Bias Victims May Bypass Rights Panel, Court Says : Law: Justices’ decision will allow participants in sex discrimination cases to seek potentially lucrative compensatory or punitive damages in court.

The California Supreme Court, denouncing the “pernicious influence of sexism,” ruled Thursday that victims of sex discrimination may bypass the state civil rights commission and seek large damage awards in court.

The justices unanimously rejected contentions by employers that bias complaints must be taken first to the state Fair Employment and Housing Commission, an administrative body that conciliates disputes and has only limited power to compensate victims.

The court found that the anti-discrimination provisions of the state Constitution reflected a “fundamental public policy” against sex bias, entitling victims to seek potentially lucrative compensatory or punitive damages in court.

“So long as (sexism) exists, we are all demeaned,” Justice Edward A. Panelli wrote for the court. The decision caused some surprise, coming from a generally conservative court that only two years ago restricted the damages that workers can win for wrongful firing in cases not involving discrimination or a violation of public policy.

“This is an encouraging sign to employees that the tide may have turned on the California Supreme Court,” said John M. True, staff counsel of the Employment Rights Center in San Francisco. “The justices were invited to regress on employee rights in discrimination cases and they declined to do so.”

Steven G. Drapkin of Los Angeles, lawyer for the Merchants and Manufacturers Assn., voiced disappointment with the ruling. “This will create a lot of added litigation that otherwise could have been handled properly by the commission,” he said.

The decision was one of three issued Thursday involving the extent to which employers may be held liable for violation of labor-protection laws.

In a second pro-worker ruling, the justices unanimously permitted a state employee to seek compensatory and punitive damages under a “whistle-blower” protection law for stress-related injuries that he said resulted from harassment for his efforts to investigate official wrongdoing.

In a third decision, the court, as expected, sharply limited the remedial power of the Fair Employment and Housing Commission, which receives about 8,000 complaints of sex, race and other bias annually. The justices held 5 to 2 that the commission, unlike the courts, lacked authority to award compensatory damages for emotional stress and other intangible harm, and was limited to ordering back pay and reinstatement.

This decision followed a 1987 ruling that barred similarly lucrative punitive damage awards by the commission.

The ruling opening the way for court action by bias victims resulted from a suit by Emma Rojo and Teresa Maloney against their former employer, Dr. Irwin H. Kliger of Los Angeles, charging that they suffered emotional distress from sexual harassment and improper demands.

The women charged that they had been grabbed, kissed and fondled by the physician and were forced out of their jobs when they resisted his demands. Kliger denied the charges.

The high court rejected the employer’s contentions that a worker must exhaust the administrative process before going to court. The justices noted that although the commission’s procedures for conciliation, back pay and reinstatement may be effective for many workers, the judicial remedies of punitive and compensatory damages can provide the “only adequate form of relief” for others.

The court also rejected employers’ contentions that victims of sex bias could not sue for wrongful discharge as a violation of public policy. “No extensive discussion is needed to establish the fundamental public interest in a workplace free from the pernicious influence of sexism,” Panelli wrote.

Attorneys for business groups expressed disappointment with the ruling. Fred J. Hiestand, general counsel for the Assn. for California Tort Reform, predicted a “boom” in employment litigation and increased legal costs for employers. Increasing numbers of aggrieved workers will go to court hoping for a “big jackpot,” Hiestand said, while fewer people--those more interested only in reinstatement--will go to the agency.

In the second case decided Thursday, Jack Shoemaker, a former special investigator for the state Department of Health Services, filed a lawsuit against the department seeking damages for stress-related injuries. Shoemaker contended that he had been harassed and then fired after he found, in an investigation, that officials might have improperly given funds to family-planning clinics that did not use licensed professionals.

A trial court rejected the investigator’s bid for damages and a state Court of Appeal agreed, ruling that Shoemaker could collect only the $140 per month payment he was due from the state workers compensation fund, the system established to provide for the work-related injury or death of an employee.

In an opinion by Justice Armand Arabian, the high court held Thursday that the “whistle-blower” law was aimed specifically at protecting state workers who properly report unlawful governmental actions. Even though the workers compensation system was designed to comprehensively cover injuries on the job, Shoemaker could sue under the separate law aimed at deterring retaliation by authorities.

The third case Thursday centered on a discrimination claim filed with the commission by Rose Brown against her former employer, the Peralta Community College District in Oakland. Brown, a temporary secretary, charged that she suffered emotional distress from sexual harassment by a college dean.

The commission ruled in favor of Brown, ordering the district not only to reimburse the woman $374.55 in lost pay, but also $20,000 in compensatory damages for harm to her “dignity and esteem.”

The high court, in another opinion by Panelli, concluded that state statutes allow the commission only to order back pay and reinstatement to an unjustly fired worker or to issue orders barring discriminatory actions by employers.

State Deputy Atty. Gen. Marian M. Johnston and commission Executive Director Steven Owyang expressed disappointment with the court’s limitation on commission power. While employees who go to court will profit from Thursday’s rulings, those who choose the faster, less-expensive process of the commission will gain far less in compensation, they said.