Spitzer v. Good Guys, Inc.

Facts

The statutory framework. The California Fair Employment and Housing Act (FEHA) makes it an unlawful employment practice for an employer “to fail to make reasonable accommodation for the known physical or mental disability of an applicant or employee” (Gov. Code, § 12940, subd. (k)), and for an employer, “because of the . . . physical disability, mental disability, medical condition . . . of any person, . . . to discharge the person from employment . . . or discriminate against the person in compensation or in terms, conditions, or privileges of employment.” (Gov. Code, § 12940, subd. (a); Spitzer, supra, 80 Cal.App.4th at p. 1383.) The court drew on the implementing regulations and federal authority to define the operative duty: “Employers must make reasonable accommodations to the disability of an individual unless the employer can demonstrate that doing so would impose an ‘undue hardship.’” (Id. at p. 1383.) Reasonable accommodation “may, but does not necessarily, include, nor is it limited to,” job restructuring and “reassignment to a vacant position, part-time or modified work schedules,” and similar measures. (Ibid.) Because the FEHA regulations defining reasonable accommodation are “virtually identical” to the parallel language of the Americans with Disabilities Act, the court found “[r]esort to federal case law is particularly appropriate in connection with the duty to make reasonable accommodation.” (Id. at p. 1384.)

A rising store manager develops a degenerative disability. Susan Spitzer began working for The Good Guys in January 1991 and “was rapidly promoted to more responsible positions,” becoming store manager of the Sunnyvale store in October 1993 and, a year later, of the Stonestown mall store in San Francisco, “one of the company’s largest stores.” (Spitzer, supra, 80 Cal.App.4th at p. 1379.) In 1992 she was diagnosed with “discogenic spondylosis, a degenerative disc disease” whose degeneration of a lumbar disc “caused appellant to suffer serious chronic back pain,” treated for years with physical therapy and medication. (Ibid.) The employer conceded she had a physical disability within the meaning of the FEHA. (Id. at p. 1383.)

A physically demanding job. The employer’s “Floor Management Guidelines” required store managers to “‘Keep moving, create urgency, and set the pace!’” and instructed, “‘Don’t leave the floor! Ever! . . . [and] Don’t become stationary in your own department.’” (Spitzer, supra, 80 Cal.App.4th at pp. 1379–1380.) Spitzer’s supervisor, Steve Quanstrom, testified that “‘the job of being a store manager is physically demanding’” and required managers “‘to be on your feet a lot of the day,’” and a company “manager time study” showed a large-store manager “would be required to work an average of 10.1 hours daily.” (Id. at p. 1380.)

Repeated requests for reassignment to a sedentary position. Beginning in 1995, Spitzer “repeatedly told management personnel she ‘needed accommodation due to my back disability.’” (Spitzer, supra, 80 Cal.App.4th at p. 1380.) She had three formal discussions with Gera Vaz, the vice-president of human relations, about reassignment, first telling Vaz on June 30, 1995, that she “needed a job ‘at corporate’” because “‘my back was deteriorating, and it would continue to get worse’” if she remained a store manager, and that she “‘would wind up having to have back surgery if I didn’t get off my feet on a more permanent basis.’” (Ibid.) Vaz responded that she “‘should just hang in there and keep trying and that something might come up.’” (Ibid.) Spitzer renewed the request in March 1996 and again by telephone months later, and conveyed her need for reassignment to her regional manager and others, including telling the Stonestown associate relations manager she “‘needed to get a position in corporate where I could be off my feet.’” (Ibid.)

Unsuccessful efforts to transfer. Spitzer sought several sedentary positions: a corporate employment specialist post (“put on hold”), an “MIS Systems Analyst” job, and a “Store Operations/Special Projects” job (rejected for both). (Spitzer, supra, 80 Cal.App.4th at p. 1380.) As directed by Vaz, she then notified individual department managers of her interest, but “[a]ll these efforts were unavailing.” (Ibid.) From May 1996 until late 1998 she “‘was not informed of a single such position that actually existed and was open,’” though she later “learned that such positions, for which she was qualified, did in fact exist.” (Id. at pp. 1380–1381.)

The on-the-job accommodations, and their failure. When Spitzer returned from a 1996 medical leave, Quanstrom told her to do what was necessary to follow her physician’s directive to vary her activities and “authorized her to sit in a chair on the floor of the store,” but she “concluded this was incompatible with her job responsibilities, which required ‘moving around and getting involved in what was going on.’” (Spitzer, supra, 80 Cal.App.4th at p. 1381.) Several months later, Quanstrom “reduced appellant’s job performance classification from ‘highly effective’ to ‘effective,’” cut her customer-service rating two levels, and commented that she “‘had personal issues that affected her performance’” and questioned “‘whether or not this is the right job for [appellant], given her personal situation.’” (Ibid.) In November 1997—after Spitzer had retained counsel who raised the prospect of litigation—the employer contacted her about a corporate store-manager-trainer position; she “claims that position was actually available eight months earlier.” (Id. at p. 1382.) She left the company in March 1998. (Ibid.)

Procedural history

Spitzer sued The Good Guys for disability discrimination and retaliation under the FEHA. (Spitzer, supra, 80 Cal.App.4th at p. 1378.) The trial court (Hon. David A. Garcia) granted summary judgment for the employer, on findings that it “‘reasonably accommodated’ appellant’s disability and that no triable issue of material fact existed with respect to that issue or the elements of malice, oppression or fraud,” essential to the punitive-damages claim, and that the retaliation claim was time-barred for failure to exhaust administrative remedies. (Ibid.) The Court of Appeal, First Appellate District, Division Two, reversed in part and affirmed in part in an opinion by Presiding Justice Kline, with Justices Haerle and Ruvolo concurring; a petition for rehearing was denied May 25, 2000. (Id. at pp. 1378, 1390.) The court “find[s] conflicts in the evidence as to whether respondent provided a reasonable accommodation” and reversed “insofar as it relates to the cause of action alleging discrimination on that basis,” while agreeing the retaliation claim was time-barred and that the punitive-damages claim “must be disallowed.” (Id. at p. 1378.)

A note on the opinion’s citability. This opinion is certified for publication only in part. By its own terms it “is certified for publication with the exception of parts IV. and V.” Parts IV (retaliation) and V (punitive damages) are unpublished and therefore not citable. (See Cal. Rules of Court, rule 8.1115.) The analysis below rests solely on the published portion—the reasonable-accommodation and duty-to-reassign reasoning in parts I through III—and on the published disposition. The bottom-line outcomes as to retaliation and punitive damages (summary relief affirmed for the employer) appear in the published Disposition and are reported as such, but the reasoning supporting those outcomes is unpublished and is neither developed nor quoted here.

Issue

The court framed the published question narrowly: “whether the trial court properly determined on motion for summary judgment that appellant failed to provide respondent notice that reassignment was necessary to reasonably accommodate her limitations.” (Spitzer, supra, 80 Cal.App.4th at p. 1385.) Embedded within that question were two sub-issues that controlled the accommodation cause of action: whether a triable issue existed as to the employer’s knowledge that its on-the-job restructuring had failed to accommodate the employee, and whether the employer discharged its affirmative duty to reassign her to a vacant position—or instead did “no more than advise her to apply for such positions.” (Id. at p. 1389.)

Holding

Reasoning

Reasonable accommodation is an affirmative, employer-side obligation, informed by federal law. The court began by anchoring the duty in section 12940, subdivisions (k) and (a), and in the implementing regulation requiring employers to “‘make reasonable accommodations . . . unless the employer can demonstrate that doing so would impose an “undue hardship,”’” with the regulation expressly listing “‘reassignment to a vacant position’” among the available measures. (Spitzer, supra, 80 Cal.App.4th at p. 1383.) Because the FEHA regulations are “virtually identical” to the ADA’s, the court treated federal precedent as persuasive on the contours of the accommodation duty. (Id. at p. 1384.)

The employee triggers the process, but a request suffices to shift the burden. The court accepted the employer’s premise that “‘the responsibility to initiate the interactive process of fashioning an appropriate accommodation lies primarily with the employee,’” and that “‘[i]f the employee fails to request an accommodation, the employer cannot be held liable for failing to provide one.’” (Spitzer, supra, 80 Cal.App.4th at p. 1384.) But it stressed that once the employee gives notice, that “‘notice then triggers the employer’s burden to take “positive steps” to accommodate the employee’s limitations,’” with reasonable accommodation envisioning “‘an exchange between employer and employee where each seeks and shares information to achieve the best match between the employee’s capabilities and available positions.’” (Id. at pp. 1384–1385.) On this record, Spitzer’s repeated, specific requests for reassignment to a sedentary corporate position more than satisfied her burden to put the employer on notice.

The summary-judgment posture demanded that inferences run in the employee’s favor. Reviewing de novo and not bound by the trial court’s rationales, the court “accept[ed] as true the facts alleged in the evidence of the party opposing summary judgment and the reasonable inferences that can be drawn from them,” adding the discrimination-specific caution that, “‘[b]ecause discrimination cases often depend on inferences rather than on direct evidence, summary judgment should not be granted unless the evidence could not support any reasonable inference for the nonmovant.’” (Spitzer, supra, 80 Cal.App.4th at pp. 1385–1386.) That standard framed every factual conclusion that followed.

The two grounds for summary judgment were internally inconsistent. The trial court had rested on two rationales: that the restructuring of Spitzer’s store-manager job reasonably accommodated her, and—apparently in the alternative—that once she requested reassignment, the employer satisfied its duty by inviting her to apply for a trainer position and telling her to check the job hotline. The court observed these “determinations are somewhat inconsistent, because respondent would have no duty to accommodate by way of reassignment to a different position if the restructuring of her current job provided a reasonable accommodation.” (Spitzer, supra, 80 Cal.App.4th at p. 1386.) Either way, “neither determination is justified by the record.” (Ibid.)

A triable issue on whether the employer knew the restructuring had failed. The record was “replete with evidence pertaining to the physical demands placed upon respondent’s store managers as well as the manner in which appellant’s disability severely restricted her ability to satisfy those demands, even after the restructuring of her job.” (Spitzer, supra, 80 Cal.App.4th at pp. 1386–1387.) Crucially, “[t]hough it is contested, there is also evidence appellant’s supervisor, Steve Quanstrom, was aware that the restructuring of appellant’s position did not succeed in enabling her to perform her job properly.” (Id. at p. 1387.) Spitzer testified she could not, “as a practical matter,” take the breaks she was allowed, and that she “never actually used a chair on the floor,” having concluded with Quanstrom that it “‘wasn’t a practical solution.’” (Ibid.) Quanstrom’s downgrading of her performance—tied to his view that she could not “‘be on [her] feet a lot’”—further evidenced that the employer knew restructuring had not worked. (Id. at pp. 1387–1388.) The court rejected the employer’s “heavy reliance” on Spitzer’s April 1996 letter expressing hope that “‘with accommodations, I believe that I will be able to perform my job,’” because that letter predated her return and could not show whether restructuring would in fact succeed. (Id. at p. 1388.)

The core move: reassignment is an affirmative duty, not equal treatment of an applicant. Engaging the employer’s argument that it had done enough by inviting Spitzer to apply for openings, the court held the trial court’s reasoning “reflects a misunderstanding of the affirmative nature of the reasonable accommodation requirement.” (Spitzer, supra, 80 Cal.App.4th at p. 1388.) Drawing on federal authority, the court explained that “‘[n]umerous courts have assumed that the reassignment obligation means something more than treating a disabled employee like any other job applicant.’” (Id. at p. 1389.) The duty does “‘not require creating a new job, moving another employee, promoting the disabled employee, or violating another employee’s rights under a collective bargaining agreement,’” but it “nevertheless does entail affirmative action,” and “‘an employer has a duty to reassign a disabled employee if an already funded, vacant position at the same level exists.’” (Ibid.)

The employer’s two escape hatches—and why neither was established. The court announced the controlling limiting principle: “Under the FEHA (and the ADA) an employer is relieved of the duty to reassign a disabled employee whose limitations cannot be reasonably accommodated in his or her current job only if reassignment would impose an ‘undue hardship’ on its operations or if there is no vacant position for which the employee is qualified.” (Spitzer, supra, 80 Cal.App.4th at p. 1389.) Neither defense was made out. The employer “has never claimed it would be an ‘undue hardship’ to reassign appellant,” yet “appears to have done no more than advise her to apply for such positions.” (Ibid.) And on vacancy, the deposition testimony of Vaz and two associate relations managers “suggest that positions as associate relations manager or corporate trainer, for which appellant was apparently qualified, may have been available in 1996 and 1997 but she was never told.” (Id. at p. 1390.) The employer’s evidence therefore “does not establish that vacant positions for which appellant was qualified did not exist” during the relevant period. (Ibid.) Because both knowledge and vacancy were genuinely disputed, “the grant of summary judgment on appellant’s first cause of action was error.” (Ibid.)

Telling the employee to check the hotline is not, as a matter of law, an accommodation. The court took the additional step of holding one of the trial court’s factual premises legally insufficient: “the court’s conclusion that requesting appellant ‘to continually check the job hotline’ constitutes a ‘reasonable accommodation’ is untenable as a matter of law.” (Spitzer, supra, 80 Cal.App.4th at p. 1386.) Passive referral to a self-service listing does not satisfy an affirmative duty to reassign.

Significance

Spitzer is an early and influential California statement that the FEHA’s reassignment duty is affirmative and employer-side, not a mere promise of nondiscriminatory treatment in an open-application process. Decided shortly after Prilliman v. United Air Lines, Inc. (1997) 53 Cal.App.4th 935, on which it repeatedly relies, Spitzer sharpened the doctrine by holding that an employer cannot discharge its duty by telling a disabled employee to compete for postings like any other applicant or to “check the job hotline.” (Spitzer, supra, 80 Cal.App.4th at pp. 1386, 1389.) Its formulation of the two—and only two—defenses to the reassignment duty, undue hardship or the absence of a vacant qualified position, has become a workhorse citation in FEHA accommodation litigation and maps directly onto the duty-to-reassign theory captured in CACI No. 2542.

The decision also illustrates the interaction between on-the-job restructuring and reassignment. By flagging the “inconsisten[cy]” between holding restructuring adequate and treating reassignment efforts as the relevant accommodation, the court underscored that where restructuring fails, the duty to consider reassignment is live—and that the employer’s knowledge of that failure is itself a fact question. (Spitzer, supra, 80 Cal.App.4th at p. 1386.) The holding’s reach is bounded by its summary-judgment posture: the court decided only that triable issues existed, expressly leaving the merits—including the ultimate questions of knowledge and vacancy—for trial. (Id. at p. 1390.) And because parts IV and V are unpublished, Spitzer supplies no citable authority on FEHA retaliation exhaustion or the punitive-damages malice standard.

Key quotes

“The responsibility to reassign a disabled employee who cannot be otherwise accommodated does ‘not require creating a new job, moving another employee, promoting the disabled employee, or violating another employee’s rights under a collective bargaining agreement’ . . . but it nevertheless does entail affirmative action.” (Spitzer, supra, 80 Cal.App.4th at p. 1389.)

“Under the FEHA (and the ADA) an employer is relieved of the duty to reassign a disabled employee whose limitations cannot be reasonably accommodated in his or her current job only if reassignment would impose an ‘undue hardship’ on its operations or if there is no vacant position for which the employee is qualified.” (Id. at p. 1389.)

“The extent of respondent’s knowledge of the failure of job restructuring to reasonably accommodate appellant, and the need to reassign her to another position, is unclear. A triable issue of fact is therefore presented.” (Id. at p. 1388.)

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Practice pointer

Open questions

The merits of knowledge and vacancy. The court resolved only that summary judgment was improper; it expressly left for the factfinder “whether respondent knew it had not reasonably accommodated appellant’s limitations by restructuring her job and, if so, whether suitable positions to which she could have been reassigned were available.” (Spitzer, supra, 80 Cal.App.4th at pp. 1389–1390.)

The comparative-qualifications question. On the existence of suitable vacancies, the court noted the record “does not adequately establish whether all of those who received these positions were as qualified as or better qualified than appellant”—leaving open how the relative-qualifications inquiry bears on the reassignment duty. (Spitzer, supra, 80 Cal.App.4th at p. 1390.)

The Hayward position. The court declined to decide whether a vacancy existed at the Hayward Call Center when Spitzer inquired, reasoning it was not “relevant” because, on medical advice, “appellant felt such a position would not accommodate her disability due to the necessity of a long commute.” (Spitzer, supra, 80 Cal.App.4th at p. 1389, fn. 4.)