Dickson v. Burke Williams, Inc.
A FEHA failure-to-prevent verdict cannot stand where the jury finds harassing conduct that is not severe or pervasive and no adverse employment action — there must be an underlying actionable wrong.
Dickson v. Burke Williams, Inc. (2015) 234 Cal.App.4th 1307
Harassment
Failure to prevent
FEHA (Gov. Code § 12940)
In brief. A massage therapist won a FEHA verdict against her employer for failing to take reasonable steps to prevent customer sexual harassment and sex discrimination — yet the same jury found the harassing conduct was not severe or pervasive and that she suffered no adverse employment action. The Court of Appeal reversed, holding that a claim under Government Code section 12940, subdivision (k) cannot stand absent an underlying actionable violation: “[t]here cannot be a valid claim for failure to take reasonable steps necessary to prevent sexual harassment if … the jury finds that the sexual harassment that occurred was not sufficiently severe or pervasive as to result in liability.” (Dickson, supra, 234 Cal.App.4th at p. 1309.) The court directed entry of judgment for the employer. (Id. at p. 1318.)
By Jonathan J. Delshad
Founder & Editor-in-Chief
Facts
This is, in the court’s own framing, a case about questions of law rather than facts. Because the appeal “presents pure questions of law concerning plaintiff’s claims for failure to take reasonable steps necessary to prevent sexual harassment and sex discrimination, which claims were based on the alleged misconduct of customers,” the Court of Appeal expressly declined to recite the plaintiff’s “specific factual allegations or evidence at trial.” (Dickson, supra, 234 Cal.App.4th at p. 1309, fn. 2.) The reviewing court thus worked almost entirely from the pleadings, the special verdict, and the jury instructions — a posture that makes the case a clean vehicle for examining the architecture of a FEHA “failure to prevent” claim.
The plaintiff, Domaniqueca Dickson, worked as a massage therapist at a spa operated by the defendant, Burke Williams, Inc. (Dickson, supra, 234 Cal.App.4th at p. 1309.) She filed an employment action alleging that she “was subjected to harassing and discriminatory conduct by two customers.” (Ibid.) The conduct at issue was therefore that of nonemployees — customers — rather than supervisors or coworkers, a distinction the court flagged because it implicates the knew-or-should-have-known liability standard rather than the strict-liability rule that governs supervisor harassment. (Id. at p. 1313 & fn. 7.)
The statutory framework. The plaintiff’s claims arise under the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.). Section 12940 declares it an unlawful employment practice “[f]or an employer, because of … sex … to discriminate against the person” (Gov. Code, § 12940, subd. (a)), and “[f]or an employer … , or any other person, because of … sex … to harass an employee” (id., subd. (j)(1)). (Dickson, supra, 234 Cal.App.4th at pp. 1312–1313.) The provision at the heart of the appeal is subdivision (k), which makes it an unlawful employment practice “[f]or an employer … to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring.” (Id. at p. 1313.) As the court explained, subdivision (k) “creates a separate actionable tort enforceable upon the establishment of the usual tort elements of duty of care, breach of duty (a negligent act or omission), causation, and damages.” (Ibid.) Critically, “[o]ne of the elements of a harassment claim pursuant to section 12940, subdivision (j)(1) is that the harassment be sufficiently severe or pervasive so as to alter the conditions of employment and create an abusive working environment.” (Ibid.)
The special-verdict findings. The plaintiff presented six causes of action to the jury: (1) sex discrimination, (2) sexual harassment, (3) racial harassment, (4) retaliation, (5) failure to take reasonable steps necessary to prevent harassment and discrimination based on sex, and (6) failure to take reasonable steps necessary to prevent harassment based on race. (Dickson, supra, 234 Cal.App.4th at pp. 1309–1310.) The jury returned a special verdict finding the defendant not liable on five of those claims — sex discrimination, sexual harassment, racial harassment, retaliation, and failure to prevent race-based harassment. (Id. at p. 1311.) On the harassment claims, the jury found that the plaintiff was “subjected to unwanted harassing conduct” because of her sex and race “but that such conduct was not ‘severe or pervasive.’” (Ibid.) On the sex discrimination claim, the jury found that the plaintiff “had not suffered an adverse employment action.” (Ibid.)
The pivotal — and self-contradictory — finding came on the failure-to-prevent claim. “Although the jury found defendant not liable for sexual harassment or sex discrimination, it nevertheless found defendant liable on plaintiff’s claim for failure to take reasonable steps necessary to prevent sexual harassment ‘or’ sex discrimination.” (Dickson, supra, 234 Cal.App.4th at p. 1311.) The special verdict on that claim recorded “Yes” answers to each element of the prevention claim. (Id. at p. 1311, fn. 6.) The jury awarded the plaintiff $35,000 in compensatory damages and $250,000 in punitive damages. (Id. at p. 1311.)
Procedural history
The friction in the verdict was foreseeable, because the parties had fought over exactly this structural problem before deliberations. During trial, the defendant twice proposed a special verdict form that “directed the jury to skip deliberations on plaintiff’s claims for failure to take reasonable steps necessary to prevent harassment and discrimination based on sex if there was no corresponding finding of underlying liability.” (Dickson, supra, 234 Cal.App.4th at p. 1310.) One version instructed the jury to answer the failure-to-prevent questions “[o]nly … if you responded ‘Yes’” to the concluding questions on harassment or discrimination based on sex. (Id. at p. 1310, fn. 4.) Defense counsel pressed the point at sidebar: “If there’s no underlying harassment, there can’t be a failure to prevent.” (Id. at p. 1310.) The trial court rejected the gating language, reasoning that if there was no harassment, “the answer would be no” and “it wouldn’t make any difference,” and that the prefatory language did not appear in CACI. (Ibid.) The court declined to give the defendant’s proposed special verdict form. (Ibid.)
Instead, the trial court instructed the jury on the failure-to-prevent claim in language that “closely follows the language of CACI No. 2527,” requiring the plaintiff to prove that she was an employee, that she “was subjected to harassment or discrimination because she’s a woman,” that the defendant “failed to take reasonable steps to prevent the harassment or discrimination,” that she was harmed, and that the failure was a substantial factor in causing her harm. (Dickson, supra, 234 Cal.App.4th at pp. 1310–1311 & fn. 5.)
After the verdict, the defendant moved for judgment notwithstanding the verdict, arguing under Trujillo v. North County Transit Dist. (1998) 63 Cal.App.4th 280 that “the special verdict was too inconsistent to be enforced,” that the plaintiff had no evidence to support the punitive damages award, and that the punitive award was excessive as a matter of law. (Dickson, supra, 234 Cal.App.4th at p. 1311.) The plaintiff opposed, arguing that the jury’s finding of harassing conduct based on sex — even short of severe or pervasive conduct — sufficed to support the failure-to-prevent claim. (Ibid.) The trial court agreed with the plaintiff, denied the JNOV motion, and distinguished Trujillo on the ground that the jury here “did make findings that plaintiff was subjected to unwanted, harassing conduct based on her sex.” (Id. at pp. 1311–1312.) The court also upheld the punitive award, finding evidence of fraud, malice, or oppression and concluding that the seven-to-one ratio of punitive to compensatory damages was not excessive. (Id. at p. 1312.) The defendant appealed from the judgment, the denial of the JNOV motion, and the punitive damages award. (Id. at p. 1309.)
Issue
May a plaintiff recover under Government Code section 12940, subdivision (k) for an employer’s failure to take reasonable steps necessary to prevent sexual harassment or sex discrimination where the jury has found that the harassing conduct was not severe or pervasive — and thus not actionable harassment — and that the plaintiff suffered no adverse employment action? Put differently, does a section 12940, subdivision (k) claim require an underlying, actionable FEHA violation, or does a bare finding of “harassing conduct” suffice?
Holding
No. The Court of Appeal reversed. There cannot be a valid claim for failure to take reasonable steps necessary to prevent sexual harassment where the jury finds that the harassment that occurred was not sufficiently severe or pervasive to result in liability; the failure-to-prevent claim “cannot prevail when the necessary element of sexual harassment is not established.” (Dickson, supra, 234 Cal.App.4th at p. 1309.) “It is the absence of actionable harassment that precludes the cause of action … , not simply the lack of any harassing conduct at all.” (Id. at p. 1314.) The same logic defeats the failure-to-prevent-discrimination theory: because the jury found no adverse employment action, “[t]here cannot be a claim for failure to take reasonable steps necessary to prevent sex discrimination under section 12940, subdivision (k) if actionable sex discrimination has not been found.” (Id. at p. 1318.) The trial court erred in refusing the defendant’s special verdict form and in denying the JNOV motion. (Id. at p. 1317.) The judgment was reversed and remanded with instructions to enter a new judgment in favor of the defendant. (Id. at p. 1318.)
Reasoning
The standard of review framed the question as one of law. The court reviewed de novo “the issue of whether a special verdict form correctly states the law.” (Dickson, supra, 234 Cal.App.4th at p. 1312.) Although denial of a JNOV motion ordinarily prompts a substantial-evidence inquiry, the court explained that “[t]he issue of whether in this case there can be liability for failure to prevent harassment under section 12940, subdivision (k) … is a question of law that we review de novo.” (Id. at p. 1312.) That framing mattered: with no factual dispute to resolve and the jury’s own findings supplying the operative facts, the appeal turned entirely on the legal sufficiency of a failure-to-prevent claim built atop nonactionable conduct.
The Trujillo rule supplied the governing principle. The court anchored its analysis in Trujillo v. North County Transit Dist., supra, 63 Cal.App.4th 280, the foundational authority on inconsistent FEHA failure-to-prevent verdicts. In Trujillo, the jury returned a special verdict “finding defendants had committed no discriminatory, racially harassing, or retaliatory conduct,” yet “nonetheless found the employer was liable for failing to take all reasonable steps necessary to prevent discrimination and harassment from occurring.” (Dickson, supra, 234 Cal.App.4th at p. 1313.) The Trujillo court affirmed JNOV, holding “’the jury’s special verdict is too inconsistent to be enforced’” and reasoning that “’[w]e do not believe the statutory language [of section 12940, subdivision (k)] supports recovery on such a private right of action where there has been a specific factual finding that no such discrimination or harassment actually occurred.’” (Id. at pp. 1313–1314.) The Dickson court quoted Trujillo‘s endorsement of the trial court’s “commonsense approach,” which had “great intuitive appeal”: “’[T]here’s no logic that says an employee who has not been discriminated against can sue an employer for not preventing discrimination that didn’t happen … .’” (Id. at p. 1314.)
Carter and Scotch confirmed the rule at both ends of the appellate hierarchy. The court emphasized that the California Supreme Court in Carter v. California Dept. of Veterans Affairs (2006) 38 Cal.4th 914, 925, footnote 4, cited Trujillo for the proposition that “’courts have required a finding of actual discrimination or harassment under FEHA before a plaintiff may prevail under section 12940, subdivision (k).’” (Dickson, supra, 234 Cal.App.4th at p. 1314.) And in Scotch v. Art Institute of California (2009) 173 Cal.App.4th 986, the Court of Appeal affirmed summary judgment on a subdivision (k) claim, holding that “[a]n actionable claim under section 12940, subdivision (k) is dependent on a claim of actual discrimination.” (Dickson, supra, 234 Cal.App.4th at p. 1315.) The court reinforced the point with a string of federal decisions applying California law to the same effect, including the observation that a section 12940, subdivision (k) claim “fails in the absence of a viable underlying claim.” (Id. at pp. 1315–1316.)
The court distinguished “harassing conduct” from “actionable harassment.” The plaintiff’s lead argument seized on a factual difference from Trujillo: here, unlike in Trujillo, the jury did affirmatively find that the plaintiff was “subjected to unwanted harassing conduct because of her sex,” whereas the Trujillo jury had found “no discriminatory, racially harassing, or retaliatory conduct.” (Dickson, supra, 234 Cal.App.4th at pp. 1314–1315.) The court rejected the distinction as immaterial. “Trujillo, however, indicates it was the absence of actionable harassment that precluded the cause of action … , not simply the lack of any harassing conduct at all.” (Id. at p. 1314.) The plaintiff had conceded — correctly — that “a finding of actual harassment is required for her to prevail.” (Ibid.) Because the jury found the conduct “was not actionable because the harassment was not severe or pervasive,” the predicate for a subdivision (k) claim was missing. (Ibid.) The severe-or-pervasive requirement is not a technicality; it is what separates legally cognizable harassment from “nonactionable teasing, an offhand comment, or an isolated incident.” (Id. at p. 1317.)
The CACI structure confirmed the dependency. The court found the plaintiff’s reliance on the pattern verdict form self-defeating. The plaintiff argued the jury’s verdict “strictly follow[ed]” CACI No. VF-2514. (Dickson, supra, 234 Cal.App.4th at p. 1316.) But the “Directions for Use” to that form state that it “is based on CACI No. 2527,” that its questions “should be added to the verdict form that addresses the underlying claim,” and — decisively — that “[t]he jury should not reach these questions unless it finds that the underlying claim is proved.” (Id. at p. 1317.) The Directions for Use to CACI No. 2527 likewise direct that the failure-to-prevent instruction be given “after the appropriate instructions … on the underlying claim for … harassment.” (Ibid.) The court drew the structural inference: “An instruction on the elements of an underlying sexual harassment claim would be unnecessary if the failure to take reasonable steps necessary to prevent a claim for harassment could be based on harassing conduct that was not actionable harassment.” (Ibid.) The pattern instructions thus encode the very dependency the plaintiff sought to deny.
The policy reasoning closed the door — including on punitive damages. The court found no federal analogue to section 12940, subdivision (k); under Title VII, the prevention question arises only as the employer’s Ellerth-Faragher affirmative defense to an established harassment claim, which “applies when a plaintiff establishes that an actionable sexual harassment claim occurred, not just that harassing conduct occurred.” (Dickson, supra, 234 Cal.App.4th at pp. 1316–1317.) Turning to consequences, the court reasoned that it “would be anomalous to provide a remedy for failure to prevent acts that are not ‘unlawful’ under the FEHA.” (Id. at p. 1317.) The punitive award crystallized the danger: “[A]s occurred here, punitive damages could be awarded for not preventing underlying conduct that is legally permissible.” (Ibid.) Under the plaintiff’s theory, an employee “could maintain an action for failing to take reasonable steps necessary to prevent any conduct that the employee perceives is harassing even if that conduct amounts to nothing more than nonactionable teasing, an offhand comment, or an isolated incident.” (Ibid.) Accordingly, the trial court erred both in refusing the defendant’s special verdict form and in denying the JNOV motion. (Ibid.)
The discrimination theory fell with the harassment theory. The plaintiff did not contend on appeal that her failure-to-prevent recovery rested on actual sex discrimination. (Dickson, supra, 234 Cal.App.4th at p. 1317.) Even so, the court applied the same logic: because the jury found no adverse employment action and thus no actionable sex discrimination, “[t]here cannot be a claim for failure to take reasonable steps necessary to prevent sex discrimination under section 12940, subdivision (k) if actionable sex discrimination has not been found.” (Id. at p. 1318.) Having reversed the judgment on these grounds, the court declined to reach the defendant’s separate challenges to the punitive damages award. (Ibid.)
Significance
Dickson is now a leading citation for the proposition that a FEHA “failure to prevent” claim under Government Code section 12940, subdivision (k) is strictly derivative: it cannot survive without an underlying, actionable FEHA violation. The decision sharpens Trujillo in a way that matters in practice. Trujillo itself involved a jury that found no harassing conduct at all, leaving open the argument the plaintiff pressed here — that a finding of some harassing conduct, even if not severe or pervasive, might suffice. Dickson forecloses that argument squarely: the operative line is not between “no conduct” and “some conduct,” but between nonactionable conduct and conduct that meets the severe-or-pervasive threshold. (234 Cal.App.4th at p. 1314.)
The opinion also carries doctrinal weight because it harmonizes the trial bar’s pattern materials with substantive law. By reading the CACI No. 2527 and VF-2514 “Directions for Use” as confirming that the failure-to-prevent questions “should not [be] reach[ed] … unless [the jury] finds that the underlying claim is proved” (id. at p. 1317), the court effectively endorsed the gating special-verdict structure the defendant had proposed and the trial court had rejected. After Dickson, a verdict that finds liability for failure to prevent while exonerating the employer on the predicate claim is “too inconsistent to be enforced.” (Id. at p. 1313.) The decision is frequently invoked at summary judgment and on JNOV to dispose of derivative subdivision (k) claims once the underlying harassment or discrimination claim falls.
Key quotes
“In reversing the judgment, we hold there cannot be a valid claim for failure to take reasonable steps necessary to prevent sexual harassment if, as here, the jury finds that the sexual harassment that occurred was not sufficiently severe or pervasive as to result in liability.” (Dickson, supra, 234 Cal.App.4th at p. 1309.)
“Trujillo, however, indicates it was the absence of actionable harassment that precluded the cause of action for failure to take reasonable steps necessary to prevent the harassment, not simply the lack of any harassing conduct at all.” (Id. at p. 1314.)
“It would be anomalous to provide a remedy for failure to prevent acts that are not ‘unlawful’ under the FEHA. Otherwise, as occurred here, punitive damages could be awarded for not preventing underlying conduct that is legally permissible.” (Id. at p. 1317.)
Practice pointer
For the defense: propose a special verdict form that expressly gates the failure-to-prevent questions on affirmative findings of underlying liability, and put the objection on the record if the trial court refuses — Dickson makes that refusal reversible error and confirms that a verdict finding failure-to-prevent liability without an actionable predicate is “too inconsistent to be enforced.” (234 Cal.App.4th at pp. 1313, 1317.) Cite the CACI No. 2527 and VF-2514 “Directions for Use” as the court’s own authority that the jury “should not reach these questions unless it finds that the underlying claim is proved.” (Id. at p. 1317.) For the plaintiff: do not treat the failure-to-prevent count as a fallback that can pay out when the harassment or discrimination claim is weak. Recovery under subdivision (k) is wholly derivative — you must prove an actionable underlying violation, meaning harassment that is severe or pervasive (Gov. Code, § 12940, subd. (j)(1)) or discrimination causing an adverse employment action. Plead and prove the predicate claim to the same standard, or the prevention claim will not survive JNOV or summary judgment.
Open questions
The court took care to note a question it did not resolve. Quoting the Supreme Court’s footnote in Carter, the Dickson court observed that the high court “’d[id] not express a view on whether [section 12940,] subdivision (k) must be read in pari materia with [section 12940,] subdivision (j)(1)’” — that is, whether the prevention provision and the harassment provision must be construed together as statutes “relating to the same subject matter.” (Dickson, supra, 234 Cal.App.4th at p. 1314 & fn. 8.) Because Dickson resolved the appeal on the narrower ground that the jury found no actionable underlying violation, it likewise did not decide the broader in-pari-materia construction question, leaving the precise interpretive relationship between subdivisions (j)(1) and (k) for another day.
A second reserved issue is remedial. Having reversed the judgment outright, the court “d[id] not reach defendant’s contentions regarding punitive damages.” (Dickson, supra, 234 Cal.App.4th at p. 1318.) The opinion therefore offers no holding on whether — or in what amount — punitive damages may attach to a properly established failure-to-prevent claim, nor on the seven-to-one ratio the trial court had approved. Those questions await a case in which an actionable predicate violation is found.