State High Court to Weigh Bosses’ Liability in Job Bias

Pediatric nurse Kimberly Reno said she was fired from a job after her supervisors learned that she had cancer.

What was worse, Reno’s attorneys say, was a judge ruling that California law prevented her from suing the two bosses for discrimination.

Today, the California Supreme Court in San Francisco will hear oral arguments in Reno’s case and attempt to resolve a question: Can supervisors be held personally liable if they discriminate in the workplace?

The Napa nurse’s suit has become one of the most widely watched employment cases in the state, turning into a battle between two powerful organizations--a group representing California’s largest employers versus private attorneys who represent fired workers.

A state Supreme Court decision, both sides acknowledge, could affect the thousands of discrimination cases filed in California courts each year. It would also establish guidelines for a supervisor, who under state law is anyone overseeing more than five employees.

The Employers Group, which represents 5,000 companies with 2.5 million employees, warned that holding supervisors liable will have disastrous effects on business.

It would “dampen if not inhibit entirely the willingness of supervisors to make personnel decisions based solely on business needs,” said Thomas P. Klein, an attorney for the group, in a friend of the court brief.

But the California Lawyers Employment Assn., which represents terminated workers, has fired back, saying that relieving supervisors of liability would “promote personal irresponsibility and disrespect for the law.”

“What kind of message would we be sending if we let individual perpetrators off the hook?” asked Joseph Posner, an Encino lawyer who wrote the group’s brief.

Attorney General Backs Employers

Atty. Gen. Dan Lungren, a GOP gubernatorial candidate and the state’s top civil rights enforcer, has jumped into the dispute--on the side of employers.

If supervisors are held personally responsible for discrimination, Lungren said, they would be scared to carry out routine duties such as performing job evaluations because lawsuits from disgruntled employees could bankrupt them.

Lungren said the court’s decision will affect all enterprises, including the state government, which has more supervisors than any other business in California.

The firing that sparked this debate over individual responsibility for job discrimination occurred in August 1992, a year after Reno was hired by Redwood Health Care, a nurse registry in Vallejo.

Company supervisors, according to court records, became concerned after Reno came to work with a two-inch bandage on her neck, the result of surgery that removed an aggressive malignant tumor.

A week later, Reno came home to a jarring message on her answering machine.

“You are not to return to work,” Reno, 33, recalled a supervisor saying. “We feel that a nurse with cancer is inappropriate for a nurse-patient relationship.”

Marijo Baird, Redwood’s owner, and another supervisor named in Reno’s suit denied that the Napa woman was fired because of her medical condition.

Baird, who declared in a deposition that she was also a cancer survivor, said she fired Reno because the nurse had improperly cared for a 2-year-old disabled infant. Reno denies that.

When Reno’s suit came before Solano County Superior Court Judge Richard M. Harris, he dismissed the suit against Baird and the other supervisor, saying they were immune from such claims.

Reno appealed to the 1st District Court of Appeal in San Francisco. Her attorney, Phil Horowitz of San Francisco, said that if Reno was barred from recovering damages from Baird, she would have no other recourse because Baird had sold the company even before the suit was filed.

Harris set an August trial date after the appellate panel reinstated Reno’s suit. Baird, the supervisor, appealed to the Supreme Court, which is expected to issue its decision within 90 days.

Venturing Into New Territory

Law experts acknowledge that the state high court is venturing into uncharted legal territory.

State courts have consistently held that supervisors are personally liable for sexual harassment because such conduct is avoidable and not necessary “to carry out legitimate objectives of personnel management,” an appellate panel in Los Angeles stated.

Courts have, however, remained largely silent on whether the state’s Fair Housing and Employment Act placed supervisors as well as their companies on the hook for job discrimination.

That changed in 1996 when the 2nd District Court of Appeal in Los Angeles dismissed three supervisors from an age discrimination suit filed by a group of employees from Hughes Electronics.

“If every personnel manager risked losing his or her home, retirement savings, hope of children’s college education, etc., whenever he or she made a personnel decision, management of [businesses] would be seriously affected,” wrote Associate Justice John Zebrowski in a groundbreaking decision.

Since then, several courts across the state have thrown out discrimination suits against individual supervisors, citing Zebrowski’s opinion.

But the appellate panel in Baird’s case disagreed.

Many supervisors of large companies have widespread impact on people’s job opportunities including the power to hire, fire and promote employees, the three-judge panel in San Francisco said.

“If supervisors are subject to individual liability, they may refrain from engaging in unlawful discrimination and businesses would be better protected,” the panel stated.

Faced with clashing opinions from appellate panels in San Francisco and Los Angeles, the high court had no choice but to step into the dispute, said Christopher D. Cameron, a professor at Southwestern University School of Law in Los Angeles.

In fact, justices placed Baird’s case on top of their docket, setting a date for oral argument even before they received all the legal briefs in the case.

Both sides acknowledge that Reno’s case also involves a fight over whether discrimination cases are heard in federal or state courts.

Attorneys for fired workers typically prefer to sue deep pocket corporations for job discrimination. In cases involving out of state employers, they need defendants who are California residents to keep their suits in state courts--which have traditionally been more protective of workers rights.

If supervisors are held not liable, companies whose headquarters are based out of state could move discrimination suits to federal court where, among other advantages, monetary damages are capped.

Horowitz, Reno’s attorney, said the high court decided to review the case because it presents an “important question of statewide significance.”

“Supervisors are held liable in the workplace when they fall asleep at the switch and someone gets injured or when they help to defraud someone. Why should discriminators be any different?”