Rose Mediation's ADR Newsletter - July 2013

Ken Rose is the founder and President of Rose Mediation [www.rosemediation.us]. Through Rose Mediation, Ken serves as mediator of legal disputes throughout California and adjoining States, most particularly employment law matters, including wrongful termination, wage and hour, class actions, breach of contract, discrimination, harassment, retaliation, and misappropriation of trade secrets/unfair competition cases.

During the past month, I have been busy mediating discrimination and wage & hour law cases. I thank my attorney colleagues for their confidence in selecting me to assist the parties resolve their disputes.

I am pleased to announce that I have been added to the Orange County Superior Court Civil Mediation Panel.

Contact me to discuss any cases you believe can be resolved through mediation. I handle matters throughout California and adjoining States.

Sincerely,

Harris v. City of Santa Monica May Encourage Early Efforts at Settlement of Employment Discrimination Cases

Every now and then the California Supreme Court issues that long anticipated blockbuster decision broadly impacting the employment law landscape. Landmark Supreme Court decisions that immediately come to mind are: Foley v. Interactive Data Corp., 47 Cal. 3d 654 (1988); Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal. 4th 83 (2000); and Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (2012). Each of these decisions was a mixed bag for employers and employees, yet provided much-needed guidance for the lower courts and practitioners litigating employment law disputes.

It is arguable that the California Supreme Court’s recent rulings in Harris v. City of Santa Monica, 56 Cal. 4th 203 (2013) will be similarly far reaching.

In Harris, the Supreme Court addressed the "mixed-motive" defense against claims of discrimination brought under the California Fair Employment and Housing Act (FEHA). The essence of the mixed motive defense is although both legitimate and illegitimate factors motivated the adverse employment decision, the employer would have made the same decision absent the discriminatory intent.

The Supreme Court held that, under FEHA, a plaintiff must produce evidence sufficient to show by a preponderance of evidence that discrimination was a "substantial factor" motivating an employment decision. No longer will plaintiff’s counsel be able to obtain a jury instruction providing that the aggrieved employee only has to show unlawful discrimination was a "motivating reason" for the adverse action to prevail. The Court ruled that, even if a discriminatory motive was a substantial factor in the adverse employment decision the employer can cut off damages and reinstatement upon proving by a preponderance of evidence it would have made the same decision even absent any discriminatory motive. The Court cautioned that an employer may not prevail in a mixed-motive case by offering a legitimate and sufficient reason for its decision if that reason did not motivate it at the time of the decision.

However, that’s not all Harris says. The Court ruled that when the finder of fact determines the adverse employment decision would have been made absent any discriminatory motive, but the jury also finds the employer action was substantially motivated by unlawful discrimination, the employee may recover attorneys' fees, and obtain declaratory and injunctive relief to bring a cessation to the employer’s discriminatory practices.

Although the upshot of Harris is employees will have greater difficulty prevailing in employment discrimination cases --as it increases the employee's burden to prove discrimination under the FEHA—it has aspects of a "double-edged sword" for both employers and employees. On the one hand, when an employer proves it would have made the same decision absent discrimination, neither economic nor noneconomic damages may be awarded. On the other hand, the Harris decision does not provide employers a complete defense given that if plaintiff can show a discriminatory motive was a "substantial factor," the employee will be entitled to recover attorneys' fees (and injunctive/declaratory relief). Moreover, presenting an assuming arguendo mixed motive defense is risky. Jurors may view the employer’s position as a concession it engaged in unlawful discrimination.

I am of the view that where the employer has a plausible mixed motive defense in a FEHA action, the Harris decision should encourage early efforts at settlement through mediation or direct negotiations. Certainly, Harris provides mediators with an additional tool for resolving employment discrimination lawsuits that are in the early stages of litigation. The mediator will be cognizant that the plaintiff’s counsel may be more leery of pushing the case to trial given the decreased odds of obtaining an award of damages. By the same token, the mediator will recognize that defense counsel may have greater incentive to settle the dispute to avoid the tightrope in presenting a mixed motive defense before a jury as well as the possibility their employer client will in the end be required to pay both parties’ legal fees