March 11, 2014

California Supreme Court Clarifies Employer’s Burden of Proof in Mixed-Motive Cases

On February 7, the California Supreme Court decided the issue of whether the federal “mixed motive” defense applies to employment discrimination claims under the California Fair Employment and Housing Act (FEHA). By way of background, this defense states that if the employer had both discriminatory and non-discriminatory reasons for firing an employee, the employer should not be found liable as long as the non-discriminatory reasons standing alone were sufficient to warrant dismissal.

In Wynona Harris v. City of Santa Monica, the Court affirmed the Court of Appeal’s decision overturning a damages verdict against the City of Santa Monica, finding that employers may properly assert a mixed-motive defense in discrimination cases under FEHA to defeat liability for damages where the employee would have been terminated anyway for a non-discriminatory reason. Specifically, the Court held that when a jury finds that unlawful discrimination was a “substantial factor” motivating a termination of employment, but the employer proves it would have made the same decision absent such discrimination, a court may not award damages, back pay, or an order of reinstatement. However, the Court also held that an employee who proves that discrimination was a substantial motivating reason for his or her termination may still be entitled to injunctive and declaratory relief, as well as reasonable attorneys’ fees and costs.

Jury Trial

Harris, a bus driver for Santa Monica’s city-owned bus service, was terminated for poor performance shortly after notifying her supervisor that she was pregnant. Harris filed a lawsuit against the City, alleging that the City unlawfully fired her because she was pregnant. Before jury trial, the City asked the court to give a mixed-motive instruction to the effect that if the City would have reached the same decision even without the alleged discriminatory rationale, then it is not liable for discrimination under FEHA. Instead, the trial court instructed the jury (using California Civil Jury Instruction (CACI) No. 2500) that if Harris proved pregnancy was a “motivating factor/reason for the discharge,” then the City was liable. The jury found by a vote of nine to three that Harris’s pregnancy was a motivating reason for her termination, and awarded her $177,905 in damages and $401,187 in attorneys’ fees.

The City appealed the verdict and the Court of Appeal remanded for a retrial after determining that the trial court should have used the City’s proposed “mixed-motive” instruction. The Court of Appeal found that the mixed-motive defense, permitted in federal employment discrimination cases under Title VII, could be used by employers in FEHA cases. Irvine Las Vegas Los Angeles Salt Lake City San Francisco

California Supreme Court Decision

In affirming the Court of Appeal’s judgment overturning the damages verdict, the Court held that rather than instructing the jury under CACI No. 2500 to determine whether discrimination was “a motivating factor/reason” for Harris’s termination, the jury should have instead determined whether discrimination was “a substantial motivating factor/reason” for her termination. Under this revised instruction, if the plaintiff makes that showing, the employer then has the opportunity to limit its exposure by proving by a preponderance of evidence that it would have made the same decision anyway for non-discriminatory reasons. Assuming the jury agrees that the employer has met this burden, the plaintiff cannot be awarded the usual compensatory damages, back pay, or an order of reinstatement. However, because the jury will have found that discrimination occurred, the plaintiff may still seek declaratory or injunctive relief (other than reinstatement). Of critical importance to employers, even though the plaintiff would not be entitled to a damages award, the trial court would still have the discretion to award attorneys’ fees under the FEHA.

Practical Implications

The Harris decision is a welcome development for California employers, as it provides clarity in mixed-motive cases. While liability may still be imposed against employers, at the very least, the universe of potential damages is smaller. Employers will be able to use this decision to minimize damages in certain discrimination cases if they can demonstrate that the employee would have been discharged due to performance reasons, company layoff or reorganization, or other legitimate business reasons. However, because employers may still be responsible for the plaintiff’s attorneys’ fees in such cases, the deterrent effect of the Harris decision may not be as great as employers would hope; attorneys’ fees are often the driving force of such litigation. Thus, employers need to continue to ensure their antidiscrimination policies are up to date and followed, and should continue to review termination decisions with counsel where warranted.