On May 7, 2015, the California Court of Appeal held in Hirst v. City of Oceanside that an employee of an independent contractor has standing to bring an action for sexual harassment under the Fair Employment & Housing Act (“FEHA”) against the company at which he or she is placed. This expansion of FEHA has potentially significant implications on California employers and the scope of their liability in sexual harassment cases.
FACTUAL BACKGROUND OF THE CASE
Ms. Hirst, the plaintiff in this case, was an employee of American Forensic Nurses, Inc. (“AFN”) which was contracted with the City of Oceanside to provide phlebotomy services to the Oceanside Police Department when its officers needed samples of blood drawn from suspects for intoxication testing and other purposes. While taking a sample, the phlebotomists were supervised at all times by a police officer to ensure the safety of the phlebotomists and the criminal suspects. Ms. Hirst was regularly supervised in this capacity when she took suspect’s blood samples by one officer who sexually harassed her on multiple occasions.
Once notified of this conduct, the City of Oceanside conducted an investigation and after having found that the officer did in fact sexually harass Ms. Hirst, terminated the officer’s employment. Following this, Ms. Hirst brought a FEHA claim against the City of Oceanside alleging that she had been sexually harassed by the Oceanside Police Officer. The jury awarded Ms. Hirst $1.5 million in damages for past loss and future loss, despite the fact that Ms. Hirst had not lost her job nor suffered any loss of wages.
THE COURT’S REASONING AND THE POTENTIAL SHIFT IN THE LAW
Prior to this ruling, there was some ambiguity as to whether or not companies could be liable for FEHA claims (i.e. sexual harassment claims) from the employees of an independent contractor. For example, if a grocery store hired a security company to watch its store, it was unknown whether or not the grocery store could be liable if one of its employees sexually harassed an employee of the security guard company. In fact, an unpublished California case held that there was no FEHA liability for the grocery store in such a scenario. Davis v. Smart & Final, B182045, 2006 WL 2664250 (Cal. Ct. App. Sep. 18, 2006). This new Hirst ruling has clarified this prior ambiguity.
The Court of Appeal found that the City of Oceanside could be held liable for the sexual harassment suffered by Ms. Hirst, an employee of AFN, at the hands of one of the City’s employees, the police officer, because Ms. Hirst was a “person providing services pursuant to a contract” under Government Code section 12940, subdivision (j) (1) which lays out who is entitled to protection under FEHA. Specifically, FEHA states that an employer may be held liable for its employee’s harassment of an “employee, applicant, or a person providing services pursuant to a contract.” Cal. Govt. Code § 12940 (j) (italics added).
Prior to the Hirst case, courts had interpreted this section to exclude the employees of independent contractors. Under the new Hirst ruling, an employee of an independent contractor (or assigned worker) has remedies under FEHA against the company at which he or she is placed. In other words, the security guard in the prior example could sue the grocery store for sexual harassment under this new ruling. A company will be liable for sexual harassment to an employee of a independent contractor if: 1) the worker was performing work pursuant to a contract with the harasser’s employer, and 2) the plaintiff proves the perpetrator was a supervisor or agent or that the perpetrator’s employer knew should have known of the harassment and failed to take immediate and appropriate corrective action.
SOME STEPS TO TAKE NOW
Employers should provide sexual harassment training to all supervisors, and if possible, to all employees. Further, employers should inform all employees that they have an obligation to immediately report any sexual harassment or inappropriate conduct, no matter what person is the target of such conduct. Employers may also want to set up a system for independent contractors’ employees to report complaints of harassment and distribute to them the employer’s sexual harassment policy. This case and its possible implications will be discussed in more detail at our July 1, 2015 California Mid-Year Update webinar. Please visit suttonhague.com/events for more information about all of our webinars.