Insulating Employers

VIEWPOINT: The 'Murillo' decision underscores the court's position that harassment by an employee does not hold the company liable for intentional infliction of emotional distress.

By Julian B. Bellenghi and Marc D. Mootchnik

Defense counsel in harassment cases should attack a claim for intentional infliction of emotional distress on the basis that the conduct falls outside of the course and scope of employment. In that way, unless the employer has somehow ratified the misconduct, the employer should prevail either on demurer or summary judgment. This tactic is an alternate to the traditional approach of demurring based on the Workers' Compensation Act where no violation of public policy is alleged or where the underlying conduct constitutes discrimination. Where the conduct alleged is harassment based on any of the characteristics protected by Fair Employment and Housing Act, the demurrer will likely be overturned.

Although in 1995, the California Supreme Court held that sexual harassment falls outside the course and scope of employment, most complaints for discrimination or harassment contain cause of action for intentional infliction of emotional distress. Plaintiffs assert that this is a viable tactic because claims for intentional infliction of emotional distress based on a violation of a public policy are not barred by the Workers' Compensation Act.

Ending the analysis at the workers' compensation preemption issue is a mistake. Under tort law, an employer is not liable for the acts of its employees absent ratification so intentional infliction of emotional distress is rarely applicable in the employment context.

• Respondeat - superior theory. On June 30, 1998, the 2nd District Court of Appeal held in Murillo v. Rite Stuff Foods, Inc., 65 Cal.App.4th 833 (1998) that an employer is not liable in tort for the harassment of its supervisor under the doctrine of respondeat superior because, as a matter of law, sexual harassment is not within the scope of employment, so the employer is liable only if it ratifies the tortuous conduct.

  Just two days later, in a case that considered only the workers' compensation issue and did not touch on respondeat superior theory, the 4th District Court of Appeal held in Kovatck v. California Casualty Management Co., 65 Cal.App.4th 1256 (1998) that a plaintiff could state a claim for intentional infliction of emotional distress against his or her employer based on the harassment of the supervisor.

• Workers' Compensation Act coverage. In 1987, the California Supreme Court held in Cole v. Fair Oaks Fire Protection Dist., 43 Cal.3d 148, (1987) that claims for intentional infliction of emotion distress against an employer are pre-empted by workers' compensation in the limited circumstances where the underlying misconduct consists of "actions which are a normal part of the employment relationship, such as demotions, promotions, criticism of work practices, and frictions in negotiations as to grievances."

  Although three years later, in Shoemaker v. Myers, 52 Cal.3d 1 (1990), the court found an exception to the workers' compensation bar where the claim for intentional infliction of emotional distress is based on conduct that constitutes a violation of a statute or fundamental public policy the public policy violation may not be sufficient to support claim for intentional infliction of emotional distress.

  This was amplified in Jankins v. GM Hughes Electronics 46, Cal.App.4th 55 (1996), where the court held that, because "personnel management activity" is insufficient to show outrageous conduct, the mere allegation of discrimination cannot give rise to a claim for intentional infliction of emotional distress.

  Harassment, however, is a different matter, because "By its very nature [harassment] is outrageous conduct, as it exceeds all bounds of decency usually tolerated by a decent society sexual harassment [can] constitute the outrageous behavior of a cause of action for intentional inflection of emotional distress. Fisher v. San Pedro Peninsula Hospital 214 Cal.App.3d 59 (1990).

  The Fisher court further stated that in order to hold the employer liable for the conduct of the plaintiff's supervisor, plaintiffs have "to prove that [the plaintiff] was a victim of sexual harassment, that [the supervisor] is an employee of [the defendant] and that [the supervisor] was acting within the scope of his employment."

  Following Shoemaker and Fisher, the courts have repeatedly held that claims for intentional infliction of emotional distress against one's employer may be premised upon harassment, already established as outside the course and scope of employment. See i.e. Accardi v. Superior Court, 17 Cal.App.4th 341 (1993) and Kevatch v. California Casualty Management Co. 65 Cal.App.4th 1256 (1998). In each case, the courts found that harassment is "outside the normal part of the employment environment" and thus is not barred by workers' compensation pre-emption allowing employment defense counsel to successfully set up a bar to recovery for intentional infliction of emotional distress.

  Most recently, in Murray v. City of Oceanside, 2000 Daily Journal D.A.R. 4045 (April 19,2000), the appellate court came to the same conclusion, finding that a plaintiff could state a claim for intentional infliction of emotional distress based on sexual orientation harassment.

• Employer liability. A line of cases has developed in recent years, however, which suggests that workers' compensation is not the most significant hurdle for a plaintiff to overcome in suing an employer for intentional infliction of emotional distress.

  In December 1995; the California Supreme Court specifically held that sexual harassment is outside the scope of employment. Farmers Ins. Group v. County of Santa Clara, 11 Cal.4th 992 (1995). In that case, a deputy sheriff sued the county for his costs in defending a sexual harassment lawsuit brought by other deputies based on misconduct, which occurred on work time, and in the workplace.

  The court held applying the doctrine of respondeat superior, that "an employer will not be held vicariously liable for an employee's malicious or tortuous conduct if the employee substantially deviates from the employment duties for personal purposes."

  Although the issue in Farmers was whether a perpetrator of harassment is entitled to indemnification, and the decision did not directly address whether the victim was barred from suing the employer, the court pointed out the employers are not liable in tort for the sexual misconduct of their employees, aside from the unique circumstance of police officers raping motorist.

  Soon after, in Lisa M. v. Henry Mayo Newhall Memorial Hospital, 12 Cal.4th 291 (1995), the California Supreme Court held that a hospital is not liable, under respondeat superior, for the sexual assault of a medical technician upon a patient, confirming that certain acts, outside of the course and scope of employment, cannot form the basis for employer liability.

  Subsequently, the Murillo court resolved the issue in the employment context, with some finality, holding that, as a matter of law, sexual harassment is not within the scope of employment, so a plaintiff may not hold an employer liable for sexual harassment under the theory of respondeat superior. The court held that the employer may only be liable when it ratifies an originally unauthorized tort.