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September 12, 2023
The Fair Employment and Housing Act (FEHA) provides protection from harassment or discrimination in employment based on many characteristics, including disabilities and medical conditions. Subject to certain exceptions, the statute makes it an unlawful employment practice for any employer to make any medical or psychological inquiry of an applicant. The term “employer” includes any person regularly employing five or more persons, or any person acting as an agent of an employer, directly or indirectly. A recent California Supreme Court decision concluded that an employer’s business-entity agents can be held directly liable for employment discrimination under the FEHA. Raines v. U.S. Healthworks Medical Group, et al., No. S273630 (Cal., Aug. 21, 2023).
Factual Background of the Case: Plaintiffs Kristina Raines and Darrick Figg, on behalf of themselves and others similarly-situated, alleged that they received offers of employment conditioned on successful completion of pre-employment medical screenings conducted by U.S. Healthworks Medical Group (USHW), who was acting as an agent for their prospective employers. Plaintiffs claimed that USHW required job applicants to complete a written health history questionnaire that included questions that had no bearing on the applicant’s ability to perform job-related functions, as well as questions about medications they were taking, prior job-related illnesses and injuries, and whether they were pregnant.
Raines declined to answer a question about the date of her last menstrual period. She alleged that, as a result, USHW terminated the screening process and her prospective employer revoked its offer to employ her as a food service aide. Figg answered all of the questions, passed the screening, and was hired for a position as a member of the volunteer communication reserve with a fire protection district.
Procedural History of the Case: In response to the plaintiffs’ claims under the FEHA, USHW argued that, even if it was an agent of the plaintiffs’ prospective employers, it could not be held directly liable for FEHA violations. The lower court agreed with USHW.
On appeal, the United States Court of Appeals for the Ninth Circuit recognized the ambiguity in the FEHA’s definition of “employer.” Specifically, do you interpret the language “any person acting as an agent of an employer, directly or indirectly” as incorporating the common law principle of respondeat superior[1] – in which case liability for a violation of the statute would rest with the employer, not the agent – or do you interpret that language to mean that an employer’s agents are subject to all of the obligations and liabilities that the statute imposes on the employer itself?
In light of the ambiguity, the Ninth Circuit asked the California Supreme Court to clarify the meaning of the term “employer” in the FEHA.
The California Supreme Court’s Holding: The Court analyzed its prior decisions interpreting the definition of “employer” under the FEHA and examined the text of the FEHA, its legislative history, the interpretations that federal courts have given to federal antidiscrimination laws that use similar language, and public policy considerations. The Court concluded 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 the employer” (italics added).
What the California Supreme Court Did Not Decide: The Court declined to identify the specific scenarios in which a business-entity agent will be subject to liability under the FEHA. The Court also declined to express a view on the significance, if any, of employer control over the acts of an agent that gave rise to an alleged FEHA violation. Lastly, the Court did not decide whether its conclusion extends to business-entity agents that have fewer than five employees.
Takeaways: Dear Employers, this decision does not absolve you of liability under the FEHA if you use a business-entity agent to conduct FEHA-regulated activities, like pre-employment screenings. An employer’s obligations under the FEHA may not be delegated.
Dear business-entity agents, you are obligated – just like your employer-principals – to protect workers from harassment and discrimination.
The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania. This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in California, Pennsylvania, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist. Always consult an attorney with specific legal issues.
[1] “Respondeat superior” is a legal doctrine according to which an employer is responsible for the actions of its agents performed during the course of employment.
