California Supreme Court Holds That Personnel Management Conduct Can Constitute Harassment
The California Supreme Court issued its decision today in Roby v. McKesson Corp., addressing two important issues--(1) whether personnel management conduct can constitute "harassment" within the meaning of FEHA, and (2) the constitutional limits on awards of punitive damages. With respect to the first issue, the Court held that personnel management conduct, including reprimanding an employee in front of coworkers, belittling an employee's job, and shunning an employee during staff meetings, is conduct that can support a finding of hostile work environment harassment. The Court further held that evidence supporting discrimination claims and harassment claims often overlaps and is not necessarily exclusive. Such evidence does not need to be separately allocated between the two claims. This ruling blurs the distinction between conduct traditionally thought to support a "discrimination" claim on the one hand (e.g. written warnings, termination, etc.), and conduct traditionally thought to support a harassment claim on the other (e.g. discriminatory slurs, inappropriate physical contact, etc.). This decision will likely make it more difficult for employers (and individual supervisors) defending claims of harassment under FEHA to obtain summary judgment.
With respect to the second issue on the size of the punitive damages award, the Court reiterated the standards articulated by the United States Supreme Court in State Farm v. Campbell, 538 U.S. 408 (2003), for reviewing the appropriateness of a punitive damages award: (1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases. The decision contains a detailed explanation of how each of these factors is properly analyzed and applied. In this particular case, the Court held that the jury's $15 million punitive damage award was constitutionally excessive and that on the facts of the case, punitive damages could not properly exceed the amount of compensatory damages awarded to the plaintiff. The punitive damages were, therefore, reduced from $15 million to $1.9 million.
The Roby decision is here.