The Supreme Court of California [i] recently answered a question of statutory interpretation concerning the state’s Fair Employment and Housing Act (FEHA). The question certified to the Court was whether the FEHA’s definition of ‘employer,’ which includes ‘any person acting as an agent of an employer,’[ii] permits a business entity acting as an agent of an employer to be held directly liable for employment discrimination.
Finding ambiguity in the FEHA’s statutory definition of ‘employer,’ the Court articulated two possible interpretations:
- A narrow reading that limits liability to the employer, not the employer’s agent; or
- A broader reading that would subject an employer’s agent to all the obligations and liabilities that the FEHA imposes on the employer itself.
The Court found that an employer’s business entity agents can be held directly liable under the FEHA for employment discrimination in appropriate circumstances when the business-entity agent has at least five employees and carries out FEHA-regulated activities on behalf of an employer.
What It All Means
The FEHA provides protection from harassment or discrimination in employment because of age (40 and over), ancestry, color, creed, denial of family and medical care leave, disability (mental and physical) including HIV and AIDS, marital status, medical condition (cancer and genetic characteristics), national origin, race, religion, sex, and sexual orientation.
The Raines decision means that business entities designated to act as an employer’s agent with regard to certain actions (e.g., hiring, discharging and supervising employees) can be found liable under the FEHA as an “employer” for any violations (e.g., acts of harassment, discrimination and/or retaliation based on a protected classification) committed while acting in that capacity.
[i] Raines v. U.S. Healthworks Medical Group (SC S273630 (8/21/23)).
[ii] Cal. Gov’t Code § 12926(d).