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California Supreme Court ruling favors employers in job discrimination cases

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California Supreme Court ruling favors employers in job discrimination cases

A California Supreme Court ruling will make it more difficult for plaintiffs to prevail in job discrimination cases, but a provision that permits courts to award plaintiff attorney fees still could prove costly for firms.

In its Feb. 7 ruling in Wynona Harris v. City of Santa Monica, the court held that in cases where there are discriminatory and nondiscriminatory reasons for taking an adverse job action and the employer shows it would have made the same decision even absent the discrimination, plaintiffs can prevail only when the discriminatory factor is “substantial.”

However, the court may not award damages, back pay or reinstatement in such cases, the state high court ruled unanimously.

But plaintiffs still could be awarded declaratory or injunctive relief and, most significantly, reasonable attorney fees (see related story), which observers say could discourage settlements.

“I think both sides got something in the ruling,” said Michael A.S. Newman, a partner with Barger & Wolen L.L.P. in Los Angeles.

But many observers say the ruling is more favorable to employers.

“I would say while this is not a home run for employers, it is probably a double or triple in terms of good news for employers,” said Anthony J. Oncidi, a partner with Proskauer Rose L.L.P. in Los Angeles.

Observers are divided about the case's influence outside California.

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“I don't expect it to be the sort of precedent that will be able to be readily used” elsewhere, said Gerald L. Maatman Jr., a partner with Seyfarth Shaw L.L.P. in Chicago.

However, Mr. Oncidi said, “Whenever the California Supreme Court speaks, other courts take notice.”

Meanwhile, the U.S. Supreme Court soon will consider a “mixed motive” case (see related story).

Before the ruling in Harris, employees needed to show only that discrimination was a motivating factor for their firing. “Now, the employee is required to show the discrimination was a substantial motivating factor, and the additional adjective, "substantial,' makes a huge difference in what the employee has to prove in order to prevail,” Mr. Oncidi said.

“The court went even further, saying even if the employee proves that discrimination was a substantial motivating factor, the employee will have only a qualified win if the employer could show that it would have made the same employment decision anyway for nondiscriminatory reasons, Mr. Oncidi said.

“The court fashioned its own standard, but I believe employers are in a better place than they were before this decision,” said Linda E. Shostak, a partner with Morrison & Foerster L.L.P. in San Francisco.

It will be difficult, though, to determine what the court means by a “substantial factor,” said Mark Askanas, a partner with Jackson Lewis L.L.P. in San Francisco.

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In addition, the court's ruling on attorney fees is a concern.

“The threat of attorneys' fees is often the thing that compels employers to settle this case as early as possible,” said Robin E. Largent, a partner with Carothers DiSante & Freudenberger L.L.P. in Sacramento, Calif.

Paul D. Fogel, a partner with Reed Smith L.L.P. in San Francisco, cited a case in which he was involved that resulted in a $25,000 plaintiff award and $900,000 in attorney fees. He noted that the Harris ruling did not specify circumstances in which plaintiff attorney fees could be awarded.

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    The issue of mixed-motive adverse job actions “has been percolating for many years” in the courts, said Anthony J. Oncidi, a partner with Proskauer Rose L.L.P..