Why it matters: Employers are seeing positive results from last year’s California Supreme Court decision in Harris v. Santa Monica, which established a heightened standard for plaintiffs alleging violations of the state’s Fair Employment and Housing Act (FEHA) to prove that discrimination was “a substantial motivating factor” rather than just “a motivating factor.” In a recent victory for employers, a California appellate court held that same heightened standard should be applied to plaintiffs claiming a public policy violation where the policy asserted was based on the FEHA, reversing a $238,328 jury verdict.

Detailed Discussion

Romeo Mendoza was employed by Western Medical Center for more than 20 years as a nurse, receiving positive reviews and commendations for his work. But in 2010 he reported that a supervisor was sexually harassing him. The allegations included physical contact, inappropriate comments, and lewd displays.

Western Medical conducted an investigation of Mendoza’s claims. The other employee said that Mendoza consented to the conduct and participated in other mutual interactions. The hospital fired both men for unprofessional conduct.

At trial on Mendoza’s suit for wrongful termination in violation of public policy, the jury found for the plaintiff and awarded a total of $238,328 in damages. However, the verdict form asked the jurors “Was Romeo Mendoza’s report of sexual harassment . . . a motivating reason for [the defendants’] decision to discharge Romeo Mendoza?”

Based on last February’s holding in Harris v. Santa Monica, the Court of Appeals found the language of the verdict form to be prejudicial error requiring reversal.

Harris involved a plaintiff who claimed her employer terminated her because she was pregnant. The California Supreme Court determined that the proper standard was whether the discrimination was a substantial motivating factor in the employer’s decision, not merely a motivating factor.

“Requiring the plaintiff to show that discrimination was a substantial motivating factor, rather than simply a motivating factor, more effectively ensures that liability will not be imposed based on evidence of mere thoughts or passing statements unrelated to the disputed employment decision,” the state’s highest court wrote. “At the same time…proof that discrimination was a substantial factor in an employment decision triggers the deterrent purpose of the FEHA and thus exposes the employer to liability, even if other factors would have led the employer to make the same decision at the time.”

Effective June 2013, California Civil Jury Instructions for Judges and Attorneys (CACI) No. 2430 was updated to read: “That [insert alleged violation of public policy…] was a substantial motivating reason for [name of plaintiff]’s discharge.” The Court noted that the corresponding special verdict form also inserted updated language.

“It would be nonsensical to provide a different standard of causation in FEHA cases and common law tort cases based on public policies encompassed by the FEHA,” the appellate panel concluded. “The court should have instructed the jury to determine whether Mendoza’s report of sexual harassment was a substantial motivating reason for Mendoza’s discharge.”

Particularly because the jury’s vote was extremely close (nine to three in favor of Mendoza), the appellate panel said the error was prejudicial, remanding the case for a new trial.

The Court also took the opportunity to remind employers to conduct thorough investigations when an employee reports sexual harassment. At trial, Mendoza’s expert witness pointed to several shortcomings in Western Medical’s investigation that provided support for his retaliation claims, the Court said, like interviewing the two men together rather than separately.

“[E]mployers should conduct a thorough investigation and make a good faith decision based on the results of the investigation,” the panel advised in a footnote. “Hopefully, this opinion will disabuse employers of the notion that liability (or a jury trial) can be avoided by simply firing every employee involved in the dispute.”

To read the decision in Mendoza v. Western Medical Center, click here.