The court ruled last week that a woman whose sexual harassment claim was thrown out under federal law — because she did not use her company’s policies to deal with harassment claims before she sued — cannot pursue her claims under state law for the same reason.

The ruling “is going to do away with strict liability in California. And that is clearly a major defeat for employees,” said plaintiff’s attorney Mark Rudy.

“Reasonable Care” Defense

In upholding a federal district court decision to throw out the woman’s state claims, 9th Circuit Judge Arthur Alarcon said that employers are allowed the same defense against harassment suits under California’s Fair Employment and Housing Act as they receive under federal Title VII of the Civil Rights Act of 1964.

In so doing, Alarcon ruled that previous California Court of Appeal opinions holding employers “strictly liable” for supervisor harassment did not preclude the defense established by the U.S. Supreme Court in two 1998 decisions.

The Supreme Court ruled in those cases that employers can avoid liability by showing that they exercised “all reasonable care” to prevent and correct the harassment, and that the employee did not take advantage of preventive or corrective company policies.

Faced with predicting how the California Supreme Court would decide the issue, Alarcon explained:

• That California courts have consistently looked to Title VII for guidance in interpreting FEHA.
• That the two statutes had the same legislative intent.
• FEHA’s requirement that employers “take all reasonable steps to prevent harassment” is similar to the first test of an affirmative defense.

Attorney Richard Rahm, who represents management in employment disputes, said the 9th Circuit was looking at public policy. The judges “want to encourage employers to have a strong anti-sexual harassment policy, ” Rahm said.

– Fred Schneyer                                                       editors@plansponsor.com