Who Can Courts Hold Responsible For Discrimination Claims?*

* This article was originally published on Law360, on March 9, 2017.

Former Uber engineer Susan Fowler made headlines last month by posting a scathing blog article[1] alleging Uber discriminated against her and other female employees. Fowler’s post describes a direct supervisor sending her solicitous messages over Uber’s own messaging platform, being told by human resources that her options were to either seek a new team or suffer a negative performance review, and later receiving a negative evaluation and being denied a transfer based on her complaints.

Since then, several additional employees have come forward with similar accusations. Both Uber and Fowler have retained counsel, and it’s only a matter of time before Uber’s other accusers follow suit.

Who will these lawsuits target and who can courts hold responsible? Under current California law, while Uber cannot escape the judicial consequences, the managers and HR staff who actually discriminated or retaliated against Uber’s employees will likely walk away unscathed.

Uber is Legally Responsible for its Employees’ Actions

Under California’s Fair Employment and Housing Act (FEHA), courts can almost certainly hold Uber responsible for its employees’ actions. The doctrine of respondeat superior — which literally translates as, “Let the master answer” — holds a company responsible for the actions of its employees when those actions fall within the scope of their employment. Even where an employee’s actions are outside the scope of their employment, such as in the case of sexual harassment, the FEHA holds employers responsible so long as the employer “knows or should have known of the conduct and fails to take immediate and appropriate corrective action.”[2]

Whether the employees who actually harassed, discriminated or retaliated against Fowler can be held legally responsible, is a different question. Ultimately, it turns on whether their actions were committed in the performance of their job duties. Using this metric, courts have found employees personally responsible for harassment, but not for discrimination or retaliation. What is the difference between the two?

Employees are Legally Responsible for Harassment

Harassment, according to the California Supreme Court, is conduct outside the scope of an employee’s job, engaged in for personal gratification, because of meanness or bigotry, or for other personal motives that do not touch on the employee’s professional responsibilities.[3] Harassment can be verbal, physical or even visual.[4]

Because harassment is outside the employee’s job duties, the employee is personally liable, even when the harassment occurs on the employer’s premises and during work hours.

In Fowler’s case, the solicitous messages from a supervisor would likely be described as harassment, leaving that supervisor personally liable for his actions.

Employees are Not Legally Responsible for Discrimination or Retaliation

The California High Court has taken the opposite approach when considering discrimination and retaliation. Unlike harassment, discrimination arises out of the employees’ official duties, such as hiring and firing, work assignments, station assignments, promotions and performance evaluations.[5]

Holding employees personally responsible for discriminatory actions, the court reasoned, would place a supervisory employee in direct conflict with their employer every time they were faced with a personnel decision. Since management cannot avoid doing their jobs, holding them personally responsible — and therefore placing their livelihood at risk — would be against both the legislature’s intent and the public interest.[6]

This same reasoning was extended to claims of retaliation. In fact, the court explained that the rule makes even more sense in the case of retaliation because if an employee gains a reputation as a complainer, supervisors might be particularly afraid to discipline that employee out of fear the employee might bring a claim directly against the supervisor for retaliation for complaining.[7]

Using Fowler’s allegations as an example, being given a negative evaluation and being denied a transfer is specifically the type of actions the court identified as “arising out of a manager’s duties.” Therefore, while the manager who solicited her could be personally held liable, the manager who gave her a negative review, the HR representative who gave her misleading information and the manager who refused her transfer request, could not be — even if their conduct was intended to discriminate and retaliate against her.

Is the California Approach Right?

California’s approach is by no means universally accepted. Out of the 12 state courts that have considered this issue, seven have decided that employees should be individually liable for discriminatory practices, and only five — including California — have decided that they should not.[8]

The justification courts use in support of the California approach are twofold: First, it allows managers to conduct their day-to-day work without being afraid of legal repercussions and allows them to make difficult decisions without worrying about the financial impact of those decisions on themselves or their families. Second, it assumes that by holding the employer responsible for their employees’ actions, supervisors are prevented from having a “free pass to discriminate,” because the employer will have the proper incentive to discipline discriminating employees.[9]

This reasoning is not without its flaws: First, it is common for employees to be held accountable for their actions, even when committed in furtherance of their official duties. Drivers, as an example, can be held personally liable for accidents caused by their negligence, even when driving for their job (another issue that forced Uber into the headlines for the better part of 2016). It seems contradictory for the courts to have no protection for employees who act negligently but simultaneously protect employees who purposefully discriminate.

Second, the argument that employers will have every incentive to discipline discriminatory employees assumes that the penalties for discrimination outweigh the employer’s goals. If, as Fowler alleges, the discriminatory managers were allowed to continue discriminating because of their “high-performer” status, California’s assumption would obviously be inaccurate. If Uber’s intent was to optimize profits through any means, then keeping their top performers happy, even by allowing them to discriminate, may be exactly what California’s rule incentivized them to do.

Regardless of Uber’s actions, the publicity generated by these allegations will hopefully reopen the discussions of whether those who discriminate should be held personally liable for their actions. As an employer, Uber should welcome a rule that holds their managers personally responsible for discriminatory actions, since it would incentivize those managers to regulate themselves, rather than continue discriminating until upper management steps in.

[1] Fowler, Susan J, Reflecting On One Very, Very Strange Year At Uber (Feb. 19, 2017).

[2] Cal. Gov’t Code § 12940(j)(1).

[3] Reno v. Baird (1998) 18 Cal. 4th 640.

[4] Miller v. Department of Corrections (2005) 36 Cal. 4th 446.

[5] Reno at 646-47.

[6] Ibid.

[7] Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal. 4th 1158.

[8] Payne v. U.S. Airways, Inc. (Vt. 2009) 186 Vt. 458, 468.

[9] Reno, at 654.