California Supreme Court Rules That Employer Agents Can Be Held Liable for Discrimination

The California Fair Employment and Housing Act (FEHA) is a state law that protects California employees and job seekers from discrimination, harassment, and retaliation in employment. According to FEHA, it is unlawful for a California employer to illegally discriminate against, harass, or retaliate against an employee or job seeker. According to the law, the term “employer” includes a person acting as an employer’s agent, either directly or indirectly. 

In the past, the Supreme Court has made it clear that, under the Fair Employment and Housing Act, employers’ agents who are individual employees cannot be held liable in discrimination and retaliation cases. However, until August 21, 2023, the court had not clarified if other types of employer agents could be sued directly for violating the FEHA. 

In a recent decision, the Supreme Court of California ruled that third-party employer agents of a particular size can be held directly responsible for violations of the FEHA when performing FEHA-regulated activities on behalf of the client employer. According to the recent ruling, business-entity agents with at least five employees can be directly liable for discrimination or other violations of the FEHA when the entity provides employment-related services to a California employer.

The case in question was filed by two individuals, K.R. and D.F. The two plaintiffs filed this case as a class action after they underwent discriminative medical screenings conducted by U.S. HealthWorks Medical Group. According to the lawsuit, U.S. HealthWorks Medical Group, a job applicants screening firm, asked questions prohibited under the FEHA. Both job applicants were required to answer questions about their health history. The questionnaire the applicants were required to fill out included, among others, questions about the applicants’ menstrual cycles, mental health, and whether the applicants had cancer, HIV, or venereal diseases. Plaintiff K.R. refused to answer a question about her menstrual cycle and was ultimately denied the job. On the other hand, D.F. answered all the questions and was hired.

The two job applicants joined forces and filed a class-action lawsuit claiming that U.S. HealthWorks Medical Group included intrusive questions in the questionnaire that violated the FEHA. Under the FEHA, it is illegal to ask about an applicant’s medical issues unless the questions are job-related and necessary for the success of the business. The questions that U.S. HealthWorks included in the questionnaire were not job-related or necessary for the success of the employer’s business. In its defense, the screening firm said it only asked questions as required by client employers.

The trial court ruled that the screening firm was not considered an employer and closed the case. The case was appealed to the 9th Circuit, which then asked the Supreme Court of California to provide instructions on who is an employer under the FEHA and whether the screening firm can be held responsible for discrimination. After examining similar past cases and making statutory and policy considerations, the court found that third-party business agents of employers, such as screening firms with five or more employees, can be held directly liable for discrimination and other FEHA violations. So, in other words, the claimants in this case have the right to sue the screening firm even though the firm is not their employer. 

Contact a California Employment Lawyer

If you believe an employer or agent of an employer has illegally discriminated against you, contact a qualified California employment lawyer.