As regular readers of this blog know, it has been a busy summer for employment-related legislation in the California Legislature (see here and here). Yet of all the bills currently wending their way through the legislative process, none would affect California employment law more than Senate Bill 655. If enacted, SB 655 would modify the rule set forth in the California Supreme Court’s recent seminal decision Harris v. City of Santa Monica, 56 Cal. 4th 203 (2013). In Harris, the Supreme Court addressed, for the first time, the “mixed motive” defense – essentially, where an employer’s adverse employment action (such as a termination) was partly based on a valid reason, and partly based on an illegal reason such as racial or sexual bias. The court held that an employer has a valid defense to any claim for monetary damages if it establishes that it would have made the same decision absent any discriminatory motive. However, a plaintiff may still be entitled to declaratory or injunctive relief (and, crucially for the plaintiff’s bar, attorneys’ fees). Harris is generally regarded as a careful compromise between employees’ rights to be free from unlawful discrimination, and employers’ rights to run their business without fear of arbitrary awards in cases where the plaintiff’s termination or discipline was not caused by any unlawful discrimination or animus.
SB 655 would not completely reverse Harris’s holding. In fact, it partially codifies Harris by adding a new section to the Government Code, § 12940.5, which would explicitly state that an FEHA plaintiff has the burden to show that a discriminatory motive was a “substantial motivating factor” behind any adverse employment action. While Harris left “substantial motivating factor” undefined, proposed § 12940.5 seeks to define that phrase, to an extent, by stating that it “must be more than a remote or trivial factor, but need not be the only or main cause of the employment action or decision.” (Whether this definition actually provides any useful guidance is an open question.)
However, SB 655 does reverse Harris’s central compromise regarding damages recovery. The bill proposes an amendment to Gov. Code § 12965(b)(2) which, consistent with Harris, would prevent a plaintiff from obtaining reinstatement, back pay or declaratory relief in a mixed motive case. However, the amended statute would provide for a $15,000 statutory penalty ($25,000 in the the original version of the bill). More importantly, it would allow a plaintiff to recover unlimited “noneconomic damages” – i.e., damages associated with alleged emotional distress. (Last February, an L.A. County jury awarded $4.7 million in noneconomic damages to a former customer service representative who had been suffering from “panic attacks.”)
In practical terms, this amendment would undo the central holding of Harris and reopen the possibility of potentially ruinous monetary awards against employers even where all parties agree that an illegal discriminatory motive was not the actual or even the primary reason motivating the plaintiff’s termination. Moreover, while economic damages and back pay are limited by factors such as the plaintiff’s provable lost earnings, noneconomic damages are limited only by the outer bounds of the jury’s imagination.
Senate Bill 655 was introduced by Sen. Roderick Wright (D-Inglewood). It passed the Senate, and is currently before the Assembly Committee on the Judiciary.