Esther Kim began working for Konad, a business involving the distribution and sale of nail art kits, in 2006 as an account manager.  The following year, Kim alleges that Konad's owner-manager, Dong Whang, began sexually harassing her.  Whang would regularly make comments about Kim's breasts and legs, question her about her sexual activities, leer at her, and, one occasion, asked her to sit on his lap.

Whang progressed from daily comments to touching Kim.  He would hug her without permission, and pat her buttocks.  By the end of 2010 Kim could not take it anymore, and wrote to Whang informing him that she was not returning to work.  Kim claims that Whang offered to pay her $500 per month to help her pay for her apartment so long as she did not tell his wife.

In July 2011, Kim sued Whang and Konad for sexual harassment (both hostile environment and quid pro quo), retaliation, and wrongful termination in violation of public policy.  The first causes of action were pleaded under the fair Employment and Housing Act (FEHA).  Kim filed complaints with the DFEH and received her right-to-sue letter.  She did not, however, specifically plead in her complaint that she had exhausted her administrative remedies.

Konad answered the complaint and included as an affirmative defense that Kim had failed to exhaust her administrative remedies, as required by Government Code section 12960.  Konad did not file any other type of motion to attempt to dismiss Kim's claim.  Trial began in February 2013 and Konad never argued that Kim failed to exhaust her administrative remedies, either during trial or in closing arguments.  The only time administrative remedies were mentioned at trial was when Kim testified.  The defense counsel asked Kim if she filed a document with a governmental agency alleging sexual harassment and she said no.  But her lawyers were able to get into evidence the letter from DFEH entitled "Notice of Case Closure" giving Kim her right to sue.

The court took the case under submission on February 20, 2013.  One week later, the court issued a proposed statement of decision and judgment.  Konad objected to the statement of decision, alleging that Kim failed to exhaust administrative remedies and also on the grounds that Konad did not have more than 5 employees.  Despite these objections, the court filed the judgment and decision and awarded Kim $60,000 in a lump sum.

Several days later defense lawyers filed supplemental objections, arguing that Kim did not prove she had exhausted her administrative remedies by filing complaints naming both Whang and Konad.  The defendants moved to set aside and vacate the judgment.  Kim opposed the motion on several grounds, including that defendants had waived their arguments and that she in fact had complied with the requirements of filing administrative complaints against both Konad and Whang.  Kim attached to her opposition motion the right-to-sue letter against Konad, like the letter against Whang which she had introduced at trial.  The trial court denied the motion and Konad and Whang appealed.

Before filing a civil action alleging violations of FEHA, a plaintiff has to exhaust her remedies with DFEH by filing administrative complaints and receiving right-to-sue letters.  The employee plaintiff then has the burden of pleading and proving the timely exhaustion of such remedies.   In this case, the court noted, the defendants waited until after the case was submitted for decision to raise their argument that Kim did not exhaust her administrative remedies.  The record, however, shows that Kim filed the complaint and received the letters as to both Konad and Whang.  What the defendants were now attempting to argue, was that exhausting administrative remedies was a jurisdictional prerequisite, such that they were entitled to raise the argument at any point. 

The appeals court disagreed with Konad and Whang's argument, holding that they waived their right to argue Kim did not exhaust her administrative remedies when they declined to request dismissal before the case was submitted for decision.  The court added that even under the defendants' logic, the case still would not be overturned because the record demonstrated that Kim did file the required administrative complaints as to both defendants. 

Another argument Whang raised was that he was not Kim's employer, Konad was the employer.  This related only to the wrongful discharge claim, since an individual who is not an employer cannot commit the tort of wrongful discharge under California law.  The court rejected Whang's claim and affirmed the judgment because it was not clear the issue was raised in a timely fashion and there was no proof the error, if any, was prejudicial against Whang.  The $60,000 award was one lump sum, and was not differentiated with respect to the individual claims or defendants.  Whang had no argument that the amount he would be responsible for would be less if he were not found liable on the wrongful termination claim.

Kim v. Konad USA Distribution, Inc. (2014) –Cal.Rptr.3d--, [2014 WL 2612087]