Fitzsimons v. California Emergency Physicians Medical Group

Facts

The statutory framework. The claim arose under the California Fair Employment and Housing Act (FEHA), Government Code section 12900 et seq. Section 12940 “prohibits numerous ‘employment practice[s]’ specified in the subdivisions of the section — in general, invidious discrimination or harassment, and retaliation for complaining about such conduct.” (Fitzsimons, supra, 205 Cal.App.4th at p. 1426.) The retaliation provision provides that it is an unlawful employment practice “‘[f]or any employer, labor organization, employment agency, or person to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part.’” (Id. at p. 1427, quoting § 12940, subd. (h).) A companion provision, section 12925, subdivision (d), defines the operative term: “‘“Person” includes one or more individuals, partnerships, associations, corporations, limited liability companies, legal representatives, trustees, trustees in bankruptcy, and receivers or other fiduciaries.’” (Id. at p. 1427, fn. 4.) The harassment provision, section 12940, subdivision (j), separately makes it unlawful for an employer to harass an employee. (Id. at p. 1427.)

The partnership and the plaintiff. California Emergency Physicians Medical Group (CEP) is “a California general partnership with approximately 700 partners working in hospital emergency rooms throughout California,” governed by a nine-member elected board of directors. (Fitzsimons, supra, 205 Cal.App.4th at p. 1425.) The emergency doctors at each hospital are supervised by a medical director, and the hospitals are grouped into regions supervised by appointed regional directors. (Ibid.) Plaintiff Mary Fitzsimons is “an emergency physician who has been a member of CEP since 1985.” (Id. at p. 1426.) She became CEP’s medical director at Sutter Medical Center in Antioch in 1987, a regional director serving four hospitals in June 1999, and a member of the CEP board of directors in November 2003. (Ibid.)

The reports and the alleged retaliation. Fitzsimons alleged that beginning in the fall of 2003 and continuing through 2004, employees of CEP’s management and billing subsidiaries — MedAmerica and MBSI — approached her to complain that “‘certain officers and agents of CEP’ had sexually harassed female employees,” and that she reported the incidents to the MedAmerica Human Resources Department and to CEP’s chief operating officer. (Fitzsimons, supra, 205 Cal.App.4th at p. 1426 & fn. 3.) In October 2004, “plaintiff’s appointment as a regional director was terminated,” though she was not removed from the board and continued to work as an emergency physician at Sutter Medical Center. (Id. at p. 1426.) Her complaint alleged that CEP “removed her from her position as regional director and otherwise created a hostile working environment in retaliation for reports she made.” (Ibid.)

Procedural history

Fitzsimons filed suit against CEP, its president, and its chief operating officer in May 2006, alleging retaliation in violation of public policy, breach of contract, breach of the implied covenant, and breach of fiduciary duty. (Fitzsimons, supra, 205 Cal.App.4th at p. 1426.) By the time of trial in January 2011, the individual defendants had been dismissed and “the sole remaining cause of action against CEP was for retaliation in violation of the FEHA and public policy.” (Id. at pp. 1426–1427.)

Before trial, the court ruled that “if plaintiff was a bona fide partner in CEP, she did not have standing to assert a cause of action for retaliation under the FEHA against CEP.” (Fitzsimons, supra, 205 Cal.App.4th at p. 1427.) On CEP’s motion, the trial was bifurcated so the jury would first decide whether Fitzsimons was an employee or a partner. (Ibid.) “The jury found that plaintiff was a partner and the court entered judgment in favor of CEP.” (Ibid.) The trial court relied “largely on the decision in Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158,” reasoning that because partners are not in an employer-employee relationship, the retaliation provision did not reach them. (Ibid.) Fitzsimons appealed. The Court of Appeal, in a unanimous opinion by Justice Pollak, reversed and remanded. (Id. at pp. 1425, 1432.)

Issue

The precise question, as the court framed it, was whether “a partner does not have standing to assert a claim for retaliation under the FEHA against his or her partnership.” (Fitzsimons, supra, 205 Cal.App.4th at p. 1425.) More exactly: does section 12940, subdivision (h) — which forbids retaliation against “any person” who has “opposed any practices forbidden under this part” — protect a partner who reports the partnership-employer’s harassment of its employees, even though the partner is not herself an “employee” and could not bring a discrimination or harassment claim against the partnership? Because the jury had already found Fitzsimons a partner, the appeal presented a pure question of statutory construction. (Ibid.)

Holding

Reasoning

The employment-relationship baseline — and why it did not control. The court began where CEP wanted it to begin: with the principle that the FEHA reaches only employment relationships. Section 12940 “‘prohibits employment discrimination … ,’ not discrimination or retaliation in other relationships,” and “‘[t]he fundamental foundation for liability is the “existence of [an] employment relationship between the one who discriminates … and [the person] who finds himself the victim of that discrimination.”’” (Fitzsimons, supra, 205 Cal.App.4th at pp. 1426–1427, quoting Shephard v. Loyola Marymount Univ. (2002) 102 Cal.App.4th 837, 842, and Vernon v. State of California (2004) 116 Cal.App.4th 114, 123.) “‘If there is no proscribed “employment practice,” the FEHA does not apply.’” (Id. at p. 1427.) But the court located the requisite employment relationship not between CEP and Fitzsimons, but between CEP and the harassed employees — the victims of the underlying unlawful practice she opposed. (Id. at p. 1429.) The proscribed employment practice was the harassment of CEP’s employees; Fitzsimons merely opposed it.

The plain language: two distinct referents of “person.” The interpretive key was the court’s observation that subdivision (h) “uses the word ‘person’ repeatedly, with two different referents.” (Fitzsimons, supra, 205 Cal.App.4th at p. 1428.) The subdivision makes it unlawful for “‘any employer, labor organization, employment agency, or person’ to engage in proscribed activity which includes discriminating against ‘any person because the person has opposed any practices forbidden under this part.’” (Id. at pp. 1428–1429.) Parsing that structure, the court held: “The subdivision first prohibits a person from retaliating, and second states the retaliation must not be against a person who opposes discrimination or harassment of other employees.” (Id. at p. 1429.) Section 12925, subdivision (d) defines “person” to include partnerships, and that ordinary meaning controls the second referent. (Ibid.)

Confining Torrey Pines to the first referent. CEP’s strongest authority was Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, on which the trial court had principally relied. The court took it seriously and described its logic in full. Torrey Pines extended Reno v. Baird (1998) 18 Cal.4th 640 — which held that a supervisor cannot be held personally liable for discrimination under subdivision (a) — to retaliation, holding that “‘the rationale for not holding individuals personally liable for discrimination applies equally to retaliation.’” (Fitzsimons, supra, 205 Cal.App.4th at pp. 1427–1428, quoting Torrey Pines, supra, 42 Cal.4th at p. 1164.) The court reproduced Torrey Pines’ catalog of policy reasons for not imposing liability on nonemployer individuals: “‘supervisors can avoid harassment but cannot avoid personnel decisions, it is incongruous to exempt small employers but to hold individual nonemployers liable, sound policy favors avoiding conflicts of interest and the chilling of effective management, corporate employment decisions are often collective, and it is bad policy to subject supervisors to the threat of a lawsuit every time they make a personnel decision.’” (Id. at p. 1428, quoting Torrey Pines, supra, 42 Cal.4th at p. 1167.) But — and this was the pivot — the Torrey Pines court read subdivision (h) not to impose personal liability on the nonemployer who retaliates: it “held that the first reference to a ‘person’ does not include nonemployer individuals. It did not hold that the second reference excludes partners or other persons who are not themselves the victims of the harassment.” (Id. at p. 1429.)

Why the trial court read Torrey Pines too broadly. The trial court had read Torrey Pines “to have ‘effectively written “person” out of the statute,’” reasoning that because a partnership is not the “employer” of its partners, it could not be liable to a partner. (Fitzsimons, supra, 205 Cal.App.4th at p. 1429.) The Court of Appeal disagreed: “We believe that the trial court read Torrey Pines too broadly. Its error arises from the fact that section 12940, subdivision (h) uses the word ‘person’ repeatedly, with two different referents.” (Ibid.) Torrey Pines spoke only to the first referent — who can be held liable as a retaliator. It said nothing about who is protected from retaliation. And critically, the court explained, recognizing Fitzsimons’ claim “does not contravene any of the reasons explained in Torrey Pines for excluding supervisors from the scope of liability,” because her “claim does not seek to impose liability on any ‘nonemployer individual’ but only upon the employer — the partnership.” (Ibid.)

Drawing the line: a partner may oppose, but may not herself be the victim. The court was meticulous about the limits of its holding, and it adopted CEP’s own framing to draw them. “As CEP urges, the alleged sexual harassment of a partner by a fellow partner is not a ‘practice[] forbidden under this part,’ but harassment of the partnership’s employees is an unlawful employment practice forbidden under ‘this part.’” (Fitzsimons, supra, 205 Cal.App.4th at p. 1429.) Thus the distinction is between a partner asserting her own victimhood (no claim, because a partnership is not her employer) and a partner asserting retaliation for opposing the employer’s unlawful treatment of employees (a claim, because subdivision (h) reaches any person who opposes a forbidden practice). “Plaintiff, although a partner, is a person whom section 12940, subdivision (h) protects from retaliation for opposing the partnership-employer’s harassment against those employees.” (Ibid.)

The remedial-construction canon. The court reinforced its reading with the FEHA’s interpretive command. Because the Act is remedial legislation declaring the opportunity to seek and hold employment without discrimination to be a civil right, “‘the court must construe the FEHA broadly, not … restrictively.’” (Fitzsimons, supra, 205 Cal.App.4th at pp. 1429–1430, quoting Kelly v. Methodist Hospital of So. California (2000) 22 Cal.4th 1108, 1114.) The court underscored the statutory directive that “‘[t]he provisions of this part shall be construed liberally for the accomplishment of the purposes of this part.’” (Id. at p. 1430, quoting § 12993, subd. (a).) Both “the language of the retaliation provision and the purpose of the statute support liability,” and recognizing the claim “furthers the protection of those employees subject to sexual harassment, and does not give rise to any of the evils discussed in Reno v. Baird and Torrey Pines.” (Ibid.)

Rejecting CEP’s legislative-history argument. CEP argued that the Legislature’s 1999 amendment expanding the harassment provision to cover “‘a person providing services pursuant to a contract,’” without a parallel amendment to the retaliation provision, showed an intent to make a “special exception” for harassment claims only. (Fitzsimons, supra, 205 Cal.App.4th at p. 1430.) The court turned the inference around: when the harassment provision was amended in 1999, the retaliation provision “was already more expansive,” having prohibited retaliation against “‘any person’” both before and after the amendment, while the harassment provision then reached only employees and applicants. (Ibid.) “Thus, the failure to amend what is now subdivision (h) does not reflect an intent to limit its broad scope.” (Id. at pp. 1430–1431.)

Why federal Title VII authority did not carry the day. CEP’s final argument was that under Title VII a partner cannot sue the partnership, citing a line of federal cases holding that “‘bona fide general partners are not employees under the Antidiscrimination Acts.’” (Fitzsimons, supra, 205 Cal.App.4th at p. 1431, quoting Wheeler v. Hurdman (10th Cir. 1987) 825 F.2d 257, 277.) The court acknowledged the federal rule but found it inapposite because of a textual mismatch. “‘[O]nly when FEHA provisions are similar to those in Title VII do we look to the federal courts’ interpretation of Title VII as an aid in construing the FEHA,’” and “explicit differences between federal law and the FEHA ‘diminish the weight of the federal precedents.’” (Ibid., quoting State Dept. of Health Services v. Superior Court (2003) 31 Cal.4th 1026, 1040.) Here the difference was decisive: Title VII’s antiretaliation provision protects only “‘any of his employees or applicants for employment,’” and “says nothing about retaliating against other persons who complain about discrimination or harassment of employees.” (Id. at p. 1431.) That language “is considerably more restrictive than the language of section 12940, subdivision (h).” (Ibid.) Because the federal statute is narrower by its terms, the federal partner cases proved nothing about FEHA’s broader “any person” command.

The narrow conclusion. The court ended by emphasizing the modesty of its ruling and the limited record before it. “Because this issue was not submitted to the jury, the record contains no evidence regarding the relationship between CEP and the alleged victims of sexual harassment,” so the court relied on the complaint’s allegation that the victims were employees and did “not address other arguments advanced by CEP as to why plaintiff ultimately should not prevail.” (Fitzsimons, supra, 205 Cal.App.4th at p. 1430, fn. 8.) “Thus, we conclude that under the unique circumstances now before us, plaintiff’s claim does not fail because she is a partner in the partnership she alleges has retaliated against her.” (Id. at p. 1431.) The judgment was reversed and the matter remanded; the panel was unanimous, with no concurrence or dissent. (Id. at p. 1432.)

Significance

It decouples retaliation-plaintiff status from employee status. Fitzsimons is the clearest California appellate statement that the universe of FEHA retaliation plaintiffs is broader than the universe of discrimination plaintiffs. A person who could never sue for discrimination or harassment against herself — because she is a partner, not an employee — may nonetheless sue for retaliation if she opposed the employer’s forbidden treatment of its employees. (Fitzsimons, supra, 205 Cal.App.4th at p. 1429.) The decision rests on the literal breadth of subdivision (h)’s “any person” language, anchored by the section 12925 definition that expressly lists partnerships. (Ibid.)

It refines, rather than disturbs, Torrey Pines. The opinion’s most useful doctrinal contribution is its dissection of subdivision (h) into two referents. (Fitzsimons, supra, 205 Cal.App.4th at pp. 1428–1429.) Torrey Pines and Reno v. Baird govern who can be held liable as a retaliator — nonemployer individuals cannot — but they say nothing about who is protected from retaliation. By keeping those two questions separate, Fitzsimons preserves the policy concerns animating Torrey Pines (no chilling of supervisory personnel decisions, no individual liability) while giving full effect to the protective sweep of the provision. The line it draws is principled: the partnership is sued only as an employer, and only for retaliating against opposition to its mistreatment of employees. (Id. at p. 1429.)

It marks a deliberate divergence from Title VII. The opinion is a model of the California courts’ selective use of federal precedent. Where FEHA’s text is broader than Title VII’s, federal partner-standing cases such as Wheeler, Hyland, and Hishon lose their persuasive force. (Fitzsimons, supra, 205 Cal.App.4th at p. 1431.) The decision thus stands as a reminder that FEHA’s “any person” opposition clause is materially more generous than Title VII’s employee-and-applicant clause, and counsel should resist defense efforts to import the narrower federal frame.

Key quotes

“The subdivision first prohibits a person from retaliating, and second states the retaliation must not be against a person who opposes discrimination or harassment of other employees. Torrey Pines held that the first reference to a ‘person’ does not include nonemployer individuals. It did not hold that the second reference excludes partners or other persons who are not themselves the victims of the harassment.” (Fitzsimons, supra, 205 Cal.App.4th at p. 1429.)

“Plaintiff, although a partner, is a person whom section 12940, subdivision (h) protects from retaliation for opposing the partnership-employer’s harassment against those employees.” (Id. at p. 1429.)

“[U]nder the unique circumstances now before us, plaintiff’s claim does not fail because she is a partner in the partnership she alleges has retaliated against her.” (Id. at p. 1431.)

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Practice pointer

Open questions

The factual predicate on remand. The court relied on the complaint’s allegation that the harassment victims were employees because “this issue was not submitted to the jury,” and the “record contains no evidence regarding the relationship between CEP and the alleged victims of sexual harassment.” (Fitzsimons, supra, 205 Cal.App.4th at p. 1430, fn. 8.) Whether Fitzsimons can prove that the victims were in fact CEP’s employees — rather than employees of the subsidiaries MedAmerica and MBSI — remains unresolved.

CEP’s other defenses. The court expressly declined to “address other arguments advanced by CEP as to why plaintiff ultimately should not prevail.” (Fitzsimons, supra, 205 Cal.App.4th at p. 1430, fn. 8.) The standing holding decides only that a partner is not categorically barred; the merits of causation, the substance of the harassment reports, and the adverse-action analysis were left for remand.

The instructional issue. Because it reversed on the standing question, the court did “not reach plaintiff’s alternative contention that the jury was not properly instructed regarding the legal distinction between an employee and a partner.” (Fitzsimons, supra, 205 Cal.App.4th at p. 1425, fn. 2.) How that distinction should be framed for a jury — and whether the partner/employee finding itself was sound — is unresolved.