Supervisors Not Personally Liable

In Reno v. Baird, an employee claimed that she was terminated because she had cancer. The employee sued her employer and her supervisor for discrimination based on the medical condition, as well as for wrongful termination under FEHA. The court refused to hold the supervisor individually liable, finding that FEHA, while imposing personal liability for harassment, was not intended to impose personal liability for discrimination.

The court explained that a fundamental difference exists between discrimination and harassment. Acts that might be labeled discriminatory are the very acts inherent to a supervisor’s job, for example, hiring, promotions and terminations. On the other hand, harassment consists of a type of behavior that is not necessary for a supervisor’s job. Although it is possible for a supervisor to avoid harassment, it is not possible to avoid making personnel decisions, nor to prevent the claim that those decisions were discriminatory.1

The California Supreme Court has held that, in addition to discrimination, a supervisor cannot be held personally liable for acts of retaliation against employees.2 For more information, see Federal Laws Define Retaliation Protection.

Third-Party Liability

Often, employers will contract with a third party for such employment-related services as recruitment, preemployment medical screenings, and leave and disability accommodation administration, among others. And although the California Supreme Court has previously held that individual supervisors could not be directly liable for discrimination or retaliation under the FEHA, other businesses performing employment-related work for an employer can be held directly liable for FEHA violations under a 2023 California Supreme Court decision.3

In the case, the California Supreme Court evaluated the legislative and case history related to who can be held liable for FEHA violations and concluded that where a third-party business has five or more employees and engages in conduct regulated by the FEHA, the business can be directly liable for FEHA violations even though it’s doing work at the direction of a client employer.

The case originated as a class action lawsuit led by two individuals who applied for positions with two different employers. The common thread is that they both were required to undergo pre-employment medical screenings conducted by a third-party vendor on behalf of the employer. The prospective employees claimed that the medical screening asked impermissible questions, was too broad, and violated the FEHA requirement that any medical inquiry be justified by a legitimate business interest and narrowly tailored to the applicant’s or employee’s specific job duties.

The primary issue before the California Supreme Court was whether an employer’s business agent entities can be held directly liable for FEHA violations, or if an applicant’s or employee’s only recourse for third-party FEHA violations is through their direct employer. After analyzing the statute, cases and public policy considerations, the court determined that an employer’s business agent entities can be held directly liable for FEHA violations.

The FEHA’s broad hiring and employment protections can extend to myriad activities, including administering leaves of absences and disability accommodations, recruiting and hiring, and the use of artificial intelligence vendors to assist with recruitment and performance. Employers and businesses that engage employers for services that may be covered by the FEHA need to consult with legal counsel to ensure the contractual relationship addresses FEHA concerns.

1. Reno v. Baird, 18 Cal. 4th 640 (1998); Janken v. GM Hughes Electronics, 46 Cal. App. 4th 55 (1996)