Fiol v. Doellstedt

Facts

The California Fair Employment and Housing Act (FEHA) makes freedom from employment discrimination on the basis of sex and other protected grounds a civil right, declares such discrimination contrary to public policy and an unlawful employment practice, and directs that the statute be “liberally construed to effectuate its purposes.” (Fiol, supra, 50 Cal.App.4th at p. 1323; Gov. Code, §§ 12920, 12921, 12940, 12993, subd. (a).) Beyond discrimination, FEHA separately prohibits harassment: it is an unlawful employment practice “‘[f]or an employer . . . or any other person, because of . . . sex, . . . to harass an employee,’” and an entity “‘shall take all reasonable steps to prevent harassment from occurring.’” (Fiol, supra, 50 Cal.App.4th at pp. 1324–1325, quoting Gov. Code, § 12940, subd. (h)(1).) For purposes of that subdivision, “‘employer’” includes “‘any person acting as an agent of an employer, directly or indirectly.’” (Id. at p. 1325, quoting Gov. Code, § 12940, subd. (h)(3)(A).) It is also unlawful “‘[f]or any person to aid, abet, incite, compel, or coerce’” a forbidden act (id. at p. 1325, quoting Gov. Code, § 12940, subd. (g)), and “‘[f]or an employer . . . to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring’” (ibid., quoting Gov. Code, § 12940, subd. (i)). Gender harassment, the court noted, includes same-sex sexual harassment. (Ibid.)

Giovanni Fiol began working for Activision, Inc. on January 5, 1994. (Fiol, supra, 50 Cal.App.4th at p. 1322.) His immediate supervisor was Sean Silva, whose own immediate supervisor was the defendant, Jon Doellstedt. (Ibid.) Silva, the complaint alleged, “routinely engaged in sexual jokes and innuendoes at Fiol’s expense,” grabbed Fiol’s buttocks and crotch, rubbed his pelvic area against Fiol’s back, kissed him, forced Fiol’s face into his crotch and demanded oral copulation, and told Fiol that to advance at Activision he “would have to submit to his sexual advances.” (Ibid.)

Fiol complained to Doellstedt of Silva’s harassment in February 1994, again in May 1994, and once more on June 6, 1994. (Fiol, supra, 50 Cal.App.4th at p. 1322.) “Nothing was done to investigate Fiol’s sexual harassment complaints against Silva or control Silva’s behavior.” (Ibid.) On June 6, 1994 — the same day as his third complaint — Activision terminated Fiol. (Ibid.) Crucially for the appeal, Fiol’s claim against Doellstedt rested on a single, narrow predicate: it “was based solely on Doellstedt’s failure to ‘investigate, control, monitor, discipline or restrain’ Silva,” even after the harassment had been reported to him. (Id. at p. 1322.) Doellstedt was not alleged to have harassed Fiol himself.

Procedural history

After obtaining a right-to-sue letter from the Department of Fair Employment and Housing, Fiol filed a ten-count complaint on December 2, 1994, against Silva, Doellstedt, and Activision, pleading FEHA sexual harassment, FEHA sex discrimination, FEHA wrongful termination, and common law claims for assault, battery, invasion of privacy (common law and constitutional), defamation, intentional infliction of emotional distress, and negligent supervision; the complaint also carried “standard agency, aiding and abetting and conspiracy allegations.” (Fiol, supra, 50 Cal.App.4th at pp. 1322–1323.) Neither Silva nor Activision was a party to the appeal. (Id. at p. 1322, fn. 2.)

Doellstedt moved for judgment on the pleadings. On March 8, 1995, the trial court (Judge Alan B. Haber) granted the motion without leave to amend and entered a judgment of dismissal in Doellstedt’s favor. (Fiol, supra, 50 Cal.App.4th at p. 1323.) Fiol appealed. The Court of Appeal affirmed in an opinion certified for partial publication; the published portion resolved the FEHA theories against Doellstedt, while the unpublished portions (parts VII–IX) addressed the common law causes of action. (Id. at p. 1322 & fn. *.) Reviewing a judgment on the pleadings under the rules governing a general demurrer, the court treated the demurrer “‘as admitting all material facts properly pleaded’” and asked whether the complaint stated a cause of action, with the burden of showing a curable defect resting “‘squarely on the plaintiff.’” (Id. at p. 1323.) Justice Turner dissented from the FEHA holding. (Id. at pp. 1331–1342.) The Supreme Court denied review on February 19, 1997, with three justices voting to grant. (Id. at p. 1342.)

Issue

The published question was tightly bounded by the pleadings: whether a nonharassing second-tier supervisor, sued solely for failing to take action after an employee reported being sexually harassed by the employee’s immediate supervisor, can be held personally liable under FEHA. The court framed three distinct routes to liability that Fiol pressed and resolved each in turn — whether Doellstedt was personally liable (1) as an aider and abettor of the harasser (Silva), (2) as an aider and abettor of the employer (Activision), or (3) as an “agent” of the employer who is himself an “employer” under Government Code section 12940, subdivision (h)(3)(A). (Fiol, supra, 50 Cal.App.4th at pp. 1322, 1325–1330.) Because the case arose on the pleadings, the court accepted that Doellstedt did nothing; the legal question was whether that inaction, standing alone, exposed him to individual FEHA liability.

Holding

Reasoning

Aiding and abetting the harasser: inaction is not “substantial assistance.” Because FEHA does not define “aiding and abetting,” the court turned to the common law definition: liability attaches to one who “‘knows the other’s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act’” or who gives substantial assistance to a tortious result while his own conduct independently breaches a duty to the plaintiff. (Fiol, supra, 50 Cal.App.4th at pp. 1325–1326, quoting Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 846, and Rest.2d Torts, § 876.) But “[m]ere knowledge that a tort is being committed and the failure to prevent it does not constitute aiding and abetting,” and “‘[a]s a general rule, one owes no duty to control the conduct of another.’” (Id. at p. 1326.) The court found “no authority for the proposition that a supervisory employee is personally liable, as an aider and abettor of the wrongdoer, to a subordinate for failing to prevent the misconduct of another subordinate.” (Ibid.) Two independent reasons supported that conclusion: first, “mere failure to act does not constitute the giving of ‘substantial assistance or encouragement’ to the tortfeasor”; and second, “a supervisory employee owes no duty to his or her subordinates to prevent sexual harassment in the workplace,” a duty the statute places on the employer alone. (Ibid., citing Gov. Code, § 12940, subds. (h)(1), (i).)

Aiding and abetting the employer: a single actor cannot conspire with itself. The court then asked whether Doellstedt could be liable as an aider and abettor of the employer — the party that does owe the duty to prevent harassment — and answered no. Relying on Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55, the court reasoned that “[a]n employee cannot aid and abet his or her corporate employer.” (Fiol, supra, 50 Cal.App.4th at p. 1326.) A corporation acts only through its employees, “thus, an employee acting on behalf of the employer cannot be acting in concert with the employer, as there is in law only a single actor.” (Ibid.) The agent’s immunity rule pointed the same way: an agent “is not liable for conspiring with the principal when the agent is acting in an official capacity on behalf of the principal.” (Ibid., citing Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 512, fn. 4.) The aiding-and-abetting theories thus failed at both ends — there was no concerted action with the harasser and no cognizable concert with the employer.

The “three clear rules,” and why nonharassing supervisors fall outside them. The court paused to harmonize the FEHA supervisor-liability cases. It recounted Page v. Superior Court (1995) 31 Cal.App.4th 1206, which held a supervisor who personally harasses an employee is a “person” personally liable under FEHA, and the court’s own earlier decision in Matthews v. Superior Court (1995) 34 Cal.App.4th 598, which extended personal liability to a supervisor who aided and abetted the harasser — while disavowing any suggestion in Matthews that mere inaction would suffice. (Fiol, supra, 50 Cal.App.4th at pp. 1326–1327.) The court then “ma[de] clear that mere inaction by a nonharassing supervisor does not constitute aiding and abetting,” and distilled “three clear rules”: first, a supervisor who personally engages in harassing conduct is personally liable under FEHA; second, a supervisor who participates in the harassment or “substantially assists or encourages continued harassment” is personally liable as an aider and abettor; and third, “the employer is vicariously and strictly liable for sexual harassment by a supervisor.” (Id. at p. 1327.) Doellstedt fit none of these, because he was “a nonharassing second-tier supervisor who fail[ed] to take action when an employee complain[ed].” (Ibid.)

A policy line between harassing conduct and personnel-management decisions. The court identified a principled basis for treating nonharassing supervisors differently. “Sound policy reasons exist,” it explained: individual supervisors “should be placed at risk of personal liability for personal conduct constituting sexual harassment,” whether as the actual harasser or as an aider and abettor, but “should not be placed at risk of personal liability . . . for personnel management decisions which have been delegated to the supervisor by the employer, such as deciding whether to investigate or take action on a complaint of sexual harassment.” (Fiol, supra, 50 Cal.App.4th at pp. 1327–1328.) Borrowing Janken’s distinction between harassment (conduct “‘not necessary to a supervisor’s job performance’”) and personnel-management decisions (which are “‘inherently necessary to performance of a supervisor’s job’”), the court mapped that line onto the divide between harassing and nonharassing supervisors: a supervisor who does not act on a complaint “has not engaged in personal conduct constituting harassment, but rather has made a personnel management decision which in retrospect may be considered to be inadequate or improper.” (Id. at pp. 1330–1331.)

The “agent of the employer” clause is a vicarious-liability provision, not a personal-liability one. The most consequential analysis addressed section 12940, subdivision (h)(3)(A), which deems “any person acting as an agent of the employer” an “employer.” (Fiol, supra, 50 Cal.App.4th at p. 1328.) Conceding that a supervising employee is an “agent” (ibid., citing Civ. Code, § 2295, and Janken), the court found the statutory language “ambiguous and susceptible of two reasonable constructions”: either every supervisor is personally liable as an “employer,” or the employer is vicariously liable for its supervisors’ FEHA violations. (Ibid.) The court chose vicarious liability for “a number of compelling reasons.” (Id. at pp. 1328–1329.) First, that reading reflects “a ‘clear and growing consensus’ of the federal circuit courts” construing parallel agent language in Title VII, the ADEA, and the ADA — the court cited decisions from nine circuits. (Id. at pp. 1328–1329.) Second, personal liability is “contrary to general principles of agency law”: an agent ordinarily is not liable for a subagent’s acts (Civ. Code, § 2351), nor for acts within “the legitimate scope of delegated personnel management authority,” because “[a]n agent is responsible only for his or her own wrongdoing.” (Id. at p. 1329.) Third, imposing personal liability on a nonacting supervisor “would only marginally increase the likelihood of recovery of damages or prevention of such inaction in the future,” since the employer must indemnify the supervisor (Lab. Code, § 2802) and would remain liable and likely discipline the supervisor in any event. (Ibid.) Finally, had the Legislature “intended such a major shift in the law of agency, it would have expressly so stated.” (Id. at pp. 1329–1330.)

The court read the agency’s own precedent narrowly. Anticipating the dissent, the majority addressed the Fair Employment and Housing Commission’s decisions, which contain “broad language” suggesting personal liability on individuals with hiring-and-firing authority who “fail to take action upon learning of the harassment.” (Fiol, supra, 50 Cal.App.4th at p. 1330.) On “closer scrutiny,” however, the court found that the FEHC had actually imposed personal liability “only on the actual harasser or one who participated in the harassment,” identifying “no FEHC decision in which personal liability was imposed solely on the basis of failure to take action.” (Ibid.) The court likewise discounted appellate decisions involving individual FEHA defendants where no personal-liability argument had been raised: such decisions “do not constitute authority for issues which were not raised or resolved.” (Id. at p. 1331, fn. 8.) Summing up in its conclusion, the court held that a supervisor who “without more, fails to take action to prevent sexual harassment of an employee is not personally liable as an aider and abettor of the harasser, an aider and abettor of the employer or an agent of the employer.” (Id. at p. 1331.)

The dissent: inaction is itself an unlawful act. Presiding Justice Turner dissented at length. He would have held that “[a] supervisor with knowledge of ongoing sexual harassment occurring in the workplace, or of a complaint of such misconduct, who fails to take any investigative or corrective action is subject to potential civil liability under the FEHA.” (Fiol, supra, 50 Cal.App.4th at p. 1331 (dis. opn. of Turner, P. J.).) Marshaling FEHA’s remedial purpose, its text reaching “‘any person,’” its legislative history, the FEHC’s consistent regulatory and adjudicatory construction, and the Legislature’s repeated reenactment without disturbing that construction, Turner concluded that a supervisor — as both an “agent”/“employer” and a “person” — who breaches the “affirmative and mandatory duty to prevent harassment from occurring” commits an unlawful act. (Id. at pp. 1331–1340.) He read the aiding-and-abetting regulation’s “permissible practices” clause — protecting failure to act only where it is not “‘the normal business duty of the person . . . to prevent or report such acts’” — to imply that a supervisor’s failure, in breach of his mandatory duty, “is tantamount to approving, condoning, assisting in, or encouraging” the harassment. (Id. at pp. 1340–1341.) And he rejected the majority’s personnel-management characterization outright: “[t]he refusal to act is not a mere personnel management decision. . . . It is an unlawful act.” (Id. at p. 1341.) Although Turner agreed a supervisor is an “agent,” he parted ways on whether that status imposes individual responsibility. (Id. at pp. 1338–1339.)

Significance

Fiol is a foundational marker in the line of California cases — running through Janken, Page, and Matthews — that sorts out who may be sued individually under FEHA. Its enduring contribution is the “three clear rules” framework and the bright line it draws between a supervisor’s harassing conduct (personal liability) and a supervisor’s personnel-management inaction (no personal liability; the employer answers vicariously). (Fiol, supra, 50 Cal.App.4th at pp. 1327–1331.) The decision is the doctrinal companion to the better-known holding of Janken in the discrimination setting and was later reinforced when the California Supreme Court, in Reno v. Baird (1998) 18 Cal.4th 640 and Jones v. The Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, confirmed that individual supervisors are not personally liable for discrimination or retaliation under FEHA — even as harassers remain individually liable. Fiol’s specific value is that it forecloses an end-run: a plaintiff cannot manufacture individual supervisor liability by recasting a supervisor’s failure to investigate or stop a coworker-harasser as “aiding and abetting.” Its limits are equally important. Fiol does not touch the harassing supervisor’s personal exposure, the aider-and-abettor who actually encourages continued harassment, or the employer’s strict and vicarious liability — including the employer’s own statutory duty under section 12940, subdivision (k) (then subdivision (i)) to take all reasonable steps to prevent harassment. (Id. at pp. 1325, 1327.) The split vote on review — three justices would have granted — signals how genuinely contestable the question was in 1996.

Key quotes

“[A] supervisory employee owes no duty to his or her subordinates to prevent sexual harassment in the workplace. That is a duty owed only by the employer.” (Fiol, supra, 50 Cal.App.4th at p. 1326.)

“[W]e make clear that mere inaction by a nonharassing supervisor does not constitute aiding and abetting.” (Id. at p. 1327.)

“The ‘agent of an employer’ language in section 12940, subdivision (h)(3)(A) does not impose personal liability on a non-harassing supervisor, but rather imposes on the employer vicarious liability for the supervisor’s acts.” (Id. at p. 1331.)

Read the full opinion (Justia) →

Practice pointer

Open questions

By design, the published opinion answered only the narrow pleadings question and left several adjacent issues unresolved. The court expressly noted that Page “refused to decide” the personal liability of a harassing supervisor as an agent of the employer, and the personal liability of harassing nonsupervisory coworkers — questions Fiol did not need to reach. (Fiol, supra, 50 Cal.App.4th at p. 1327, fn. 6.) Fiol also reserved, by negative implication, the line between true inaction and conduct that crosses into “substantially assist[ing] or encourag[ing] continued harassment,” which the court held does create aider-and-abettor liability but did not define at its margins. (Id. at p. 1327.) The court flagged but declined to follow the FEHC regulation’s suggestion that failure to prevent harassment may be actionable where prevention is “the normal business duty of the person,” concluding the regulation was “silent on this issue” and disagreeing “[t]o the extent the regulation provides that mere inaction may constitute aiding and abetting.” (Id. at p. 1326, fn. 5.) Finally, the court invited the Legislature to act if it disagreed: if lawmakers “intend[ed] to impose personal liability on nonharassing supervisors for failure to take action on sexual harassment complaints, [they] should expressly amend the statute to so provide.” (Id. at p. 1330.) The dissent’s contrary reading of the same statutory text and agency precedent (id. at pp. 1331–1342) shows the question was a close one — and the divided vote on review underscores it.