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Partner could sue partnership for retaliation for opposing discrimination and harassment under FEHA

Fitzsimons v. California Emergency Physicians (2012) 205 Cal.App.4th 1423, 141 Cal.Rptr.3d 265

Background: Plaintiff, an emergency physician and a partner in Defendant’s general partnership, California Emergency Physicians Medical Group (CEP) brought action against the partnership for retaliation in violation of public policy, breach of contract, breach of the covenant of good faith and fair dealing, and breach of fiduciary duty. Plaintiff alleged that, partnership created a hostile working environment in retaliation for reports she made to her supervisors that “certain officers and agents of CEP” had sexually harassed female employees of CEP’s management and billing subsidiaries.

Court History: Prior to trial, the court ruled that if plaintiff was a bona fide partner in CEP, she did not have standing to assert a cause of action for retaliation under FEHA against CEP. Relying largely on the decision in Jones v. Lodge at Torrey Pines Partnership (Torrey Pines) (2008) 42 Cal.4th 1158, 72 Cal.Rptr.3d 624, court held that, section 12940, subdivision (h) does not apply to retaliation by a partnership against a partner, because partners are not in an employer-employee relationship. Pursuant to Defendant’s motion, the jury trial was bifurcated so that the jury would first decide whether plaintiff was an employee or partner. The jury found that plaintiff was a partner and the court entered judgment in favor of CEP. Plaintiff appealed.

Pertinent Issues addressed: The Court of Appeal reversed and remanded the trial court’s judgment and held that partners may assert FEHA claims for retaliation for opposing harassment of employees. The Court explained,

Under section 12940, it is an “unlawful employment practice” “[f]or any employer, labor organization, employment agency, or person to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part”.

Section 12925, subdivision (d) reads: “ ‘Person’ includes one or more individuals, partnerships, associations, corporations, limited liability companies, legal representatives, trustees, trustees in bankruptcy, and receivers or other fiduciaries.”

The Court stated as follows:

“While CEP is not in an employment relationship with plaintiff, CEP is the employer of those persons who are the victims of the alleged harassment that plaintiff reported, for which she allegedly became the subject of CEP’s retaliation. The harassment of CEP employees, if proven, is an unlawful practice for which CEP is liable under section 12940, subdivision (j). And subdivision (h) makes it an unlawful practice for CEP to retaliate against “any person” for opposing that harassment. Interpreting “person” in the context of those against whom the employer may not retaliate to include a partner gives the word its normal meaning and is consistent with the definition in section 12925, subdivision (d). This interpretation does not contravene any of the reasons explained in Torrey Pines for excluding supervisors from the scope of liability. Plaintiff’s claim does not seek to impose liability on any “nonemployer individual” but only upon the employer—the partnership. Upholding plaintiff’s claim here does not imply that a partner would have a valid claim for harassment or discrimination against himself or herself by the partnership. As CEP urges, the alleged sexual harassment of a partner by a fellow partner is not a “practice forbidden under this part,” but harassment of the partnership’s employees is an unlawful employment practice forbidden under “this part.” Plaintiff, although a partner, is a person whom section 12940, subdivision (h) protects from retaliation for opposing the partnership-employer’s harassment against those employees.”

Pointers:

  • It should be noted that the case does not authorize a partner to sue partnership for employment discrimination or harassment, but for retaliation for reporting discrimination or harassment of the partnership’s employees.