In Retaliation Cases Brought under California’s FEHA, California Supreme Court Holds That an "Adverse Employment Action" Is an Action or Series of Actions -- Viewed in Their Totality -- That Materially Affect the Terms and Conditions of Employment.

August 12, 2005
Elysa Yanowitz was a regional sales manager who had worked for L’Oreal for 18 years. Yanowitz's performance reviews consistently ranked her performance as "Above Expectations." In 1997, Yanowitz was named L'Oreal's regional sales manager of the year, which earned her a Cartier watch and a note from the company's human resources manager praising her for her leadership, loyalty, motivation and ability to inspire team spirit.

Shortly after Yanowitz was named regional sales manager of the year, Yanowitz and her supervisor, Jack Wiswall, toured one of the department stores in Yanowitz’s region. After the tour, Wiswall told Yanowitz to fire a dark-skinned female sales associate because she was not "hot enough." Yanowitz did not fire the associate. When Wiswall returned to the store and saw that the associate was still there, Wiswall pointed to a young, sexy, blonde girl and told Yanowitz, "God damn it, get me one that looks like that." Yanowitz asked Wiswall for justification to fire the associate, to which Wiswall never responded. Because the associate was one of the store’s top sellers of men’s fragrances, Yanowitz refused to fire her.

Over the next several months, Yanowitz’s supervisor began chastising her, soliciting negative information about her from her subordinates, and issuing veiled threats of termination. As a result of the stress Yanowitz was under from the tense situation, she was placed on disability leave and never returned to L’Oreal.

Yanowitz filed an action against L’Oreal alleging, among other things, that she was retaliated against for refusing to fire the "unattractive" sales associate. L’Oreal filed a motion for summary judgment, which was granted by the trial court. Yanowitz appealed and the appellate court reversed. The California Supreme Court affirmed.

To establish a case of retaliation under the FEHA, an employee must demonstrate that: (1) the employee engaged in a "protected activity;" (2) the employer subjected the employee to an adverse employment action; and (3) a causal link exists between the protected activity and the employer’s action. In concluding that Yanowitz had presented sufficient facts to overcome summary judgment on her retaliation claim, the Court held that:

  1. An employee’s refusal to follow a supervisor’s order that the employee reasonably believes to be discriminatory constitutes a protected activity under the Fair Employment and Housing Act (FEHA); and,
  2. For purposes of a retaliation claim under the FEHA, an adverse employment action is defined under the same standard used to adjudicate discrimination claims -- namely, an action or series of actions that materially affect the terms and conditions of an employee’s employment.

Protected Activity
A retaliation claim may be brought by an employee who has complained of or opposed conduct that the employee reasonably believes to be discriminatory, even if a court later determines that the conduct about which the employee complained was not actually prohibited by the FEHA. Moreover, an employee need not explicitly state that he or she is opposing what the employee believes to be unlawful discrimination or formally file a charge in order to engage in a protected activity. On the other hand, an employee may not simply make a vague complaint about personal grievances and expect that his or her employer will know that he or she is opposing discriminatory conduct.

An employee is not required to use legal terms or buzzwords when opposing discrimination. [However], the court will find opposing activity if the employee’s comments, when read in their totality, oppose discrimination.

Here, Yanowitz’s actions, when viewed in their totality, should have put L’Oreal on notice that she was opposing conduct that she believed was discriminatory. Yanowitz believed that firing an unattractive female associate imposed a more stringent standard on female associates than male associates and constituted unlawful sexual discrimination. Yanowitz refused to fire the associate and continually asked Wiswall for adequate justification for the order. This conduct was sufficient to communicate to L’Oreal that Yanowitz believed Wiswall’s order was discriminatory and, therefore, constituted a protected activity under the FEHA.

Adverse Employment Action
For purposes of claims brought under the FEHA, an "adverse employment action" is a term used by courts to refer to the kind, nature, or degree of action taken against an employee that is sufficient to support a cause of action under the FEHA. Yanowitz urged the court to adopt the same standard for adverse employment action as was applied by the appellate court, the deterrence standard and is also utilized by the federal Ninth Circuit Court of Appeals. Under this standard, an adverse employment action is an action that is reasonably likely to deter employees from engaging in protected activities. The Court rejected the deterrence standard and held that an adverse employment action is one that materially affects the terms, conditions or privileges of employment. However, the Court held that the test was to be liberally applied:

This provision protects an employee against unlawful discrimination with respect not only to so-called "ultimate employment actions" such as termination or demotion, but also the entire spectrum of employment actions that are reasonably likely to adversely and materially affect an employee’s job performance or opportunity for advancement in his or her career.

For purposes of establishing an adverse employment action, "there is no requirement that an employer’s retaliatory acts constitute one swift blow, rather than a series of subtle, yet damaging injuries." Here, Yanowitz did not allege that she was subjected to a single adverse employment action such as termination or demotion. Rather, she alleged that she was subject to a series of actions -- including unwarranted criticism, unwarranted negative performance evaluations and solicitation of negative feedback from her subordinates -- which viewed together, amounted to an adverse employment action. The Court held that each of these actions individually need not constitute an adverse employment action. Instead, the series of separate retaliatory acts viewed collectively could constitute an adverse employment action, even if some or all of the individual acts may not be actionable or outside of the statute of limitations.

Practice Advisor:
Despite the fact that the court rejected the liberal "deterrence" standard for what constitutes an adverse employment action, it nevertheless applied a very loose and extremely broad standard for what can amount to an adverse employment action. This case means that for purposes of establishing actionable retaliation and/or discrimination claims under the FEHA, an adverse employment action may be something far less tangible than a disciplinary action or unsatisfactory performance evaluation.

Moreover, employers have to be aware that any opposition to an employment action -- regardless of whether the employee specifically files a grievance or complaint -- may be considered by courts as a protected activity for purposes of a retaliation claim under the FEHA. Employers must be more diligent than ever in documenting their legitimate, non-discriminatory business reasons for employment decisions.

If you have questions about this issue, feel free to contact either our Los Angeles or San Francisco office.

Yanowitz v. L’Oreal USA Inc., 2005 DJDAR 3797 (August 11, 2005)
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