SANDERS v. CITY AND COUNTY OF SAN FRANCISCO

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

Allen SANDERS, Plaintiff and Appellant, v. CITY AND COUNTY OF SAN FRANCISCO, Defendant and Respondent.

No. A052479.

Decided: May 13, 1992

Roderick P. Bushnell, Bushnell, Caplan & Fielding, San Francisco, for plaintiff and appellant. Louise H. Renne, City Atty., Jonathan V. Holtzman, Sp. Asst. to City Atty., Camille Hamilton, Deputy City Atty., San Francisco, for defendant and respondent.

Appellant Allen Sanders (Sanders) appeals from a judgment entered after a demurrer by respondent City and County of San Francisco (City) was sustained without leave to amend.   The issue on appeal is whether a terminated public employee who asserts that his dismissal was the result of unlawful discrimination must obtain a writ of mandate overturning his termination before he may bring a civil suit under the Fair Employment and Housing Act.   We find that such a requirement does not exist, and will reverse the judgment.

BACKGROUND

Sanders, a black man, was hired by the City in 1980.   He worked as a welder for the San Francisco Municipal Railway.   In February 1988, and again in September, Sanders entered a chemical dependency program and was absent from work for extended periods.   In October, the City notified Sanders that charges were preferred against him for his dismissal, based on inattention to duties and absence without leave.

On November 9, a hearing was held before a City hearing officer.   The City presented evidence supporting its charges that Sanders had been neglectful of his duties, absent without leave and excessively absent;  that he had previously been counseled and disciplined for these performance problems but had not improved;  and that this absenteeism created a serious hardship for the track department.   No issues concerning racial or physical handicap discrimination by the City were raised at this hearing.   On November 16, the hearing officer determined that Sanders' employment should be terminated.

In January 1989, Sanders timely appealed the hearing officer's decision to the San Francisco Civil Service Commission.   The commission held a hearing on the matter and ultimately issued a ruling which read:  “Future employment subject to the review and approval of the General Manager, Personnel after satisfactory completion of a recognized rehabilitation program.”   The ruling impliedly upheld the hearing officer's decision to dismiss Sanders from his job.

Sanders then filed a complaint with the California Department of Fair Employment and Housing (DFEH), alleging discrimination based on race and physical handicap.   On February 6, 1989, the DFEH responded by issuing Sanders a “right to sue” letter which verified his attempt to file the complaint, but declined further action and advised him of his right to bring a civil lawsuit.

On February 5, 1990, Sanders filed this action in superior court for damages, injunction, and reinstatement under the Fair Employment and Housing Act (FEHA or Act).   The complaint alleged that the City had refused to reasonably accommodate Sanders' medical condition or physical handicap;  that there was an atmosphere of discrimination against persons with physical disabilities at the City's place of business;  that Sanders was terminated because of his medical condition or physical handicap in that his absences were due to his participation in a recognized rehabilitation program;  that Sanders was terminated so that the City could hire, promote, or retain individuals who were not black;  and that other City employees who were absent due to drug dependency problems and had completed rehabilitation programs but were not black were not terminated from their employment.

The City filed a demurrer to the complaint, asserting that Sanders had not exhausted all available administrative and judicial remedies.   On December 13, the court sustained the demurrer without leave to amend on the ground that Sanders failed to exhaust administrative remedies.   Sanders timely appealed from the judgment.

APPEAL

The City claims, and the trial court apparently agreed, that because Sanders did not obtain a writ of mandate overturning the hearing officer's decision to terminate him “for cause,” he is barred by the exhaustion doctrine from filing a complaint for employment discrimination under the FEHA.

To assess Sanders' claim it is first necessary to examine the interrelationship between the exhaustion doctrine and the FEHA's statutory scheme.

The Exhaustion Doctrine

 The basic policy behind the exhaustion of remedies doctrine is the promotion of judicial efficiency where administrative remedies are available and are as likely as a judicial remedy to provide relief.  (Yamaha Motor Corp. v. Superior Court (1986) 185 Cal.App.3d 1232, 1240, 230 Cal.Rptr. 382.)   “[Exhaustion] rules are based on a practical approach to the solution of internal problems, complaints and grievances․   They make possible the settlement of such matters by simple, expeditious and inexpensive procedures, and by persons who, generally, are familiar therewith.”  (Holderby v. Internat. Union etc. Engrs. (1955) 45 Cal.2d 843, 846, 291 P.2d 463.)

 It is a fundamental rule of procedure that “where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act.”   (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 292, 109 P.2d 942.)   It is well settled that “ ‘a court violating the [exhaustion] rule acts in excess of jurisdiction.’  [Citation.]”  (City of Susanville v. Lee C. Hess, Co. (1955) 45 Cal.2d 684, 689, 290 P.2d 520.)

It is not disputed that Sanders exhausted the City's administrative remedies for challenging his dismissal.   A hearing occurred, evidence was presented, the hearing officer issued a final written order recommending dismissal.   Sanders then appealed to the Civil Service Board, which upheld this decision.  (See City & County of S.F. Civil Service Com.Rules, § 6.06, governing termination of a permanent employee, and S.F. Charter, § 8.341, entitled “Dismissal for Cause.”)

 However, section 1094.5 of the Code of Civil Procedure (section 1094.5) sets forth an additional remedy which is used to obtain judicial review of adjudicatory decisions of state or local agencies, certain districts, and certain private entities.  (See Deering, Cal.Administrative Mandamus (2d ed. 1989) § 1.1 et seq.)   Specifically, section 1094.5 sets forth a mandamus procedure whereby a superior court judge, sitting without a jury, reviews the record of an administrative agency hearing to determine (1) whether the employer has proceeded without, or in excess of, jurisdiction;  (2) whether there was a fair trial;  and (3) whether there was any prejudicial abuse of discretion.  (§ 1094.5, subd. (b);  see also Boren v. State Personnel Board (1951) 37 Cal.2d 634, 234 P.2d 981.) 1

As a means for challenging disciplinary action against a public employee, the writ of mandamus is considered a critical step in the exhaustion process.  “[S]o long as ․ a quasi-judicial decision is not set aside through appropriate [mandamus] review the decision has the effect of establishing the propriety of [an agency's] action.”  (Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, 484, 131 Cal.Rptr. 90, 551 P.2d 410.)

The FEHA

 The FEHA is a “comprehensive scheme” enacted by the Legislature for combating employment discrimination.  (Brown v. Superior Court (1984) 37 Cal.3d 477, 485, 208 Cal.Rptr. 724, 691 P.2d 272.)   The Act declares that it is the public policy of this state “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 handicap, medical condition, marital status, sex, or age.”  (Gov.Code, § 12920.)   Its purpose is to “provide effective remedies which will eliminate ․ discriminatory practices.”  (Ibid.)  The FEHA provides protection to both private and public employees.  (See State Personnel Bd. v. Fair Employment & Housing Com. (1985) 39 Cal.3d 422, 429–431, 217 Cal.Rptr. 16, 703 P.2d 354 (State Personnel Bd.).)

The FEHA sets forth a variety of procedural remedies, including its own administrative remedies.  “[T]o bring an action under the FEHA an individual is required to exhaust his administrative remedies under the act․   It was the intent of the Legislature to provide an administrative forum for eliminating unlawful employment practices ‘by conference, conciliation, and persuasion.’  (Gov.Code, § 12963.7, subd. (a).)”  (Snipes v. City of Bakersfield (1983) 145 Cal.App.3d 861, 866, 193 Cal.Rptr. 760;  see also Commodore Home Systems, Inc. v. Superior Court (1982) 32 Cal.3d 211, 213, 185 Cal.Rptr. 270, 649 P.2d 912;  State Personnel Bd., supra, 39 Cal.3d 422, 428–429, 217 Cal.Rptr. 16, 703 P.2d 354.)

 Under the FEHA's provisions, once a complaint is filed with the DFEH, an administrative investigation must occur, and the employer must be served with notice of the complaint.   The DFEH may then either choose to pursue an accusation against the employer before the Fair Employment and Housing Commission or issue a “right to sue” letter, which allows the complainant to pursue a private court action under the FEHA.  (Gov.Code, §§ 12965, subds. (a) & (b), 12967.)   Again, the purpose of these procedures is “ ‘to provide an administrative forum whereby discrimination disputes may be resolved short of going to court․’ ”  (Snipes v. City of Bakersfield, supra, 145 Cal.App.3d 861, 869, 193 Cal.Rptr. 760.)

Exhaustion of Remedies as a Bar to an FEHA Civil Action

 In the public employment context, it appears that the Legislature has developed two legislative schemes which are somewhat overlapping but clearly independent of one another.   The section 1094.5 mandamus procedure provides a forum for judicial review of an agency's decision to terminate or discipline an employee.   The exhaustion of this remedy is a jurisdictional prerequisite to a private action against a public agency where the dismissal or discipline is the basis of the action.   The FEHA, on the other hand, is designed to ensure that all employers, both public and private, refrain from engaging in discriminatory employment practices.   Utilization of the administrative remedies set forth in the FEHA are, by the terms of the Act itself, the only prerequisite for bringing a private civil action for violation of the Act.

The City argues that because the sole basis of Sanders' claims under the FEHA is the conduct of the hearing officer and the outcome of its quasi-judicial hearing, a writ of mandamus providing for judicial review of this decision was the proper recourse.   Without obtaining a judicially decreed reversal of the officer's decision, the City argues, Sanders should be barred from pursuing a civil action based on his termination, even under the provisions of the FEHA.

 The City is incorrect in contending that Sanders' complaint for unlawful discrimination is premised on substantive or procedural error that occurred at his disciplinary hearing.   Sanders' lawsuit does not take issue with the findings of the hearing officer or the sufficiency of evidence supporting his decision.   The essence of his complaint is the allegation that the City practices discrimination in the way it disciplines its employees.   In other words, regardless of whether the dismissal of Sanders was technically free from defect under its rules and regulations, those standards are being applied in a manner which has a disparate adverse impact on black and physically handicapped employees.2  That issue was not before the hearing officer in this case.

By the City's reasoning, an employer who meets its own “just cause” criteria for dismissal is completely insulated from liability under the FEHA, even if the employer applies that criteria in an unequal and discriminatory manner.   We doubt that the Legislature intended such a result.   Indeed, Sanders' FEHA claims were inchoate until his termination became a reality.

The City claims Westlake Community Hosp. v. Superior Court, supra, 17 Cal.3d 465, 131 Cal.Rptr. 90, 551 P.2d 410 (Westlake ) precludes Sanders from pursuing this action.   In Westlake, a physician whose hospital privileges were revoked brought a tort action against the hospital before seeking judicial review by mandamus to compel her readmission.   Her complaint alleged that her privileges were revoked as part of “a malicious conspiracy, engineered by all of the named defendants in order to destroy [her] medical practice.”  (Id., at p. 470, 131 Cal.Rptr. 90, 551 P.2d 410.)   The California Supreme Court analogized the doctor's suit to an action for malicious prosecution and reasoned that because the claim was “necessarily premised on the assertion that the hospital's decision to revoke plaintiff's privileges was itself erroneous and unjustified,” she was required to obtain a judicial vindication of her position before proceeding with a civil action.   (Id., at p. 484, 131 Cal.Rptr. 90, 551 P.2d 410, emphasis added.)  “[O]nce a court determines in a mandamus proceeding that an association's quasi-judicial decision cannot stand, either because of a substantive or procedural defect, the prevailing party is entitled to initiate a tort action․”  (Ibid, emphasis added.)

Unlike the physician's complaint in Westlake, Sanders' present causes of action are not inexorably premised on a substantive or procedural violation of the City's rules or regulations.   Instead, he claims to be a victim of a disciplinary system which, as practiced by the City, promulgates unequal treatment based on race and physical handicap.

The other cases cited by City are likewise not controlling here, as each involved only allegations of wrongful discharge, not discrimination.  (See, e.g., Summers v. City of Cathedral City (1990) 225 Cal.App.3d 1047, 275 Cal.Rptr. 594;  City of Fresno v. Superior Court (1987) 188 Cal.App.3d 1484, 234 Cal.Rptr. 136;  Logan v. Southern Cal. Rapid Transit Dist. (1982) 136 Cal.App.3d 116, 185 Cal.Rptr. 878.)

United States Supreme Court cases interpreting the exhaustion doctrine in connection with analogous civil rights legislation are in accord with our conclusion.   In Alexander v. Gardner–Denver Co. (1974) 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147, the court held that even where employee had previously raised and litigated his discrimination claims before the employer's arbitrator, he was still able to pursue an action under federal anti-discrimination statutes.   Said the Alexander court, “We think ․ the federal policy favoring arbitration of labor disputes and the federal policy against discriminatory employment practices can best be accommodated by permitting an employee to pursue fully both his remedy under the ․ collective-bargaining agreement and his cause of action under Title VII.”   (Id., at pp. 59–60, 94 S.Ct. at 1025, emphasis added.)   Subsequently, the high court held that a plaintiff need not first exhaust state mandated administrative or judicial remedies before bringing an employment discrimination suit under 42 United States Code section 1983.  (Patsy v. Florida Board of Regents (1982) 457 U.S. 496, 516, 102 S.Ct. 2557, 2568, 73 L.Ed.2d 172.)

Collateral Estoppel

 In supplemental letter briefing the City has changed its emphasis and now urges that Sanders is barred by the doctrine of collateral estoppel from raising FEHA claims which, according to the City, he could have but did not raise at his dismissal hearing.   The Knickerbocker court noted that a failure to exhaust judicial remedies is actually an aspect of collateral estoppel or issue preclusion, which “bars the relitigating of issues which were previously resolved in an administrative hearing by an agency acting in a judicial capacity.”  (Knickerbocker, supra, 199 Cal.App.3d 235, 242, 244 Cal.Rptr. 764, citing People v. Sims (1982) 32 Cal.3d 468, 478–479, 186 Cal.Rptr. 77, 651 P.2d 321.)   The court held that, to the extent that plaintiff's civil causes of action contain issues that were previously resolved adversely to him in an administrative proceeding, such causes of action are barred by collateral estoppel.  (Id., 199 Cal.App.3d at p. 242, 244 Cal.Rptr. 764.)

Collateral estoppel was subsequently applied in an employment discrimination context in Oquendo v. California Institution for Women (1989) 212 Cal.App.3d 520, 260 Cal.Rptr. 688.   Oquendo, a probationary employee of the state Department of Corrections contended, in an administrative proceeding, that the state agency had not made a fair accommodation for his disability under the FEHA.   The administrative law judge found against Oquendo, who then filed a civil action alleging a violation of the same accommodation provision of the FEHA.   The court held that the plaintiff was collaterally estopped from relitigating an issue already determined adversely to him in a final administrative proceeding.  (Id., at p. 522–523, 260 Cal.Rptr. 688.)

The City's citation of Oquendo as authority for the proposition that Sanders is barred by collateral estoppel in this case is not persuasive.   First, FEHA discrimination issues were neither raised nor litigated in the administrative proceedings below.   Consequently, a necessary prerequisite for application of the doctrine, i.e., that the issue sought to be raised in the second proceeding was necessarily determined adversely to the plaintiff in the previous proceeding (People v. Sims, supra, 32 Cal.3d 468, 479, 186 Cal.Rptr. 77, 651 P.2d 321), is absent.

Second, in our view Oquendo fails to give adequate consideration to the clear purpose manifested by the FEHA to provide an independent administrative vehicle for the redress of employment discrimination claims.

In State Personnel Bd., supra, 39 Cal.3d 422, 217 Cal.Rptr. 16, 703 P.2d 354, the board asserted that it had exclusive jurisdiction over all aspects of the selection of civil service employees, and thus applicants who claimed they had been denied positions because of discrimination could not seek relief through the FEHA.   The state Supreme Court rejected this contention, finding that the Legislature chose to provide employees suffering from discrimination with more than an agency's own administrative remedies, remedies which are limited to a hearing where there is no right of cross-examination or direct examination of witnesses, where the rules of evidence do not apply, and where the proceeding may not normally extend beyond two hours.  (Id., at p. 433, 217 Cal.Rptr. 16, 703 P.2d 354.)   By enacting the FEHA the Legislature chose to provide for review of allegedly discriminatory standards by an independent and fully adjudicatory body.  (Id., at p. 434, 217 Cal.Rptr. 16, 703 P.2d 354.)   Stated the court, “The FEHA was meant to supplement, not supplant or be supplanted by, existing antidiscrimination remedies, in order to give employees the maximum opportunity to vindicate their civil rights against discrimination.”  (Id., at p. 431, 217 Cal.Rptr. 16, 703 P.2d 354;  see also Evans v. Southern Pacific Transportation Co. (1989) 213 Cal.App.3d 1378, 1382–1388, 262 Cal.Rptr. 416 [railroad employee's discrimination claims under the FEHA not preempted by the federal Railway Labor Act].)

In Snipes v. City of Bakersfield, supra, 145 Cal.App.3d 861, 193 Cal.Rptr. 760, it was held that the purposes and procedures of the FEHA demonstrated a legislative intent to exempt actions brought under it from the requirements of the Tort Claims Act.   The court found that “[t]he procedural guidelines and the time framework provided in the FEHA are special rules for this particular type of claim which control over the general rules governing claims against governmental entities.”  (Id., at p. 868, 193 Cal.Rptr. 760, emphasis original.)

Finally, in ruling that the FEHA did not supplant common law causes of action for employment discrimination and that exhaustion of FEHA administrative remedies is not required prior to the filing of such nonstatutory claims, our Supreme Court noted that the FEHA's purpose “was not to narrow, but to expand the rights and remedies available to victims of discrimination.”   (Rojo v. Kliger (1990) 52 Cal.3d 65, 82, 276 Cal.Rptr. 130, 801 P.2d 373 (Rojo ).)

 As these cases recognize, the statutory scheme created by the FEHA evinces a legislative intent to provide an independent statewide remedy for employment discrimination regardless of any remedies which may have previously been available through the employer's own grievance procedures.

Swartzendruber v. City of San Diego (1992) 3 Cal.App.4th 896, 5 Cal.Rptr.2d 64 (Swartzendruber ) illustrates this point.   The plaintiff in Swartzendruber was ostensibly fired for refusing to wear a uniform on the job.   She unsuccessfully challenged her termination before the Civil Service Commission.   Then (without first seeking a writ of mandate under section 1094.5) she filed a lawsuit containing several causes of action, including intentional infliction of emotional distress, breach of statutory duty, violation of public policy, federal civil rights violation and sex discrimination.

The Swartzendruber court held that all of plaintiffs causes of action except the one for sex discrimination under the FEHA were barred under principles of collateral estoppel.   The court ruled that in the case of plaintiff's FEHA claim, “unlike her other causes of action—there was an alternate administrative avenue to the City's internal review proceedings and an appeal to the Commission” which she separately chose to pursue by filing complaints with the DFEH and EEOC and obtaining right-to-sue letters.   (Swartzendruber, supra, 3 Cal.App.4th at p. 910, 5 Cal.Rptr.2d 64.)   Citing Rojo and State Personnel Bd., the court concluded that “recourse to the FEHA administrative procedures eliminates the need to pursue administrative mandamus pursuant to Code of Civil Procedure section 1094.5.”  (Id., at p. 911, fn. 8, 5 Cal.Rptr.2d 64.)   Again, federal discrimination cases are in accord with this result.  (See Astoria F.S. & L. Assn. v. Solimino (1991) 501 U.S. 104, ––––, 111 S.Ct. 2166, 2171, 115 L.Ed.2d 96, 106 [unreviewed state administrative findings have no preclusive effect on actions under Age Discrimination in Employment Act];  University of Tennessee v. Elliott (1986) 478 U.S. 788, 795–796, 106 S.Ct. 3220, 3224–25, 92 L.Ed.2d 635 [same as to Title VII employment discrimination claims];  Garrett v. City and County of San Francisco (9th Cir.1987) 818 F.2d 1515, 1520 [dismissed firefighter bringing a Title VII action alleging disparate racial treatment not collaterally estopped by virtue of state court judgment denying petition for writ of mandate which sought to overturn dismissal].)

 We conclude that a terminated public employee who claims to be a victim of unlawful discrimination in the workplace need not challenge the propriety of his or her dismissal under section 1094.5 before bringing a private suit under FEHA.   The administrative remedies provided for in the FEHA are the only ones which must be exhausted prior to commencing a civil action thereunder.

DISPOSITION

The judgment is reversed.

FOOTNOTES

1.   In Knickerbocker v. City of Stockton (1988) 199 Cal.App.3d 235, 244 Cal.Rptr. 764 (Knickerbocker ), the Court of Appeal noted the confusion into which courts have frequently fallen by mislabeling a writ of administrative mandamus as an administrative remedy when it is in fact a judicial one.  (Id., at pp. 241–242, 244 Cal.Rptr. 764.)   Although the order below cited a failure to exhaust “administrative remedies,” the City now acknowledges that the demurrer should have been sustained due to Sanders' failure to exhaust his judicial remedies.  (See Knickerbocker, supra, at p. 240, 244 Cal.Rptr. 764.)   The matter is of no moment, since it is the ruling of the court and not its reasoning which we must review.   (El Centro Grain Co. v. Bank of Italy (1932) 123 Cal.App. 564, 567, 11 P.2d 650.)

2.   In reviewing the trial court's decision to sustain the City's demurrer we accept, as we must, the truth of the allegations in Sanders' complaint.  (Dale v. City of Mountain View (1976) 55 Cal.App.3d 101, 105, 127 Cal.Rptr. 520.)

SMITH, Associate Justice.

KLINE, P.J., and PETERSON, J., concur.