Second, Government Code Section
12925(d) defines a 'person' to include 'one or more
individuals.'" (2 Wilcox, California Employment Law (1998
supp.) Section 41.81 (6) (e), p. 41-280., emphasis added.)
Likewise, the Fair Employment and Housing Commission (FEHC)
(which filed an amicus brief in Carrisales supporting liability
for employees) had, in its own precedential administrative
decisions, held non-supervisory coworkers liable for harassment
under Section 12940(h). Department of Fair Employment and
AB 1856
Page 4
Housing v. Lake County Department of Health Services (1998) No.
98-11, FEHC Precedential Decs. 1998-1999 CEB __; Department of
Fair Employment and Housing v. Madera County (1990), FEHC Dec.
No. 90-03, 1990-91, CEB 1.
Employer Liability for Harassment Under FEHA . FEHA's standard
regarding the acts that constitute harassment is clear. As to
sexual harassment claims, California courts interpreting FEHA
have recognized two distinct categories of sexual harassment:
(1) "quid pro quo" sexual harassment and (2) "hostile work
environment" sexual harassment.
"Quid pro quo" harassment occurs when unwanted sexual advances
are made and some employment benefit is conditioned on an
exchange of sexual favors (e.g., offering a promotion if the
employee agrees to have sexual relations with the harasser).
Under FEHA, an employee is required to prove, by a preponderance
of the evidence, that "a causal connection exists between the
employee's resistance to sexual harassment and an adverse action
taken against the employee by his or her employer. ? The FEHA is
violated if the action was caused at least in part by a
retaliatory motive." 2 Wilcox, California Employment Law (1998
supp.) Section 41.81(1) (a), p. 41-261.
"Hostile work environment" sexual harassment occurs when the
harassment is so severe or pervasive as to interfere
unreasonably with the plaintiff's work performance or to create
an abusive work environment. Fisher v. San Pedro Peninsula
Hospital (1989) 214 Cal. App. 3d 590, 608. California
Employment Law states that "? a mere isolated epithet usually
fails to support a ['hostile work environment'] claim. ? Whether
the sexual conduct complained of is sufficiently severe and
pervasive to create a hostile work environment must be evaluated
by examining the totality of the circumstances. Thus, rather
than viewing incidents of sexual conduct separately and in
isolation from one another, the court should inquire into the
overall composite effect of all the incidents on the working
environment." 2 Wilcox, California Employment Law (1998 supp.)
Section 41.81(1) (b), p. 41-264.
As to all harassment claims, under FEHA, employers may be held
liable for harassment by an individual other than an agent or
supervisor, when the employer "knows or should have known of
this conduct and fails to take immediate and appropriate
corrective action." (Government Code section 12940(h)(1).)
AB 1856
Page 5
Thus for the employer to be held liable there must be, in
addition to the requisite severity of conduct (sufficient to
create an abusive environment), some duration of the conduct in
time (past the time when the employer has the opportunity to
take corrective action).
Carrisales v. Dept. of Corrections : Notwithstanding the FEHC's
decisions, and expert commentary to the contrary, in Carrisales ,
the Supreme Court of California held that non-supervisory
employees could not be held liable for their harassing conduct
under FEHA. In that case, Maryann Carrisales, an employee of
the Department of Corrections, sued the Department of
Corrections, two of her supervisors and a coworker for sexual
harassment in violation of FEHA. She alleged that her coworker
repeatedly sexually harassed her, and that her supervisors
failed to take immediate and appropriate corrective action
despite knowledge of the harassment. The Supreme Court found
that FEHA created a cause of action against the employer and
supervisors, but not against the coworker who was personally
responsible for the harassing conduct, due to a lack of clear
legislative history indicating that this was the intent of the
California Legislature.
Finding no indication of legislative intent to impose liability
for harassment on non-supervisory employees under Section
12940(h)(1), the Court narrowly read the language of the statute
as imposing liability for this "unlawful employment practice"
solely on employers and supervisors.
In reading the law regarding harassment as a matter of
employment practice, the Court concluded that it was, therefore,
a practice engaged in by employers and supervisors rather than
individual employees. The Court found further support for this
reading in the specification that harassment shall be unlawful
only if the employer fails to take appropriate corrective
action. "If the employer takes appropriate action, no unlawful
employment practice has occurred. If the employer fails to take
such action, there may be an unlawful employment practice, but
it is by the employer, not the coworker." Carrisales , 21 Cal.
4th at 1136.
Invitation to Clarify Legislative Intent . In Carrisales , the
Court invited the Legislature to consider whether coworker
liability should be imposed to provide more effective deterrence
of sexual harassment. The Court stated that policy arguments
AB 1856
Page 6
regarding the most effective way to deter harassment should be
directed to the Legislature, "which can study the various
policy and factual questions and decide what rules are best for
society. ? If the Legislature believes it necessary or desirable
to impose individual liability on coworkers, it can do so."
Carrisales , 21 Cal. 4th at 1140.
Employer Liability . According to the author, the bill is
intended only to clarify that liability for workplace harassment
extends to individual employees. The bill does not change
existing law under FEHA regarding the liability of employers and
supervisors for harassment. Opponents have argued that by
making employees liable under FEHA for their conduct, this bill
could let employers "off the hook," lessening their liability
and thus their sense of responsibility for workplace harassment.
In its amicus brief filed in the Carrisales case, The Employers
Groups argued that imposing liability on the individual coworker
could potentially harm a plaintiff's ability to recover against
the employer because it might result in apportioned liability,
and thus lessen the liability of the employer, the party best
able to pay. However, under existing law, employers are jointly
liable with supervisors for harassment by supervisors, and this
has not resulted in making it more difficult to recover against
employers.
Furthermore, as a jury considers what compensatory damages to
award, it is instructed to look at the losses suffered by the
plaintiff - typically, in a harassment suit, lost wages and
emotional distress. These factors in any given case will not
change if the individual harasser is made liable, and thus the
total damages awarded should not change. Additionally, it is
well settled that California's punitive damages statute applies
to actions brought under FEHA. (See Weeks v. Baker & McKenzie
(1998) 63 Cal. App. 4th 1128 (affirming $3.5 million punitive
damage award against law firm for sexual harassment claim
against employer and supervisor).)
Assertion That the Bill Will Encourage Non-Cooperation . The
Motion Picture Association of America California Group also
argues that the bill will "cause interference with an employer's
ability to investigate and remedy allegations of harassment. If
an individual employee faces personal liability for harassment,
that employee may be unwilling to cooperate in the employer's
investigation of a harassment complaint." While an employee in
AB 1856
Page 7
such a situation could potentially be uncooperative, an employee
not facing personal liability under current law could also be
uncooperative since an employer can discipline, or even
terminate, the employee because of the harassing behavior.
Assertion That the Standard for Harassment Will Be Too Loose .
Opponents argue that, under the bill, people will be able to sue
their coworkers for any little thing that they find offensive.
The California Employment Law Council states:
"The evil of this bill is that whenever a plaintiff sues a
company for harassment, it is an easy matter to name every
individual employee at the company whoever said a bad word
to the plaintiff. ? Since hostile environment harassment is
generally a collection of things, one or two comments by a
low-level employee which together with lots of other things
make up the harassment might be considered to be
'perpetrated by the employee.'"
The Traditional Values Coalition also opposes the bill for
similar reasons, stating "[E]mployees who do express their
objection for moral or religious convictions that homosexuality
or bisexuality is not the legal equivalent to heterosexuality
would be guilty of harassment and thereby liable in a court of
law."
However, as explained above, existing law as to what constitutes
harassment is clear. The conduct must be either so severe or so
pervasive as to create a hostile work environment and interfere
with work performance. One joke does not meet this standard.
In further support of this argument, the author notes: "This
bill is not intended to change the standard as to what
constitutes unlawful harassment under FEHA. The intent is
simply to make a non-supervisory employee personally liable for
harassment where his acts would be sufficient to allow
individual liability for a supervisor under existing law."
Courts should be able to apply existing legal standards to
determine when personal liability for individual coworkers
should apply.
Ineffectiveness of Traditional Tort Remedies . This bill raises
the issue of whether a person who unlawfully harasses a coworker
should be made to pay for the damages caused by his or her
actions under FEHA. The author believes that the bill is
necessary in part because "traditional tort remedies are
AB 1856
Page 8
ill-suited to compensate victims of workplace harassment."
Opponents of the bill argue that it is not a question of whether
the person who perpetrates harassment should be held liable, but
rather whether there should be liability under FEHA in addition
to other remedies. The Association of California Water Agencies
(ACWA) states: "AB 1856 attempts to provide for personal
liability and, though well-intentioned, is inappropriate under
the FEHA, which is intended to address employment practices.
The existing law provides remedies for a victim of harassment to
pursue against a coworker under the Tort Claims Act, which is
intended to address personal liability."
Under existing law, a person subjected to harassment in the
workplace can sue his or her harasser in tort for battery or
intentional infliction of emotional distress depending on the
behavior in question. However, recovery under tort theories for
sexual harassment is very difficult. Each of the potential
claims presents difficulties for the claimant, even where the
behavior is clearly unlawful under FEHA. In order to prevail on
a claim of intentional infliction of emotional distress, the
plaintiff must show that the behavior in question was extreme
and outrageous, and that the plaintiff suffered severe emotional
distress as a result of the behavior. There is a wide range of
behavior that is not sufficiently outrageous to meet this
standard that nonetheless is unlawful under FEHA, as it is
sufficient (particularly when continuing over time) to create an
abusive work environment.
Where harassment takes the form of actual physical contact
(unwanted touching, kissing, or embracing) a plaintiff may
succeed on a theory of battery. (In addition, where there is
the threat of such contact, a plaintiff may sue for assault.)
However, such a suit is only possible where there is physical
contact. In those cases where the harassment consists of
something other than physical touching, such as insults or
offensive materials posted in the workplace, there is no
liability for battery.
The inadequacies of these theories to protect those who suffer
harassment in the workplace highlight the need for a statute
such as FEHA to create liability as a means of deterring and
redressing unlawful workplace conduct. Tort law is intended to
allow those who suffer wrongs to be compensated for those
wrongs. FEHA is California's statutory means of making
AB 1856
Page 9
harassing behavior in the workplace unlawful, regardless of
whether it rises to the level likely to allow for recovery in
tort. It seems only logical, and indeed fair, that this law
should impose liability on those persons directly responsible
for harassment as well as on employers.
The Role of Insurance: The Duty to Defend . In defending a
sexual harassment claim, an employer may be able to turn to
their insurer for coverage under traditional commercial general
liability and umbrella insurance policies. Whether coverage
will be available to the employer will depend on the specific
claim and policy language. In Melugin v. Zurich Canada , the
First Appellate District held that an insurer had a duty to
defend the insured in a case alleging sex-based harassment and
marital-based harassment under FEHA. Melugin v. Zurich Canada
(1996) 50 Cal. App. 4th 658. In that case, the court found the
language of the policy persuasive since it covered liability for
"discrimination, ? violation of civil rights, [and] sexual
discrimination." Id. at 660.
Deterring Workplace Harassment . In Carrisales , the Supreme
Court invited the Legislature to consider whether imposing
liability on individual employees under FEHA would more
effectively deter harassment in the workplace. One of the
primary aims of FEHA is to prevent workplace harassment by
providing an effective deterrent against unlawful behavior. The
deterrent effect of the statute as to individuals may be
undermined by the ruling in Carrisales , as employees get the
message that they will not be held personally liable for
harassing a coworker. The author notes: "Existing law sends a
strong message to employers that unlawful harassment of
employees will not be tolerated. My bill will make sure that
employees get the same message."
Opponents argue that employer liability is the best means to
deter harassment, as employers have effective means available to
affect the behavior of individual employees. For example, if
employees know that those who engage in unlawful harassment will
be fired, they have a strong incentive not to behave in that
manner. ACWA argues that: "The burden is on the employer to
take appropriate corrective action and the employer may be held
liable where they fail to take such action."
While employers have an important role to play in the deterrence
of harassment, however, it is difficult to see how direct
AB 1856
Page 10
employee liability would detract from the deterrence provided
through employers. The author notes that "employee liability
will provide an additional means for employers to control
employee behavior, as the employer can stress to the employee
that he or she will be held liable for his or her actions - and
will have to pay out of his or her own pocket." Individual
liability should provide an additional deterrent, enhancing the
deterrent effect of employer and supervisor liability under
existing law.
Compensating Victims . A further goal of the FEHA provisions
regarding harassment is to provide adequate compensation for the
damages suffered by victims of unlawful workplace harassment.
In most cases, recovery from the employer is the best means of
achieving this goal, as the employer is most likely to be able
to pay.
However, in certain cases, although the employee has suffered
damages due to unlawful harassment by a coworker, the employer
cannot be held liable. This is true, for example, if the
employer did not know (and should not have known) of the
harassment, or if the employer knew but took immediate and
appropriate corrective action. It will also be true where the
employer is financially insolvent. In these cases, imposing
liability on the harassing coworker represents the victim's only
hope of financial recovery. As noted above, traditional tort
remedies are often inadequate to provide compensation to the
victims of sexual harassment; thus imposing liability on
employees pursuant to FEHA may be essential to ensuring that
some victims are made whole.
Attorney General's Amicus Brief in Carrisales . The Attorney
General, who has not yet taken a position on this bill, filed an
amicus brief in Carrisales , supporting liability under FEHA for
employees. In the brief, the Attorney General argued, on behalf
of the FEHC, that the Commission's view was that Section
12940(h) prohibited any person from sexually harassing a
co-worker and imposed personal liability upon those who do. The
Attorney General also argued that eliminating sexual harassment
in the workplace solely through employer sanctions is difficult
when the harasser is incorrigible.
Prior Related Legislation :
AB 519 (Aroner) (Ch. 964, Stats. of 1999) clarified that
AB 1856
Page 11
California's "business and professional relationships" sexual
harassment prevention statute extends to verbal, visual, and
physical conduct of a sexual nature.
AB 1670 (Committee on Judiciary) (Ch. 591, Stats. of 1999) added
a definition of "supervisor" to Section 12940(h) and made the
section applicable to harassment of persons providing services
pursuant to a contract.
SB 953 (Watson, 1995) provided that an employee or agent of the
employee is personally liable for any harassment of an employee
or applicant performed by that employee or agent. Died on the
Senate Floor.
REGISTERED SUPPORT / OPPOSITION :
Support
California Employment Lawyers Association (sponsor)
American Association of University Women
American Civil Liberties Union
California Federation of Business and Professional Women
California National Organization for Women
California Women Lawyers
City of West Hollywood
Commission on the Status of Women
Consumer Attorneys of California
Equal Rights Advocates
National Women's Political Caucus
San Francisco Women Lawyers' Alliance
Western Center on Law and Poverty
Opposition
Association of California Water Agencies
California Employment Law Council
Motion Picture Association of America California Group
Traditional Values Coalition
Analysis Prepared by : Saskia Kim / JUD. / (916) 319-2334