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The following discussion thread excerpt is from an ongoing law.com online seminar “Current Issues Facing California Employment Attorneys,” moderated by Jeffrey Tanenbaum of Littler Mendelson. For information on this program and other law.com seminar offerings, please visit http://www.law.com/seminars. MODERATOR JEFFREY TANENBAUM, LITTLER MENDELSON, SAN FRANCISCO Good morning, and a warm welcome to our panelists and attendees! Our Day 1 topic will focus on two recent cases — Fielder v. United Airlines, 218 F.3d 973 (9th. Cir. 2000) and Jacobus v. Krambo Corp., 78 Cal. App. 4th 1096 (2000). However, please feel free to expand the discussion to other subjects within the field of harassment and discrimination if you so desire. To get us started, I’d like to pose a few questions about Fielder and Jacobus that may be of interest. Fielder: 1. It seems clear that the 9th Circuit has greatly expanded the statute of limitations period for harassment/discrimination claims — has it done so to the point where the dissent is correct that there is now no statute of limitations for such claims at all? 2. In doing so, has the 9th Circuit also changed the definition of “retaliation” or “constructive discharge” in any important way? 3. The court reserved the question of whether the mere presence of the harasser in the workplace during the limitations period is enough. Is this where we are going next? 4. Does this case raise a free-speech concern when it focuses on comments made by co-workers in which they express their opinions on Ms. Fielder’s underlying claims? 5. The dissent really blasts the majority — and it does so not just on the basis of legal reasoning, but it goes so far as to suggest the majority has distorted the factual record. Does this disturb you? 6. Finally, is this an “only in the 9th Circuit” decision, or do you believe it will be followed elsewhere? Jacobus: 1. Here we have a case in which a court requires an employer to indemnify an officer who is sued, along with the employer, after the officer shares sexually oriented material with an employee. Whether a correct decision or not, is this good public policy? 2. The court relied heavily on the fact that the employee lost her underlying case. Is this a proper basis for the court’s decision? Have fun! PANELIST V. JAMES DE SIMONE, SCHONBRUN DE SIMONE SEPLOW HARRIS & HOFFMAN, VENICE, CALIF. The dissent in Fielder v. United Airlines goes too far when it claims that there is now no statute of limitations for retaliation claims. The majority found two overt acts of discrimination and retaliation which took place within the statute of limitations period. As the majority opinion pointed out, it is a triable issue of fact whether the motivation for this conduct was in retaliation for Ms. Fielder’s complaints of sexual harassment. In finding that the acts were not retaliatory in nature, the dissent parrots the explanation of the defense witnesses. However, this case was decided at the summary judgment stage. All inferences must be granted in favor to the plaintiff. For example, the dissent focuses on the motivation of the co-workers when Ms. Fielder was ordered off of an airplane in front of customers, co-workers and her mother. However, it is the supervisor who ordered her off the plane. There was ample evidence in the record that the supervisor was hostile to Ms. Fielder’s complaints of sex harassment. It is for the trier of fact to decide whether the supervisor’s statement that she showed poor judgment by coming to the airport at all was retaliatory in nature. Additionally, the company’s failure to transfer Ms. Fielder or keep the harasser away from her also continued into the statute of limitations period. While Ms. Fielder was on disability leave during this period, it is a reasonable inference that if she was provided guarantees that she would not have to work with the harasser that she would have been back at work. Instead, the record showed that her supervisor said the harasser would have to commit some other improper act before United would take any protective action. Her reasonable request for a meeting with the harasser to establish guidelines for conduct was even refused. The refusal to transfer her continued into the statute of limitations period and provides ample basis for the application of the continuing violations doctrine. While Fielder is an important decision for employees, it does not eviscerate the statute of limitations requirement for employment cases. Instead, it provides guidance for employees who want to work within the company’s system for redress before filing a lawsuit. If the continuing violations doctrine is applied in too rigid a manner, it will encourage plaintiffs and their attorneys to file lawsuits at the first instance of discrimination or harassment instead of attempting to mediate concerns within the workplace. MODERATOR JEFFREY TANENBAUM Is the reverse also true — that by applying an expansive definition of timeliness, plaintiffs will be encouraged to wait and file only at a point where it is too late for an employer to take effective responsive action? PANELIST ALAN EXELROD, RUDY, EXELROD & ZIEFF, SAN FRANCISCO Women in situations where they are being sexually harassed generally are not thinking about statutes of limitations issues. They are worried about complaining and losing their jobs. When they go to lawyers and the harassment is at least arguably continuing, the lawyers are generally not going to refrain from raising the issue. Whether or not the continuing violation applies will be something that the parties look back later principally for evidence and damages purposes. PANELIST V. JAMES DE SIMONE I agree with Alan that women who are being sexually harassed are not going to consider statute of limitations issues. That is why a restrictive application of the continuing violations doctrine is so pernicious. If the courts are interested in following the stated purpose of Title VII and FEHA, the continuing violations doctrine should apply wherever there is at least one act of harassment within the statute of limitations period. In answer to Jeff T.’s question: I don’t believe that the reverse is true. If a co-worker is harassing an employee, the only way to obtain redress against the company is for the employee to inform the company that he or she is being harassed. At that point, the company has the obligation to investigate and take prompt corrective action if warranted. If the employee waits and does not complain, there is no liability against the company. Thus, there is no advantage whatsoever to wait until it’s too late to take appropriate action. Thus, whenever the lawsuit is filed, the company will have had the opportunity to correct the misconduct. It is also important to note that if the employee is harassed by a supervisor, then there is strict liability against the company. Nonetheless, even in these instances it is important for the employee to place the company on notice of the harassing conduct in order to have an opportunity to request punitive damages against the company. The recent Supreme Court decisions in Burlington Industries and Faragher in fact require the plaintiff to have utilized any internal complaint procedure, if one is available, before proceeding against the company. Thus, in any case where an employee is being harassed, it is important for the employee to inform the company through whatever channels are available of the harassment before proceeding with a lawsuit. ATTENDEE JIM JORDAN, EMPLOYMENT ATTORNEY, CORTE MADERA, CALIF. Regarding Fielder, I don’t think that the decision has greatly expanded the limitations period. It appears that the appeals court applied the usual continuing violation theory to the facts in the case. There was a long course of events related to alleged sexual harassment, hostile environment, and retaliation. Some of the related events occurred within the 300-day period before the administrative complaint was filed. The timely alleged events present issues of fact sufficient to preclude summary judgment. The constructive discharge was not alleged in the administrative complaint, but the issue is arguably like and related to the other issues in the complaint. The plaintiff’s disability period ended, but her physician indicated that she could not return to work because of the hostile work environment, resulting in the constructive discharge. The totality of the facts in the case do not look good for the defendant, which may have influenced the appellate decision. I don’t have a copy of the Jacobus decision handy, but found a short summary of it. The issue is whether the co-worker’s conduct was within the scope of his employment, and thus a basis for indemnification of defense costs. Usually sexual harassment is not within the scope of employment, but the court reasoned that the employee and the complainant voluntarily shared sexual banter and materials, and socialized outside of work, which made their conduct incidental to their employment. That is a debatable conclusion, and not supportive of a public policy of discouraging sexual harassment in employment. PANELIST ALAN EXELROD I believe the California state courts will be comfortable with the Fielder decision. While there has been some backing away from Aicardi on the continuing violation issue, the state courts have not been as rigorous in application of the continuing violation theory as federal courts around the country. ANONYMOUS ATTENDEE What is the current climate in California towards sexual harassment and discrimination suits? On what type of fact patterns are plaintiffs prevailing? What defenses are working? MODERATOR JEFFREY TANENBAUM Those are two very broad questions! I would say that Fielder will give you a good sense of how the 9th Circuit views this subject — from an employer’s perspective, it has an expansive view of actionable conduct and limits the defenses which can be interposed. That being said, the U.S. Supreme Court certainly set forth the “reasonable steps to prevent” defense in Burlington Industries and Faragher and we are certainly seeing employers use this defense in California. In general, I would say that in California, and elsewhere, there are two conflicting trends: 1) Some courts, such as the 9th Circuit, are taking an increasingly broad view of actionable conduct and 2) At the same time, we do see something of a backlash against such expansion. Compare Burlington/Faragher language with that found in Fielder. Panelists: further thoughts on this issue of trends? ATTENDEE JIM JORDAN Having read the Jacobus decision, the court’s approach seems to be that if the harassment complaint was unfounded, and the officer’s actions were not unlawful sexual harassment, then his conduct was not clearly outside of the scope of employment. It may be that the court considered two public policies, one concerning alleged sexual harassment, and one limiting the liability of employees in employment-related litigation. The court favored the second public policy under the circumstances of this case. Regarding the statute of limitations in discrimination cases, courts are sometimes not receptive to the continuing violation theory. Discrimination cases are dismissed because the complainants were one or two days late in filing their administrative complaints. The lesson is to always check closely whether the complaints were filed timely. Responding to Anonymous, the climate concerning discrimination cases in California is cloudy, with a chance of thunderstorms. My impression is that the frequency of sexual harassment cases may [come] down from its peak, possibly due to employers providing training and following a near “zero tolerance” approach to sexual harassers. On the other hand, the number of discrimination cases is probably up, reflecting the increasing size and diversity of the population, and the unsettled economic conditions. I have been interested to hear attorneys discussing whether discrimination plaintiffs are becoming more inclined to file suit in federal court, which is a change from the commonly held opinion that state court is usually the better forum for plaintiffs. PANELIST MICHELLE REINGLASS, LAW OFFICES OF MICHELLE REINGLASS, LAGUNA HILLS, CALIF. Replying to Jim Jordan’s last comment regarding plaintiffs’ leanings toward federal vs. state court, from the plaintiffs’ perspective I believe state court is still the preferred forum. Employers will maintain their Faragher defense regardless of which court is used. There appears to be stability in both harassment and discrimination filings, although lawyers filing sexual harassment cases are becoming more alert to the higher prospect of dismissal given the recent spate of decisions addressing “stray” or “remote” incidents (e.g. see today’s Tennison v. Circuit City decision). I would like to add one comment to the dialogue re: continuing violation and statute of limitations, and that is the need to pay extra attention to time limits in public employee cases. Some legal theories require filing of a tort claim separate and apart from a FEHA complaint (e.g. public policy). Also, there is still looming the issue set out in Johnson vs. City of Loma Linda (Cal Supreme Court 8/00), regarding the harsh effect of a public employee’s election of remedies balanced against the need in some cases to exhaust internal remedies. These raise tricky traps for the unwary. PANELIST JEFFREY BERMAN, SIDLEY & AUSTIN, LOS ANGELES In my experience, only the more sophisticated plaintiffs’ attorneys file in federal court, and only when there are strategic advantages of doing so, e.g. Duffield issues. I see many cases brought in state court that should have been brought in federal court in order to take advantage of employee-favorable 9th Circuit decisions. I can only conclude that this is done because the attorney is not comfortable in federal court, with its stricter enforcement of procedural rules and less tolerance for bad lawyering. On the other hand, if 9th Circuit law is not more favorable than the analogous state law, state court is generally a more plaintiff favorable place. PANELIST MARVIN KRAKOW, KRAKOW & KAPLAN, LOS ANGELES I think that the U.S. Supreme Court’s effort to create a safe harbor for employers who adopt good faith and effective sexual harassment policies and procedures will continue to have enormous influence on the development of sexual harassment law and on the culture of the workplace. The emphasis on real policies and procedures (as opposed to wallpapering over business as usual) has particular force, because it builds on social and political trends in our society at large. A major step remains to be taken: the repeal of the antediluvian presumption of at-will employment. I am already seeing, in the part of my practice which involves counseling employees, that the availability of good-faith procedures provides real opportunities to confront problems before they rise to the level of destroying a career. Putting the Burlington and Boca Raton approach to sexual harassment together with similar encouragement for investigation and workplace “fair process” seen in the California Supreme Court’s Cotran and Armendariz decisions points to a somewhat voluntary consensus of limits on full blown management discretion to fire at will. When we discuss Guz, I think we will see some of the same trend in applying implied contract theories to fair procedures. Issues related to continuing violations and scope of employment will be evaluated in light of an employer’s actual policies and procedures. If an employer has effective and demonstrably safe procedures to deal with harassment and discrimination, there should be an effective check on a long-lasting history of harassing conduct. Similarly, effective policies and discipline of rogue managers will certainly strengthen the practical, evidentiary claim that those managers act outside the scope of their authority when they harass. Case law may and should provide employees considerable pleading leeway. But ultimately, jurors will determine those issues based on the reality of the workplace — a reality which will be measured by management’s deeds, not its words. PANELIST STEPHEN SONNENBERG, PAUL, HASTINGS, JANOFSKY & WALKER, LOS ANGELES A note about Jacobus — California employers are well advised to read the Supreme Court’s decision, and to assess their indemnification responsibility, in the context of Assembly Bill 1856, effective Jan. 1, 2001. Under AB 1856, an employee of an employer covered by the FEHA may be held personally liable for any unlawful harassment, regardless of whether or not the employer also is liable because it knew or should have known of the conduct and failed to take immediate and appropriate corrective action. AB 1856 effectively reversed Carrisales v. Department of Corrections, 21 Cal. 4th 1132, 90 Cal. Rptr. 2d 804 (1999). PANELIST ROBERT PATTISON, JACKSON, LEWIS, SCHNITZLER & KRUPMAN, SAN FRANCISCO In response to Stephen Sonnenberg, I don’t have the sense AB 1856 (overruling Carrisales and providing an individual may be held liable for sexual harassment under FEHA) should have an impact on Jacobus or an employer’s duty to indemnify an employee for attorney’s fees in defending a claim arising out of employment. The focus of the indemnification duty likely will remain on whether the conduct complained of occurred in the course and scope of employment. (See my letter analyzing this issue in the seminar library.) MODERATOR JEFFREY TANENBAUM And a final point/reminder on Jacobus. Don’t forget that Labor Code 2802 was amended by SB1305 in 2000 so that it now expressly provides for costs, including attorneys’ fees incurred by an employee in enforcing the rights granted by 2802, effectively overruling that portion of Jacobus.

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