Reprisals for Refusing Management Order Believed to Be Discriminatory May Constitute Retaliation

An employee who refuses to follow a supervisor's order because the employee "reasonably believes" the order to be discriminatory – even if it is not – may claim retaliation for any later adverse employment action that "materially" affects conditions of employment, says California high court. This is so even if the objecting employee does not explicitly tell her supervisor she believes the order to be discriminatory.

That is the way the California Supreme Court sees it, according to the 4-2 majority opinion issued on August 11, 2005, in the well known "she's not hot enough" case, Yanowitz v. L'Oreal USA, Inc. In a case the dissenters called one where "a person can be a whistleblower without blowing the whistle," the court ruled on a number of important issues under California's Fair Employment and Housing Act:

• an employee's refusal to follow a supervisor's order that she reasonably believes to be discriminatory constitutes protected activity under the FEHA;
• an employer may not retaliate against an employee on the basis of such conduct when the employer, in light of all the circumstances, knows that the employee believes the order to be discriminatory, even when the employee does not explicitly state to her supervisor or employer that she believes the order to be discriminatory;
• the proper standard for defining an adverse employment action is the "materiality" test, which requires an employer's adverse action to materially affect the terms and conditions of employment. The court of appeal had applied the arguably broader "deterrence" test, a sanction or adverse measure to which an employee is subjected in retaliation for protected conduct is actionable so long as the employer's action is "reasonably likely to deter employees from engaging in protected activity." (California employers should note the Ninth Circuit applies the deterrence standard in Title VII cases.). Under the "materiality" test, "[m]inor or relatively trivial adverse actions or conduct by employers or fellow employees that, from an objective perspective, are reasonably likely to do no more than anger or upset an employee cannot properly be viewed as materially affecting the terms, conditions, or privileges of employment and are not actionable, but adverse treatment that is reasonably likely to impair a reasonable employee's job performance or prospects for advancement or promotion falls within the reach of the antidiscrimination provisions" of California law; and
• in determining whether an employee has been subjected to treatment that materially affects the terms and conditions of employment, it is appropriate to consider the totality of the circumstances and to apply the "continuing violation" doctrine the state Supreme Court adopted in Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798. Here the court ruled that "[c]ontrary to L'Oreal's assertion that it is improper to consider collectively the alleged retaliatory acts, there is no requirement that an employer's retaliatory acts constitute one swift blow, rather than a series of subtle, yet damaging, injuries."

Boiled to its essence, the court found a manager's order to an employee to fire a female co-worker for failing to meet the manager's personal standards of sexual attractiveness could constitute sex discrimination where no similar standard applied to men. The court further ruled a series of criticisms and changes in job assignments could constitute retaliation against the employee who refused to carry out the order.

How It Happened

The employee was hired in 1981 by the employer's predecessor as a sales representative. She eventually was promoted to regional sales manager, a position in which she was responsible for stores in eleven states. In her first ten years of employment, the employee consistently was rated "above expectation" and just short of "outstanding," the highest rating possible, and in 1997, she was named Regional Sales Manager of the Year. Following a merger and downsizing in 1997, the employee was even given more responsibility.

Shortly after the merger, the general manager instructed the employee to discharge a sales associate because she was not "good looking enough" and to fill the position with "somebody hot," or words to that effect. Upon learning the employee had not discharged the sales associate, who was a top performer, the general manager repeated that she be fired immediately, allegedly while pointing to another woman and saying "get me one that looks like that." Although the employee demanded that the general manager provide adequate justification for the termination, it was not provided and the sales associate was not terminated, despite repeated inquiries by the general manager about it.

In 1998, the employee alleged that her direct supervisor and the general manager began a campaign of alleged retaliation, including:

1. soliciting negative information about the employee from her subordinates;
2. calling a special meeting to criticize her "dictatorial" management style;
3. commenting to the employee at the special meeting that "it would be a shame to end an eighteen-year career this way;"
4. auditing her expense reports;
5. screaming at her during a meeting with her peers that the general manager was "sick and tired of all the f___ ups," and that she "could not get it right;" and
6. sending memoranda to the human resources department criticizing the employee for being "too assertive."

Later the same year, the employee received a critical memorandum from her supervisor demanding that she respond within one week. At a later meeting with the supervisor and human resources about the memorandum, the employee's response was not discussed. Two days later, she took leave that eventually became a disability leave, and the employer subsequently replaced her. In 1999, the employee filed a lawsuit claiming, among others, retaliation under the California Fair Employment and Housing Act.

On the employer's request for summary judgment, the trial court ruled the employee had failed to satisfy the requirements for a claim of retaliation under the FEHA, which included:

1. she had engaged in a protected activity;
2. the employer had subjected her to an adverse employment action; and
3. there was a causal connection between the protected activity and the adverse action. The trial court's ruling was based on its conclusion that physical appearance is not a protected category under the FEHA, and that the employee had not expressly complained that she believed the termination order to be illegal discrimination (she had merely requested "adequate justification" for firing the sales associate).

Taking a different approach, the court of appeal said the issue is not whether physical appearance is a "protected category," but whether it is sex discrimination: may a male executive insist a female subordinate be discharged because she is not sexually appealing to him, when no similar orders are issued with respect to male employees? The court's unequivocal answer was "no." The court further noted that an employer may not hire both men and women and then subject the women to more stringent appearance standards (i.e., greater weight restrictions). Finally, the court of appeal concluded the evidence was sufficient to establish an inference that the general manager would not have ordered any male employee fired based on nothing more than physical appearance. This was sufficient to establish an inference of illegal sex discrimination that could be the basis of a retaliation claim.

California Supreme Court Affirms Basis for Retaliation Claim with Comment on Appearance, Adverse Action and Quiet Whistleblowing

On the question whether "physical appearance" may be a protected category under California's FEHA, the Supreme Court acknowledged the issue was not before it but opined on it anyway. The Court said,

"Because a trier of fact could find from [the] evidence that Yanowitz believed Wiswall's order was discriminatory as reflecting an instance of disparate treatment on the basis of sex, we have no occasion in this case to determine whether a gender-neutral requirement that a cosmetic sales associate be physically or sexually attractive would itself be violative of the FEHA or could reasonably be viewed by an employee as unlawfully discriminatory. Courts in other jurisdictions have uniformly held that an appearance standard that imposes more stringent appearance requirements on employees of one sex than on employees of the other sex constitutes unlawful sexual discrimination unless such differential treatment can be justified as a bona fide occupational qualification. (Citations.) We believe it is clear that such unjustified disparate treatment also would constitute unlawful sex discrimination under the FEHA."

While the court of appeal applied the "deterrence" standard in determining whether the acts Yanowitz complained of were retaliatory, the Supreme Court adopted the "materiality" test for determining what conduct may constitute an "adverse employment action."

The Supreme Court's decision requires employers to engage in a certain amount of mind-reading in trying to discern why an objecting employee declines to comply with a directive. Quoting another opinion, the court said, "we believe it is clear that 'an employee is not required to use legal terms or buzzwords when opposing discrimination. The court will find opposing activity if the employee's comments, when read in their totality, oppose discrimination.' It is not difficult to envision circumstances in which a subordinate employee may wish to avoid directly confronting a supervisor with a charge of discrimination and the employee engages in subtler or more indirect means in order to avoid furthering or engaging in discriminatory conduct."

Lessons Learned

Boiled down to its logical conclusion, the decision by the California Supreme Court affirmed the court of appeal's reversal of the trial court's summary judgment order in favor of the company -- because of disputed facts. The high court concluded "that the evidence presented by Yanowitz would permit — although it certainly would not compel — a reasonable trier of fact to find that, in view of the nature of Wiswall's order, Yanowitz's refusal to implement the order, coupled with her multiple requests for 'adequate justification,' sufficiently communicated to Wiswall that she believed that his order was discriminatory. * * * We hold only that, at the summary adjudication stage, Yanowitz's evidence was sufficient to satisfy the adverse action element of her prima facie case. It remains for the trier of fact to decide whether Yanowitz's allegations are true."

In the wake of the California Supreme Court's Yanowitz decision, employers would be wise to keep the following in mind:

• Employment decisions should not be based on physical characteristics (barring a bona fide reason for doing so, such as casting an actor for a particular role or endurance requirements for firefighter/law enforcement jobs).
• Even where a bona fide reason exists for making a physical characteristic a condition of the job, the condition (with few exceptions) must be equally applied to men and women.
• When investigating reports of retaliation, employers should consider all acts that might be construed as retaliatory, not just "ultimate employment decisions" such as hiring, firing, transfers or promotions.
• Employers must immediately address all claims of retaliatory conduct -- even when convinced the complaining employee is wrong about his or her belief that a particular request is improper. Remember, an employee need only establish he or she had a reasonable, good faith belief he or she was being asked to engage in an improper activity to establish retaliation.
• Employers should give sufficient consideration to an employee's rebuttal to criticism by a supervisor or others to avoid further evidence of retaliation or pretext.
• Employers should consider enacting policies that require employees to report to Human Resources (or some other monitoring authority) any instructions they consider improper.
• Employers with further questions regarding the Yanowitz v. L'Oreal decision or the general topic of retaliation in the workplace should consult with experienced employment counsel.