California Supreme Court: The Burden Shifts to Employers to Prove Legitimate, Non-discriminatory Reason for Termination

I know the length is longer than usual but you must read it in its entirety even if you have to come back. This is important.

The California Supreme Court issued its decision in Harris v. Santa Monica, addressing the “mixed motive” defense to discrimination claims under FEHA (Fair Employment & Housing Act). This case addresses whether a discrimination plaintiff suing under California law must prove that a discriminatory motive was (1) the “but for” cause for the adverse employment decision, (2) a lesser standard, that the discriminatory motive was a motivating factor behind the decision, even if not the dispositive factor, or (3) something in between. The California Supreme Court went with “something in between.” In short, the Court held that in mixed motive cases, if an employee proves that an employment action was substantially motivated by discrimination (but also motivated in part by legitimate, non-discriminatory reasons), the burden shifts to the employer to prove that it would have made the same decision for legitimate, non-discriminatory reasons. If the employer succeeds in proving this, then the employer wins, right? Not so fast. The Court today held that if the employer proves that it would have made the same decision for legitimate reasons, the employee may not recover back pay, reinstatement, or emotional distress damages. However, the Court held that the employee may still be entitled to declaratory relief (a court declaration that the employer engaged in unlawful discrimination), injunctive relief (a court order requiring the employer to refrain from similar acts of discrimination in the future) and—the real kicker—attorneys’ fees.

In the Harris case, the plaintiff-employee was a bus driver for the City of Santa Monica. Harris had a less than stellar performance record, to put it nicely. Shortly into her initial 40-day training period, she had an accident determined to be her fault and which caused minor damage to the bus. She then had a second at-fault accident within her first three months and while still a probationary employee. In addition to these accidents, within the first few months of her employment (also while she was still a probationary employee) she reported late to her shift twice and failed to give the dispatcher at least one hour’s notice as required by policy. Applicable policies clearly indicated that these circumstances warranted termination of employment. Indeed, following these incidents, the transit services manager and the assistant director concluded that Harris did not meet the standards for continued employment. However, prior to any termination decision actually being made and communicated to Harris, Harris had a chance encounter with her immediate supervisor (not the transit manager or assistant director), who noticed Harris’ uniform shirt sloppily hanging loose and he told her to tuck it in. At that time, Harris informed the supervisor that she was pregnant. Harris claims her supervisor looked displeased at the news. He asked her to get a doctor’s note clearing her to continue to work, which she did. A few days later, Harris’ supervisor was called to a meeting at which time he was given a list of probationary employees who were not meeting the performance standards for continued employment. Harris was on the list. Her employment was then terminated.

Harris sued for pregnancy discrimination, and the claim managed to survive summary judgment and get to trial. At trial, the City requested that the jury be instructed on the “mixed motive” defense and, more specifically, that even if the jury concluded that pregnancy discrimination was a motivating factor in the termination decision (along with legitimate reasons), the City would not be liable if it proved that it would have terminated Harris for the legitimate business reasons even without pregnancy discrimination as a motivating factor. The trial court refused to give this instruction to the jury. The trial court instead instructed the jury that the City was liable if Harris proved simply that pregnancy discrimination was “a motivating factor” in the termination decision. The jury thereafter concluded that discrimination was a motivating factor and awarded Harris about $150,000 for emotional distress and $25,000 for wage loss. In addition, because a prevailing employee is entitled to recover attorneys’ fees incurred to successfully litigate a discrimination claim, the court awarded Harris some $400,000 in attorneys’ fees.

The City appealed, and the court of appeal reversed the judgment, holding that the trial court should have given the jury instruction requested by the City. Harris then petitioned for review to the California Supreme Court, which granted review.

Recently, the Supreme Court issued its decision, agreeing with the court of appeal in part. The Court held that an employer is entitled to assert the mixed motive defense but that successful proof of the defense does not absolve the employer of all liability. The Court reasoned that if an employee proves that discrimination was a substantial factor behind an adverse employment action, it would be contrary to public policy and the purpose of FEHA to allow the employer to escape all liability. However, the Court held that where an employer proves that it would have made the same decision for legitimate business reasons irrespective of any partly discriminatory motive, the employee may not recover damages or reinstatement. In such instances, though, the trial court could still award declaratory and/or injunctive relief against the employer and also award attorneys’ fees to the employee as the prevailing party.

Given that the attorneys’ fees often exceed the damages awarded to a prevailing plaintiff in a discrimination case (such as was the case here), this still provides significant exposure to employers litigating this type of claim, even if successful in their defense. To be clear, however, an employer will not be liable for declaratory relief, injunctive relief, or attorneys’ fees in a FEHA case unless the employee proves that discrimination was a “substantial” motivating factor behind the adverse employment action. There is no concrete rule for what type of evidence will suffice, but the evidence of discriminatory motive must be substantial, not slight (e.g. a stray or isolated discriminatory remark likely would not be considered “substantial” evidence).

Thanks for reading the entire article! It is very important information.