Bagatti v. Department of Rehabilitation

Facts

Because the case reached the Court of Appeal on a demurrer, the operative facts are the well-pleaded allegations of the plaintiff’s second amended complaint, which the court treated “as admitting all material facts properly pleaded.” (Bagatti v. Department of Rehabilitation (2002) 97 Cal.App.4th 344, 352.) The court did not assume the truth of “contentions, deductions or conclusions of law.” (Ibid.) The facts that follow are therefore allegations taken as true for pleading purposes, not findings.

The governing statute is the California Fair Employment and Housing Act (FEHA), Government Code section 12940. As relevant, subdivision (m) makes it an unlawful employment practice “[f]or an employer or other entity covered by this part to fail to make reasonable accommodation for the known physical or mental disability of an applicant or employee,” with the qualification that “[n]othing in this subdivision or in paragraph (1) or (2) of subdivision (a) shall be construed to require an accommodation that is demonstrated by the employer or other covered entity to produce undue hardship to its operation.” (Bagatti, supra, 97 Cal.App.4th at p. 353.) “Physical disability” is defined in section 12926, subdivision (k) to include a physiological condition that affects a listed body system — including the musculoskeletal system — and “[l]imits a major life activity.” (Id. at p. 353.) And “[r]easonable accommodation” is defined both in section 12926, subdivision (n) and in a regulation of the Fair Employment and Housing Commission, California Code of Regulations, title 2, section 7293.9, to include “[m]aking existing facilities used by employees readily accessible to, and usable by, individuals with disabilities” and the “acquisition or modification of equipment or devices.” (Id. at pp. 354–355.)

Marilyn Bagatti began working for the California Department of Rehabilitation on July 1, 1987, and worked there for nearly twelve years, the last eight as a Supervising Accounting Clerk responsible for overseeing five employees; she received merit pay increases and “generally” favorable performance evaluations. (Bagatti, supra, 97 Cal.App.4th at pp. 350–351.) “As a result of severe polio and post polio,” she was “a disabled individual who is unable to walk long distances” and “substantially impaired in her ability to move around her work site as needed and to transport herself from her car to her work station.” (Id. at p. 350.) Beginning in about February 1998 she requested, as an accommodation, “motorized transportation from her parked car to her work station and motorized transportation within her work site,” her job duties having “required her to transport herself long distances within the work site and to travel to and from the work site.” (Ibid.)

Her immediate supervisor refused in about June 1998 to provide any accommodation — denying the motorized-vehicle request and “even refus[ing] to provide hand railing or chairs along the hallways of the job site” — and told Bagatti “that she should just retire.” (Bagatti, supra, 97 Cal.App.4th at p. 350.) On July 15, 1998, the Department’s Chief, Office of Civil Rights “officially denied” the accommodation request. (Ibid.) Bagatti filed a complaint with the Department of Fair Employment and Housing on November 30, 1998, and received a right-to-sue letter on April 6, 1999. (Id. at pp. 350–351.) The complaint alleged that on December 21, 1998 — “as a direct result of Defendants’ discrimination and refusal to accommodate” — she was “forced to walk a distance in excess of her physical capabilities,” suffering “a broken right fibula, tibia, and ankle” and other injuries requiring surgeries, which left her unable to return to work; the Department offered the requested accommodation only afterward, on January 13, 1999. (Id. at pp. 351–352.)

Procedural history

Bagatti sued the Department of Rehabilitation and Michael D. Fuentes in the Superior Court of Sacramento County. The trial court, John R. Lewis, Judge, “sustained defendants’ demurrer without leave to amend and entered judgment dismissing plaintiff’s complaint,” and Bagatti timely appealed. (Bagatti v. Department of Rehabilitation (2002) 97 Cal.App.4th 344, 352.) The defendants’ theory below and on appeal was that the complaint failed to state a cause of action — principally because, borrowing the federal ADA framework, Bagatti had not pleaded that she was a “qualified individual,” that she was denied equal opportunity or essential job functions, or that she suffered an adverse employment action — and, alternatively, that any claim for the resulting physical injuries was barred by the exclusive-remedy provisions of the Workers’ Compensation Act. (Id. at pp. 358, 363–364.)

The Court of Appeal, Third Appellate District, affirmed in part and reversed in part in a unanimous opinion by Acting Presiding Justice Sims, with Justices Callahan and Hull concurring; there was no separate concurrence or dissent. (Bagatti, supra, 97 Cal.App.4th at pp. 349, 370.) The court held that Bagatti had pleaded a valid FEHA failure-to-accommodate claim and that the demurrer was wrongly sustained as to that claim and the supporting allegations, but it affirmed dismissal of certain additional allegations in paragraph 19 of the complaint — that the Department “created an unbearable and hostile work environment” and circulated a “libelous e-mail” — because the plaintiff’s brief never explained how those allegations stated a cause of action. (Id. at pp. 368–370.) The disposition was therefore: affirmed as to the paragraph 19 allegations addressed in part IV; “otherwise reversed.” (Id. at p. 370.)

Issue

The dispositive question was whether the complaint stated a cause of action for damages under FEHA based on the employer’s failure to make reasonable accommodation for a known physical disability — and, in particular, whether such a claim under Government Code section 12940, subdivision (m) carries the limitations the federal ADA imposes: that the plaintiff be a “qualified individual with a disability,” that she suffer an adverse employment action, and that the duty be tethered to discrimination “in the terms and conditions of employment.” (Bagatti v. Department of Rehabilitation (2002) 97 Cal.App.4th 344, 353, 359–361.) Two subsidiary questions followed: whether the requested accommodation could be deemed unreasonable “on its face” at the pleading stage (id. at pp. 368–369), and whether the action — including the alleged physical injuries — was barred by the exclusive-remedy provisions of the Workers’ Compensation Act (id. at pp. 363–368). Because the appeal arose from a demurrer sustained without leave to amend, review was de novo, asking whether the complaint stated a cause of action “under any possible legal theory.” (Id. at pp. 352–353.)

Holding

Reasoning

The demurrer standard framed everything: a complaint survives if it states a claim under any theory. The court began with the settled rule that, on review of a demurrer sustained without leave to amend, it “gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded,” though “not … the truth of contentions, deductions or conclusions of law.” (Bagatti v. Department of Rehabilitation (2002) 97 Cal.App.4th 344, 352, quoting Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966–967.) Critically, “it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory,” and the court is “not limited to plaintiffs’ theory of recovery,” but must ask whether “the factual allegations of the complaint are adequate to state a cause of action under any legal theory.” (Id. at pp. 352–353, quoting Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38–39.) That generous lens shaped each step that followed.

The pleaded facts satisfied every element of a section 12940, subdivision (m) claim. The court worked through the statutory elements in turn. Bagatti’s allegations that, “as a result of severe polio,” she “was unable to walk long distances” and was “substantially impaired in her ability to move around her work site” “sufficiently pleaded a physiological condition that affected her musculoskeletal system and limited a major life activity within the meaning of subdivision (k) of section 12926” — a point the Department “conceded … at oral argument.” (Bagatti, supra, 97 Cal.App.4th at pp. 353–354.) Her requests for motorized transportation and for handrailing or chairs were facially within the statutory and regulatory examples of accommodation — “[m]aking existing facilities … readily accessible” and the “acquisition or modification of equipment or devices.” (Id. at pp. 355–356.) She did not need to plead the absence of undue hardship: “a plaintiff need not initially plead or produce evidence showing that the accommodation would not impose an undue hardship on the employer; rather, the burden is on the employer to make a showing of undue hardship.” (Id. at p. 356, citing County of Fresno v. Fair Employment & Housing Com. (1991) 226 Cal.App.3d 1541, 1553.) Finally, the complaint pleaded that the disability was “known,” that the accommodation was requested and denied, and that injury resulted “as a direct result.” (Ibid.)

Section 12965 authorizes a civil action on any “unlawful practice” — not just disability discrimination under subdivision (a). The court tied the substantive duty to the remedy. Section 12965 “authorizes the filing of a civil action based upon ‘an unlawful practice,’” and “[n]othing in section 12965 limits such an unlawful practice to the unlawful practice of disability discrimination found in subdivision (a) of section 12940.” (Bagatti, supra, 97 Cal.App.4th at p. 357.) Because “subdivision (m) of section 12940, outlawing the failure to provide reasonable accommodation, is statutorily defined as a separate unlawful employment practice,” a plaintiff who has obtained a right-to-sue notice — as Bagatti had pleaded — may sue on it directly. (Ibid., citing Jensen v. Wells Fargo Bank (2000) 85 Cal.App.4th 245, 256, and Commodore Home Systems, Inc. v. Superior Court (1982) 32 Cal.3d 211, 221.)

FEHA is not the ADA: the federal EEOC interpretive gloss does not govern California’s duty to accommodate. This is the heart of the opinion. The Department leaned on Brundage v. Hahn (1997) 57 Cal.App.4th 228, which had imported the EEOC’s interpretive statement — limiting reasonable accommodation to three categories tied to the application process, essential functions, and equal benefits — into FEHA. (Bagatti, supra, 97 Cal.App.4th at pp. 358–359.) The court accepted the “operative principle” that a federal regulation “may be ‘useful’ to guide the construction of the FEHA where the state statute or an interpretive state regulation are modeled on the ADA.” (Id. at p. 359, citing Cassista v. Community Foods, Inc. (1993) 5 Cal.4th 1050, 1063.) But here the predicate was missing. The EEOC statement “is based upon ADA provisions that differ in important material respects from the applicable FEHA provision,” because the federal categories all derive from the ADA’s definition of a “qualified individual with a disability” in 42 United States Code sections 12111 and 12112 — concepts that anchor the federal duty to job-application, hiring, advancement, discharge, compensation, and “terms, conditions, and privileges of employment.” (Id. at pp. 359–360.) FEHA’s subdivision (m), by contrast, “does not require that an employee be ‘a qualified individual with a disability’” and “applies simply to ‘an applicant or employee’”; nor does it “link the failure to make reasonable accommodation to discrimination in the terms and conditions of employment.” (Id. at p. 361.) The court therefore “respectfully disagree[d] with Brundage … to the extent that court adopted the interpretive EEOC statement to define reasonable accommodation under the FEHA,” holding the duty “should be construed according to our own state regulation,” section 7293.9, which “correctly contains none of the limitations on reasonable accommodation found in the EEOC interpretive statement.” (Id. at pp. 361–362.)

The court also pared back Jensen and grounded its reading in legislative intent and plain meaning. While agreeing with Jensen v. Wells Fargo Bank that an adverse employment action “was irrelevant” to a subdivision (m) claim, the court “respectfully disagree[d] with Jensen to the extent it holds that … a plaintiff must show that he or she is ‘a qualified individual’ within the meaning of 42 United States Code section 12111,” a requirement that “finds no reference in the FEHA statute or applicable regulation.” (Bagatti, supra, 97 Cal.App.4th at p. 361, fn. 4.) The court anchored the broader-than-ADA reading in section 12926.1, by which the Legislature declared California disability law “independent” of the ADA and a “floor of protection” the state exceeds, and in the 1992 enactment’s stated intent “to strengthen California law in areas where it is weaker than” the ADA. (Id. at pp. 362–363.) Notably, the court disclaimed reliance on FEHA’s liberal-construction command: “we do not think our method of statutory construction of the FEHA is ‘liberal.’ Rather, we are simply applying the language of the FEHA and the applicable state regulation as they are written according to their ordinary meaning,” invoking Justice Scalia’s description of the “regular method” of statutory interpretation. (Id. at p. 363, quoting Chisom v. Roemer (1991) 501 U.S. 380, 404 (dis. opn. of Scalia, J.).) Recognizing the decision “will leave employers uncertain” about when accommodation is required, the court pointed to the Commission’s regulatory authority under section 12935, subdivision (a) as “a better one than importing into the FEHA provisions from the ADA that the Legislature has not seen fit to put there.” (Id. at p. 363.)

The accommodation was not unreasonable as a matter of pleading. The Department argued the motorized-wheelchair request was “a request for a personal item.” (Bagatti, supra, 97 Cal.App.4th at p. 368.) The court rejected the characterization at the demurrer stage: the complaint alleged the transport was needed because her “job duties required her to transport herself long distances within the work site,” the state regulation expressly lists “acquisition … of equipment or devices,” and the refused handrailing and chairs “are not personal items.” (Id. at pp. 368–369.) Because “the burden is on the employer to show that a requested accommodation would constitute a hardship,” it “cannot be determined on demurrer whether plaintiff’s requested accommodations were reasonable … or constituted an undue hardship.” (Id. at p. 369.)

Workers’ compensation exclusivity did not bar the FEHA claim, even for the physical injuries. Drawing on City of Moorpark v. Superior Court (1998) 18 Cal.4th 1143, the court distinguished two strands of that decision. The statutory-construction strand — that section 132a sits in division 1 of the Labor Code and so escapes the division 4 exclusive-remedy provisions — “does not favor plaintiff,” because Bagatti “does not fairly allege a cause of action for disability discrimination” under subdivision (a) (having pleaded no denial of compensation or adverse action) and so was never within section 132a’s orbit. (Bagatti, supra, 97 Cal.App.4th at pp. 365–366.) But the “compensation bargain” strand controlled: just as disability discrimination “falls outside the compensation bargain,” so too “the employer’s commission of another statutory unlawful employment practice, as defined by subdivision (m) of section 12940, falls outside the compensation bargain.” (Id. at pp. 366–367.) The court reinforced the point with Moorpark’s discussion of FEHA’s breadth and the Labor Code’s own directive to inform “injured workers” of their FEHA rights, concluding the Act “does not provide the exclusive remedy for plaintiff’s FEHA claim.” (Id. at pp. 367–368.)

Some allegations failed. The court was not uniformly with the plaintiff. It affirmed the demurrer as to the paragraph 19 allegations of a “hostile work environment” and a “libelous e-mail,” because the plaintiff’s brief never showed how they stated a claim and “[t]he burden is on an appellant of affirmatively showing error.” (Bagatti, supra, 97 Cal.App.4th at pp. 369–370.) It likewise treated as insufficient the “conclusionary allegations” that the Department “limited, segregated or classified” her, which “allege no specific acts.” (Id. at p. 367, fn. 8.)

Significance

Bagatti is a foundational California statement that the FEHA duty of reasonable accommodation is a stand-alone unlawful employment practice — broader than its federal analogue and not parasitic on a discrimination claim. (Bagatti v. Department of Rehabilitation (2002) 97 Cal.App.4th 344, 361–362.) The opinion did three doctrinally consequential things. First, it confirmed that section 12940, subdivision (m) is independent of subdivision (a): a plaintiff may sue for failure to accommodate without alleging — or proving — a discriminatory discharge, demotion, or other adverse action, and without showing she is a “qualified individual” in the ADA sense. (Id. at pp. 357, 361.) That reading became settled California law and underlies the modern instructions in CACI No. 2541 (reasonable-accommodation failure) and its companion CACI No. 2542 (failure to engage in the interactive process under subd. (n)), which treat accommodation and the interactive process as discrete FEHA duties rather than mere components of a disparate-treatment case. Second, by “respectfully disagree[ing]” with Brundage and trimming Jensen, the court rejected the wholesale importation of EEOC ADA gloss into FEHA where the statutes diverge — a methodological caution that recurs across FEHA jurisprudence. (Id. at pp. 361–362.) Third, it extended City of Moorpark’s “compensation bargain” analysis to failure-to-accommodate claims, so that even physical injuries flowing from a denied accommodation escape workers’-compensation exclusivity. (Id. at pp. 366–368.) The holding’s limits are equally important: it is a pleading decision, not a merits ruling; the court expressly left for trial whether the accommodation was reasonable and whether it would impose undue hardship, and it candidly acknowledged the resulting uncertainty for employers, inviting regulatory clarification. (Id. at pp. 356, 363, 369.)

Key quotes

“Nothing in section 12965 limits such an unlawful practice to the unlawful practice of disability discrimination found in subdivision (a) of section 12940. … [S]ubdivision (m) of section 12940, outlawing the failure to provide reasonable accommodation, is statutorily defined as a separate unlawful employment practice.” (Bagatti, supra, 97 Cal.App.4th at p. 357.)

“[U]nlike the federal ADA provisions, subdivision (m) does not require that reasonable accommodation for disability be made only where the person is ‘a qualified individual’ able to perform the essential functions of the job … nor is there any requirement in subdivision (m) that the employee has a right to assert the duty of reasonable accommodation only where some kind of adverse employment action is taken against the employee.” (Id. at p. 361.)

“This means that the duty of an employer to provide reasonable accommodation for an employee with a disability is broader under the FEHA than under the ADA.” (Id. at p. 362.)

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Practice pointer

Open questions

The decision is a pleading ruling, and the court was careful to reserve the merits. It did not decide whether the specific accommodations Bagatti sought were in fact reasonable, holding only that the question “cannot be determined on demurrer.” (Bagatti v. Department of Rehabilitation (2002) 97 Cal.App.4th 344, 369.) It did not decide whether providing them “would constitute a hardship,” leaving that affirmative defense for the employer to develop. (Ibid.) Most candidly, the court “recognize[d] that this result will leave employers uncertain with respect to when they must provide reasonable accommodation to disabled employees,” and rather than resolve that uncertainty itself, it pointed to the Fair Employment and Housing Commission’s rulemaking authority under section 12935, subdivision (a) as the proper avenue — expressly preferring agency clarification “to importing into the FEHA provisions from the ADA that the Legislature has not seen fit to put there.” (Id. at p. 363.) The opinion also left undisturbed, without resolving, the precise boundary between subdivision (m) and the separate interactive-process duty later codified in subdivision (n); Bagatti addressed the failure to accommodate, not the failure to engage in a “timely, good faith, interactive process,” a duty that the statute’s appended text shows existed independently but that the court had no occasion to construe. (Id. at p. 376 [appen. A, § 12940, subd. (n)].) Finally, because the court declined to rely on FEHA’s liberal-construction command and rested instead on “ordinary meaning,” the reach of its broader-than-ADA reading in cases where the statutory text is less clear remains a matter for later development. (Id. at p. 363.)