Rosenfeld v. Abraham Joshua Heschel Day School, Inc.

Facts

The avoidable-consequences framework. The decision rests on a doctrine the California Supreme Court imported into the Fair Employment and Housing Act (FEHA) in State Dept. of Health Services v. Superior Court (2003) 31 Cal.4th 1026 (sometimes called McGinnis). “In ‘civil actions generally, the right to recover damages is qualified by the common law doctrine of avoidable consequences.’” (Rosenfeld, supra, 226 Cal.App.4th at p. 900, quoting State Dept. of Health Services, supra, 31 Cal.4th at pp. 1042–1043.) As the Supreme Court drew it from the Restatement, “‘[O]ne injured by the tort of another is not entitled to recover damages for any harm that he could have avoided by the use of reasonable effort or expenditure after the commission of the tort’” — a rule that “‘applies only to the diminution of damages and not to the existence of a cause of action.’” (Ibid., quoting Rest.2d Torts, § 918, subd. (1) & com. a, p. 500.) In the harassment setting from which it sprang, the Supreme Court held that “in a FEHA action against an employer for hostile environment sexual harassment by a supervisor, an employer may plead and prove a defense based on the avoidable consequences doctrine,” a defense having three elements: “(1) the employer took reasonable steps to prevent and correct workplace sexual harassment; (2) the employee unreasonably failed to use the preventive and corrective measures that the employer provided; and (3) reasonable use of the employer’s procedures would have prevented at least some of the harm that the employee suffered.” (Id. at pp. 900–901, quoting State Dept. of Health Services, supra, 31 Cal.4th at p. 1044.) The doctrine “appli[es] to damage claims under the [FEHA]” generally; under it “a plaintiff’s recoverable damages do not include those damages that the plaintiff could have avoided with reasonable effort and without undue risk, expense, or humiliation.” (Id. at p. 900, quoting State Dept. of Health Services, supra, 31 Cal.4th at p. 1034.) Rosenfeld is significant because it deploys that machinery in a garden-variety age-discrimination action — to admit evidence that the employee skipped the employer’s grievance process.

The employment and the hours reduction. Ruth Rosenfeld began teaching at Heschel, a private Jewish elementary and middle school in Northridge, in 1972. (Rosenfeld, supra, 226 Cal.App.4th at p. 890.) Heschel is an affiliate of the Bureau of Jewish Education (BJE), and under the BJE’s code of personnel practices (BJE Code) Rosenfeld was a tenured teacher; she taught third- and fourth-grade Hebrew/Judaic studies full time, amounting to 25 hours per week. (Ibid.) Beginning in 2005–2006, enrollment fell — by 15 students that year, “from 455 to 440” — “[which] led to a decrease in the need for teachers and a reduction in the number of available teaching hours.” (Ibid.) Heschel renewed Rosenfeld’s contract for 2005–2006 “reduced to 20 hours per week, with a severance payment of $9,800 for the five-hour reduction.” (Ibid.) As enrollment kept declining — to 423, then 391 students — her hours were cut again, to 15 and then, for 2007–2008, to 10. (Id. at pp. 890–891.) For the 10-hour offer she “would be compensated $14,658 for the seven-hour loss,” and the head of school, Betty Winn, “assured Rosenfeld she would be notified if more hours were to become available.” (Id. at p. 891.)

The resignation and the foregone hours. On May 22, 2007, Rosenfeld accepted the 10-hour offer in writing, stating “I plan to return to [Heschel] for the 2007–2008 school year.” (Rosenfeld, supra, 226 Cal.App.4th at p. 891.) But on August 24, 2007 — “three days before classes were to begin” — she advised Heschel through counsel that she was “forced to resign her employment” because her work environment had become intolerable, the letter asserting that her age (60) “was a motivating reason for her demotion and constructive discharge.” (Ibid.) The avoidable-consequences facts come next: “Shortly after Heschel received this letter, five more teaching hours became available. Had Rosenfeld returned to Heschel per the contract, or employed the BJE grievance procedure, she would have taught 15 hours during the 2007–2008 school year, the same teaching load she had the previous year.” (Ibid.) Rosenfeld herself “testified in her deposition that had she been given the same number of teaching hours as the previous year, that would have been acceptable to her.” (Ibid.) She was replaced by Tzipi Aboodi, “who was in her mid-50’s, slightly younger than Rosenfeld,” and who “wound up teaching the 15 hours that would have been taught by Rosenfeld.” (Ibid.)

Procedural history

Rosenfeld first filed an age-discrimination charge with California’s Department of Fair Employment and Housing, alleging Heschel “systematically reduced her hours ‘in an effort to force me out because of my age, in an effort to replace me with workers under 40.’” (Rosenfeld, supra, 226 Cal.App.4th at p. 891.) She filed suit on May 13, 2008. (Ibid.) The operative second amended complaint pleaded “discrimination on the basis of age under the [FEHA] (Gov. Code, § 12940, subd. (a)); constructive wrongful termination (ibid.); failure to prevent discrimination (id., subd. (k)); constructive wrongful termination in violation of public policy; intentional infliction of emotional distress; and negligent infliction of emotional distress.” (Id. at pp. 891–892.) After trial commenced on September 16, 2011, the jury on November 1, 2011 “returned a defense verdict,” and “in a special verdict, specifically found Rosenfeld’s age was not ‘a motivating reason for the reduction of her working hours.’” (Id. at p. 892.) Rosenfeld’s new-trial motion failed, and she appealed from the judgment entered January 3, 2012. (Ibid.) The Court of Appeal, Second District, Division Three, affirmed in an opinion by Presiding Justice Klein, with Justices Croskey and Aldrich concurring; there was no separate concurrence or dissent. (Id. at pp. 889, 904.) The Supreme Court denied review on August 27, 2014.

On appeal Rosenfeld did “not challenge the sufficiency of the evidence to support the verdict”; her contentions ran to “various evidentiary, instructional and other rulings.” (Rosenfeld, supra, 226 Cal.App.4th at p. 889.) She raised five: that the court wrongly precluded a disparate-impact claim; that it wrongly let Heschel argue she was an at-will employee notwithstanding her tenure; that it wrongly admitted evidence of her failure to exhaust the internal grievance procedure; that it wrongly refused a pretext instruction; and that it wrongly denied her new-trial motion on several other grounds. (Id. at p. 892.)

Issue

The headline question for this site’s purposes is whether, in a FEHA age-discrimination action, the trial court may admit evidence that the plaintiff “failed to pursue [the employer’s] internal grievance procedure before filing suit” as “relevant to mitigation of damages” under the avoidable-consequences doctrine. (Rosenfeld, supra, 226 Cal.App.4th at pp. 889, 900.) The court framed it as whether the avoidable-consequences doctrine, established for hostile-environment harassment in State Dept. of Health Services, supports admitting such evidence more generally where “reasonable use of [the employer’s] internal procedures would have prevented at least some of the harm the employee suffered.” (Id. at p. 890.) The opinion also decided four subsidiary questions: whether a disparate-impact theory first surfaced “on the eve of trial” may be barred (id. at pp. 892–896); whether parol evidence may explain the meaning of “tenure” under the BJE Code, and whether tenure status even matters to a FEHA claim (id. at pp. 896–898); whether a pretext instruction telling the jury it “permit[ted]” an inference of age discrimination from disbelief of the employer’s reasons was correct (id. at pp. 898–900); and various new-trial points (id. at pp. 901–904).

Holding

Reasoning

The avoidable-consequences doctrine, born in harassment, governs FEHA damages generally. The court grounded the mitigation ruling in State Dept. of Health Services, quoting its holding that “the ‘avoidable consequences doctrine applies to damage claims under the [FEHA], and that under that doctrine a plaintiff’s recoverable damages do not include those damages that the plaintiff could have avoided with reasonable effort and without undue risk, expense, or humiliation.’” (Rosenfeld, supra, 226 Cal.App.4th at pp. 889–890, 900, quoting State Dept. of Health Services, supra, 31 Cal.4th at p. 1034.) The court then traced the doctrine to its common-law and Restatement roots — a rule of “diminution of damages,” not of liability, that bars recovery for “harm that [the plaintiff] could have avoided by the use of reasonable effort or expenditure after the commission of the tort.” (Id. at p. 900.) It reproduced the three-element State Dept. of Health Services defense as articulated for hostile-environment sexual harassment — reasonable preventive steps by the employer, the employee’s unreasonable failure to use them, and prevention of at least some harm — and the Supreme Court’s caution that the defense reaches only “those damages, and only those damages, that the employee more likely than not could have prevented … by taking advantage of the employer’s internal complaint procedures.” (Id. at pp. 900–901, quoting State Dept. of Health Services, supra, 31 Cal.4th at p. 1044.) Translating that to the facts, the court reasoned that because “reasonable use of [the employer’s] internal procedures would have prevented at least some of the harm the employee suffered,” the grievance-procedure evidence was admissible: had Rosenfeld pursued the BJE procedure after five hours reopened, “she would have taught the same number of hours during the 2007–2008 school year that she taught the year before.” (Id. at pp. 890, 901 & fn. 6.)

Even if admission was error, the special verdict made it harmless. The court did not rest on the doctrine alone. Because the jury found age “was not ‘a motivating reason for the reduction of her working hours,’” it “did not reach the issue of damages.” (Rosenfeld, supra, 226 Cal.App.4th at pp. 901–902.) “Consequently, any error with respect to the admission of evidence relating to Rosenfeld’s failure to mitigate her damages was harmless.” (Id. at p. 902.) This is a recurring move in the opinion: a liability-only defense verdict insulates damage-side evidentiary rulings from reversal, because the jury never reached the question the evidence bore upon.

A disparate-impact theory cannot be sprung on the eve of trial. The court devoted its longest discussion to Rosenfeld’s attempt to add a disparate-impact theory by trial brief filed “shortly after commencement of trial and before opening statements.” (Rosenfeld, supra, 226 Cal.App.4th at p. 892.) Starting from first principles — “[d]isparate impact and disparate treatment are different theories of employment discrimination with different elements” (id. at p. 889) — it explained that disparate treatment “is intentional discrimination,” a claim “that an employer has treated a particular person less favorably than others because of the plaintiff’s race, sex, or other protected category,” while disparate impact requires no motive and reaches a “facially neutral employer practice or policy … [that] in fact had a disproportionate adverse effect on members of the protected class.” (Id. at pp. 893–894, quoting Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 354, fn. 20.) Relying on Coleman v. Quaker Oats Co. (9th Cir. 2000) 232 F.3d 1271, the court held the theories “must be specifically alleged,” because “[a] complaint guides the parties’ discovery” and a disparate-impact theory “requires that the defendant develop entirely different defenses, including the job relatedness of the challenged business practice or its business necessity.” (Id. at pp. 894–895.) Rosenfeld’s pleadings, discovery responses, and case-management statement “solely alleged a theory of disparate treatment.” (Id. at pp. 894–895.) Her three asserted “notice” events did not save her: a continuance request to pursue statistical discovery “does not put a defendant on notice” of a disparate-impact theory, “in that statistical evidence may be utilized to show either disparate treatment or disparate impact discrimination,” and her proposed instruction and trial brief “occurred on the eve of trial, long after the close of discovery.” (Id. at p. 896.) The court pointedly noted that Rosenfeld faulted Heschel for not pleading business necessity — but “because Rosenfeld solely pled disparate treatment, there was no need for Heschel to plead business necessity,” which “illustrates the prejudice to Heschel as a consequence of Rosenfeld’s belated assertion.” (Ibid.)

Parol evidence properly explained “tenure,” which was irrelevant anyway. Rosenfeld argued that because she had “a fully integrated contract requiring cause for termination,” the parol evidence rule barred Heschel from portraying her as an at-will employee. (Rosenfeld, supra, 226 Cal.App.4th at p. 897.) The court rejected the premise: the parol evidence rule permits extrinsic evidence “to explain or interpret ambiguous language,” and the BJE executive director’s testimony properly clarified that “[t]enure under the BJE Code is not a guarantee of employment but rather, a salary protection policy,” entitling a teacher terminated without cause to severance and permitting termination for cause, including “a drop in student enrollment sufficient to justify termination.” (Id. at pp. 897–898.) More fundamentally, the court held tenure beside the point: “whether Rosenfeld’s status was tenured or at will is irrelevant,” because at-will and other employees alike “are protected from terminations which are ‘motivated by legally proscribed, invidious discriminatory attitudes.’” (Id. at p. 898.) She “did not sue Heschel for breach of an employment contract”; she sued for age discrimination, and her “status as a ‘tenured’ teacher had no bearing on her right to be free of age discrimination.” (Ibid.)

The proposed pretext instruction overstated the law. Rosenfeld sought an instruction that “[r]ejection of the defendant’s proffered reasons … permit[s] you to infer the ultimate fact of age discrimination.” (Rosenfeld, supra, 226 Cal.App.4th at p. 898.) The court held this misstated the controlling rule from Guz: “an inference of intentional discrimination cannot be drawn solely from evidence … that the company lied about its reasons,” because “[t]he pertinent statutes do not prohibit lying, they prohibit discrimination,” and “there must be evidence supporting a rational inference that intentional discrimination … was the true cause of the employer’s actions.” (Id. at pp. 898–899, quoting Guz, supra, 24 Cal.4th at pp. 360–361.) Because the instruction “did not fully comport with Guz, it was properly refused.” (Id. at p. 899.) And applying Soule v. General Motors Corp. (1994) 8 Cal.4th 548, the court held any omission harmless: pretext “was central to this case,” the jury “was well aware of the parties’ competing narratives,” and it “believed Heschel’s version of the events,” so “there is no reasonable probability the jury was misled or the verdict affected by the instructional omission.” (Id. at pp. 899–900.)

The new-trial points failed on waiver, discretion, and an unambiguous statute. The court disposed of Rosenfeld’s remaining arguments briskly. Exclusion of Winn’s comments about another teacher’s “antiquated” kindergarten program was within discretion, because “the alleged remarks … did not pertain to [that teacher’s] age but to the quality of her … program” and “were not directed at Rosenfeld.” (Rosenfeld, supra, 226 Cal.App.4th at p. 902.) Two claimed references to Rosenfeld’s wealth were “waived” for want of objection below. (Id. at pp. 902–903.) And the court held a trial subpoena to a third party served “eight days before trial” was properly not enforced, because the statute requires service “in sufficient time to allow the witness a reasonable time … to locate and produce the records,” defined as no earlier than “20 days after the issuance, or 15 days after the service.” (Id. at pp. 903–904, quoting Code Civ. Proc., §§ 1985.3, subd. (d), 2020.410, subd. (c).)

Significance

Rosenfeld’s lasting contribution is its extension of the FEHA avoidable-consequences doctrine outside the hostile-environment harassment context in which the Supreme Court announced it. State Dept. of Health Services framed the three-element defense in terms of “workplace sexual harassment” and an employer’s anti-harassment “internal complaint procedures.” (Rosenfeld, supra, 226 Cal.App.4th at pp. 900–901.) Rosenfeld treats the underlying principle as one of FEHA damages law generally: because the doctrine “applies to damage claims under the [FEHA]” and bars recovery of harm the plaintiff “could have avoided with reasonable effort,” an employer in an ordinary age-discrimination case may put before the jury the plaintiff’s failure to use an available internal grievance procedure. (Id. at pp. 890, 900.) The case is therefore a natural companion to CACI No. 2526 (the FEHA avoidable-consequences instruction) and to the harassment line that includes State Dept. of Health Services. Two limits keep the holding modest. First, the doctrine remains one of mitigation only — it “appli[es] only to the diminution of damages and not to the existence of a cause of action,” so the employee’s omission cannot defeat liability. (Id. at p. 900.) Second, the holding is reinforced — and arguably narrowed — by the harmlessness rationale: because the defense verdict turned on liability and the jury “did not reach the issue of damages,” the appellate endorsement of the mitigation evidence was not strictly necessary to the affirmance. (Id. at pp. 901–902.) The opinion’s disparate-impact discussion is independently useful: it is among the clearer Court of Appeal statements that the two theories “must be specifically alleged,” and that a plaintiff cannot convert a disparate-treatment pleading into a disparate-impact case by trial brief. (Id. at pp. 894–896.)

Key quotes

“Thus, the avoidable consequences doctrine enables an employer to show that reasonable use of its internal procedures would have prevented at least some of the harm the employee suffered.” (Rosenfeld, supra, 226 Cal.App.4th at p. 890.)

“Accordingly, the trial court properly allowed Heschel to present evidence that Rosenfeld failed to pursue the internal grievance procedure which could have prevented at least some of Rosenfeld’s damages.” (Id. at p. 901.)

“Disparate impact and disparate treatment are different theories of employment discrimination with different elements. … Her papers were insufficient to put Heschel on notice that she intended to pursue a disparate impact theory at trial.” (Id. at p. 889.)

Read the full opinion (Justia) →

Practice pointer

Open questions

The opinion leaves the doctrinal reach of its mitigation holding partly unmapped. Most importantly, because the defense verdict meant the jury “did not reach the issue of damages,” the court resolved the grievance-procedure question on alternative grounds — both that the evidence was properly admitted and that any error “was harmless.” (Rosenfeld, supra, 226 Cal.App.4th at pp. 901–902.) That dual rationale leaves room to argue, in a later case where damages are reached, that the admissibility holding is not strictly necessary to the judgment. The opinion also imports the three-element State Dept. of Health Services defense verbatim from the sexual-harassment context (id. at pp. 900–901) without analyzing how each element translates to a non-harassment age claim — for instance, what counts as the employer having “reasonable steps to prevent and correct” age discrimination, or how an internal grievance procedure maps onto the defense where the underlying claim is constructive discharge rather than ongoing harassment, a setting in which the employer’s own conduct allegedly forced the exit. The opinion answers the question before it — the evidence was admissible on mitigation — without resolving these adjacent applications. (Id. at pp. 900–901.)