In Raines v. U.S. Healthworks Medical Group, the California Supreme Court clarified the definition of the term “employer” as used in the Fair Employment and Housing Act (the “FEHA”).
Plaintiffs Kristina Raines and Darrick Figg each received an offer of employment from Front Porch Communities and Services (“Front Porch”) and the San Ramon Valley Fire Protection District (“San Ramon Fire”), respectively. However, the employment offers were subject to successful completion of preemployment medical screenings that were to be conducted by defendant U.S. Healthworks Medical Group (“USHW”), who was acting as an agent of the prospective employers.
The plaintiffs claim that USHW required the job applicants to complete a health history questionnaire that included a variety of questions regarding the health of the prospective employees that have no relation to the abilities of the prospective employees to complete their jobs. In addition to questions regarding the prospective employees’ history of certain illnesses and conditions (e.g., cancer, sexually transmitted infections, menstrual issues, hair loss, etc.), prospective employees were asked whether they are pregnant and to disclose prior job-related injuries and illnesses.
Plaintiff Raines alleged that her offer from Front Porch was revoked when she refused to answer the question regarding the date of her last menstrual period. Plaintiff Figg alleges that he answered all of the questions and was hired.
The operative complaint in this matter alleges claims under California employment laws, including the FEHA, the Unruh Civil Rights Act, unfair competition law, and the common law right of privacy. The lawsuit was filed in state court, but removed to federal court and ultimately appealed to the United States Court of Appeals for the Ninth Circuit.
Following hearing oral argument, the Ninth Circuit asked the California Supreme Court to answer the following question:
“Does California’s Fair Employment and Housing Act, which defines ‘employer’ to include ‘any person acting as an agent of an employer,’ Cal. Gov’t Code § 12926(d), permit a business entity acting as an agent of an employer to be held directly liable for employment discrimination?”
The California Supreme Court concluded that yes, under California employment law, Section 12926(d) permits a business entity agent of an employer to be held directly liable for violation of the FEHA when it carries out FEHA-regulated activities on behalf of an employer.
Pursuant to Section 12940(e) of the FEHA, it is an unlawful employment practice for “any employer” “to make any medical or psychological inquiry of an applicant”, subject to certain exceptions. However, an employer or employment agency may require such an examination or inquiry of a potential employee after an employment offer has been made but prior to the commencement of employment duties, only if (i) the examination or inquiry is job related and consistent with business necessity and (ii) all entering employees in the same job classification are subject to the same examination or inquiry.
In addition, Section 12926(d) of the FEHA provides that, for purposes of the FEHA, the term “employer” “includes any person regularly employing five or more persons, or any person acting as an agent of an employer, directly or indirectly . . . .”
The California Supreme Court looked to three federal anti-discrimination laws that have definitions of “employer” that are similar to that in Section 12926(d). Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act of 1990 define “employer” as “a person engaged in an industry affecting commerce who has fifteen or more employees . . . , and any agent of such a person.” The Age Discrimination in Employment Act of 1967 contains a similar definition of “employer”, but changes the employee threshold amount. Each of these federal laws defines employer to include the employer’s agents.
Citing several federal court decisions interpreting the statutes referenced above, the California Supreme Court concluded that a business-entity agent of an employer can fall within the FEHA’s definition of “employer” and such agent can be found to be directly liable for FEHA violations under certain circumstances only when it carries out activities that are regulated under the FEHA on behalf of an employer.
Implications for California Employees
The decision in Raines v. U.S. Healthworks Medical Group expands the scope of potential defendants that may be identified in a FEHA lawsuit to include certain businesses that are acting as agents of an employer. As such, if an employee believes that a business entity agent of a potential employer committed a violation of Section 12940(e) of the FEHA, then such business agent can potentially be found liable to the employee.