Monday, May 5, 2008

Can individual employees be personally liable for their workplace conduct?

Employers must always be vigilant of retaliation and sexual harassment claims. Generally, retaliation cases involve situations where an employee is terminated, suspended or otherwise disciplined after complaining about workplace concerns or employment practices that violate the law.

Sexual harassment claims involve (1) Quid Pro Quo sexual harassment - usually where a supervisor conditions an employment benefit on an employee’s willingness to engage in sexual behavior; or (2) Hostile Work Environment sexual harassment - when sexual jokes, comments, cartoons, physical interference with movement (blocking or following) creates an offensive working environment.

California courts have awarded huge verdicts in retaliation and harassment cases, making this treacherous ground for employers. But what about individual employees? Can they be held personally liable for retaliation or harassment?

Individual employees are NOT liable for retaliation

Until recently, it was unknown in California whether individual employees could be held personally liable in retaliation cases. However, in March 2008, the California Supreme Court, in Jones v. The Lodge at Torrey Pines Partnership, held that employees, including supervising employees, cannot be personally liable in cases where retaliation is alleged.

In the Jones case, Mr. Jones sued the Lodge as his employer, as well as an individual supervisor. Mr. Jones alleged that he was retaliated against after he made complaints about sexual orientation discrimination and obscene jokes in the workplace. The appellate court found both the employer and the supervisor liable for retaliation.

Yet the California Supreme Court found that California’s statutes prohibiting retaliation do not provide for personal liability. The Court compared retaliation cases to discrimination cases - which also do not provide for personal liability of individually employees - and based its decision on the following: (1) corporate decisions (i.e., the firing of an employee) are often collective, and (2) it is “bad policy to subject supervisors to the threat of a lawsuit every time they make a personnel decision.”

Individual employees ARE liable for sexual harassment

The Court’s ruling with respect to retaliation claims does not apply to claims of sexual harassment. California’s Fair Employment and Housing Act allows for personal liability for supervisors who sexually harass employees. While the company as a whole can be held partially responsible for the supervisor’s conduct, the individual supervisor’s personal assets are at risk as well. As such, companies and supervisors need to make prevention of workplace sexual harassment a priority. (See my April 2008 article on Sexual Harassment training.)

A supervisor’s personal liability has its limitations. California courts have held that a supervisor with knowledge that his/her subordinate was being sexually harassed by another employee cannot be held personally liable for the harassment merely for failing to take action on the complaint. Of course the employer and alleged harasser would face liability in this situation.