Kelley v. The Conco Companies

Facts

The statutory framework. The case arises under the California Fair Employment and Housing Act, which separately forbids harassment and retaliation. The harassment provision protects against “‘a broad range of conduct, ranging from expressly or impliedly conditioning employment benefits on submission to or tolerance of unwelcome sexual advances, to the creation of a work environment that is hostile or abusive on the basis of sex.’” (Kelley, supra, 196 Cal.App.4th at p. 202, quoting Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 277.) The retaliation provision makes it unlawful “for an employer to ‘discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part … .’” (Id. at p. 209, quoting § 12940, subd. (h).) The Act, the court reminded, “should not be transformed into ‘a general civility code for the American workplace.’” (Id. at p. 204, quoting Oncale v. Sundowner Offshore Services, Inc. (1998) 523 U.S. 75, 80, and Lyle, at p. 295.)

The parties and the worksite. Patrick C. Kelley was an apprentice ironworker, a member of Ironworkers Union Local 378, dispatched to work for respondent The Conco Companies, “one of the largest concrete construction companies in California,” a union shop. (Kelley, supra, 196 Cal.App.4th at pp. 196–197.) He was hired on July 28, 2006, and assigned to an Emeryville jobsite under supervisor David Seaman. (Id. at p. 197.) The trade environment is central to the holding: it was “undisputed that in the environment in which this incident took place, sexually taunting comments by supervisors and employees were commonplace, including gay innuendo, profanity, and rude, crude and insulting behavior,” made “both jokingly and in anger.” (Id. at pp. 205–206.)

The Emeryville incident. On or about July 30, 2006, after Kelley mishandled rebar, Seaman erupted. He called Kelley a “bitch” and a “fucking punk,” said Kelley had a “nice ass,” that he wanted to “fuck [Kelley] in the ass,” that Kelley would “look good in little girl’s clothes,” that he would make Kelley “his bitch,” and — when Kelley knelt to a task — that “‘[t]hat’s where you belong[,] on your knees.’” (Kelley, supra, 196 Cal.App.4th at pp. 198–199.) A coworker chimed in that he would “make me suck [Seaman’s] dick” while he watched; Seaman thought it “was a joke and thought it was funny.” (Id. at p. 198.) Kelley confronted Seaman, calling him “fucking gay”; Seaman “puffed up” and threatened to “kick [Kelley’s] ass,” then told him to leave. (Id. at p. 198.)

Management intervention — and its limits. Kelley reported the incident, in tears, to Conco field safety manager Joseph Gallegos, who spoke to Seaman. (Kelley, supra, 196 Cal.App.4th at pp. 198–199.) After that intervention, “Seaman ceased any personal harassment of Kelley on the very same day,” and Seaman even later intervened to stop coworkers from harassing Kelley; Kelley “had no issues or difficulties with Seaman after that date,” including on a later Redwood City job they worked together “without incident.” (Id. at pp. 199, 207.) But coworkers turned on Kelley. That same afternoon two coworkers called him a “bitch” and threatened to “jump him after work.” (Id. at p. 199.)

The coworker campaign. The hostility followed Kelley across jobsites. At Vallejo, coworkers called him “‘bitch,’ ‘faggot,’ and ‘narc’ or ‘snitch’ for complaining,” with a supervisor “within earshot” who “ignored the comments.” (Kelley, supra, 196 Cal.App.4th at p. 199.) When Kelley reported it to dispatcher Scott Nava, Nava replied, “‘Well, that’s the way the trade is, man. That’s just the way these guys are.’” (Ibid.) Over the next three months Kelley “heard remarks daily about what had happened with Seaman,” was called “‘punk bitch,’ ‘snitch’ or ‘fag,’” and was threatened with being “jump[ed]”; he complained to Nava “‘two [to] three times a week’” and to one other person (“Tony”) “two or three” times. (Id. at pp. 199–200.) Nava “regularly moved him” to different jobsites at his request. (Ibid.)

The union suspension and the end of the employment. Separately, Kelley took a day off for his brother’s wedding after handing a leave request to union representative Dana Fairchild; Fairchild then claimed he never received the letter, raised the absence with the apprenticeship board, and on October 3, 2006, the board suspended Kelley for six months. (Kelley, supra, 196 Cal.App.4th at p. 200.) The board notified Conco that Kelley was “dropped from the program” and “not eligible for employment or training” under the collective bargaining agreement; “Kelley never again worked at Conco.” (Ibid.) After the suspension expired in about April 2007, Kelley sank into “a deep depression,” took a leave, then resigned from the union, ending his ability to work union ironworker jobs. (Id. at pp. 200–201.)

Procedural history

Kelley sued Conco and Seaman in October 2007 for sex discrimination and sexual harassment under FEHA (§ 12940), retaliation, termination in violation of public policy, failure to prevent discrimination, intentional infliction of emotional distress, and negligent infliction of emotional distress. (Kelley, supra, 196 Cal.App.4th at p. 197.) Defendants moved for summary judgment, and the trial court (Judge John M. True) granted it on all claims. (Ibid.) At the hearing, the court framed the dispositive harassment question as whether “‘the incident in and of itself [was] so … severe … so inherently destructive of [Kelley’s] work environment that in and of itself it should be considered sexual harassment.’” (Id. at p. 201.)

The Court of Appeal, in a unanimous opinion by Justice Bruiniers, reversed in part. It reversed the grant of summary judgment and reversed summary adjudication of the second cause of action (retaliation), but affirmed summary adjudication of all other claims. (Kelley, supra, 196 Cal.App.4th at pp. 196–197, 217.) The parties bore their own costs, and the California Supreme Court denied review on September 28, 2011. There was no dissent.

Issue

Three questions structured the appeal. First, whether crude, sexually explicit same-sex verbal abuse — vulgar enough to “express[] sexual interest and solicit[] sexual activity” on its face — constitutes harassment “because of sex” under FEHA where there was no evidence the harasser acted from sexual desire or because of the plaintiff’s perceived orientation. (Kelley, supra, 196 Cal.App.4th at pp. 205–206.) Second, whether the conduct was severe or pervasive enough to alter the conditions of employment. (Id. at pp. 207–208.) Third — and the ground for reversal — whether an employer may be liable for retaliation under section 12940, subdivision (h), based on coworker hostility, and on what standard the employer’s responsibility for nonmanagement employees’ retaliatory harassment turns. (Id. at pp. 212–213.)

Holding

Reasoning

The summary-judgment posture. Reviewing de novo, the court construed Kelley’s evidence “liberally” and defendants’ “narrowly,” drawing “all reasonable inferences in favor of Kelley.” (Kelley, supra, 196 Cal.App.4th at p. 197, citing Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826.) Because Kelley bore the trial burden, Conco had to “present evidence that would require a reasonable trier of fact not to find any underlying material fact more likely than not.” (Id. at pp. 201–202, quoting Aguilar, at p. 851.) The court also flagged the low evidentiary threshold for intent: “very little evidence of such intent is necessary to defeat summary judgment.” (Id. at p. 203.)

Same-sex harassment is cognizable — but sexual content is not the test. Following Oncale, the court had “no difficulty concluding” that same-sex harassment is actionable under FEHA where it “amounted to discrimination because of sex.” (Kelley, supra, 196 Cal.App.4th at p. 203.) But it stressed the limiting principle: “the mere fact that harassment has sexual content is insufficient to establish that it constituted discrimination because of sex.” (Id. at p. 204.) Quoting Lyle, the court held “it is the disparate treatment of an employee on the basis of sex — not the mere discussion of sex or use of vulgar language — that is the essence of a sexual harassment claim.” (Ibid.) Oncale’s suggested “evidentiary route[s]” — credible evidence the harasser was homosexual, sex-specific derogatory animus toward the plaintiff’s gender, or comparative evidence of how both sexes were treated — were not exclusive, but “‘[w]hatever evidentiary route the plaintiff chooses to follow, he or she must always prove that the conduct at issue was not merely tinged with offensive sexual connotations, but actually constituted “discrimina[tion] … because of … sex.”’” (Id. at pp. 204–205, quoting Oncale, at p. 81.)

Why the record could not clear that bar. The court agreed the operative incident was Emeryville on July 30, 2006, and that the language was “graphic, vulgar, and sexually explicit” — the “literal statements expressed sexual interest and solicited sexual activity.” (Kelley, supra, 196 Cal.App.4th at p. 205.) But there was “no ‘credible evidence that the harasser was homosexual’ or that the harassment was ‘motivated by sexual desire,’” and Kelley made “no contention here that Seaman’s statements were intended to be taken literally.” (Ibid.) Rather, in a trade where sexual taunting and gay innuendo were “commonplace,” the comments were “crude, offensive and demeaning,” but no evidence showed “they were an expression of actual sexual desire or intent by Seaman, or that they resulted from Kelley’s actual or perceived sexual orientation.” (Id. at pp. 205–206.) The court noted federal courts “routinely insisted on evidence that an alleged harasser was acting from genuine sexual interest” before inferring sex-based discrimination from a sexual proposition. (Id. at p. 205.)

The split with Singleton. Kelley leaned on Singleton v. United States Gypsum Co. (2006) 140 Cal.App.4th 1547, where the Second District found materially similar homophobic taunting of a heterosexual man to be discrimination “because of sex” because it “targeted Singleton’s heterosexual identity.” (Kelley, supra, 196 Cal.App.4th at pp. 205–206.) The Kelley court “respectfully disagree[d].” It warned that Singleton’s reasoning “inevitably leads to the conclusion that any hostile, offensive and harassing comment or conduct, with or without sexual content or innuendo, made to one gender and which would not be made to the other, would constitute discrimination because of sex.” (Id. at pp. 206–207.) The proper inquiry, it held, “is not whether the two sexes are treated differently in the workplace, but whether one of the sex is treated adversely to the other sex in the workplace because of their sex.” (Id. at p. 207.) This deliberate intra-appellate split is the doctrinal core of the harassment holding.

The court did not reach severity or pervasiveness. Having found no sex-based discrimination, the court “need not address” severity. (Kelley, supra, 196 Cal.App.4th at p. 207.) It observed in dicta, however, that the proof “failed to show pervasive hostile conduct … by Seaman or by any other supervisor on any date other than July 30, 2006,” that liability ordinarily “may not be imposed based on a single incident” short of “egregious conduct akin to a physical assault,” and that after Gallegos intervened Kelley “experienced no further harassment” from Seaman. (Id. at pp. 207–208.) The failure-to-prevent claim fell with the harassment claim, since “‘courts have required a finding of actual discrimination or harassment under FEHA before a plaintiff may prevail under section 12940, subdivision (k).’” (Id. at p. 208, quoting Carter v. California Dept. of Veterans Affairs (2006) 38 Cal.4th 914, 925, fn. 4.)

Protected activity survives even though the harassment claim does not. The retaliation analysis pivoted on a crucial doctrinal asymmetry: a retaliation plaintiff need not win the underlying harassment claim. “‘[A] retaliation claim may be brought by an employee who has complained of or opposed conduct that the employee reasonably believes to be discriminatory, even when a court later determines the conduct was not actually prohibited by the FEHA.’” (Kelley, supra, 196 Cal.App.4th at p. 209, quoting Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1043.) Because two California decisions had already treated similar same-sex taunting as actionable, “Kelley reasonably could have believed that the harassment he experienced at Conco violated section 12940, subdivision (j)(1).” (Id. at pp. 209–210.) His complaints therefore qualified as protected activity, “even when a court later determines” — as this one did — that the conduct was not in fact unlawful. (Id. at pp. 209, 210.)

Coworker harassment as an adverse action — and the standard for employer liability. The court invoked Yanowitz for the proposition that “‘[w]orkplace harassment, if sufficiently severe or pervasive, may in and of itself constitute an adverse employment action’” for retaliation purposes, and that mere ostracism is not enough. (Kelley, supra, 196 Cal.App.4th at p. 212.) Section 12940, subdivision (h), “does not specifically address whether an employer can be held liable for retaliation by nonmanagement employees,” and “[f]ew California courts have considered the issue.” (Ibid.) Drawing on the Tenth Circuit’s Gunnell and the Seventh Circuit’s Knox — cited with approval in Yanowitz — the court adopted a knowledge-plus-acquiescence rule: an employer “may be found to have engaged in an adverse employment action … ‘by permitting … fellow employees to punish [him] for invoking [his] rights,’” and is liable “if the employer knew or should have known of the coworkers’ retaliatory conduct and either participated and encouraged the conduct, or failed to take reasonable actions to end the retaliatory conduct.” (Id. at p. 213, quoting Knox v. State of Indiana (7th Cir. 1996) 93 F.3d 1327, 1334.) This was the opinion’s principal contribution: California recognition that an employer’s toleration of coworker retaliation can itself be the actionable adverse action.

Triable issues defeated summary adjudication. Applying that standard, the court found a jury could connect the dots. Coworkers expressly tied their hostility to Kelley’s complaint — calling him “snitch” and “narc” — and threatened violence, and a Conco superintendent testified that in the trades “news of altercations … passes ‘around the whole community.’” (Kelley, supra, 196 Cal.App.4th at p. 212.) On knowledge: Kelley complained to dispatcher Nava “‘two [to] three times a week,’” a “supervisor was within earshot when some of the comments were made” but “ignored them,” and Nava’s response — “‘that’s the way the trade is’” — could be read as acquiescence rather than cure. (Id. at p. 213.) The court rejected Conco’s argument that Nava was a mere dispatcher whose knowledge could not be imputed: “the evidence established that Nava had sufficient supervisory authority to redirect employees to alternative job locations at his discretion.” (Ibid., fn. 13.) Because retaliation is “inherently fact-specific,” with the acts “considered collectively rather than individually,” Kelley “raised triable issues as to whether coworkers engaged in retaliatory harassment sufficiently severe to constitute an adverse employment action, whether Conco had actual or constructive knowledge of the improper conduct, and whether it took appropriate action in response.” (Id. at pp. 213–214.)

The discrete-event retaliation theories failed. By contrast, the court affirmed summary adjudication of the two event-based retaliation theories. As to the union suspension, Kelley “offer[ed] nothing more than speculation that the union’s action was at Conco’s behest”; whatever Fairchild’s motives, nothing supported “an inference of collusion or management involvement.” (Kelley, supra, 196 Cal.App.4th at pp. 211–212.) As to the failure to rehire, Kelley “never again sought work with Conco” after reinstatement and could not “show that Conco discriminated against him by failing to hire him for a job for which he did not apply.” (Id. at p. 212.) The reversal thus rested specifically on the retaliatory-coworker-harassment theory, not on the termination or refusal-to-rehire theories.

The collateral tort claims. The public-policy discharge claim failed because Conco discharged Kelley for the union suspension, which he could not tie to his complaints. (Kelley, supra, 196 Cal.App.4th at pp. 214–215.) The intentional-infliction claim failed on causation of severe distress: even assuming Seaman’s conduct was outrageous, Kelley’s “severe depression did not arise until [he] later lost his ability to work as an ironworker,” “over a year later,” and not from “his single confrontation with Seaman.” (Id. at pp. 215–216.) Unable to “causally attribute his severe emotional distress to Seaman’s conduct,” Kelley could not establish the tort. (Id. at p. 216.)

Significance

It is California’s clearest endorsement of employer liability for coworker retaliation. Before Kelley, section 12940, subdivision (h), was largely silent on whether an employer answered for retaliation by rank-and-file coworkers, and the only California precedent (Birschtein) had assumed the point without analyzing it. (Kelley, supra, 196 Cal.App.4th at pp. 212–213.) Kelley filled that gap with a worked-out standard borrowed from Gunnell and Knox: knowledge (actual or constructive) plus either encouragement or a failure to take reasonable corrective action. (Id. at p. 213.) It thus aligns FEHA retaliation with the negligence-style employer-knowledge framework familiar from coworker-harassment law, and confirms that tolerating a campaign of coworker reprisal is itself an adverse action.

It sharpens — and splits over — the “because of sex” requirement in same-sex cases. By expressly disagreeing with Singleton, Kelley created an open intra-appellate divide on whether gender-specific homophobic taunting of a heterosexual man is, without more, discrimination “because of sex.” (Kelley, supra, 196 Cal.App.4th at pp. 206–207.) Kelley demands an additional inferential link — sexual desire, anti-gender animus, or comparative differential treatment — and rejects the view that “differently treated” equals “because of sex.” The tension persisted until the Legislature and later authority reshaped the landscape; practitioners citing either case should confirm its current vitality against the post-Kelley evolution of sexual-orientation and gender-identity protections.

It models the protected-activity/underlying-claim asymmetry. The opinion is a clean teaching case on why a plaintiff can lose the harassment claim yet keep the retaliation claim: the reasonableness of the employee’s belief, not the ultimate legality of the conduct opposed, anchors protected activity. (Kelley, supra, 196 Cal.App.4th at pp. 209–210.) That asymmetry, drawn from Yanowitz, routinely decides FEHA cases and is squarely illustrated here.

Key quotes

“We therefore hold that an employer may be held liable for coworkers’ retaliatory conduct if the employer knew or should have known of the coworkers’ retaliatory conduct and either participated and encouraged the conduct, or failed to take reasonable actions to end the retaliatory conduct.” (Kelley, supra, 196 Cal.App.4th at p. 213.)

“[W]hile the use of vulgar or sexually disparaging language may be relevant to show discrimination, it is not necessarily sufficient, by itself, to establish actionable conduct.” (Id. at p. 205.)

“What matters, however, is not whether the two sexes are treated differently in the workplace, but whether one of the sex is treated adversely to the other sex in the workplace because of their sex.” (Id. at p. 207.)

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Practice pointer

Open questions

Severity and pervasiveness of the harassment. The court “need not address the trial court finding” that the conduct was not “‘sufficiently severe or pervasive,’” resolving the claim solely on the “because of sex” element — leaving the severity analysis on these facts undecided. (Kelley, supra, 196 Cal.App.4th at p. 207.)

The Singleton conflict. By “respectfully disagree[ing]” with Singleton, the court left a live intra-appellate split — unresolved by the Supreme Court here — over whether gender-specific homophobic taunting of a heterosexual employee is, standing alone, discrimination “because of sex.” (Kelley, supra, 196 Cal.App.4th at pp. 206–207.)

The outer bounds of imputed supervisory knowledge. The court held that, “[f]or purposes of summary judgment,” Nava’s authority to “redirect employees to alternative job locations” sufficed to impute knowledge, while noting Kelley “would have the burden of proof on this issue at trial” — leaving for trial exactly which employees’ knowledge counts. (Kelley, supra, 196 Cal.App.4th at p. 213, fn. 13.)