A recent California Court of Appeal decision reinforces the California Civil Rights Department’s (CRD) authority to investigate alleged violations of the Fair Employment and Housing Act (FEHA), even when an employer contends that the underlying conduct occurred outside California. 

In Civil Rights Department v. Space Exploration Technologies Corp., the court affirmed an order requiring the employer to comply with a CRD investigatory subpoena. The subpoena followed an administrative complaint by a former employee alleging discrimination and retaliation under FEHA. The employer challenged enforcement on constitutional, extraterritoriality, and statutory grounds, arguing that the complaint concerned a Washington-based employee and conduct beyond FEHA’s territorial reach. 

The court rejected those arguments and concluded that the employer had not met its burden to show error. Among other things, the court distinguished the territorial reach of CRD’s investigatory authority from the ultimate question of whether FEHA applies to the alleged employment practices. At the subpoena stage, CRD was entitled to obtain information needed to determine whether relevant conduct occurred in California or had sufficient California connections. 

The decision does not establish that FEHA governs every employment decision involving an out-of-state worker. Nor does it determine the employer’s ultimate liability on the former employee’s claims. Instead, it confirms that an employer generally cannot defeat an investigatory subpoena merely by asserting, before the relevant facts have been developed, that FEHA does not apply outside California. 

The ruling is particularly relevant to multi-state agricultural employers. Hiring, compensation, promotion, discipline, transfer, and termination decisions may involve employees working in one state and HR personnel, executives, payroll teams, or managers located in another. Seasonal operations, employees who move between worksites, remote work, and shared management structures can further complicate where a decision was made, implemented, approved, or felt. 

What Does it Mean? 

For multi-state employers, state lines do not necessarily limit an agency’s questions or the records it may seek. As the SpaceX case shows, knowing where decisions are made and records are kept can make an employer better prepared when an agency comes calling. 

Employers can take the following steps now to make it easier to respond if they receive a CRD request: 

• Keep employee records, emails, messages, and other workplace documents organized and follow a consistent retention schedule. 

• Maintain clear records showing who participated in important employment decisions, including HR staff, supervisors, payroll staff, and leaders in other states. 

• Note where employment decisions are made, approved, communicated, and carried out, especially when employees and decision-makers work in different states. 

• Identify the people responsible for gathering records and responding to agency requests so the process does not have to be created from scratch. 

• Use a consistent process across locations for documenting employment decisions and storing related records. 

The decision serves as an important reminder that subpoena enforcement is an early investigative step, not a final ruling on liability. Multi-state employers should be prepared to establish the location and role of each decision-maker while responding timely and carefully to CRD investigative demands.