Acuna v. San Diego Gas & Electric Co.

Facts

The two statutory deadlines. FEHA claims are governed by two distinct limitations provisions, and keeping them separate is essential to the opinion. (Acuna, supra, 217 Cal.App.4th at p. 1411.) The first, Government Code section 12960, requires an employee “bringing an FEHA claim” to “exhaust the administrative remedy by filing an administrative complaint with the DFEH within one year after the alleged unlawful action occurred,” providing that “‘[n]o [administrative] complaint may be filed after the expiration of one year from the date upon which the alleged unlawful practice or refusal to cooperate occurred … .’” (Ibid., quoting Gov. Code, § 12960, subd. (d).) The second, section 12965, governs the period after the Department of Fair Employment and Housing (DFEH) issues a right-to-sue letter: it “establishes a strict ‘one-year statute of limitations, commencing from the date of the right-to-sue notice by the [DFEH],’” a deadline the court described as “a condition on a substantive right rather than a procedural limitation period for commencement of an action.” (Id. at p. 1413.)

The continuing-violation framework. The one-year filing period under section 12960 “is subject to equitable tolling under various doctrines.” (Acuna, supra, 217 Cal.App.4th at p. 1412.) Central to the case is the continuing-violation doctrine as the California Supreme Court fashioned it in Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798. The doctrine “may toll the section 12960 accrual period if the employer engaged in a series of continuing and related FEHA violations and at least one of those violations occurred within the one-year period.” (Acuna, supra, at p. 1412.) Richards held that “when a continuing pattern of wrongful conduct occurs partly in the statutory period and partly outside the statutory period, the limitations period begins to accrue once an employee is on notice of the violation of his or her rights and on notice that ‘litigation, not informal conciliation, is the only alternative for the vindication of his or her rights.’” (Ibid., quoting Richards, supra, 26 Cal.4th at p. 823.) The tolling turns on three factors — whether the employer’s actions were “‘(1) sufficiently similar in kind … ; (2) have occurred with reasonable frequency; (3) and have not acquired a degree of permanence’” — with “permanence” meaning, in the accommodation or harassment context, that “an employer’s statements and actions make clear to a reasonable employee that any further efforts at informal conciliation to obtain reasonable accommodation or end harassment will be futile.” (Id. at pp. 1412–1413, quoting Richards, supra, 26 Cal.4th at p. 823.) The high court later extended the doctrine “to FEHA claims alleging a retaliatory course of conduct.” (Id. at p. 1413, citing Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1056.)

The material facts. Esperanza Acuna, who is Hispanic, began working for San Diego Gas & Electric Company (SDG&E) in June 1979, handling timekeeping responsibilities, and “consistently received positive performance appraisals.” (Acuna, supra, 217 Cal.App.4th at p. 1406.) In 2002, Jim Valentine became her supervisor and allegedly began making “‘condescending’” comments about her Hispanic background, told employees “‘he did not want employees speaking Spanish around him,’” and lodged “numerous unjustified criticisms of Acuna’s work.” (Ibid.) After Acuna developed carpal tunnel in 2004 and returned from leave, Valentine “‘continuously and falsely’” accused her of data-entry errors and, in a February 2005 evaluation, “‘retaliated against [Acuna] by misrepresenting [Acuna’s] work performance.’” (Id. at pp. 1406–1407.) In April 2005, Acuna “suffered an emotional breakdown” attributed to Valentine’s conduct, was placed on disability leave, and lodged an internal discrimination and harassment complaint with human resources. (Id. at p. 1407.) A qualified medical evaluator later concluded her psychological disability arose from “‘the harassment and disparagement of her by her immediate manager, Mr. Valentine,’” and recommended she be placed “in a different department under a different manager.” (Ibid.)

The administrative chronology is the spine of the limitations analysis. On March 16, 2006, Acuna filed her first DFEH complaint, alleging she was “‘discriminated and harassed because I was an Hispanic female,’” with harassment increasing after her workers’ compensation claim and retaliation for protesting; the DFEH issued a right-to-sue letter on March 27, 2006. (Acuna, supra, 217 Cal.App.4th at pp. 1408, 1413.) On February 23, 2007, she filed her second DFEH complaint, alleging disability discrimination and a failure to accommodate, stating that despite a medical note clearing her to return to a different worksite, “‘[t]o this date I have not been reinstated’”; the DFEH issued a second right-to-sue notice on February 19, 2008. (Id. at pp. 1408–1409, 1413.) Throughout this period SDG&E “refused and continued to refuse to consider [Acuna] for any position or job opening for which she was qualified.” (Id. at p. 1409.) On July 11, 2008, SDG&E terminated Acuna, asserting she had engaged in wrongful conduct in 2004 and 2005 relating to reporting hours and overtime — allegations she denied and contended SDG&E “‘fabricated … in retaliation for protesting Defendant’s unlawful conduct.’” (Id. at p. 1410.) On October 23, 2008, she filed her third DFEH complaint, alleging discrimination, harassment, and retaliation, including “‘[f]ailure to accommodate me and forced termination’”; the DFEH issued a right-to-sue notice on November 7, 2008. (Ibid.) Acuna filed suit on November 5, 2009 — less than a year after the third notice. (Id. at p. 1414.)

Procedural history

Acuna’s November 2009 superior court complaint alleged three FEHA claims — retaliation, disability discrimination, and racial harassment — plus wrongful termination in violation of public policy and several nonstatutory claims. (Acuna, supra, 217 Cal.App.4th at p. 1410.) SDG&E demurred, arguing the FEHA-based claims were barred by the applicable statutes of limitations and that the common law claims failed to state a viable cause of action. (Ibid.) The trial court, Judge Lisa Foster presiding, sustained the demurrer with leave to amend on all claims except fraud. (Ibid.) Acuna filed a verified amended complaint adding allegations directed at the continuing-violation and equitable-tolling doctrines. (Ibid.)

After a hearing, the court sustained the demurrer without leave to amend. (Acuna, supra, 217 Cal.App.4th at p. 1410.) On the FEHA claims, the court “focused primarily on Acuna’s first two DFEH complaints and the right-to-sue notices received in response,” finding the November 2009 lawsuit time-barred because she did not sue within one year of those notices; it reasoned that the continuing-violation and equitable-tolling doctrines “did not apply to the limitations period applicable after an employee receives a right-to-sue notice” and that the third right-to-sue notice “could not revive the claims set forth in Acuna’s prior two administrative complaints because the allegations were essentially identical.” (Ibid.) The court also found the contract claims insufficient to overcome the at-will presumption and concluded there was no reasonable possibility amendment could cure the defects. (Id. at pp. 1410–1411.) Acuna appealed. The Court of Appeal, Division One of the Fourth Appellate District, affirmed in part and reversed in part in a unanimous opinion by Justice Haller, with Acting Presiding Justice Huffman and Justice McIntyre concurring; there was no separate concurrence or dissent. (Id. at pp. 1402, 1405–1406, 1420.)

Issue

The published portions of the opinion present a set of related statute-of-limitations questions, each tied to a different FEHA claim. For the disability claim: whether the continuing-violation doctrine of Richards tolled section 12960’s one-year administrative-filing deadline where the employer repeatedly refused to accommodate, or whether that refusal had achieved “permanence” such that the clock had already run. (Acuna, supra, 217 Cal.App.4th at pp. 1414–1415.) For the racial-discrimination claim: whether a plaintiff who timely files an administrative complaint but fails to sue within a year of her right-to-sue letter under section 12965 may revive the expired claim by filing a later administrative complaint. (Id. at p. 1417.) And for the retaliation and wrongful-termination claims: whether the one-year accrual period under section 12960 for a retaliatory discharge runs from the date of termination or, as the employer argued, from the earlier time when “the underlying motives for that practice arose.” (Id. at p. 1419.) Because the appeal arose from a demurrer, the court exercised independent judgment, accepting as true all properly pleaded facts. (Id. at p. 1411.)

Holding

Reasoning

The court separated the two FEHA limitations periods and the doctrines that toll each. The opinion’s analytical architecture rests on distinguishing section 12960 (the administrative-filing deadline) from section 12965 (the post-right-to-sue deadline for filing suit). (Acuna, supra, 217 Cal.App.4th at pp. 1411–1413.) Section 12960’s one-year period “is subject to equitable tolling,” including under the continuing-violation doctrine. (Id. at p. 1412.) Section 12965, by contrast, “establishes a strict” one-year deadline from the right-to-sue notice that operates as “a condition on a substantive right,” causing “‘the right which previously arose … to expire.’” (Id. at p. 1413.) That distinction does the decisive work throughout: tolling arguments aimed at the administrative-filing clock cannot rescue a claim that has lapsed under the separate post-notice deadline.

The disability claim failed because the refusal to accommodate had reached “permanence.” Applying Richards, the court explained that the continuing-violation doctrine tolls section 12960 only “during the time the employee and employer are engaged in informal efforts to resolve the employer’s claimed wrongful conduct,” and that tolling “ends when the employer’s determination achieves a level of permanence, i.e., when a reasonable employee would understand that ‘further efforts to end the unlawful conduct will be in vain.’” (Acuna, supra, 217 Cal.App.4th at p. 1414, quoting Richards, supra, 26 Cal.4th at p. 823.) On Acuna’s own allegations, “a reasonable person would have understood that SDG&E had denied her requests for accommodation no later than February 2007.” (Id. at p. 1414.) The court reasoned that “[b]y retaining counsel and filing a DFEH complaint, Acuna manifested an understanding that further attempts at informal, rather than formal, resolution of the disability accommodation process would not be successful and were futile.” (Id. at pp. 1414–1415.) It drew explicit support from Cucuzza v. City of Santa Clara (2002) 104 Cal.App.4th 1031, where permanence attached once the employer repeatedly refused the plaintiff’s requests and her internal grievances failed. (Id. at p. 1415.) Because Acuna did not sue within one year of her February 2008 right-to-sue notice, the disability claim was time-barred. (Ibid.)

The court rejected the plaintiff’s attempt to reset permanence with later, contradictory allegations. Acuna argued SDG&E’s post-February 2007 conduct — telling her it was “working on providing her a job” — negated her earlier understanding of futility. (Acuna, supra, 217 Cal.App.4th at p. 1415.) The court was unpersuaded: within months SDG&E “disputed her doctor’s recommendation,” and at that point, “no reasonable employee would have believed that further efforts at informal conciliation would be successful.” (Ibid.) More pointedly, the court disregarded her amended-complaint allegation that from December 2007 through June 2008 SDG&E “‘[led] the Plaintiff to believe that it was earnest in its efforts to find her a position,’” because it “directly contradict[ed]” her original verified complaint’s admission that during that same period SDG&E “refused and continued to refuse to consider Plaintiff for any position.” (Id. at pp. 1415–1416.) Under the sham-pleading rule, “[w]here a party amends a verified pleading to avoid the effect of a damaging factual allegation, a court may disregard the new inconsistent allegations.” (Id. at p. 1416.) The court also distinguished Accardi v. Superior Court (1993) 17 Cal.App.4th 341 as predating, and inconsistent with, Richards’s balanced permanence factor, and rejected equitable tolling because Acuna alleged no “alternate remedy in an established procedural context,” and because that doctrine too “is inapplicable once the employee is on notice that … her alternate remedies will be unsuccessful.” (Id. at pp. 1416–1417.)

The racial claim lapsed under section 12965 and could not be revived. Acuna’s racial-discrimination allegations concerned Valentine’s conduct “during 2005 and 2006,” with no allegation that SDG&E’s later accommodation or retaliation decisions “were motivated by racial discrimination.” (Acuna, supra, 217 Cal.App.4th at p. 1417.) Although she “timely alleged her racial discrimination claim regarding Valentine in her first DFEH complaint under section 12960, she did not timely file suit under section 12965 once she received her right-to-sue letter on this complaint.” (Ibid.) She could not “revive these expired claims by filing a new DFEH complaint many years after the alleged racial discrimination took place,” and the continuing-violation doctrine was unavailable because there was “no allegation of continuing racial discrimination or harassment.” (Ibid.) This is the section 12960/section 12965 distinction in operation: timely administrative filing does not cure an untimely lawsuit.

The retaliation claim was timely because the discharge — not the motive — triggers accrual. Here the court reversed. Acuna “alleged she was terminated in July 2008,” filed her third DFEH complaint “[l]ess than four months later,” and sued within a year of the resulting right-to-sue notice — satisfying both section 12960 and section 12965. (Acuna, supra, 217 Cal.App.4th at p. 1418.) Drawing on Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, the court held that “the one-year period for filing a DFEH claim challenging a termination accrues at the time the employee is actually terminated,” and that this is so “even if the employee knew or should have known before that time that the employer was intending to terminate the employment for the alleged improper reasons.” (Id. at p. 1418.) The court squarely rejected SDG&E’s argument that the clock ran from 2005–2006 when the retaliatory motives arose: “the one-year statutory deadline set forth in section 12960 is triggered by an ‘unlawful practice,’ not the time at which the underlying motives for that practice arose,” and “[t]he alleged unlawful practice was the July 2008 termination.” (Id. at p. 1419.)

Control of the discharge date is control of the limitations trigger. The court grounded the rule in a fairness rationale drawn from Romano: “because a termination date is within the employer’s control, the employer is able to secure or retain evidence if a claim should arise.” (Acuna, supra, 217 Cal.App.4th at p. 1418.) Applying that logic, the court observed that “SDG&E, not Acuna, selected the termination date and was in control of the trigger date for the accrual period,” so it could not complain of late notice. (Id. at p. 1419.) The court added that if SDG&E “had wanted to advance the accrual date, it could have terminated her years earlier because its proffered reasons for the termination allegedly occurred in 2004 and 2005.” (Ibid.) Critically, the timeliness of the retaliation claim did not depend on the viability of the earlier, untimely claims: “the fact that SDG&E may have engaged in various wrongful acts that are not independently actionable … does not mean the alleged wrongful acts … committed during the limitations period cannot form the basis of a timely cause of action.” (Ibid.)

The wrongful-termination claim rises and falls with the retaliation claim. Because “‘[w]hen a plaintiff relies upon a statutory prohibition to support a common law cause of action for wrongful termination in violation of public policy, the common law claim is subject to statutory limitations affecting the nature and scope of the statutory prohibition,’” the public-policy tort is “‘tethered to the meaning of the FEHA.’” (Acuna, supra, 217 Cal.App.4th at p. 1420.) The court therefore reversed the demurrer on the wrongful-termination claim “for the same reasons” it reversed on the FEHA retaliation claim: to the extent Acuna could prove a timely retaliation claim, she “also may be entitled to recover on a claim for wrongful termination in violation of public policy prohibiting retaliatory terminations.” (Ibid.)

Significance

Acuna is a clean, practitioner-oriented application of Richards v. CH2M Hill, Inc. and Romano v. Rockwell Internat., Inc. to the recurring problem of a long-running employment dispute that culminates in a discharge. Its enduring contribution is the sharp line it draws between two timing questions that litigants routinely conflate. On the front end, the continuing-violation doctrine can toll section 12960 while an employee and employer remain engaged in good-faith, informal efforts — but that tolling halts the moment the employer’s position acquires “permanence,” and the opinion supplies a concrete, fact-driven marker: when the employee retains counsel and files a formal administrative complaint about the very conduct at issue, she has signaled that informal conciliation is over. (Acuna, supra, 217 Cal.App.4th at pp. 1414–1415.) On the back end, the decision reaffirms Romano’s bright-line accrual rule for discharge claims — the clock starts at the actual termination, not at the formation of the unlawful motive — and links it to a policy of evidentiary fairness: the party that controls the discharge date controls the limitations trigger. (Id. at pp. 1418–1419.) The case also illustrates the structural divide between section 12960 and section 12965; the racial claim shows that timely administrative exhaustion is worthless if the plaintiff sleeps on the resulting right-to-sue letter, and that a later, overlapping administrative complaint will not resurrect a substantive right that has already expired. (Id. at p. 1417.) Equally instructive is the court’s use of the sham-pleading rule to police the permanence inquiry: a plaintiff cannot manufacture continued tolling by amending a verified complaint to contradict her own earlier admissions. (Id. at p. 1416.) The decision is, finally, a useful corrective to the defense temptation to attack a retaliatory-discharge claim as stale by pointing to old motives; Acuna holds that argument backwards.

Key quotes

“By retaining counsel and filing a DFEH complaint, Acuna manifested an understanding that further attempts at informal, rather than formal, resolution of the disability accommodation process would not be successful and were futile. Under these circumstances, the continuing violations doctrine is inapplicable.” (Acuna, supra, 217 Cal.App.4th at pp. 1414–1415.)

“[T]he one-year statutory deadline set forth in section 12960 is triggered by an ‘unlawful practice,’ not the time at which the underlying motives for that practice arose. … The alleged unlawful practice was the July 2008 termination of Acuna’s employment because of alleged retaliation for Acuna’s prior actions … .” (Id. at p. 1419.)

“SDG&E, not Acuna, selected the termination date and was in control of the trigger date for the accrual period. At that time, SDG&E was on notice that it should secure and retain all evidence regarding the reasons for the termination.” (Id. at p. 1419.)

Read the full opinion (Justia) →

Practice pointer

Open questions

Because Acuna arose on demurrer, the court expressly reserved the evidentiary scope of the surviving claims. It noted that, “[b]ecause we are ruling on a demurrer, we do not consider any issues regarding the scope of evidence that may be used to prove this alleged retaliatory conduct (e.g., whether Acuna may present evidence outside the limitations period to prove her claim that retaliation was the motivating factor in her termination).” (Acuna, supra, 217 Cal.App.4th at p. 1419, fn. 3.) The interplay between timeliness and proof is thus unresolved: a claim may be timely as to the discharge yet rely heavily on time-barred background conduct to establish motive, and Acuna leaves for another day how far such “background evidence” may reach. The opinion also does not delineate precisely when, short of retaining counsel and filing a formal complaint, an employer’s refusal to accommodate crosses into “permanence”; the court located permanence “no later than February 2007” on these facts but did not fix an earlier outer boundary. (Id. at p. 1414.) Finally, the published analysis addresses only the limitations issues; the court’s treatment of the contract and other nonstatutory claims falls in parts IV and V, which are not certified for publication and are not citable. (See Cal. Rules of Court, rule 8.1115.)