Employees Not Entitled to Receive Damages in Mixed Motive Cases – Harris v. City of Santa Monica
Yesterday the California Supreme Court issued some welcome news for employers. Judges and juries can no longer award a terminated employee damages in a mixed motive case. A “mixed motive” case is one where both unlawful discrimination and legitimate business reasons were at play in motivating the termination decision. The Court’s decision highlights the critical difference between a termination decision that is reviewed for strength of evidence and one that is not.
Specifically, the Court ruled:
When a plaintiff proves that discrimination was a substantial factor motivating his or her termination, the employer is entitle to demonstrate that legitimate, nondiscriminatory reasons would have led it to make the same decision at the same time. If the employer proves that it would have made the same decision for lawful reasons, then the plaintiff cannot be awarded damages, back pay, or an order of reinstatement. However, where appropriate, the plaintiff may be entitled to declaratory or injunctive relief. The plaintiff may also be eligible for an award of reasonable attorney’s fees and costs.
The Court began its journey in deciding how to properly handle mixed motive cases by defining the statement in the California Fair Employment and Housing Act that decisions made “because of” an employee’s race, religion, gender or other protected characteristic are unlawful. The Court noted that there are three possible meanings for the “because of” phrase in the statute and supporting authority for each. The three possible meanings are: (1) unlawful discrimination was a “but for” cause of the employment decision; (2) unlawful discrimination was a “substantial factor” in the decision; and (3) unlawful discrimination was simply “a motivating factor” in the decision.
The Court could not decide which meaning was correct based upon any relevant legislative history or intent. So, it looked to interpretations of Title VII by federal courts. After years of inconsistency in lower federal court opinions on the subject, the United States Supreme Court set the standard for mixed motive cases. See Price Waterhouse v. Hopkins, 490 U.S. 288 (1989). The US Supreme Court ruled that a plaintiff does not have the burden of proving “but for” causation. Rather, the plaintiff need only prove that unlawful discrimination was a motivating factor. Once the plaintiff does this, the burden shifts to the defendant to negate “but for” causation by proving that the decision would have been made even if no discrimination had been present. At the time, if the defendant was able to meet this burden of proof, the plaintiff’s claim was defeated entirely. Two years later, however, Congress amended Title VII to clarify that proof of a mixed motive by a defendant did not relieve the defendant of all liability. It simply meant that the plaintiff could not receive damages related to the employment decision. Because the employer’s decision was motivated in part by unlawful discrimination, courts retained the authority to impose injunctive relief to stop future discrimination and could award the plaintiff reimbursement for attorneys’ fees and costs.
In addition to looking at US Supreme Court precedent, the California Supreme Court noted that the purpose of FEHA was critical to determining the meaning of “because of” in mixed motive cases. The Court focused on the clearly-stated purpose of “preventing and deterring unlawful discrimination.” In light of this purpose, the Court stated that same-decision proof by an employer is not a complete defense to liability when the plaintiff has proven that discrimination on the basis of a protected characteristic was a substantial factor motivating the adverse employment action. Mere discriminatory thoughts or stray remarks are not sufficient to create liability for unlawful discrimination, but an employer does not escape all liability when its employment decision was substantially motivated by unlawful discrimination. To make the point the Court stated “Section 12940(a) does not prohibit discrimination ‘in the air.’ It prohibits discrimination that causes an employer ‘to refuse to hire or employ the person . . . or to discharge the person . . . or to discriminate against the person in compensation or in terms, conditions, or privileges of employment.’”
It is important to note that while discriminatory thoughts and stray remarks may not be sufficient to establish liability for discrimination, they can be sufficient to establish liability for unlawful harassment under California law. Cal. Gov’t Code §12940(j); Lyle v. Warner Bros. Television Productions, 38 Cal. 4th 264 (2006).
In a major development favorable to employers, the Court rejected the standard jury instruction adopted by the courts in 2003, and essentially returned to the standard instruction that existed previously. The rejected instruction informed the jury that the plaintiff has met his/her burden by proving that unlawful discrimination was a “motivating reason” in the employer’s decision. The Court ruled that this was the incorrect standard, and that a plaintiff must prove that it was a “substantial motivating” reason or factor. The difference between the two standards could be huge in any give case. While this is great news for employers, the Court was careful to note that the employer’s burden in a mixed motive case must be proven precisely. A successful defendant in a mixed motive case must prove that the same decision would have been made at the time the decision was actually made. In other words, the employer must prove that the legitimate reasons for the decision were motivating reasons at the time of the decision, and standing alone, would have resulted in the same decision.
As noted above, the Court ruled that if an employer is successful in proving that the legitimate reasons would have resulted in the same decision, the plaintiff is not entitled to damages. With regard to lost wages, this makes common sense. The Court was a little more troubled by the question of emotional distress damages. It noted that an employee subjected to unlawful discrimination might well have additional or different emotional damage beyond the emotional damage resulting from the termination of employment itself. The Court, however, ruled that it was “unrealistic to ask the trier of fact to parse the plaintiff’s past mental state so finely and to award only the quantum of damages that corresponds to the emotional distress resulting specifically from discrimination rather than the termination itself.” The Court was apparently comfortable excluding the potential emotional damages under the discrimination statute because plaintiffs are not precluded from getting the same type of damages by way of a tort action for infliction of emotional distress.
All in all, this is a great case for employers. It gives defense attorneys a much better chance at successfully defending discrimination cases. The success, however, is still largely dependent upon the evidence that is created at the time of the termination. This is the time to examine the strength of evidence supporting the decision. After the termination is finalized, it is too late.
The entire opinion can be viewed at http://www.courts.ca.gov/opinions/documents/S181004A.PDF