Aug. 14, 2005 The California Supreme Court Clarifies Retaliation Law

Summary

Last week, the California Supreme Court issued an important decision in Yanowitz v. L’Oreal USA, Inc. regarding retaliation under the Fair Employment and Housing Act (FEHA), the California statute that makes it unlawful for an employer to “discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under [the FEHA] . . . .” Among other rulings, the Court held that an employee’s refusal to follow a supervisor’s order may be protected activity under the FEHA, even if the employee never specifically mentions a discrimination or harassment concern to anyone. The Court also broadly defined what is, and is not, an “adverse employment action” under the FEHA.

Details

When Elysa Yanowitz’ male supervisor ordered her to terminate a female sales associate because the sales associate was “not good looking enough,” and directed her to “get me someone hot,” Yanowitz refused to follow the order. When her supervisor persisted, Yanowitz asked for adequate justification for the termination. When none was offered, she continued to refuse her supervisor’s direction. In the months that followed, Yanowitz’ supervisors began soliciting negative information about her, undermining her authority in front of subordinates, fabricating negative performance reviews, threatening to end her career, and generally making her miserable in her job. She soon thereafter left on a stress leave and was ultimately replaced. She then sued her employer for, among other things, retaliating against her in violation of the FEHA.

The FEHA makes it unlawful for an employer to take an adverse employment action against an employee who engages in “protected activity” under the statute. Until now, “protected activity” has generally been limited to situations where the employee either protests discrimination or harassment, or participates in an investigation or proceeding in some active way. In this case, however, the Court determined that Yanowitz’ refusal to follow her supervisor’s order was a “protected activity” under the FEHA because she reasonably believed her supervisor’s order was discriminatory. It did not matter that she never expressly told her supervisors that she thought the order was discriminatory; based upon the circumstances, the employer should have known that that was the reason for Yanowitz’ refusal.

The Court then turned to the question of whether the employer’s actions constituted an “adverse employment action” under the FEHA. A lower court had applied the “deterrence” test, under which an “adverse employment action” exists not only where the “terms, conditions, or privileges of employment” are affected, but also whenever the employee has been subjected to any action “that is reasonably likely to deter employees from engaging in protected activities.” The California Supreme Court, however, rejected the “deterrence” test in favor of the “materiality” test. Under this test, an “adverse employment action” exists if the employer’s adverse conduct is “reasonably likely to adversely and materially affect an employee’s job performance or opportunity for advancement in his or her career.” The Court also ruled that this materiality test must be determined by looking at the employer’s entire course of conduct. As the Court stated, “there is no requirement that an employer's retaliatory acts constitute one swift blow, rather than a series of subtle, yet damaging, injuries.”

What this Means

This decision provides one very important lesson for California employers: An employee may now “oppose” discrimination in non-obvious ways and without ever offering the words “discrimination,” “harassment” or “retaliation.”

This means that employers will need to pay attention to why an employee is refusing to follow directions or is otherwise being problematic. Employers, particularly human resources professionals, may now wish to dig deeper into performance management situations to ensure that the underlying reason behind an employee's conduct is not some sort of “silent protest” against perceived discrimination or harassment. Similarly, when analyzing the risks of a particular termination decision, it would be wise to examine whether the impacted employee might be a silent protestor like Yanowitz.

This E-Update was authored by Joe Connaughton and Mark Phillips. For more information, please contact Mr. Connaughton, Mr. Phillips, or any Paul, Plevin attorney at 619-237-5200.