California Supreme Court Eliminates Damages in FEHA Discrimination Cases Where Employer Proves Mixed Motive Defense

Earlier this month, the California Supreme Court issued a ruling clarifying details of the “mixed-motive” defense applicable to discrimination claims under the California Fair Employment and Housing Act (“FEHA”). Harris v. City of Santa Monica, Case No. S181004 (Cal. Feb. 7, 2013). The Harris opinion is undoubtedly positive news for employers and provides much-needed guidance to trial courts in California handling mixed-motive cases (i.e., cases where legitimate and illegitimate factors motivated the decision).

Harris, which we discussed last month, involved a city bus driver who was terminated for not meeting performance standards shortly after she told her supervisor she was pregnant. At trial on her pregnancy discrimination claim, the trial court instructed the jury that the City could be liable for discrimination so long as the pregnancy was a “motivating factor” in its decision. The City, however, had requested a “mixed-motive” instruction that even if the City was “actually motivated by both discriminatory and non-discriminatory reasons, the employer is not liable if it can establish by a preponderance of the evidence that its legitimate reason, standing alone, would have induced it to make the same decision.” The jury returned a verdict for Harris. The Court of Appeal reversed the verdict, holding the City was entitled to its requested “mixed-motive” instruction.

The California Supreme Court, in a unanimous opinion by Justice Goodwin Liu, affirmed the Court of Appeal’s opinion in part, holding that neither of the jury instructions was completely accurate. It looked to FEHA’s discrimination provision (Gov. Code § 12940), which prohibits adverse employment actions “because of” the person’s sex, disability, sexual orientation, or other protected characteristic to determine what causal link is required to prevail in mixed-motive cases. The Court made several key rulings favorable to employers:

• Raising the Bar for Proving Discrimination. First, the Court held that, in mixed-motive cases, a plaintiff must prove that discrimination was a “substantial factor motivating” the adverse employment action. The Court explicitly ruled that California’s standard jury instruction for discrimination claims (CACI No. 2500), which only requires a jury to determine whether discrimination was a “motivating factor/reason,” was erroneous.

• Permitting a “Same-Decision” Defense. Second, if a jury finds that an employer’s action was “substantially motivated” by discrimination, the burden shifts to the employer to prove it would have made the same decision even without taking the unlawful factor into consideration.

• Limiting Damages. Third, if the employer successfully makes a “same-decision” showing, then the jury is limited in the types of damages it may award the plaintiff.  Specifically, the plaintiff cannot recover damages, back pay, or reinstatement because these remedies would provide an undeserved windfall. But, to uphold the prophylactic purpose of FEHA, plaintiffs still may be entitled to declaratory or injunctive relief and attorney’s fees.

In addition to placing a higher burden on plaintiffs and limiting their damages, the Harris opinion also brings the California approach to mixed-motive cases more in line with the standard for such cases under federal law. Under Title VII, a mixed-motive defense likewise limits the damages available to a plaintiff but is not a complete defense to liability. However, even though Harris’s elimination of damages and back pay suggests a win for employers, it is important to be mindful of the availability of injunctive relief and attorney’s fees, which may prove substantial.