California Court Overturns Employee’s $1.2M Jury Verdict


By Joanne Deschenaux May 16, 2018

A jury's award of almost $1.2 million in damages for intentional infliction of emotional distress could not stand, since a former employee failed to show that her employer engaged in conduct that was not part of a normal employment relationship, the California Court of Appeal ruled.

Workers' compensation is a no-fault system that provides the exclusive remedy under state law against an employer for an injury arising during employment. This means that whether the employee or the employer is responsible for the incident, it will be covered under workers' compensation insurance. Though there are exceptions if the employer's conduct is egregious or exceeds the risks inherent in the employment relationship, the plaintiff in this case did not prevail on her underlying discrimination claims.

[SHRM members-only toolkit: Managing Involuntary Employment Termination in California]

In May 2010, the defendant hired the plaintiff as an in-house attorney. She was pregnant at the time and had two young children. The plaintiff claimed that, while she was pregnant, her supervisor expressed his concern that the pregnancy would interfere with her ability to do her job.

The plaintiff further claimed that when she returned from maternity leave, her supervisor refused her request for a windowless office to allow her to pump breast milk and refused to provide her a lock for her office door. After a worker walked in while she had her breasts exposed, she bought and installed her own lock.

In February 2012, the plaintiff suffered a miscarriage and took a month-long medical leave. When she returned to the office, she claimed that her supervisor asked her whether she was planning to have another baby. She was fired in August 2012, allegedly for unsatisfactory performance.

The plaintiff filed a lawsuit in August 2013, claiming discrimination based on gender, pregnancy and retaliation, in addition to the claim for intentional infliction of emotional distress.

The jury found that the plaintiff's pregnancies, maternity leaves and gender were not substantial motivating reasons for her termination. The jury also found no retaliation.

However, the jury found that the defendant's conduct was outrageous and found it liable for intentional infliction of emotional distress, awarding almost $1.2 million in damages. The trial court denied the defendant's motion to set aside the verdict, and the defendant appealed.

Workers' Compensation Exclusivity

The appellate court reversed the verdict and set it aside, holding that the plaintiff was entitled only to remedies available through the workers' compensation system.

If the employer's conduct is a normal part of the employment relationship, such as discipline, criticism of work practices, negotiation of grievances and termination, the workers' compensation exclusivity provisions generally apply, the court noted. The provisions apply even if the employer's conduct is "'manifestly unfair, outrageous, harassment, or intended to cause emotional disturbance resulting in disability."

Courts have found that employees suing for emotional distress resulting from unlawful discrimination or retaliation were not limited to workers' compensation remedies, but the plaintiffs in those cases all successfully proved their discrimination or retaliation claims.

In contrast, the plaintiff in this case did not prove that the employer engaged in unlawful discrimination or retaliation, and therefore, the court said, her claim for intentional infliction of emotional distress did not fall outside of the workers' compensation exclusivity provisions.

Stepp v. Fidelity Nat'l. Title Group Inc., Calif. Ct. App., No. B270964 (April 16, 2018).

Professional Pointer: Courts have held that the worker's compensation exclusivity rule also does not bar claims for emotional-distress damages resulting from sexual harassment. If an employer's conduct is found to violate the California Fair Employment and Housing Act, the employee will likely not be limited to workers' compensation remedies.

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.


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