California Court Applies Ministerial Exception to FEHA

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In Henry v. Red Hill Evangelical Lutheran, the plaintiff was a preschool teacher and the director of preschool education at a private preschool run by a Tustin, California Lutheran church.  The school terminated her employment after if found that the plaintiff was living with her boyfriend and raising their children together, without being married.  The school required that all students and teachers be "practicing Christians."  The school felt that the plaintiff's lifestyle was violating the church teaching and commitment to live as a practicing Christian.  It decided to end the employment relationship on this ground. 

The plaintiff, Sara Henry, subsequently sued and alleged that her termination violated the California Fair Employment and Housing Act 's prohibition against marital discrimination.  The Lutheran school argued that the lawsuit was barred because FEHA's definition of "employer" does not include a non-profit religious corporation.  The school further argued that Henry could not allege a common law wrongful termination action either in this situation, whether it is based on FEHA or the California Constitution.  The court agreed, holding that the ministerial exception to FEHA set forth in section 12926(d) of the Government Code barred the claim and that the California Constitution did not support the lawsuit either. 

This is one of the first California published opinions to discuss the ministerial exception to FEHA.  Although the case appears clear cut on its face, it is plausible that the decision may have been different if the plaintiff had been able to present evidence that the school was aware of other teachers/administrators who were not living their lives as "practicing Christians" in accordance with the principles of the school and church.  Religious institutions dealing with similar situations should be aware not only of the scope of coverage of the ministerial exception, but also that should apply their religious principles equally and fairly in order to receive a similar result as in Red Hill Evangelical Lutheran, under similar factual circumstances.  Lawyers advising religious institutions should understand that good plaintiffs' attorneys will attempt to be very aggressive in discovery proceedings to uncover evidence of unequal treatment. 

A copy of the full opinion is available here.

No Duty to Accommodate Employee Who Isn’t Qualified for Job

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In Johnson v. Board of Trustees, the Ninth Circuit elaborated on the limits of an employer’s duty to accommodate a disabled employee.  Trish Johnson was a special education teacher in Idaho with a history of depression and bipolar disease.  Johnson’s position required a state teaching certificate, which in turn required certified teachers to meet a minimum level of continuing education credits in a five year period.  When her contract came up for renewal in the fall of 2007, Johnson had not completed the continuing education requirements because she suffered a major depressive episode over the summer, so she petitioned the school board to seek provisional authorization from the state to allow her to teach temporarily without a license.  The Board denied her request because 1) she had five years to obtain the credits and 2) the Board only petitioned the state when there was no certified teacher available to fill a position.  A certified teacher was available and was hired.

Johnson brought suit for disability discrimination, a suit summarily dismissed by the trial court.  On review by the Ninth Circuit, the Court agreed that Johnson's claim should be dismissed.  The Court held that in order to prevail on a claim for disability discrimination or failure to accommodate, the plaintiff must establish that she was a "qualified individual with a disability."  To establish this, the plaintiff must show that she 1) has the experience, education and skills required by the job and 2) can perform the essential functions of the job, with or without a reasonable accommodation.  The Board argued that Johnson failed to establish that she met the requirements of the job, and there was therefore no need to accommodate her disability.  Johnson countered that because she could have obtained her teaching certificate with an accommodation of additional time, the Board was required to accommodate her ability to obtain her teaching certificate.  The Court disagreed, and held that there is no duty to accommodate an employee’s efforts to meet the job skills requirement.  By way of a straightforward example, the Court noted that under the EEOC guidelines, a law firm that requires incoming attorneys to be members of the bar need not accommodate a visually impaired attorney who fails to pass the bar exam.  On the other hand, the firm is required to provide a reasonable accommodation to a visually impaired –  but otherwise qualified – bar member.  Simply summarized, guidance by the EEOC “explicitly disclaims any requirement of providing reasonable accommodation to disabled individuals who fail to meet the job prerequisites on their own.” 
Since the job requirement itself was neither discriminatory nor had a disparate impact on disabled individuals, the district court’s ruling was allowed to stand.  The Johnson case is available here.

Court Allows Post Oral Argument Briefing in Brinker

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In a relatively rare circumstance, the California Supreme Court has allowed the California Employment Law Council to file a post oral argument amicus brief.  The supplemental brief was filed on December 2 and addresses the limited issue of whether the Court's ruling on the "rolling 5 hour" issue will be retroactive or prospective only.  Many who watched the oral argument gleaned that at least some of the Justices surprisingly seemed to be leaning toward a finding that California law requires a meal break to be provided on a rolling basis for every 5 consecutive hours worked.  (This is a different and separate issue than the main issue being decided by the Court--what it means to "provide" a meal break.)  If that is in fact the ruling of the Court, it would mean that an employee who takes an early lunch and then works five more hours would be entitled to another meal break.  Most lawyers, employers, and courts have not interpreted the law in this fashion.  Thus, if the Court rules in this manner and the ruling is retroactive, it is sure to expose California employers to a new onslaught of lawsuits on this meal break issue as well as potentially huge liability.  The California Employment Law Council's amicus brief argues against such a result and suggests that any such ruling should operate prospectively only.   The parties to the case have 30 days (from December 2) to file responsive briefs.  Given the allowance of supplemental briefing, it is unlikely a decision will be rendered in Brinker much earlier than the February deadline. 

Individual Supervisors Not Liable for Military Service Discrimination

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On this Veteran's Day, employers are appropriately reminded that various laws prohibit discrimination against employees on account of military service.  One of these laws is California Military & Veterans Code Section 394.  This law prohibits employment discrimination against members of the armed forces because of their membership or service.  Yesterday, in a case of first impression, a California court addressed whether individual supervisors may be sued and held personally liable for discrimination under Section 394.  In Haligowski v. Superior Court (Pantuso), the plaintiff was a Lieutenant in the Navy and was called to active duty in Iraq during the course of his employment with defendants.  After returning from a 6 month tour of duty, plaintiff was informed his employment was terminated.  Unsurprisingly, plaintiff sued for discrimination.  He sued not only his employer, but also his immediate supervisors.  The individual supervisors asked the trial court to throw out the claims against them individually, but the trial court refused, holding that Section 394 allows for personal liability against individual supervisors.  The supervisors appealed.

On appeal, the California appellate court reversed, holding that Section 394 only allows for liability against an employer, not against individual supervisors.  The court reasoned that although Section 394 prohibits discrimination by any "person," that does not necessarily mean that liability may be imposed against any "person."  The court explained that California's primary law prohibiting employment discrimination, FEHA, similarly prohibits discrimination by any person, yet it is well-established that only employers (not individual supervisors) may be held liable for discrimination under FEHA.  The court held that there was no reason to treat employment discrimination under Section 394 any differently.

To be clear, the court in no way addressed the propriety of the employee's claims against the employer, much less held that the employer acted properly in terminating the employment relationship.  The court simply held that the employee would have to pursue his claims only against the employer and not against his individual supervisors. 

A Little Harassment Does Not Equal a Hostile Work Environment

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In an unusually helpful ruling in favor of a California employer, the Fourth District Court of Appeal upheld an Orange County trial court’s decision to throw out a jury verdict finding sexual harassment.

In Brennan v. Townsend & O'Leary, Plaintiff Stephanie Brennan started with advertising agency Townsend & O’Leary as an assistant media planner in 1991 and rose steadily in the agency until she became an advertising supervisor and vice-president in January 2005.  Brennan testified at trial that although she was close to agency owner Steve O’Leary – who was “like a second father” – and his wife, in 1999 the agency hired a senior vice president media director, and the corporate environment began to change.  Brennan told the jury that she regularly confided in O’Leary and he asked her about her personal and dating life.  She testified to a variety of sexually explicit conversations both with O’Leary and more generally at executive meetings during 2000 and 2001. She described a number of Christmas parties featuring off-color Santas in 2002 or 2003.  Finally, in August 2004, Brennan inadvertently obtained an email written by individual co-defendant Scott Montgomery referring to Brennan as “big-titted” and “mindless.”  Understandably, Brennan complained about the email, a complaint that resulted in a written reprimand and warning issued to Montgomery.  In addition, Brennan sought out and talked to current and former agency employees to find other examples of sexual harassment.  In the Fall of 2004, Brennan told O’Leary that other employees had harassment complaints, but that they would be unwilling to speak with him.  She threatened to leave the agency.  O’Leary repeatedly asked Plaintiff to stay with the agency, to cooperate in investigating sexual harassment with an outside investigator, and to “restore” the company environment.  Brennan responded that she wished to leave and that she expected a compensation package for her “constructive termination.”  When she did not get the expected package, Brennan told O’Leary that she was going to “move on” with her attorney and gave him a letter from her lawyer in October 2004.  In November, Brennan refused to cooperate with the outside investigator the agency hired to investigate sexual harassment and finally in January she submitted her written resignation.

The jury concluded that Brennan was the victim of sexual harassment and awarded $200,000 from the agency, and $50,000 from individual defendant Montgomery, author of the offensive email.  The trial judge threw out the verdict, holding that there was no substantial evidence to support a finding of hostile work environment harassment.  The Court of Appeal agreed, ruling that as a matter of law, O’Leary’s evidence was insufficient to meet the “severe or pervasive” standard necessary to support a finding of hostile work environment.  The court explained:  “There is no recovery for harassment that is “occasional, isolated, sporadic or trivial," and “an employee seeking to prove sexual harassment based on no more than a few isolated incidents of harassing conduct must show that the conduct was ‘severe in the extreme.’”

The Court quickly dismissed any suggestion that the behavior Brennan complained of was “severe” and focused instead on whether it was “pervasive.”  The Court went on to note that the only harassment directed at O’Leary personally was the single “rude, unprofessional” email referring to her as a “big-titted, mindless one.”  In addition, she witnessed three sexually offensive incidents over three years that were directed at others.  “Such evidence simply does not show a concerted pattern of harassment.”  The Court was equally unimpressed by evidence of Steve O’Leary’s personal conversations of Brennan’s personal life, many of which the plaintiff admitted were not unwelcome of offensive, and the third-party complaints of harassment Brennan uncovered in her personal investigation.  Simply put, the Court found that the evidence was “not enough” to support the verdict.

While the Brennan decision is a distinct “win” for employers and the defense bar, employers should remain wary:  the jury believed the plaintiff’s testimony and awarded $250,000 in damages to her.  What is more, one judge disagreed and wrote a dissenting decision.  The defendants eventually prevailed, but no doubt only after a costly and likely painful fight that could have been avoided had no inappropriate workplace conduct occurred.

Oral Argument in Brinker Scheduled for November

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The California Supreme Court has finally scheduled oral argument in Brinker v. Hohnbaum for November 8, 2011.   Employers can reasonably expect a decision in the case sometime between December 2011 and February 2012, as the Court generally has 90 days following oral argument to issue its decision.  The long-awaited decision is expected to provide much needed clarity on an issue that has fueled countless lawsuits and caused operational headaches for employers as well as inconvenience for employees.  Specifically, the Court will decide whether California meal period laws require employers to ensure that employees take at least a 30 minute, uninterrupted meal break at or before completing five hours of work, or whether employers are simply required to provide their employees the opportunity to take such a break, which the employee may voluntarily decide to skip with no adverse consequence to either the employer or the employee.

Most courts that have decided this issue have held that the law simply requires the employer to provide the opportunity for a meal break, but a few courts (along with the DLSE for a period of time) have held that employers must ensure such breaks are taken, regardless of whether an employee wants to take them.  As a result, employers have had no clear direction on the proper interpretation of the law and most have taken the conservative approach and forced employees to take breaks, even disciplining them for failing to do so, much to the displeasure of many employees.  Employer friendly groups have caused numerous bills to be introduced before the California legislature in the last two or three sessions to try to clarify this issue in a way that is operationally manageable and beneficial to employers and employees alike, but the legislature has refused to pass almost any bill that would provide the greatly needed relief--much to the appreciation of the California plaintiffs' bar which has profited wildly from the cottage industry of meal break litigation.

Stay tuned for further developments on this important case for California employers.

California Supreme Court to Hear Overtime Exemption Case Next Week

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Almost four years ago, the California Supreme Court granted review of Harris v. Superior Court, 154 Cal.App.4th 164 (2007), an important case involving application of the administrative exemption under California law. The Court has finally scheduled oral argument on the case for October 3, 2011.

The issue under review in Harris is whether certain insurance claims adjusters were properly classified by their employer as exempt under the administrative exemption.  Specifically, the Court will analyze whether the claims adjusters were engaged in work that was “directly related to management policies or general business operations,” commonly referred to as the administrative/production dichotomy, and whether this analysis is dispositive of the issue regarding whether an employee is properly classified under the administrative exemption.

This decision in this case is likely to offer some important guidelines in determining how to properly analyze whether employees qualify for the administrative exemption under California law. For a more detailed description of the Court of Appeal ruling and case background, click here.  We expect a decision in December or January 2012.

Another Court Says Meal Breaks Must Be ‘Available’ Not ‘Ensured’

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In a Santa Clara County Superior Court Statement of Decision that employers can hope will be echoed by an appellate court, the Honorable James P. Kleinberg ruled following a bench trial that an employer complies with California's meal break requirement if it makes a 30-minute break "available" rather than "ensure" that the break is taken.

The case is Driscoll v. Graniterock. The Graniterock plaintiffs were concrete ready-mix drivers. The drivers do not have a regular schedule and until they arrive at work to get the concrete trucks, they do not know how long the day will last or whether they will have to work through lunch. The on-duty nature of the work is dictated by the physical properties of concrete, a perishable product that, once pouring has commenced, must be poured continuously until complete. Drivers could, however, tell the dispatcher that they wanted a meal break. Drivers were paid a premium for taking an on-duty meal break, and not surprisingly, expressed a strong preference for eating on the job, earning additional pay, and leaving early.

Graniterock drivers signed a revocable on-duty meal period agreement that included the caveat that the written revocation provide a one day advance notice of the decision to revoke. Judge Kleinberg rejected Plaintiffs' argument that the one day notice was facially invalid, finding it significant that the one day notice requirement did not deter a driver from revoking the agreement -- indeed three drivers did revoke. The more common scenario showed that dispatchers made every effort to accommodate a driver's desire for a break, even when the driver did not revoke the agreement but simply called to say he wanted lunch.

Most importantly, while noting that the issue of whether an employer must "ensure" or merely "make meal breaks available" remains to be decided by the California Supreme Court, the court sided with the majority of appellate cases currently pending resolution of Brinker, and concluded that the Wage Order's use of "provide" means "to make available." Graniterock argued, apparently quite persuasively that since its drivers knew that the meal break waivers were neither required nor irrevocable, and that they could simply request and receive a meal break, it was the drivers themselves who chose to waive their right to an off-duty meal break.

While employers can applaud the trial court's ruling, a note of caution sounds in the decision's procedural background: this bench trial was tried for more than two weeks and required 55 witnesses and 285 exhibits, an expensive undertaking for the company, albeit one with the comfort of an excellent outcome.

Court Says Law Clerk Exempt from Overtime Pay

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A California court ruled this week that a law school graduate who had not yet passed the bar was a "learned professional" and thereby exempt from overtime compensation and similar benefits afforded only non-exempt employees. The plaintiff in the case began working for a law firm after graduating law school and while awaiting bar exam results and admission to the bar. During this time period, the law firm classified the plaintiff as an exempt professional employee and paid him a set salary. As an exempt employee, plaintiff was not paid overtime. The plaintiff later sued for unpaid overtime compensation, claiming the firm had misclassified him as an exempt employee. The firm moved for summary judgment, arguing plaintiff had been properly classified and was not entitled to overtime compensation. The trial court judge agreed and threw out the case. Plaintiff appealed.

The appellate court agreed with the trial court that the plaintiff's claims had no merit. Plaintiff argued that California's professional exemption only applies to licensed attorneys (who have passed the bar and been admitted to practice) and cannot be applied to law school graduates prior to bar admission. The court flatly rejected this argument, holding that California'sprofessional exemption applies not only to certain licensed professionals, but also to "learned professionals" who do not necessarily need to be licensed to qualify. The court held that the plaintiff's job duties (equivalent to those of a first year attorney) along with his salary clearly qualified him for exemption as a learned professional. The court's decision was limited to the facts at hand, which involved a law school graduate who was awaiting bar admission. The court did not address applicability of the learned professional exemption to law school students who work at law firms during summer breaks.

The case is Zelasko-Barrett v. Brayton-Purcell LLP and the decision is here.

Court Says “Me Too” Evidence Admissible in Harassment Case

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Last week, a California court held that evidence of alleged inappropriate gender-related conduct directed at female employees outside the plaintiff's presence (and of which the plaintiff was not even aware) was admissible to prove the plaintiff was sexually harassed and fired because of her gender. In Pantoja v. Anton, the plaintiff sued her former employer, an attorney, for (among other things) sexual harassment and gender discrimination, alleging she was subjected to a hostile work environment and fired because she is female. The case went to trial and the trial judge granted the employer's motions to keep out evidence of profanity and alleged touching directed at other female employees. The judge ruled that unless the conduct occurred in the plaintiff's presence or somehow affected the plaintiff, it was not admissible. As for evidence directed to the plaintiff, she alleged that the defendant employer touched her inappropriately and regularly used profanity around her, some of it arguably gender based. The employer testified that he never touched the plaintiff sexually and that while he may have used profanity, he never directed it at the plaintiff. Instead, he might use profanity when describing a situation, which is different than calling someone a profane name or similar use of profanity. The jury ultimately found for the employer and against the plaintiff on her claims for harassment and discriminatory firing. The plaintiff appealed, arguing that the trial court erroneously excluded "me too" evidence.

The appellate court agreed with the plaintiff and held that the trial judge had abused his discretion in excluding "me too" evidence of harassing conduct directed at female employees other than the plaintiff. The court held that it did not necessarily matter if the conduct did not occur in the plaintiff's presence or otherwise directly affect the plaintiff. The court held that such evidence was relevant to show the alleged harasser's "intent." Interestingly, "intent" generally is not relevant to proving harassment. Harassment can occur and be proven regardless of whether the harasser intends his conduct to be harassing. This is what is commonly referred to as the "inoccent harasser." What is relevant is the victim's perception (and the perception of an objectively reasonable person) of the conduct. Thus, the court's ruling that harassment towards others is relevant to prove the harasser's intent is at odds with fundamental harassment law. Now, to be clear, the plaintiff also had a discrimination claim based on allegations she was fired because of her gender. Intent is, of course, relevant to proving a discrimination claim because the decision-maker's intent behind the termination decision is critical. But the courtnonetheless treated the two claims the same for purposes of analysis of the admissibility of this "me too" evidence.

This case is a good reminder of the dangers of "me too"evidence in the harassment arena and of the murkiness in this area. Employers should continue to fight for exclusion of "me too" evidence on the grounds that it is inadmissible character evidence that cannot be used to prove the alleged harasser's propensity to engage in harassing behavior.