Morgan v. Regents of University of California

Facts

The Fair Employment and Housing Act (FEHA) makes race discrimination and retaliation in employment unlawful (Gov. Code, § 12940), but conditions suit on the timely exhaustion of an administrative remedy. As the court restated the framework, “the employee must exhaust the administrative remedy provided by the statute by filing a complaint with the Department of Fair Employment and Housing … and must obtain from the Department a notice of right to sue,” and “[t]he timely filing of an administrative complaint is a prerequisite to the bringing of a civil action for damages under the FEHA.” (Morgan v. Regents of University of California (2000) 88 Cal.App.4th 52, 63.) The governing limitations period is one year: no complaint “may be filed with the Department ‘after the expiration of one year from the date upon which the alleged unlawful practice or refusal to cooperate occurred,’ with an exception for delayed discovery not relevant here.” (Ibid., quoting Gov. Code, § 12960.) That deadline, and the continuing-violation exception the plaintiff invoked to circumvent it, framed the first half of the case.

Adolphus Ray Morgan worked as an electronic technician in the University of California’s mechanical engineering department from 1982 until June 30, 1995; he and one other employee “were the only two African-American electronic technicians in the University’s college of engineering.” (Morgan, supra, 88 Cal.App.4th at pp. 56–57.) In August 1994 he filed an internal grievance claiming racial discrimination after he was docked for leaving work early while two other employees who left early that day were not. (Id. at p. 57.) The administrative reviewer concluded the three should have been treated equally and restored his leave, but “found no evidence of discrimination” and noted “problems with appellant’s attendance and performance on the job as well as problems of communication and trust between appellant and his supervisor.” (Ibid.) During an informal meeting, the report recorded, Morgan “apologized to Supervisor Shaw and indicated that the grievance was not based on racial discrimination.” (Ibid.)

On May 1, 1995, Morgan was notified that he would be laid off effective July 1, 1995, “due to a permanent budget reduction for the department of mechanical engineering.” (Morgan, supra, 88 Cal.App.4th at p. 57.) Under university staff personnel policies he held “a right to recall to positions in the same class” and “preference for employment elsewhere on campus … provided he was qualified for the jobs in question.” (Ibid.) A principal personnel analyst explained that “although two jobs may have the title ‘Electronic Technician,’ the qualifications/functions for each position may vary widely, depending on the needs of each Department,” and that the department would “determine whether the candidate was qualified … then was required to offer the job if the candidate was qualified and could reject the application if the candidate was not qualified.” (Ibid.) An arbitrator who heard Morgan’s layoff grievance found “the budget crisis was legitimate,” that “the decision to lay off the least skilled electronics technician in the department could not be second-guessed,” and that “‘despite the inferences, there is no persuasive evidence supporting a finding of racial discrimination or reprisal in the decision to lay [appellant] off.’” (Id. at p. 58.) That arbitration award was later confirmed by the trial court. (Id. at p. 72.)

After the layoff Morgan “applied for some 25 jobs at the university in 1995 and seven jobs in 1996. … He was hired for none of them.” (Morgan, supra, 88 Cal.App.4th at pp. 58–59.) His work counselor, Karen Burke-Johnson, allegedly told him at the outset “that he would never get rehired because he had filed a grievance against the University” and that prospective university employers “would have his personnel file and his ‘filing a grievance and the retaliation stuff may come up.’” (Id. at pp. 58–59.) Another personnel representative, Ms. Kuroiwa, allegedly told him “it was a waste of time to file a grievance and to file job applications.” (Id. at p. 59.) Crucially, however, the seven 1996 rejections were each made by a different manager in a different department — Christine Nishida, Jolene Adams, Ferenc Kovac, James Evans, Paul Payne, and Michael Sawyer — and “[a]ll the decision makers that failed to hire appellant stated their rejections of his applications were not based on appellant’s race,” each declaring under penalty of perjury that he or she “had no knowledge of appellant’s prior complaints of retaliation and/or discrimination.” (Id. at pp. 59–62.) Each also gave specific, job-related qualification deficiencies — that Morgan lacked, for example, the requisite networking, machine-shop, or software experience the particular position demanded. (Id. at pp. 60–62.)

Procedural history

Morgan filed a DFEH complaint on April 29, 1997, alleging he had “been denied employment and rehire rights in retaliation for having complained about discrimination,” identifying the discrimination as occurring “from May 1996 to December 1996.” (Morgan, supra, 88 Cal.App.4th at p. 62.) On July 25, 1997, he sued the university, alleging racial discrimination under the FEHA (Gov. Code, § 12940, subd. (a)), retaliation under section 12940, and retaliation under Labor Code section 1102.5. (Ibid.) The third cause of action fell on demurrer; a later motion for judgment on the pleadings — granted as to discrimination and retaliation “during employment and in layoff” — left only Morgan’s “claims of discrimination and retaliation in denial of rehire rights as the only issues to be litigated,” and the court confirmed the arbitration award. (Ibid.)

The university moved for summary judgment, which the trial court (Hon. James Richman) granted by order filed March 25, 1999. The court “concluded that appellant failed to raise triable issues of fact that the legitimate reasons for denial of rehire were pretextual or that David Bogy or Alvin Shaw participated in the decision not to rehire appellant.” (Morgan, supra, 88 Cal.App.4th at p. 62.) Judgment was entered April 23, 1999, and Morgan appealed; he abandoned the appeal as to the individual defendants. (Id. at pp. 56, 63.) The Court of Appeal, First Appellate District, Division Two, affirmed in an opinion by Presiding Justice Kline, with Justices Haerle and Lambden concurring. (Id. at pp. 56, 80.) Originally filed unpublished on November 30, 2000, the opinion’s “Publication Status … was Changed by the Supreme Court from Unpublished to Published March 28, 2001.” (Id. at p. 52.)

Issue

The appeal presented two distinct questions, each of broad recurrence in FEHA litigation. First, a timeliness question: where an employee’s sole DFEH complaint reaches back only one year, may the continuing-violation doctrine pull earlier, otherwise time-barred refusals to rehire into the case — when those refusals were “a series of decisions made by different decision makers in unrelated departments of the University regarding positions with varying job requirements”? (Morgan, supra, 88 Cal.App.4th at p. 65.) Second, a causation question going to the merits: can a plaintiff defeat summary judgment on a retaliation theory by pointing to retaliatory statements and hostile conduct by employees who “played no role in the decisions” to deny rehire, where every employee who actually made those decisions swore he or she did not know of the protected grievance? (Id. at pp. 71, 73–74.) The court reviewed both issues de novo, “accept[ing] as true the facts alleged in the evidence of the party opposing summary judgment and the reasonable inferences that can be drawn from them.” (Id. at pp. 63–64.)

Holding

Reasoning

The continuing-violation doctrine reaches only systemic or closely related acts — not a scattershot of independent rejections. The court began from the one-year filing rule, under which “rehire decisions made before April 29, 1996, may not be reviewed on this appeal.” (Morgan, supra, 88 Cal.App.4th at p. 63.) To salvage his 1995 rejections, Morgan invoked the continuing-violation theory, an “‘equitable exception to the timely filing requirement.’” (Ibid.) The court explained that such a violation “may be established by demonstrating ‘a company wide policy or practice’ or ‘a series of related acts against a single individual,’” and that the doctrine has “generally … been applied in the context of a continuing policy and practice of discrimination on a company-wide basis.” (Id. at p. 64.) But it carries a demanding floor: the plaintiff “must demonstrate that at least one act occurred within the filing period and that ‘the harassment is “more than the occurrence of isolated or sporadic acts of intentional discrimination,”’” because “‘[t]he relevant distinction is between the occurrence of isolated, intermittent acts of discrimination and a persistent, on-going pattern.’” (Ibid.)

A refusal to hire has a “degree of permanence” that starts the clock. Drawing on a line of federal authority, the court stressed that the doctrine “‘is premised on the equitable notion that the statute of limitations should not begin to run until a reasonable person would be aware that his or her rights have been violated,’” so “‘a continuing violation claim will likely fail if the plaintiff knew, or through the exercise of reasonable diligence would have known, [he] was being discriminated against at the time the earlier events occurred.’” (Morgan, supra, 88 Cal.App.4th at p. 65.) The federal cases the court found persuasive — Williams v. Owens-Illinois, Inc. (9th Cir. 1982) 665 F.2d 918, Bullington v. United Air Lines, Inc. (10th Cir. 1999) 186 F.3d 1301, Morris v. Frank IX & Sons, Inc. (W.D.Va. 1980) 486 F.Supp. 728, and especially Narin v. Lower Merion School Dist. (E.D.Pa. 1998) 24 F.Supp.2d 465 — uniformly held that “a series of rejected job applications does not demonstrate a continuing violation,” because “‘each alleged discriminatory recall constitutes a separate and completed act … which triggers a new [limitations period].’” (Id. at pp. 65–66.) Narin, the closest analogue, treated each of a teacher’s ten failed applications as “‘isolated employment decisions’” carrying “‘the degree of permanence which should trigger an employee’s awareness of and duty to assert [his] or her rights.’” (Id. at p. 66.)

Applying that standard, Morgan’s rejections were unconnected and self-evident. The court found this case materially identical to Narin. Although “the adverse employment actions all involved the University’s failure to rehire appellant,” they were “a series of ‘isolated employment decisions’ … rather than acts ‘“related closely enough to constitute a continuing violation.”’” (Morgan, supra, 88 Cal.App.4th at pp. 66–67.) The decisive facts: “the decisions not to rehire appellant were made by many different decision makers, with no evidence the decisions were connected to each other in any way,” and “each time appellant was informed he was not being hired … he was, or should have been, aware this action might be contrary to his preferential rehire rights.” (Id. at p. 67.) The court therefore confined the appeal to the 1996 rejections. (Ibid.) That move illustrates the doctrine’s central limit: multiplicity of adverse acts is not continuity; what matters is whether the acts flow from one ongoing system and whether their wrongful character was reasonably hidden until within the filing period.

On the merits, the court applied the McDonnell Douglas framework and the direct-evidence alternative. Turning to the surviving claims, the court recited that a discrimination or retaliation suit “may be built on direct or circumstantial evidence, or both,” and that where “direct evidence” of animus is believed, the employer “can avoid liability only by proving the plaintiff would have been subjected to the same employment decision without reference to the unlawful factor.” (Morgan, supra, 88 Cal.App.4th at pp. 67–68.) Absent such evidence, the familiar three-stage McDonnell Douglas burden-shift governs: prima facie case, legitimate nondiscriminatory reason, and proof of pretext, with “[c]ircumstantial evidence of ‘pretense’ … ‘specific’ and ‘substantial,’” but “‘very little’ direct evidence” needed “to move past summary judgment.” (Id. at pp. 68–69.) For retaliation specifically, the plaintiff must show protected activity, an adverse action, and a causal link — and “‘[e]ssential to a causal link is evidence that the employer was aware that the plaintiff had engaged in the protected activity.’” (Id. at pp. 69–70.)

The significant-participant principle: stray remarks by non-decisionmakers carry no weight. This is the case’s second doctrinal core. Morgan’s “direct evidence” was the statements of Greenwood, Burke-Johnson, and Kuroiwa. The court rejected each evidentiary theory in turn. They were not party admissions, because admissions bind only where “the declarants were authorized by respondent to speak on the subject they addressed,” and “none of the individuals under discussion were involved in the decisions not to rehire appellant.” (Morgan, supra, 88 Cal.App.4th at p. 70.) The court distinguished E.E.O.C. v. Watergate at Landmark Condominium (4th Cir. 1994) 24 F.3d 635, precisely on this axis: there, agency could bind the employer because the declarant, though “not the actual decision maker[,] ha[d] significant involvement in the process leading to a challenged decision,” being “integrally involved in a series of decisions that culminated in the termination.” (Id. at pp. 70–71.) Here, by contrast, the three speakers “were all employed by respondent,” but “none of these individuals were involved in any way with the various departments’ decisions not to hire appellant.” (Id. at p. 71.) Nor did the statements evidence company policy: they “did not purport to attribute to the University a policy of refusing to hire employees who had previously filed grievances but rather amounted to speculation … by individuals who played no role in the decisions.” (Ibid.) That is the holding distilled — mere employment by the defendant is not enough; the speaker must have been a significant participant in the challenged decision.

The court worked through and rejected each of Morgan’s remaining inferences. Morgan’s other proffered evidence fared no better. Department chair David Bogy’s arbitration testimony that he would not bring Morgan back even with funds was read in context — Bogy “was actually being asked whether he would rehire appellant if funds became available from the retirement of an individual with a higher job classification,” “did not explain the reason for his testimony,” and uncontradictedly declared he “was not involved in any decision regarding appellant’s 1996 job applications.” (Morgan, supra, 88 Cal.App.4th at pp. 71–72.) The supposed parallel layoff of co-worker Fletcher collapsed because “there is no evidence Fletcher was laid off” — she remained employed — and because the arbitrator had already found Morgan’s own layoff untainted, a finding given preclusive effect: “‘the doctrine of collateral estoppel bars the relitigating of issues which were previously resolved in an administrative hearing by an agency acting in a judicial capacity.’” (Id. at p. 72.) Manager Sawyer’s alleged rudeness and refusal to interview likewise proved nothing, because Morgan never “demonstrated that Sawyer’s alleged rudeness … related to appellant’s race or past filing of a grievance,” making the inference “purely speculative.” (Id. at pp. 72–73.)

The “taint” theory failed because the decisions were discrete, not layered. Morgan argued, on the authority of Clark v. Claremont University Center (1992) 6 Cal.App.4th 639 and Roebuck v. Drexel University (3d Cir. 1988) 852 F.2d 715, that he “need not demonstrate that every individual who failed to hire him knew of his grievance,” because discrimination at any level may “‘infect other decisions.’” (Morgan, supra, 88 Cal.App.4th at p. 74.) The court confined those cases to their multi-tier context: Clark and Roebuck “both involved tenure decisions made after several levels of review and recommendations,” in which “decisions and recommendations made in earlier levels … may be available to decision makers at subsequent levels.” (Ibid.) The present case “is very different, as it involves discrete hiring decisions made by unconnected individuals in different departments.” (Ibid.) And because “each of the individuals who decided not to hire appellant … disclaimed knowledge of the fact that appellant had previously filed a grievance,” the court concluded that “[w]ithout such knowledge, these individuals could not have acted in retaliation.” (Ibid.)

The pretext theory likewise foundered on unrebutted, specific reasons. Because the university’s motion attacked only the second McDonnell Douglas stage, Morgan had to “‘offer substantial evidence that the employer’s stated nondiscriminatory reason for the adverse action was untrue or pretextual,’” and could not “‘simply show the employer’s decision was wrong, mistaken, or unwise.’” (Morgan, supra, 88 Cal.App.4th at p. 75.) The court rejected his claim that subjective evaluations were inherently suspect, distinguishing the “vague and subjective criteria” cases (Miles, Lee) because here “each job for which appellant applied had a written set of qualifications and each decision maker explained with specificity the qualifications found to be lacking.” (Id. at pp. 75–76.) Position by position — chemistry, communications and network services, library systems, materials science, electrical engineering — the court found Morgan offered only “his subjective personal judgments of his or her competence,” which “‘alone do not raise a genuine issue of material fact.’” (Id. at pp. 76, 79.) Even his strongest point — that the preferential-rehire policy may have required an interview he was denied — failed, because violating a rehire policy “does not so readily support an inference of discrimination,” especially where “appellant’s resume demonstrated an absence of the experience deemed necessary.” (Id. at p. 77.)

The panel was unanimous; there was no concurrence or dissent. Justices Haerle and Lambden joined Presiding Justice Kline’s opinion in full. (Morgan, supra, 88 Cal.App.4th at p. 80.)

Significance

Morgan is a workhorse authority on two questions that decide a great many FEHA cases at the pleading and summary-judgment stages. On timeliness, it stands for the proposition — frequently cited alongside Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798 and the federal recall cases — that the continuing-violation doctrine does not convert a sequence of discrete, independently-made adverse decisions into one timely whole. The decisive features the court identified (different decisionmakers, unrelated departments, varying requirements, and the obvious “permanence” of each rejection) supply a usable checklist for distinguishing a true ongoing system from a string of separate acts. (Morgan, supra, 88 Cal.App.4th at pp. 65–67.) Its instinct — that a refusal to hire is a discrete, clock-starting event, while a discriminatory promotional or compensation system may continue — anticipates the structure the United States Supreme Court would later adopt in National Railroad Passenger Corp. v. Morgan (2002) 536 U.S. 101 (an unrelated but identically named decision) for discrete acts versus hostile-environment claims.

On the merits, Morgan is the California go-to for what practitioners call the “significant participant” or “stray remarks” point: animus must be traced to someone who actually participated in the challenged decision. The opinion’s careful distinction of Watergate — agency binds the employer only where the speaker had “significant involvement in the process leading to a challenged decision” (Morgan, supra, 88 Cal.App.4th at pp. 70–71) — and its confinement of the Clark/Roebuck “taint” theory to layered, multi-level review processes (id. at p. 74) together mark the boundary of the “cat’s paw” and subordinate-bias theories in this state. The decision’s limits are equally important: it does not hold that a non-decisionmaker’s animus is always irrelevant — only that, on this record of unconnected, single-level decisions by managers who disclaimed knowledge of the protected activity, the plaintiff produced no evidence linking any speaker’s hostility to any actual hiring choice.

Key quotes

“[W]hile appellant complains that the University made a series of decisions not to rehire him, in reality he challenges a series of decisions made by different decision makers in unrelated departments of the University regarding positions with varying job requirements.” (Morgan v. Regents of University of California (2000) 88 Cal.App.4th 52, 65.)

“Here, while Greenwood, Burke-Johnson and Kuroiwa were all employed by respondent, none of these individuals were involved in any way with the various departments’ decisions not to hire appellant for the jobs for which he applied.” (Id. at p. 71.)

“Without such knowledge, these individuals could not have acted in retaliation for appellant’s filing of the grievance.” (Id. at p. 74.)

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Practice pointer

Open questions

The opinion leaves the outer edge of the continuing-violation doctrine unmapped. It holds only that these rejections — “discrete hiring decisions made by unconnected individuals in different departments” (Morgan, supra, 88 Cal.App.4th at p. 74) — are not closely related; it does not decide how much connective tissue (a shared decisionmaker, a coordinated screening process, a common biased gatekeeper) would suffice to convert a series of recall denials into one continuing violation. Decided months before the Supreme Court reframed the doctrine in Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798, Morgan also predates the modern “reasonable diligence/permanence” synthesis and is best read in light of it.

The opinion likewise reserves the precise reach of the subordinate-bias theory. The court distinguished Clark and Roebuck as “tenure decisions made after several levels of review,” and expressly noted those cases “merely held that a jury is entitled to infer that discriminatory intent in some aspects of a … decision may influence the ultimate decision.” (Morgan, supra, 88 Cal.App.4th at p. 74.) Unresolved is how a court should treat a single-level hiring decision into which a biased non-decisionmaker fed information — the classic cat’s-paw scenario — when, unlike here, the plaintiff can show that the biased actor’s input reached and influenced the decisionmaker. Morgan forecloses that theory only on a record where no such influence was shown. (Id. at pp. 71, 74.)