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Court of Appeal Denies Employer Liability for Employees’ Personal Relationship Under FEHA
Apr 4, 2023

Court of Appeal Denies Employer Liability for Employees’ Personal Relationship Under FEHA

Topics: Court Decisions, Discrimination, Harassment & Retaliation

While California’s Fair Employment and Housing Act (FEHA) generally holds employers strictly liable for harassment by a supervisor, a recent decision from the California Court of Appeal establishes an important limitation for personal relationships between employees.

In Atalla v. Rite Aid Corporation, the plaintiff, a pharmacist at Rite Aid, filed a FEHA sexual harassment claim against her supervisor, Erik Lund. The misconduct arose from a series of late-night text exchanges that ended with Lund sending a live photo of his genitals to Atalla. 

Rite Aid disclaimed liability on the grounds that the interaction occurred outside of the workplace and that Lund was not acting in the capacity of a supervisor when he sent the inappropriate text. Atalla claimed that the text message, along with her friendship with Lund, was related to the workplace because she “only interacted with him to advance her career.”

The Court of Appeal affirmed summary judgment for Rite Aid, finding that the interaction “clearly did not occur at work or during normal working hours.” Lund’s conduct in this context was not imputable to Rite Aid because he was not acting in the capacity of a supervisor when the text was sent. Rather, the interaction was “spawned from a personal exchange that arose from a friendship” between Atalla and Lund, and their personal relationship was “predated and independent of their respective employment with Rite Aid.” This relationship was evidenced by a large volume of text exchanges, and many prior instances of socializing outside of the workplace. 

Although Atalla claimed that her interactions with Lund were only motivated by the possibility of career advancement, the Court explained that it “does not change the fact of their personal relationship” or that she was “a willing participant in it.” 

Atalla may provide protection for employers where the supervisor and employee’s personal relationship exists independent of their employment relationship. Employers should continue to provide proper training and maintain policies and procedures to deter work-related misconduct and to deter personal relationships between supervisors and subordinates. However, when such a relationship arises, Atalla may help minimize the risk of liability if the harassment arises outside of the scope of employment. 

If you have any questions, please contact Taylor Wendland or your favorite CDF attorney.

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