RENO v. BAIRD

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Court of Appeal, First District, Division 2, California.

Kimberly RENO, Plaintiff and Appellant, v. Marijo BAIRD, Defendant and Respondent.

No. A075579.

Decided: September 24, 1997

Lawless, Horowitz & Lawless, Barbara A. Lawless, Phil Horowitz, Steven J. Dow, San Francisco, for Plaintiff and Appellant. Hoyt, Miller & Angstadt, Eric P. Angstadt, Walnut Creek, for Defendant and Respondent.

Kimberly Reno (Reno) challenges the trial court's dismissal of her claims against Marijo Baird (Baird) for medical discrimination in violation of the California Fair Employment and Housing Act (FEHA) (Gov.Code, § 12900 et seq.), discharge in violation of public policy, and intentional interference with business relations.  (All further unspecified code sections refer to the Government Code.)

Although the Second District in Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55, 53 Cal.Rptr.2d 741 (Janken ) holds the FEHA exempts individual supervisors from liability for their discriminatory acts, Reno argues it is “wrongly decided.”   We agree with Reno. Reno, however, cannot maintain a claim against Baird for intentional interference with business relations, which we discuss in the unpublished portion of this opinion.

BACKGROUND

Reno, a licensed vocational nurse for seven or eight years, became a registered nurse in September 1991.   Sometime prior to 1991, Reno had developed mucoepidermoid carcinoma, which is an aggressive malignant tumor at the junction of the hard and soft palate.

In September 1991, while Reno was working for Access Nursing, Redwood Health Care contacted Reno about employment.   Redwood Health Care (Redwood Health), a nurse registry providing in-home health care services, was a “doing business as” entity for Baird Health Services, Inc. (Baird Health).  (Collectively, Redwood.)   Baird, a registered nurse, was the principal owner and shareholder of Redwood.  (Baird Health became defunct in October 1993, when Staff Builders, Inc. bought its assets.)

Part of the job application for Redwood involved answering a health questionnaire.   Reno completed the questionnaire on October 22, 1991;  she checked the box indicating “no,” adjacent to the question about ever having cancer or tumors.

Reno began to work for Redwood and, in February 1992, she began providing nursing respite services for Paymon Haraz (Paymon), a severely developmentally disabled infant.   North Bay Regional Center (NBRC) contracted with Redwood to provide nursing services for Paymon.   This was essentially Reno's sole work until she stopped working for Redwood in August 1992.

In August 1992, Reno had surgery to remove her left submandibular lymph node as a measure to try to prevent the recurrence of cancer.   As a result of this surgery, Reno had a noticeable, two-inch bandage on her neck.

On August 20, 1992, Reno was wearing the bandage from her surgery when Josette V. Jacobson (Jacobson) and Jan Miller (Miller), representatives from NBRC, arrived at Paymon's home to observe Reno on duty and to evaluate her job performance.   Jacobson asked Reno about the bandage.   According to Reno, she said it was nothing, just a little biopsy.   During this visit, Reno told Jacobson and Miller she had transported Paymon alone in her vehicle when traveling from his home in Cordelia to his physical therapy appointments in Walnut Creek.

During a supervisory conference in August 1992, Jacobson told NBRC's program manager, Jean Smart (Smart), she believed Reno had something on her neck;  she surmised it indicated Reno had a test for cancer.   Jacobson also told Maes, Reno's immediate supervisor at Redwood, that Reno had cancer.   According to Maes, the following conversation ensued:  “[Jacobson] said, ‘Did you know that Kimberly Reno had cancer?’   I said, ‘No.’ And she said, ‘She told me while I was there visiting that she had cancer.’ ”   Maes, however, could not remember exactly when the conversation occurred.

On August 24, while Reno was providing services for Paymon in his home, Paymon's mother, Ladan Haraz (Ladan), learned about the unexpected death of her brother.   Ladan's husband had to leave to bring back the brother's body, and Ladan told Reno she felt unstable and unable to care for her son by herself.   According to Reno, she called her immediate supervisor, Maes, and reported the above facts to her.   Reno claims Maes responded that she would obtain approval for 24-hour emergency nursing respite care.

While Reno was still assigned to Paymon's case, Sandi L. Lafferty (Lafferty), the director of nurses at Redwood, learned about Reno's biopsy.   On August 26, six days after Jacobson and Miller had observed the bandage on Reno's neck, Lafferty wrote a memorandum regarding Reno, stating NBRC requested Reno's removal from Paymon's case.   At her deposition, Lafferty testified the memorandum was “to clarify an unemployment thing, whatever they call ‘em, that we had not terminated her, she'd been removed from the case, and why.”   When asked if one purpose of the memorandum was in anticipation of a possible unemployment-insurance claim by Reno, she responded “yes.”

The memorandum stated NBRC did not want Reno to provide nursing services for any of its patients, and Redwood had left a message on Reno's answering machine “instructing her not to go to the Haraz's residence.”   It stated Redwood had removed Reno from Paymon's case for the following reasons:  “1. The physician has ordered that the patient is not to transported [sic] anywhere without use of a paramedic and ambulance service.  [¶] Without informing the physician or Redwood Health Care, Ms[.] Reno contacted North Bay Regional Center and requested 24 hour/day RN coverage for the patient.   Up to last Friday, there is nothing in Ms[.] Reno's nursing notes indicating the need for this increased coverage.   Had Ms[.] Reno followed standard practice, she should have contacted her Case Manager, presented her rationale, and, if the patient's condition warranted, had the Agency contact North Bay. She did none of this, and Redwood Health was completely unaware that such a request had been made.

“Two RNs from North Bay made a home visit to assess the patient.   At that time, Ms[.] Reno mentioned that she had, on several occasions transported this unstable patient to Kaiser Hospital in Oakland, to [a] relative's home in Pinole and to a friend of the family's [sic ] who lives outside the immediate area.  [¶] This patient has a history of cardiac arrest-the reason for the physician's instructions concerning the use of paramedic and ambulance.   However, by her own admission, Ms[.] Reno put the baby in her private car, made the trips without anyone else in the vehicle and no provision for life support.   Her decision to do this clearly placed the client at risk.

“[¶] ․ [¶] On the 24th of August, Ms[.] Reno decided to contract with the mother to provide continuous, uninterrupted 48 hours of care.   There was no approval or authorization for this․  [¶] It appears that Ms[.] Reno decided to provide this service, not because of any change in the patient's condition, but because the mother was reacting to the death of a brother.   Although Ms [.] Reno can decide to provide emotional support to Mrs[.] Haraz as a concerned friend, she should not expect North Bay Regional to support such a relationship by paying $20 an hour under the guise of providing care for the baby․”

According to Reno, her answering machine had a message from Redwood on August 27, 1992, and she recognized Maes's voice.   She claims the message stated essentially the following:  “ ‘Kim, this is Redwood Health Care. You are not to return to work.   We are under the impression that you have cancer, and we feel that a nurse with cancer is inappropriate for a nurse patient relationship.’ ”   Reno understood the message to signify Redwood had fired her.   According to Reno, she never received any further messages from Redwood about having other work for her.

Reno telephoned Baird on August 28, 1992, to discuss the August 27th message on her answering machine.   Reno communicated to Baird the content of the message left on her machine;  Reno also said she believed Redwood's firing her because of a cancerous condition was illegal.   Baird responded she would check into the situation and get back to her.   Reno stated Baird never contacted her again.

Reno's mother also testified about receiving telephone calls from Redwood in late August, although she could not remember the dates.   The substance of the first telephone conversation was the following:  “She asked if Kim was at home, and I said, ‘No, she's not at home at this time.   May I take a message?’   And she said, ‘Yes. You can tell Kim that unless she brings her medical records in, she does not need to come in to work.’ ”

Maes testified that when she could not reach Reno, she obtained the telephone numbers for Reno's mother and sister from Reno's emergency card.   She said she talked to Reno's mother, but she was “75 percent” certain she did not say anything about Reno's cancer.

Maes also spoke to Paymon's mother, Ladan.   According to Ladan, Maes said:  Redwood had removed Reno from the case “ ‘because she has cancer, and until she brings some medical paper as to the results of the testing and all that, we cannot have her back on this case.’ ”

Ladan telephoned Jacobson (an NBRC representative).   Jacobson testified the following communication occurred:  “She [Ladan] was frantic․  [¶] And she said something, to the best of my knowledge, to the effect:  ‘Josette, I just received a message from Redwood.   They're pulling Kim Reno off the case because she has cancer.’  [¶] And I said, ‘What?’ It was the first I'd heard of it․  [¶] ․ [¶] And she said, ‘Jeannie Maes left a message.’ ”

After speaking with Ladan, Jacobson telephoned Maes. According to Jacobson, Maes revealed the following:  “ ‘[T]here was concern within the Redwood agency that, because Kim Reno had cancer and because she had become very emotionally involved with the family, that because she was dealing now with a very unfortunate illness and all the emotional trauma that would be going with that, that the agency felt that it was too much trauma to put on the Haraz family to also emotionally carry the burden of Kim Reno's problem․’ ”  Maes also informed Jacobson that Redwood had not simply removed Reno from Paymon's case, but had fired her because it had other problems with her.   Jacobson then told Smart (NBRC's program manager) about Redwood's firing Reno.

Baird claims the discharge resulted from Smart's demand to remove her, rather than because of her cancerous condition.   According to Baird, Smart expressed the following concerns:  “[Reno] was too close emotionally to the family and the child and was therefore losing her professional judgment and perspective, as was principally demonstrated by her providing round-the-clock continuous unauthorized care for almost two days without relief [when Ladan's brother had died], and [Reno] had acknowledged transporting the Haraz child alone in her private vehicle, and by doing so had potentially endangered the child in the opinion of the nurses because [Reno] would be unable to appropriately intervene during a medical crisis if she was [sic] driving on the freeway.”

Smart told Reno she had a doctor's directive indicating Paymon was not to be transported without another adult in the vehicle, and she would supply Redwood with a corroborating written report.   It is undisputed Smart never provided this written report and confirming documentation.   Reno claims neither the medical records she received nor any oral communication to her restricted the manner in which to transport Paymon in nonemergency situations.

Baird also maintains she was unaware of Reno's health condition at the time Redwood left the message discharging Reno. It is undisputed Ladan spoke with Baird, who inquired about Reno's removal from Paymon's case because she had cancer.   Baird, however, testified that Ladan's question about Reno's removal because of cancer did not induce her to consider the possibility Reno had cancer.   Baird also admitted Lafferty told her Reno had cancer, but Baird testified NBRC had requested Reno's removal before Lafferty divulged this information.   According to Baird, she learned about Reno's health condition “just days” after NBRC requested Reno's discharge.

Redwood, Baird claims, did not terminate Reno's employment and it did not remove her from Paymon's case because of her health condition.   Redwood had employed one nurse known to have cancer, and both Baird and Lafferty are cancer survivors.  (Smart testified she did not know of any nurse providing services for NBRC who had cancer.)   Baird stated she attempted to contact Reno about other assignments, but she refused to accept them.   Redwood never sent Reno a termination notice, but only sent her a letter removing her from Paymon's case.

Reno filed her charge of discrimination with the Department of Fair Employment and Housing (DFEH) on November 12, 1992.   The complaint apparently named “Redwood Health Care” and “Jeanie May” (Jeannie Maes).

After receiving her “right-to-sue letter,” Reno filed her civil complaint against Baird and other defendants on July 3, 1994.   Of the eight causes of action in her complaint, the following five were alleged against Baird:  intentional misrepresentation, negligent misrepresentation, intentional interference with business relations, negligence, medical condition discrimination in violation of FEHA, and discharge in violation of public policy.   With regard to the FEHA claim, Reno alleged Baird acted as an agent when discharging her because of her medical condition, cancer.

The various defendants, including Baird, brought a motion for summary judgment or, in the alternative, summary adjudication on March 21, 1996.   Baird argued she was not personally liable for employment discrimination and relied on Miller v. Maxwell's Intern., Inc. (9th Cir.1993) 991 F.2d 583 (Maxwell's Intern.) and other federal authority.   The trial court granted summary judgment in favor of the individual defendants, Baird and Maes. Summary adjudication was granted as to some, but not all, of the claims against the corporate defendants;  they, therefore, remain in the action.

Reno filed a timely notice of appeal from the judgment in favor of Baird, but limited her appeal to the claims for intentional interference with business relations, employment discrimination in violation of the FEHA, and wrongful discharge in violation of the public policy against employment discrimination.   Reno is not challenging the judgment in favor of Maes.

DISCUSSION

I. Standard of Review

The court properly grants summary judgment if the record establishes no triable issue as to any material fact and the moving party is entitled to a judgment as a matter of law.  (Code Civ. Proc., § 437c, subd. (c).)  A defendant moving for summary judgment has met the burden of showing a cause of action has no merit if the party establishes one or more elements of the cause of action cannot be established.  (Code Civ. Proc., § 437c, subd. (o)(2);  see also Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 37 Cal.Rptr.2d 653.)   Once the defendant meets this burden, the plaintiff must show a triable issue of fact exists as to that cause of action.  (Code Civ. Proc., § 437c, subd. (o)(2).)   We review the record de novo.  (Chevron U.S.A., Inc. v. Superior Court (1992) 4 Cal.App.4th 544, 548, 5 Cal.Rptr.2d 674.)

II. Claims of Wrongful Discharge and Violation of Public Policy

 Reno contends the statutory construction of the FEHA and its underlying public policy as well as the case law prior to Janken, supra, 46 Cal.App.4th 55, 53 Cal.Rptr.2d 741 impose individual liability on supervisors.   Thus, the trial court erred when it granted summary judgment on her claims for wrongful discharge and violation of public policy.

Baird responds the trial court committed no error when it relied on federal cases such as Maxwell's Intern., supra, 991 F.2d 583.   Furthermore, “[t]he Janken court adopted in part the identical argument raised by Respondent in her summary judgment motion․”  If Baird cannot be held individually liable for unlawfully discharging Reno under section 12940, subdivision (a), Baird contends, she also cannot be held liable for discharging her in violation of public policy.

We disagree with Baird and reject the reasoning in Janken.   The clear language of the statute, legislative intent, and the policy underlying the statute support imposing liability on both the employer and agent employees.   We therefore conclude Reno may make a claim for unlawful discharge, and discharge in violation of public policy, against the individual Baird.   In the unpublished portion, we also find Reno has presented sufficient evidence to raise a triable issue of fact as to Baird's having terminated her employment based on Reno's cancerous condition.

A. Individual Liability Under Section 12940, Subdivision (a)

We must decide whether individual supervisors may be liable for their unlawful discriminatory acts under section 12940, subdivision (a).   Section 12940 states:  “It shall be an unlawful employment practice, unless based upon a bona fide occupational qualification, or, except where based upon applicable security regulations established by the United States or the State of California:  [¶] (a) For an employer, because of the race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, or sex of any person, to refuse to hire or employ the person or to refuse to select the person for a training program leading to employment, or to bar or to discharge the person from employment or from a training program leading to employment, or to discriminate against the person in compensation or in terms, conditions or privileges of employment.”

Section 12926, subdivision (d), defines an employer as “any person regularly employing five or more persons, or any person acting as an agent of an employer, directly or indirectly․”  Thus, the question is whether the reference to “agent” in section 12926, subdivision (d), merely restates the rule of respondeat superior or also makes the agent individually liable for his or her unlawful discriminatory acts.

1. Court of Appeal and Administrative Decisions

Court of Appeal cases prior to Janken do not directly address the issue of individual liability, presumably because the clear language of the statute seems to impose liability on any person “acting as an agent of an employer” (§ 12926, subd. (d)).  They have, however, without analysis and discussion, permitted the plaintiff to sue both the employer and agent employee.  (See Monge v. Superior Court (1986) 176 Cal.App.3d 503, 222 Cal.Rptr. 64 [plaintiffs sued company and its employees for sexual discrimination and harassment];  Jones v. Los Angeles Community College Dist. (1988) 198 Cal.App.3d 794, 813, 244 Cal.Rptr. 37 [summary adjudication against individuals' discriminatory acts was improper because complaint alleged defendants were acting within the course and scope of employment];  Baker v. Children's Hospital Medical Center (1989) 209 Cal.App.3d 1057, 257 Cal.Rptr. 768 [plaintiff sued hospital and supervisors for employment discrimination based on race];  Valdez v. City of Los Angeles (1991) 231 Cal.App.3d 1043, 282 Cal.Rptr. 726 [former police officer sued city and individuals for constructive discharge];  Saavedra v. Orange County Consolidated Transportation Service Agency (1992) 11 Cal.App.4th 824, 14 Cal.Rptr.2d 282 [plaintiff sued employer and supervisor for employment discrimination];  Carr v. Barnabey's Hotel Corp. (1994) 23 Cal.App.4th 14, 28 Cal.Rptr.2d 127 [employee sued hotel and former supervisor for sexual and pregnancy discrimination];  Matthews v. Superior Court (1995) 34 Cal.App.4th 598, 603, 40 Cal.Rptr.2d 350 [cites with approval in dicta the Fair Employment and Housing Commission's rulings that individual employees are liable as agents for their discriminatory acts].)

Similarly, the Fair Employment and Housing Commission (FEHC) has consistently held supervisors individually liable as agents of the employer for their acts of discrimination and harassment.  (See, e.g., Dept. Fair Empl. & Hous. v. Bee Hive Answering Service (1984) No. 84-16, FEHC Precedential Decs.1984-85, CEB 8, p. 23 [employer and individual supervisor liable for sexual discrimination and harassment];  Dept. Fair Empl. & Hous. v. Del Mar Avionics (1985) No. 85-19, FEHC Precedential Decs.1984-85, CEB 16, p. 25 [FEHC found employer and supervisor liable for race and sex discrimination and harassment];  Dept. Fair Empl. & Hous. v. Madera County (1990) No. 90-03, FEHC Precedential Decs.1990-91, CEB 1, p. 26 [“The Department asserts that respondent Gordon is personally liable [for sexual harassment] as an employer under the Act because he acted as an agent of Madera County.”].)

Supervisors were consistently held liable for their discriminatory acts under California law until 1996 when the Second District held individual supervisors could not be liable under the FEHA for age discrimination.  (Janken, supra, 46 Cal.App.4th 55, 53 Cal.Rptr.2d 741.)   In Janken, the court interpreted section 12926, subdivision (d), as ensuring employers would be liable for their supervisors' unlawful employment practices rather than making supervisors liable for “personnel decisions.”   About five months later, a divided Court of Appeal in the Second District found a supervisor could not be liable for failing to take any action after learning about acts of harassment.   (Fiol v. Doellstedt (1996) 50 Cal.App.4th 1318, 58 Cal.Rptr.2d 308 (Fiol ).)   Although the Fiol court primarily focuses on the supervisor's liability for aiding or abetting an unlawful employment practice under section 12940, subdivision (g) (Fiol, supra, at pp. 1325-1326, 58 Cal.Rptr.2d 308), the majority also applies the reasoning and holding of Janken to find that the agency language under section 12926, subdivision (d), does not create personal liability (Fiol, supra, at pp. 1328-1329, 58 Cal.Rptr.2d 308).   No other Court of Appeal has directly addressed this issue, but Division Five in the First District in Melugin v. Zurich Canada (1996) 50 Cal.App.4th 658, 666-667, 57 Cal.Rptr.2d 781 and Division Six of the Second District in Acuna v. Regents of University of California (1997) 56 Cal.App.4th 639, 651, 65 Cal.Rptr.2d 388 cite Janken with approval.

Since Janken departed from the consistent interpretation of the FEHA, and it directly addressed the issue of a supervisor's liability, we will summarize the Janken opinion and then set forth our disagreement with its reasoning.

2. Janken

As a “foundational step” in its analysis, the Janken court distinguishes “harassment” from “discrimination” (Janken, supra, 46 Cal.App.4th 55, 62-63, 53 Cal.Rptr.2d 741).   Individual liability under Janken attaches only to the former.

When distinguishing the two, the Janken court focuses on the different language in the FEHA's prohibitions against discrimination and harassment.   Section 12940, subdivision (a), makes it an unlawful employment practice for “an employer” to discriminate;  whereas, the language in subdivision (h)(1) makes it an unlawful employment practice for an “employer, labor organization, employment agency ․ or any other person, because of race, ․ medical condition, ․ to harass an employee․”  (Italics added.)   Consequently, the Janken court concludes “the Legislature's differential treatment of harassment and discrimination is based on the fundamental distinction between harassment as a type of conduct not necessary to a supervisor's job performance, and business or personnel management decisions-which might later be considered discriminatory-as inherently necessary to performance of a supervisor's job.”  (Janken, supra, 46 Cal.App.4th at pp. 62-63, 53 Cal.Rptr.2d 741.)

Harassment, according to the Janken court, “consists of conduct outside the scope of necessary job performance, conduct presumably engaged in for personal gratification, because of meanness or bigotry, or for other personal motives.   Harassment is not conduct of a type necessary for management of the employer's business or performance of the supervisory employee's job.  [Citations.]”  (Janken, supra, 46 Cal.App.4th at p. 63, 53 Cal.Rptr.2d 741, fn. omitted.)   In contrast, discrimination claims “arise out of the performance of necessary personnel management duties․  While it is possible to avoid making personnel decisions on a prohibited discriminatory basis, it is not possible either to avoid making personnel decisions or to prevent the claim that those decisions were discriminatory.”  (Id. at pp. 63-64, 53 Cal.Rptr.2d 741, fn. omitted.)   Acts properly delegated by an employer to a supervisory employee may result in discrimination, but not harassment.  (Id. at p. 64, 53 Cal.Rptr.2d 741.)

The Janken court concludes:  “Every supervisory employee can insulate himself or herself from claims of harassment by refraining from such conduct.   An individual supervisory employee cannot, however, refrain from engaging in the type of conduct which could later give rise to a discrimination claim.   Making personnel decisions is an inherent and unavoidable part of the supervisory function.   Without making personnel decisions, a supervisory employee simply cannot perform his or her job duties.”  (Janken, supra, 46 Cal.App.4th at p. 64, 53 Cal.Rptr.2d 741, fn. omitted.)

The Janken court provides two possible constructions of section 12941, subdivision (a), and section 12926, subdivision (d):  “One construction is ․ that by this language the Legislature intended to define every supervisory employee in California as an ‘employer,’ and hence place each at risk of personal liability whenever he or she makes a personnel decision which could later be considered discriminatory.   The other construction is ․ that by the inclusion of the ‘agent’ language the Legislature intended only to ensure that employers will be held liable if their supervisory employees take actions later found discriminatory, and that employers cannot avoid liability by arguing that a supervisor failed to follow instructions or deviated from the employer's policy.”  (Janken, supra, 46 Cal.App.4th at pp. 65-66, 53 Cal.Rptr.2d 741.)   The Janken court applies the second construction.

The analyses in recent federal cases, which relieve individual supervisors from liability for their discriminatory acts under title VII of the Civil Rights Act of 1964 (Title VII) (42 U.S.C. § 2000e et seq.), the Age Discrimination in Employment Act (ADEA) (29 U.S.C. § 621 et seq.), and the Americans with Disabilities Act (ADA) (42 U.S.C. § 12111 et seq.), provide the principal framework for the Janken court's holding.  (See Tomka v. Seiler Corp. (2d Cir.1995) 66 F.3d 1295, 1313-1314 (Tomka );  Birkbeck v. Marvel Lighting Corp. (4th Cir.1994) 30 F.3d 507, 510;  Grant v. Lone Star Co. (5th Cir.1994) 21 F.3d 649, 651-653;  U.S. E.E.O.C. v. AIC Security Investigations, Ltd. (7th Cir.1995) 55 F.3d 1276, 1279;  Lenhardt v. Basic Institute of Technology, Inc. (8th Cir.1995) 55 F.3d 377, 381;  Maxwell's Intern., supra, 991 F.2d 583, 587;  Sauers v. Salt Lake County (10th Cir.1993) 1 F.3d 1122, 1125.)

The Janken court explains that, according to these federal cases, Title VII and the ADA exempt small employers from federal employment discrimination partially because “ ‘Congress did not want to burden small entities with the costs associated with litigating discrimination claims.’ ”  (Janken, supra, 46 Cal.App.4th at p. 71, 53 Cal.Rptr.2d 741, quoting Maxwell's Intern., supra, 991 F.2d 583, 587.)  (Under Title VII and the ADA, liability is limited to an employer with 15 or more employees (42 U.S.C. § 2000e(b);  42 U.S.C. § 12111(5)(A)), and under the ADEA it is limited to an employer with 20 or more employees (29 U.S.C. § 630(b)).)   These federal courts note the incongruity of exempting small employers from liability while subjecting individual nonemployer supervisors to the risk of personal liability.   (Janken, supra, at p. 71, 53 Cal.Rptr.2d 741.)   The same reasoning, the Janken court maintains, applies to the FEHA:  Since the FEHA intended to protect employers of less than five from liability, the Legislature could not have intended to make individual supervisors liable.  (Id. at p. 72, 53 Cal.Rptr.2d 741.)   Rather, the agent language was only inserted to create respondeat superior liability.  (Id. at p. 70, 53 Cal.Rptr.2d 741.)

We disagree with Janken's distinction between harassment and discrimination claims.   Moreover, inexplicably absent from the discussion of legislative intent in Janken is any analysis of the differences between the federal and state statutes, the rulings of the FEHC, and the policy underlying the FEHA.

3. Distinguishing Between Harassment and Discrimination

We find the Janken court's attempt to differentiate harassment from discrimination claims to be untenable.   The court in Janken employs the “concept of delegable authority as a test to distinguish conduct actionable as discrimination from conduct actionable as harassment.”   (Janken, supra, 46 Cal.App.4th at p. 64, 53 Cal.Rptr.2d 741.)   However, an employer does not simply delegate hiring and firing responsibilities, but also delegates the responsibility to oversee the workplace.   The supervisor may abuse his or her authority in the former situation by engaging in discriminatory acts, and may abuse it in the latter situation by failing to protect the employee's well-being in the workplace.

This “distinction” articulated in Janken is succinctly rejected by Justice Marshall in his concurrence in Meritor Savings Bank v. Vinson (1986) 477 U.S. 57, 76-77, 106 S.Ct. 2399, 2410, 91 L.Ed.2d 49 (Meritor):  “A supervisor's responsibilities do not begin and end with the power to hire, fire, and discipline employees, or with the power to recommend such actions.   Rather, a supervisor is charged with the day-to-day supervision of the work environment and with ensuring a safe, productive workplace.   There is no reason why abuse of the latter authority should have different consequences than abuse of the former.”  (All further references to Meritor, unless otherwise specified, refer to Justice Marshall's concurrence.)

The Janken court finds “personnel management decisions-which might later be considered discriminatory-[are] inherently necessary” (Janken, supra, 46 Cal.App.4th at p. 63, 53 Cal.Rptr.2d 741) to the job, but harassment is not “necessary for management of the employer's business” (ibid.).  “[E]very employee subjected to an unwanted decision could in theory claim that the decision was motivated by a prohibited basis.”  (Janken, supra, 46 Cal.App.4th at p. 64, fn. 10, 53 Cal.Rptr.2d 741.)   However, as one commentator states, “Supervisors that discriminate should not be protected from liability because they are required to make personnel decisions any more than harassers should be protected because they must regularly communicate and interact with employees.”  (Gray, Individual Supervisor Liability in Employment Discrimination Claims in California (1997) 37 Santa Clara L.Rev. 517, 543.)

Supervisors, according to Janken, know they are improperly harassing an employee, but they are unaware of making an unlawful discriminatory decision until after a trial on the claim.   Supervisors, however, do know ahead of time what behavior is illegal;  and if their decisions are based on merit, they will defeat a claim of discrimination.

In fact, it may be more difficult to anticipate a harassment claim than a discrimination claim.   Harassment includes (but is not limited to) verbal communications, physical contact, visual objects such as posters, cartoons, or drawings, and sexual favors.  (See Cal.Code Regs., tit. 2, § 7287.6, subd. (b)(1).)   A claim of harassment based on a hostile work environment may be more difficult to foresee, because the communication constituting harassment changes:  It depends upon current societal norms, the context of the behavior, and the response of the harassed person (see Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 607-608, 262 Cal.Rptr. 842).   However, the basis for a permissible decision does not change:  the supervisor must make the decision based on merit.

Further, employers can only delegate to supervisors the responsibility to make decisions based upon legally cognizable facts, and cannot grant supervisors the freedom to engage in unlawful discrimination.   The American Heritage Dictionary (3rd ed.1992) at page 484, defines “decision” as the following:  “1. The passing of judgment on an issue under consideration. 2. The act of reaching a conclusion or making up one's mind. 3. A conclusion or judgment reached or pronounced;  a verdict. 4. Firmness of character or action;  determination.”   Nothing in this definition allows prejudgment of a person on the basis of his or her race, national origin, ancestry, physical or mental disability, marital status, sex, religion, or medical condition.   Thus, supervisors have the authority to reach conclusions regarding employment;  but the law bars them from basing their conclusion on an employee's membership in any protected group.

The Janken distinction between harassment and discrimination will also engender unreasonable results.   Under the Janken court's analysis, a supervisor could hire or promote employees in order to maintain a hierarchy based exclusively on race, but would suffer no individual liability.   If, however, the supervisor posted cartoons depicting prior Jim Crow laws, the supervisor could be individually liable for harassment.   And if the supervisor did more than pin cartoons on the wall, and engaged in continuous and sustained harassment, these acts could result in the constructive discharge of the employee.   A claim for constructive discharge, or the unlawful termination of employment, is a “personnel decision”;  therefore under Janken's analysis, the supervisor would be liable for the harassment but would escape liability for terminating the employee.

Finally, we do not agree with the Janken court's conclusion regarding the different language in the provisions on discrimination and harassment.   We conclude section 12940, subdivision (h)(1), which was not added until 1982, includes the language “any other person,” because coemployees, customers, and others who communicate with an employee in the workplace also have the opportunity to harass.   Coemployees and others who are not the employer's agents cannot hire, fire, or promote employees.   Thus, an amendment of section 12940, subdivision (a), which is the provision concerning unlawful discrimination, to include “any person” would have added unnecessary language.   Courts “should avoid a construction making any word surplusage.  [Citation.]”  (Arnett v. Cielo (1996) 14 Cal.4th 4, 22, 56 Cal.Rptr.2d 706, 923 P.2d 1 (Arnett).)  (See our discussion of respondeat superior and the agent language in section II A 4 a, post.)   Nothing in the language used in the harassment provision indicates it was intended to restrict the application of other provisions in the FEHA to exclude agents of the employer.

4. Statutory Construction

a. Agent language

When construing section 12926, subdivision (d) (“any person acting as an agent of an employer, directly or indirectly”) and section 12940, subdivision (a), we first look to the language of the statute (People v. Jones (1993) 5 Cal.4th 1142, 1146, 22 Cal.Rptr.2d 753, 857 P.2d 1163).   If the language of the statute, read in the light of the statutory scheme as a whole, is clear and unambiguous, this court must apply it according to its plain meaning.   (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735, 248 Cal.Rptr. 115, 755 P.2d 299.)

The Janken court concludes the statutory construction can lead to two interpretations, and it concludes the purpose of the agent language is “only to ensure that employers will be held liable if their supervisory employees take actions later found discriminatory, and that employers cannot avoid liability by arguing that a supervisor failed to follow instructions or deviated from the employer's policy.”  (Janken, supra, 46 Cal.App.4th at pp. 65-66, 53 Cal.Rptr.2d 741.)   The Janken court maintains the definition of employer under section 12926, subdivision (d), which includes “any person acting as an agent of an employer,” is not surplusage:  “Without the ‘agent’ language, it is by no means a foregone conclusion that employers would uniformly be held liable for all prohibited discriminatory acts by their supervisory employees.   See, e.g., the analysis of the scope of respondeat superior liability in Farmers Ins. Group v. County of Santa Clara, supra, 11 Cal.4th 992 [47 Cal.Rptr.2d 478, 906 P.2d 440], and the discussion of the purpose of the ‘agent’ language in Meritor Savings Bank v. Vinson (1986) 477 U.S. 57 [106 S.Ct. 2399, 91 L.Ed.2d 49], and especially the concurring opinion of Justice Marshall.”   (Janken, supra, at pp. 70-71, 53 Cal.Rptr.2d 741.)

To support its construction, the Janken court cites Farmers Ins. Group v. County of Santa Clara (1995) 11 Cal.4th 992, 47 Cal.Rptr.2d 478, 906 P.2d 440 (Farmers) and the majority and concurrence in Meritor, supra, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49.   Both of these cases involved harassment, not discrimination.   Under the rule of respondeat superior “an employer is vicariously liable for the torts of its employees committed within the scope of the employment.   [Citation.]”  (Lisa M. v. Henry Mayo Newhall Memorial Hospital (1995) 12 Cal.4th 291, 296, 48 Cal.Rptr.2d 510, 907 P.2d 358, fn. omitted.)   The nexus required is the tort must be engendered by or arise from the work.  (Id. at p. 298, 48 Cal.Rptr.2d 510, 907 P.2d 358.)  “Thus, if the employee ‘inflicts an injury out of personal malice, not engendered by the employment’ [citation] or acts out of ‘personal malice unconnected with the employment’ [citation], or if the misconduct is not an ‘outgrowth’ of the employment [citation], the employee is not acting within the scope of employment․  In such cases, the losses do not foreseeably result from the conduct of the employer's enterprise and so are not fairly attributable to the employer as a cost of doing business.”  (Farmers, supra, 11 Cal.4th at p. 1005, 47 Cal.Rptr.2d 478, 906 P.2d 440.)   Accordingly, an employer may not be strictly liable if an employee's act of harassing a coworker was sufficiently outrageous and unknown to the employer.

Nothing in either Meritor or Farmers suggests the need for agency language to impose respondeat liability when a supervisor makes a decision regarding hiring, firing, or promoting an employee.   Such acts must be considered the act of the employer.  (See Meritor, supra, 477 U.S. 57, 75, 106 S.Ct. 2399, 2410, 91 L.Ed.2d 49 [When “a supervisor discriminatorily fires or refuses to promote a black employee, that act is, without more, considered the act of the employer.”].)

Since agency liability would always pertain to a supervisor's discriminatory employment practice, the agent language in section 12926, subdivision (d), was not needed to create employer liability.   This becomes especially apparent when we examine the original statute regarding unlawful employment practices.   The Legislature enacted the Fair Employment Practice Act (FEPA) (Lab.Code, former § 1410 et seq.) in 1959.  (The FEPA was recodified in 1980 as part of the FEHA. The FEHA combined the now-repealed FEPA and the now-repealed Rumford Fair Housing Act (Health & Saf.Code, former § 35700 et seq.).)   At the time the Legislature enacted the FEPA, the rule of respondeat superior was well established.   Agency liability was codified in 1872 by addition of section 2338 to the Civil Code. (See also Kish v. California State Automobile Assn. (1922) 190 Cal. 246, 251, 212 P. 27 (Kish ) [respondeat superior applies when negligent acts of agent are within scope of employment].)

The FEPA defined employer to include “any person acting as an agent of an employer.”  (Lab.Code, former § 1413, subd. (d) [“ ‘Employer,’ except as hereinafter provided, includes any person regularly employing five or more persons, or any person acting as an agent of an employer, directly or indirectly;  the state or any political or civil subdivision thereof and cities.”].) The FEPA did not contain a provision addressing harassment.   As discussed ante, discriminatory acts under section 12940, subdivision (a)-unlike harassment-must invoke agency liability.   Therefore, if the agent language merely articulated the rule of respondeat superior, it was unnecessary.   Thus, under the Janken court's interpretation, the definition of employer in the FEPA was surplusage, violating the rule of statutory construction to “give meaning to every word of a statute if possible” (Arnett, supra, 14 Cal.4th at p. 22, 56 Cal.Rptr.2d 706, 923 P.2d 1).

b. Differences Between Title VII and the FEHA

Aside from ignoring the inclusion of the agent language in the original FEPA, the Janken court improperly relied on unsettled federal law to interpret a California statute.   The federal courts have not reached consensus regarding a supervisor's individual liability, and the United States Supreme Court has yet to rule on this question.   Although most recent circuit courts considering the issue have found no individual liability under the federal statutes, district courts have frequently criticized their analysis.  (See, e.g., Ruffino v. State Street Bank and Trust Co. (D.Mass.1995) 908 F.Supp. 1019, 1047-1048 [expressly rejects Maxwell's Intern., supra, 991 F.2d 583, and holds supervisors liable under Title VII]. See also Ostrach v. Regents of the University of California (E.D.Cal.1997) 957 F.Supp. 196, 199-200 (Ostrach ) [“Given the plain terms of the statute [Title VII], the absence of legislative history to support the conclusion of the [Maxwell's Intern.] court, and its frustration of legislative purpose, the decision seems to rest on nothing more than a policy determination that since supervisors are ordinarily less able than ‘employers' to bear the burdens of litigation, they should not be held liable for their own discriminatory conduct under Title VII․  [¶] For all the above reasons, this court is convinced that [Maxwell's Intern.] was wrongly decided, and I can only hope that an en banc court corrects the error.   Nonetheless, as I have previously explained, ‘[h]aving noted my disagreement with both the principle and its rationale, it goes without saying that this court is bound by the Circuit's ruling and must apply it.’  [Citation.]”].) Additionally, some Courts of Appeals have not resolved the issue.  (See Scarfo v. Cabletron Systems, Inc. (1st Cir.1995) 54 F.3d 931, 952 [notes the issue of a supervisor's individual liability is currently in a state of “ ‘evolving definition and uncertainty’ ”];  Iacampo v. Hasbro, Inc. (D.R.I.1996) 929 F.Supp. 562, 571-572 [in finding individual supervisors liable, the court points out the “marked lack of unanimity” among the district courts within the First Circuit Court of Appeals].   Also compare Stults v. Conoco, Inc. (5th Cir.1996) 76 F.3d 651, 654-655 [no individual liability] with Garcia v. Elf Atochem North America (5th Cir.1994) 28 F.3d 446, 451 [supervisors are individually liable].)

 Even assuming the majority of federal circuit courts have properly interpreted the agency language of the federal statutes, the Janken court failed to acknowledge the significant differences between the federal statutes and the FEHA, and did not analyze the particular language of the FEHA. Baird cites two other Court of Appeal cases which state the legislative purposes of the FEHA and Title VII are the same:  Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383, 1386, 15 Cal.Rptr.2d 53 and Fisher v. San Pedro Peninsula Hospital, supra, 214 Cal.App.3d 590, 606, 262 Cal.Rptr. 842.   Both of these cases are also from the Second District, and they make this statement without any discussion or analysis.  “While as a general rule California courts have looked to federal decisions under title VII for assistance in interpreting FEHA ‘where appropriate’ (County of Alameda v. Fair Employment & Housing Com. (1984) 153 Cal.App.3d 499, 504, 200 Cal.Rptr. 381 ․ ), it is not appropriate to follow federal decisions where the distinct language of FEHA evidences a legislative intent different from that of Congress.  [Citation.]”  (Page v. Superior Court (1995) 31 Cal.App.4th 1206, 1215-1216, 37 Cal.Rptr.2d 529.)

One significant difference between Title VII and the FEHA is the remedy provided.   Title VII calibrates the maximum allowable damage award to the size of the employer, but makes no provision for individual damage awards.  (42 U.S.C. § 1981a(b)(3)(A) & (D).)   The federal statute creates a sliding scale of maximum liability, ranging from a cap in damages at $50,000 for employers with fewer than 101 employees to a cap of $300,000 for employers with more than 500 employees.  (Ibid.) Since individuals have not been assigned a place in this range, federal courts have concluded this omission signals Congress's desire to exclude individual liability.  (Maxwell's Intern., supra, 991 F.2d 583, 587-588;  see also Tomka, supra, 66 F.3d 1295, 1314-1315;  but see Judge Fletcher's dissent in Maxwell's, Intern., supra, 991 F.2d 583, 589, which criticizes this analysis because the statute provides more than equitable relief.)

The remedy analysis in federal cases has no applicability to the very different statutory scheme set forth in the FEHA. At oral argument, counsel for Baird argued that the FEPA, the original statute on unlawful employment practices, “omitted” any reference to filing a complaint against individuals.   However the FEPA, unlike the federal statutes, provided for employers to file complaints against their individual employees if they refused to comply with the FEPA (Lab.Code, former § 1422).   Further, California's fair employment statute (Lab.Code, former § 1422.2;  § 12965, subd. (b)) permits an employee to file a civil action against a “person, employer, labor organization or employment agency․”  (Italics added.)   Section 12965, subdivision (c)(3), added in 1992, specifies the following:  “A court may grant as relief in any action filed pursuant to this subdivision any relief a court is empowered to grant in a civil action brought pursuant to subdivision (b), in addition to any other relief that, in the judgment of the court, will effectuate the purpose of this part.”   California's act therefore explicitly permits a monetary recovery against a person, and this recovery is not limited by or related to the employer's size.

The April 16, 1959, report of the Legislative Counsel on the FEPA (Assem.   Bill No. 91) also indicated an intent to apply the FEPA to individuals.   At page 4, the report described the statute as “[specifying] that its provisions extend to all natural persons and all types of organization․”  At page 5, it stated the statute mandated the commission to “conduct an investigation and attempt to eliminate any unlawful practice ․ and that upon failure to eliminate a practice by such means, to serve an accusation on the person or organization accused․”

Besides the legislative intent evinced by the above report and by the remedy language in the FEHA, the Janken court fails to consider the clear language of other provisions in the FEHA, which also reveal an intent to apply the act to individuals.   Subdivision (g), in section 12940, explicitly makes individuals liable when it states:  “It shall be an unlawful employment practice ․ [¶] ․ [¶] (g) For any person to aid, abet, incite, compel, or coerce the doing of any of the acts forbidden under this part, or to attempt to do so.”  (Italics added.)   This provision, not found in the comparable federal statutes, expressly holds individuals liable and demonstrates a clear intent not to restrict liability for unlawful employment practice to employers.   Other states with an analogous provision in their state statutes have imposed individual liability on supervisors who have aided or abetted a discriminatory practice.  (See, e.g., Schram v. Albertson's, Inc. (1997) 146 Or.App. 415, 422, 934 P.2d 483, 488;  Cerrato v. Durham (S.D.N.Y.1996) 941 F.Supp. 388, 396 [individuals are liable under the New York Human Rights Law];  Tyson v. CIGNA Corp. (D.N.J.1996) 918 F.Supp. 836, 840 [employee liable for aiding and abetting discriminatory practice under New Jersey Law Against Discrimination];  Ulrich v. City of Crosby (D.Minn.1994) 848 F.Supp. 861, 869 [under the Minnesota Human Rights Act, “an individual can be liable if he or she is found to have intentionally aided, abetted, incited, compelled or coerced another to engage in a forbidden employment practice ․ or attempted to do so”];  Anderson v. Pistner (1986) 148 Ill.App.3d 616, 620, 102 Ill.Dec. 9, 12, 499 N.E.2d 566, 569;  Walters v. President & Fellows of Harvard College (D.C.Mass.1985) 616 F.Supp. 471, 474 [employees liable for aiding and abetting discriminatory acts under the state statute].)  (Reno's complaint does not contain a claim under this provision;  we therefore need not consider whether Baird would be individually liable for aiding or abetting a discriminatory practice.)

As stressed previously in Justice Turner's persuasive dissent in Fiol, the “unambiguous words” in the FEHA, “chosen by the Legislature[,] are conclusive evidence of its intent ․” to impose liability on individuals (Fiol, supra, 50 Cal.App.4th at p. 1335, 58 Cal.Rptr.2d 308).   After filing a complaint with the DFEH (§ 12960), the FEHA authorizes the department to file a written accusation against “the person, employer, labor organization or employment agency accused, which shall be known as the respondent ․” (§ 12965, subd. (a).)  The commission may order the respondent, which may be an individual, to cease and desist from the unlawful practice (§ 12970, subd. (a)), or to pay actual damages (§ 12970, subd. (b)).  Once the DFEH issues a “right-to-sue” notice (§ 12965, subd. (b)), the aggrieved employee (or former employee) may bring a civil action under the FEHA “against the person, employer, labor organization or employment agency named in the verified complaint [previously filed with the department].” (§ 12965, subd. (b).)

In 1992, the Legislature amended section 12965, subdivision (b), to include the following language:  “If the person claiming to be aggrieved does not request a right-to-sue notice, ․ [a] city, county, or district attorney in a location having an enforcement unit ․ for the purpose of prosecuting AIDS/HIV discrimination claims, may also bring a civil action under this part against the person, employer, labor organization, or employment agency named in the notice.”  (Italics added.)

Thus, unlike the comparable federal statutes, the FEHA (and the earlier FEPA) consistently, and explicitly, applies to individuals.

c. The FEHC's construction of the statutes

When adopting the federal courts' interpretation of the word “employer,” the Janken court never acknowledged the FEHC's construction of the FEHA, which, as already noted, holds individual supervisors liable for their discriminatory acts (see Dept. Fair Empl. & Hous. v. Bee Hive Answering Service, supra, No. 84-16, FEHC Precedential Decs.1984-85, CEB 8;  Dept. Fair Empl. & Hous. v. Del Mar Avionics, supra, No. 85-19, FEHC Precedential Decs.1984-85, CEB 16;  Dept. Fair Empl. & Hous. v. Madera County, supra, No. 90-03, FEHC Precedential Decs.1990-91, CEB 1.).   The FEHC explained its reasons for finding the individual liable for discrimination in Del Mar Avionics:  “In considering whether a person may properly be deemed an ‘employer’ ․, we have looked to the degree which that person significantly affects access to employment, and not whether that person is an employer or agent in the conventional sense.   We have previously held liable as an agent/employer those persons having supervisory status who either themselves did the wrongful act or participated in the decision-making process which formed the basis of the discriminatory action.  [Citations.]”   (Dept. Fair Empl. & Hous. v. Del Mar Avionics, supra, No. 85-19, FEHC Precedential Decs.1984-85, CEB 16, pp. 24-25.)

 An administrative agency's construction of a statute is entitled to great weight, particularly when it is consistent with the language utilized by the Legislature.  (Robinson v. Fair Employment & Housing Com. (1992) 2 Cal.4th 226, 234-235, 5 Cal.Rptr.2d 782, 825 P.2d 767 (Robinson).)   The FEHC did premise its interpretation of employer, at least in part, on federal cases which had found individuals liable under Title VII. (See Dept. Fair Empl. & Hous. v. Bee Hive Answering Service, supra, No. 84-16, FEHC Precedential Decs.1984-85, CEB 8, pp. 14-16.)   As already discussed, many federal courts have now concluded supervisors are not individually liable.   The FEHC, however, has not indicated any change in its interpretation of the FEHA.

The Legislature has repeatedly amended portions of the FEHA and has not changed the language to overrule these administrative rulings.   In 1992, the Legislature amended section 12965, subdivision (b), to include a civil action based on HIV/AIDS discrimination.   Again the statute provided the action could be brought against the “person, employer, labor organization, or employment agency named in the notice.” (§ 12965, subd. (b), italics added.)

 We cannot presume the Legislature is aware of an administrative construction of a statute unless it is shown the Legislature has been made aware of this practice (Pacific Greyhound Lines v. Johnson (1942) 54 Cal.App.2d 297, 303, 129 P.2d 32), or the construction is one of such long standing the Legislature is presumed to know of it (El Dorado Oil Works v. McColgan (1950) 34 Cal.2d 731, 739, 215 P.2d 4).  “Because the Legislature authorized the FEHC to establish the system of publication in which precedential decisions are printed (§ 12935, subd. (h);  Labor Code, former § 1418, subd. (i)), the Legislature now is presumed to be aware” (Robinson, supra, 2 Cal.4th 226, 235, fn. 7, 5 Cal.Rptr.2d 782, 825 P.2d 767) of the 1984 and 1985 administrative decisions discussed above, “and thus has reason to be aware of the construction the agency placed on its own regulation” (ibid.).   The Legislature amended section 12926 or 12940 in 1985, 1987, 1989, 1990, 1992, and 1993, but has not modified the agency language.

Further, until Janken in 1996, Courts of Appeal had imposed liability on individual supervisors.   The Legislature “ ‘is deemed to be aware of existing laws and judicial decisions construing the same statute in effect at the time legislation is enacted, and to have enacted and amended statutes in light of such decisions as have a direct bearing upon them.’  [Citation.]”  (Fermino v. Fedco, Inc. (1994) 7 Cal.4th 701, 720, 30 Cal.Rptr.2d 18, 872 P.2d 559;  see also Cumero v. Public Employment Relations Bd. (1989) 49 Cal.3d 575, 596, 262 Cal.Rptr. 46, 778 P.2d 174.)  (Assemblywoman Sheila Kuehl has recently introduced AB 310 to the California Legislature.   This bill would, among other things, overrule Janken, supra, 46 Cal.App.4th 55, 53 Cal.Rptr.2d 741.)

We find the numerous amendments to sections 12926 and 12940, which have not modified the language to overrule the administrative rulings and Court of Appeal decisions prior to Janken, disclose the Legislature's intent to hold individual supervisors liable pursuant to section 12940.

d. The FEHA's purpose

The Janken court also adopts the policy considerations set forth in the federal cases.   The Janken court cites with approval the federal courts' observation that Congress did not intend to burden small entities with the costs associated with litigating discrimination claims;  it would therefore be incongruous, the federal courts conclude, to make individuals liable while exempting small employers.  (Janken, supra, 46 Cal.App.4th 55, 71, 53 Cal.Rptr.2d 741, citing Maxwell's Intern., supra, 991 F.2d 583, 587 and Birkbeck v. Marvel Lighting Corp., supra, 30 F.3d 507, 510.)

Using the policy reason promulgated by the federal courts, the Janken court asserts:  “The same reasoning applies to our task of construing the employer definition in the FEHA. The Legislature clearly intended to protect employers of less than five from the burdens of litigating discrimination claims.  [Citation.]  We agree that it is ‘inconceivable’ that the Legislature simultaneously intended to subject individual nonemployers to the burdens of litigating such claims.   To so construe the statute would be ‘incongruous' and would ‘upset the balance’ struck by the Legislature.”   (Janken, supra, 46 Cal.App.4th at p. 72, 53 Cal.Rptr.2d 741.)

 Concern over litigation costs was not the principal reason for the small employer exemption in the FEHA. Justice Baxter in Robinson, supra, 2 Cal.4th 226, 240, 5 Cal.Rptr.2d 782, 825 P.2d 767 stated the Legislature excused small employers from liability to relieve “the administrative body of the burden of enforcement where few job opportunities are available,” and to keep “the agency out of situations in which discrimination is too subtle or too personal to make effective solutions possible.”

Justice Baxter extensively quoted the reasons set forth by three commentators:  “ ‘Employers of less than four to eight employees are excepted from statutory coverage because regulation of the practices of numerous small employers was thought infeasible.   The number of jobs which could be made available in these units is relatively small compared to the results that can be obtained by eliminating discriminatory practices of large firms.   And discrimination between persons working together in a small establishment might often be so elusive that the law could not effectively protect the employee.’   (Note, The Operation of State Fair Employment Practices Commissions (1955) 68 Harv.L.Rev. 685, 687-688, fns. omitted.)

“․ ‘The exceptions for employers of fewer than five persons and for family and domestic servants serve a dual function:  they keep the Commission out of trivia in terms of job opportunities and out of situations too personal for the law to effect a satisfactory solution.’  (Note, The California FEPC:  Stepchild of the State Agencies, supra, 18 Stan.L.Rev. at p. 202.)

“ ‘A sense of justice and propriety led the framers to believe that individuals should be allowed to retain some small measure of the so-called freedom to discriminate;  besides, they feared the political repercussions of eliminating totally an area of free choice whose infringement had been so bitterly opposed.   In the second place, the framers believed that discrimination on a small scale would prove exceedingly difficult to detect and police.   Third, it was believed that an employment situation in which there were less than five employees might involve a close personal relationship between employer and employees and that fair employment laws should not apply where such a relationship existed.   Finally, the framers were interested primarily in attacking protracted, large-scale discrimination by important employers and strong unions.   Their aim was not so much to redress each discrete instance of individual discrimination as to eliminate the egregious and continued discriminatory practices of economically powerful organizations.   Thus they could afford to exempt the small employer.’  (Tobriner, supra, 16 Hastings L.J. at p. 342, fns. omitted.)”  (Robinson, supra, 2 Cal.4th at pp. 240-243, 5 Cal.Rptr.2d 782, 825 P.2d 767.)

In addition, section 12920 articulates the policy of the FEHA, and it provides, in pertinent part:  “It is hereby declared as the public policy of this state that it is necessary to protect and safeguard the right and opportunity of all persons to seek, obtain, and hold employment without discrimination or abridgment on account of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, or age.  [¶] It is recognized that the practice of denying employment opportunity and discriminating in the terms of employment for such reasons foments domestic strife and unrest, deprives the state of the fullest utilization of its capacities for development and advance, and substantially and adversely affects the interest of employees, employers, and the public in general.  [¶] ․ [¶] It is the purpose of this part to provide effective remedies which will eliminate such discriminatory practices․”

Public policy supports a broad reading of section 12940 because remedial legislation is to be given a liberal construction to promote its objective.   (Robinson, supra, 2 Cal.4th 226, 233, 5 Cal.Rptr.2d 782, 825 P.2d 767, citing Alford v. Pierno (1972) 27 Cal.App.3d 682, 688, 104 Cal.Rptr. 110.)   In construing section 12940, we consider the purpose of the law and adopt a construction which will further its purpose (Brown v. Superior Court (1984) 37 Cal.3d 477, 485, 208 Cal.Rptr. 724, 691 P.2d 272).

When delineating the policy reasons underlying its holding, the Janken court balanced the “chilling effect” created by imposing personal liability for making management decisions by the rare circumstances a plaintiff would receive any greater damages.  (Janken, supra, 46 Cal.App.4th 55, 72-73, 53 Cal.Rptr.2d 741.)   The court explains:  “In the present context, imposing liability on individual supervisory employees would do little to enhance the ability of victims of discrimination to recover monetary damages, while it can reasonably be expected to severely impair the exercise of supervisory judgment.”  (Id. at p. 72, 53 Cal.Rptr.2d 741.)   Making the employer liable is sufficient to meet the policy of checking discrimination under the FEHA, because the employer will sanction the offending supervisor.  (Id. at pp. 76-77, 53 Cal.Rptr.2d 741.)

A balancing test which only considers a plaintiff's monetary objective ignores the nonmonetary interests involved in a claim of discrimination.   As one commentator suggests:  “Employees name individual supervisors in lawsuits for a variety of reasons, but mostly because they want a supervisor to answer for his or her actions.”  (Hensiak, When the Boss Steps Over the Line:  Supervisor Liability Under Title VII (1997) 80 Marq.L.Rev. 645, 664.)

It is also unclear how frequently the “rare” circumstance of being unable to recover from the employer may arise.   In this case, it is uncertain whether Reno will be able to obtain relief from Redwood, since its assets have been sold and it is now defunct.   If it is determined Baird discharged Reno because of her cancerous condition, and Reno is unable to recover against Redwood, it would be unfair to bar Reno from recovering against Baird.

Further, refusing to award damages against the individual committing the unlawful act frustrates the purpose of awarding punitive damages under the FEHA. “The purpose of imposing punitive damages in particular is to punish the wrongdoer and deter others.   Holding individuals harmless for their own conduct, while imposing vicarious liability upon the organizations that employ those individuals, clearly frustrates” the purpose of awarding punitive damages.  (Ostrach, supra, 957 F.Supp. 196, 199;  see also Hamilton v. Rodgers (5th Cir.1986) 791 F.2d 439, 443 [refusing to hold supervisors liable encourages the belief they “may violate Title VII with impunity”].)   Moreover, the damage award needed to hurt a company sufficiently to provoke change far surpasses the amount needed to prompt an individual to desist his or her behavior.

The FEHA's policy is not advanced by relieving culpable parties of any direct consequences for their acts.   The Janken court ignores the employment reality today:  many, if not most, people do not remain at the same job.   Thus, the supervisor may leave one company, prior to any legal determination regarding the lawsuit;  the supervisor becomes free to commit additional discriminatory acts at another company.   This clearly counters the FEHA's goal of eliminating “discriminatory practices” (§ 12920).   Moreover, many supervisors of large companies have complete autonomy to make hiring, firing, and promotional decisions.   These decisions have widespread impact on people's job opportunities.

One of the principal purposes of tort law is to make individuals responsible for their actions.   Individual liability places the burden on the party who is best able to desist making unlawful discriminatory decisions.   If supervisors are subjected to individual liability, they may refrain from engaging in unlawful discriminatory actions, and businesses would be better protected from the cost of discrimination.  “If employers have no advance notice of their supervisors' conduct, their response must be after the fact, thus frustrating the statutory purpose of preventing the discriminatory conduct.”  (Ostrach, supra, 957 F.Supp. at p. 199, fn. omitted.)   In addition to making the employer responsible, the party actually committing the act should be jointly and severally liable.

Allowing supervisors to escape liability by asserting they were “merely” acting on behalf of the company, masks the reality that corporate entities are comprised of individuals.  “An employer can act only through individual supervisors and employees;  discrimination is rarely carried out pursuant to a formal vote of a corporation's board of directors.”  (Meritor, supra, 477 U.S. at p. 75, 106 S.Ct. at p. 2409.)  “Although an employer may sometimes adopt companywide discriminatory policies ․ [discriminatory] acts ․ are generally effected through the actions of individuals, and often an individual may take such a step even in defiance of company policy.”   (Ibid.)

Baird argues the purpose underlying the small business exemption under both the FEHA and Title VII is to focus primarily on institutional discrimination and not to regulate employment discrimination on an individual-by-individual basis.   As evidenced by the commentators' statements above, institutional discrimination was but one objective, not the sole goal, of the FEHA. Today, very few companies have a blatant policy of discrimination, and as explained above, individual supervisors' acts may have extensive impact.   The remedy must be directed to the more subtle and insidious forms of discrimination, since discriminatory policies are now rarely articulated.   We must ensure that the law bars “sophisticated as well as simple-minded modes of discrimination” (Lane v. Wilson (1939) 307 U.S. 268, 275, 59 S.Ct. 872, 876, 83 L.Ed. 1281), and we undermine the policy of the FEHA (and do not help businesses), by permitting supervisory employees who commit discriminatory acts to be shielded from liability.

We note other states have imposed individual liability pursuant to state statutes.   Although many states have not passed legislation on unlawful employment practices, of those states with such legislation, we are aware of at least four states permitting a lawsuit against the supervisor.  (See St. Peter v. Ampak-Division of Gatewood Products, Inc. (1997) 199 W.Va. 365, 484 S.E.2d 481 [plaintiff sued employer and supervisor for, among other things, “handicap” discrimination in violation of the Human Rights Act];  Johnson v. Dept. of Social & Health Services (1996) 80 Wash.App. 212, 907 P.2d 1223 [discrimination claim brought against employer and employees];  Blare v. Husky Injection Molding Systems Boston, Inc. (1995) 419 Mass. 437, 646 N.E.2d 111 [plaintiff sued employer and individuals for age discrimination];  Rasheed v. Chrysler Corp. (1994) 445 Mich. 109, 517 N.W.2d 19 [employee brought religious discrimination action against employer and immediate supervisor].   Also, as discussed ante, many courts have imposed liability under an aiding and abetting provision in the state statute.)

We find the goals of the FEHA to eliminate discriminatory practices and to “safeguard the right and opportunity of all persons to seek, obtain, and hold employment without discrimination or abridgment” (§ 12920) are advanced by permitting lawsuits pursuant to section 12940, subdivision (a), against the supervisory agents committing the unlawful discrimination and the employer.   This holding should not be misconstrued to suggest an employer's liability for the agent's acts within the workplace should be diminished.   Rather, making supervisors jointly and severally liable is consistent with the rule of respondeat superior which was codified in section 2338 of the Civil Code in 1872 (see, e.g., Kish, supra, 190 Cal. 246, 251, 212 P. 27 [employer responsible for agent's decisions within the scope of employment] ).

B. Triable Issues of Fact**

III. Claim of Intentional Interference with Business Relations**

DISPOSITION

We reverse the judgment as to Reno's claims of wrongful discharge and discharge in violation of public policy, and affirm the judgment in all other respects.   Reno is awarded costs on appeal.

FOOTNOTES

FOOTNOTE.   See footnote *, ante.

LAMBDEN, Associate Justice.

KLINE, P.J., and HAERLE, J., concur.