[Note: The California Supreme Court decided Richards v. CH2M Hill, Inc. on August 23, 2001.]
When should the statute of limitations bar claims for employment discrimination or harassment? When should the statute be tolled or extended by virtue of the acts of an employer? How are these issues affected by the public policy in favor of an employee attempting to resolve such claims with the employer without litigation or a complaint to the Fair Employment and Commission? These questions are currently before the California Supreme Court in Richards v. CH2M Hill, Inc., Supreme Court Minute 06-28-2000, 2 P.3d 1065, 97 Cal.Rptr.511.
In March 2000, the California Court of Appeal for the Third District issued its decision in Richards v. CH2M Hill, Inc., 79 Cal.App.4th 570 (petition granted; case may not be cited) in which it strictly applied the statute of limitations to a disability discrimination case and dramatically restricted the "continuing violation doctrine" exception to the statute of limitations in employment discrimination cases. The "continuing violation" doctrine allows a plaintiff in a discrimination lawsuit to admit evidence of similar wrongful acts occurring outside the period of limitation for liability and damage purposes if (1) there is at least one similar wrongful act within the statute, and (2) the other acts are similar in nature so as to show a pattern or policy of discrimination. The court barred recovery for any act of discrimination occurring more than one year before the filing of an employees action unless those earlier acts of discrimination were so subtle as not to alert the employee to the existence of a claim for discrimination. In so ruling, the Third District parted company with the majority of jurisdictions to consider the issue, including the Second District of the California Court of Appeal. Further, although the Richards court purported to except "hostile environment" sex discrimination cases from its restriction of the doctrine, lower courts have applied the Richards reasoning to "hostile environment" cases. On June 28, 2000, the California Supreme Court granted the plaintiffs petition for review in Richards.
A. The Court of Appeals Holding in Richards.
In Richards, the plaintiff, a retired civil engineer who suffered from multiple sclerosis, brought an action for disability discrimination in violation of the Fair Employment and Housing Act (FEHA), Government Code Section 12940, et seq. Prior to filing her civil action, plaintiff filed an administrative complaint with the DFEH on January 25, 1994, describing a number of allegedly discriminatory acts, including the failure to provide wheelchair ramps or other forms of access, and other alleged failures to accommodate plaintiffs disability. Most of the alleged acts took place in or about 1990, when plaintiff requested but was denied certain accommodations; however, plaintiff also contended that she complained during her January 1992 and January 1993 performance evaluations that, in addition to the ongoing access problems, she had been unable to obtain timely and correct W-2 forms.
Plaintiff resigned effective March 8, 1993, and later testified that the accumulation of events placed her at a health risk and otherwise made it "unbearable" for her. Following a jury trial, in which the trial court admitted evidence of each of the above claims based on the "continuing violation" doctrine, plaintiff was awarded a total of $1.4 million in emotional distress and economic damages. The employer appealed, claiming that the trial court erred in admitting the events occurring prior to 1993, one year before plaintiffs administrative complaint was filed.
In reversing and remanding the action to the trial court, the Richards court engaged in a lengthy discussion of the "continuing violation" doctrine, as set forth in both federal and California cases, including Valdez v. City of Los Angeles, 231 Cal.App.3d 1043 (1991), City and County of San Francisco v. Fair Employment & Housing Com., 191 Cal.App.3d 976 (1987), and Accardi v. Superior Court, 17 Cal.App.4th 341 (1993). The Richards court began its analysis by distinguishing situations in which (1) the employers decision-making process takes place over a period of time, making it difficult to pinpoint the exact time of the "violation;" (2) the employer had an express and open policy alleged to be discriminatory; and (3) the employer engaged in a series of acts that, while not part of a formal policy, "emanat[e] from the same discriminatory animus." As an example of the latter situation, the Richards court specifically cited claims based on a hostile work environment, where, as the court stated, "it is only the accumulation of discrete acts that results in the unlawful practice, thus making recognition of a continuing violation doctrine a necessity for remedying the violation." Citing a series of recent federal decisions, the court added:
Based on its analysis, the court in Richards stated that, to assert a continuing violation, a party must establish (1) that at least one act occurred during the statutory period; and (2) that the discriminatory character of the acts must become cognizable when viewed cumulatively in light of later acts.
In reaching its conclusions, the court in Richards distanced itself from the majority position, including the opinion of the Second District in Accardi v. Superior Court, 17 Cal.App.4th 341 (1993). In Accardi, the court permitted a Simi Valley police officer to state a claim for sexual harassment based upon a series of events occurring as many as 11 years prior to the filing of her DFEH complaint, stating that "a complaint arising under the FEHA is timely if any of the discriminatory practices continues into the limitations period." The plaintiff in that case alleged a series of acts between 1980, when she was hired, and 1991, when she filed her claim with the DFEH. Although certain acts had sexual connotations (such as rumors that she had slept with superior officers to gain favorable treatment), other acts, such as unfavorable work shifts and substantiated comments regarding work performance, were discriminatory but non-sexual. After the lower court sustained the defendants demurrer without leave to amend, the Court of Appeal granted an extraordinary writ reversing the order sustaining the demurrer to plaintiffs sexual harassment claim, holding that "a claim for sexual harassment is not time-barred when there are continuous acts of discrimination over a period of time provided that some of those acts fall within the limitations period." Id. at 345 (emphasis added). The court also held that, because sexual harassment is a form of sex discrimination, the "continuous violation" doctrine applied. Id. at 348-50. In doing so, the court rejected the defendants assertion that the doctrine did not apply because the acts alleged by plaintiff that occurred more than one year prior to the filing of the DFEH complaint did not relate to sexual harassment. Instead, the court held that each of the discriminatory acts prior to the statutory period was relevant to establish an "abusive working environment," and that later acts, even if not separately actionable, were sufficient under the "totality of the circumstances" test to establish a "continuing violation." Id. at 349-51. In particular, the court stated that merely because "[t]here are gaps between specific incidents of sexual harassment does not preclude a finding of continuing violation." Id. at 351.
Notwithstanding Accardis clear recognition of the doctrine in discrimination cases, the Richards court refused to apply the doctrine to the facts before it, stating:
Applying its two-part test to plaintiffs disability discrimination claims, the Richards court stated that plaintiff established the first element, i.e., the existence of a discriminatory act (the continued denial of access) during the statutory period. Nevertheless, the court stated that, due to the ongoing (as opposed to discrete) nature of such denial, plaintiff was or should have been aware of her claims against the employer, and so could not establish the "cumulative" element necessary to invoke the "continuing violation" doctrine. In remanding the matter, however, the court permitted plaintiff to proceed on the aspects of her "denial of access" claims (including claims relating to fire escape, hallway and elevator access), which continued into the statutory limitations period, holding only that plaintiff could not seek redress for the other acts occurring outside the limitations period.
B. The Distinctions Between Richards And A Typical Harassment Action.
Based on the foregoing, it is clear that the Richards case is distinguishable from and inapplicable to the typical harassment case in any number of respects.
Notwithstanding these distinctions between Richards facts and the typical harassment action, the authors are aware of lower courts that have applied the Richards reasoning to claims of sex discrimination, hostile working environment and retaliation. In those cases, the trial court found that the plaintiff should have appreciated the discriminatory nature of the conduct more than a year prior to initiating the action. Thus, these lower courts interpreted Richards as barring any claims based upon acts occurring outside the limitations period even though the discriminatory conduct continued into the statutory period. Moreover, these lower courts not only barred the plaintiffs actions but also precluded the plaintiffs from introducing evidence of similar discriminatory acts occurring more than one year before the plaintiffs filed their actions, to show the existence of a hostile work environment. Relying on Richards, these courts excluded evidence of other similar acts even though such evidence is admissible to prove other disputed issues. See, e.g., Weeks v. Baker & McKenzie, 63 Cal.App.4th 1128, 1162-63 (1998) (admissible to establish malice); Turner v. Anheuser Busch, Inc., 7 Cal.4th 1238, 1248-49 (1994) (admissible to show intolerable working conditions for purposes of constructive discharge claim); Stephens v. Coldwell Banker Commercial Group, Inc., 199 Cal.App.3d 1394, 1399-1401 (1988) (admissible to establish intent to discriminate and pretext).
C. The Implications Of The Richards Courts Decision.
In light of Richards' significant restrictions of employees rights to sue their employers for sexual discrimination and harassment, the California Supreme Court is faced with a fundamental public policy dispute on review, i.e. the continued viability and application of the "continuous violation" doctrine to discrimination and harassment claims based on hostile work environment. In the employment arena, discrete acts of discrimination that, standing alone, may not be independently actionable, may become actionable by virtue of their cumulative effect. However, the Richards courts ruling, if applied generally to sexual discrimination claims, would render that concept a virtual nullity by preventing a victim of discrimination or sexual harassment from introducing or relying upon certain acts that demonstrate the existence of such an environment. Under the Richards courts ruling, an employee who experiences such cumulative incidents of discrimination or harassment would be left effectively without a remedy, because the employer could, on the one hand, preclude the employee from introducing evidence of incidents outside the limitations period and, on the other, claim that the incidents that did occur within the statutory period were "sporadic" or "trivial." Such "sporadic" or "trivial" acts of harassment are insufficient to establish a hostile working environment. See, Fisher v. San Pedro Peninsula Hospital, 214 Cal.App.3d 590, 610 (1989).
In addition, an employee who seeks to establish a cause of action for constructive termination is required to show "intolerable working" conditions. Turner v. Anheuser Busch, Inc., 7 Cal.4th 1238, 1248, 49. Before conditions can be found to be intolerable, however, an employee must be aware of the significance of the problem; indeed, the employee must bring it to the employers attention and afford the employer the opportunity to cure it. Id. Thus, if the employee acts too soon and resigns before his or her employer has had a reasonable period of time to effect such a cure, he or she will be unable to establish the necessary predicate to a claim of constructive termination. On the other hand, under Richards, if the employee waits and tries to resolve the problem with the employer, he or she does so at the peril of having a court determine that the claim is time barred.
Moreover, the abandonment of the "continuing violation" doctrine, and the imposition of a strict requirement that an aggrieved plaintiff file suit at the earliest conceivable moment, would violate the express policy of the FEHA of encouraging mediation rather than litigation as the preferred means of resolving disputes in the workplace. See, e.g., Mullins v. Rockwell Intl Corp., 15 Cal.4th 731, 741 (1997) ("[W]e do not believe it is appropriate to establish a statute of limitations rule that forces employees to resort to litigation at the earliest moment. As a practical matter, a rule requiring a lawsuit to be filed as soon as intolerable conditions begin would interfere with informal conciliation in the workplace"); see also Romano v. Rockwell Intl, Inc., 14 Cal.4th 479 (1996). Thus, in addition to ignoring the fact that continuous acts are often necessary to prove discrimination and harassment claims, Richards ignores the realities of the employer-employee relationship in which an employee may complain about employer wrongdoings, work to change them, and indeed succeed in improving the environment in certain limited respects. In doing so, Richards places an employee who attempts to improve working conditions for himself or other employees at risk of losing his right to sue if those efforts ultimately fail to secure an improvement in his working conditions.
Whether intended or not, this is precisely the dilemma opened by the Richards decision: employees are now faced with a Hobsons choice of immediately filing suit on each and every perceived act of harassment, lest they be found by some court in the future to have ignored "intolerable" conditions for too long. This compulsion to race to the filing window will, in turn, increase the amount of employment litigation in this State, a point that should concern employers. The net result will be, not only to punish litigants who viewed the court system as a last resort, but also to encourage the filing of marginal claims, to the ultimate detriment of the court system.
D. How to Avoid the Prosecution of Stale Claims and Yet Preserve and Foster the Resolution of Employment Disputes Without Litigation.
At its core, the Richards decision is motivated by a legitimate concern about the prosecution of stale claims. Its conclusions, however, run contrary to an equally legitimate concern about fostering employment relationships in which disputes can be resolved without resorting to formal litigation. These potential conflicts could be harmonized by a balanced application of the continuing violation doctrine as discussed in Accardi. In order for a lawsuit to capture any of the earlier acts, at least one similar wrongful act must occur within the statutory period. If one does not, the claim is barred. The earlier acts must be similar and must be continuous. Any significant break in that continuity would lead to the exclusion of such acts for purposes of damages, because they would not be part of a "continuing violation." (evidence of such acts may still be admissible on other relevant issues, see, e.g. Weeks, supra.) Finally, it would be up to the trier of fact to determine whether the plaintiff should have acted sooner after hearing all of the evidence of why the plaintiff waited to act: was it because he or she slept on his or her rights or was it the result of a genuine attempt to solve the problem with the employer. In the former situation, the claim would be barred; in the latter, the claim would remain viable. This would protect the employee who tried but failed to solve the problem without filing suit, while at the same time preventing employers who continued to engage in conduct prohibited by law from benefiting from their ability to drag disputes out.