We Help Protect
California's Employees

California Supreme Court Sets New Precedent for Employment Discrimination

In a landmark new opinion, the California Supreme Court has declared that employers are not the only parties directly liable for employment discrimination. In the case Raines v. U.S. Healthworks Medical Group, the Court ruled that an employer’s “business entity agents” can also be held directly liable for discriminating against workers in certain circumstances. 

This is a significant step forward for victims of workplace and employment discrimination statewide. The new ruling makes it easier to hold the correct parties accountable for discriminatory practices by expanding liability for these claims. Let’s break down how this may affect you. 

Understanding the Raines v. U.S. HealthWorks Medical Group Ruling

The case Raines v. U.S. Healthworks Medical Group is a class-action lawsuit filed by Kristina Raines against U.S. HealthWorks Medical Group. This healthcare company performs medical screenings on behalf of employers, among other activities. Raines was offered a position at a local retirement community, contingent on passing a health screening performed by U.S. HealthWorks. However, when Raines began the screening process, she was instructed to complete an extensive health history questionnaire covering her current prescriptions, pregnancy status, HIV status, menstrual issues, and more. 

Raines refused to complete the questionnaire, believing it to be overly intrusive. However, her job offer was revoked because she was reported to have failed the screening by refusing to complete it. In response, she filed a class-action lawsuit against U.S. HealthWorks, arguing that requiring her to answer all questions or fail the screening violated her rights under California’s Fair Employment and Housing Act (FEHA). 

This law prohibits employers from making employment decisions based on medical conditions that do not affect a person’s ability to do the job. It also prohibits medical inquiries not “consistent with business necessity.” Raines argued that many of the questions she was asked were irrelevant to her job, and requiring her to answer them violated her right to privacy and freedom from gender and disability discrimination. 

A federal judge in San Diego initially dismissed the lawsuit, arguing that FEHA only holds employers directly responsible for discrimination. The judge cited a previous ruling exempting supervisors from direct liability for discrimination in the workplace as grounds for the argument. 

In response, California Attorney General Rob Bonta filed an amicus brief to revive the lawsuit because the court’s initial ruling undermined FEHA’s intended broad protections against discrimination. This led the Court of Appeals for the Ninth Circuit to submit the question to the state Supreme Court. It responded that “an employer’s business entity agents can be held directly liable under the FEHA for employment discrimination in appropriate circumstances when the business-entity agent has at least five employees and carries out FEHA-regulated activities on behalf of an employer.”

As a result, Raines’ class-action lawsuit can move forward. More importantly, people with similar experiences can hold discriminatory business entity agents accountable for the harm they cause.

What Counts as a Business Entity Agent?

A business entity agent is any party that meets the following three criteria as defined by the state Supreme Court:

  • Size: The entity must consist of at least five employees, matching FEHA’s existing employment discrimination requirements.
  • Responsibilities: The entity must carry out “FEHA-regulated activities” for an employer, such as screening prospective employees, developing or administering compensation plans, or formulating minimum job standards. 
  • Independence: The entity must be a separate party as opposed to a subdivision of the employer, as in that case, it would not be independent for liability purposes. 

If these criteria are met, the entity counts as an agent of the business and may be held liable for its discriminatory practices. 

Examples of Employer Discrimination by Business Entity Agents

The Raines ruling raises the question of what may constitute discrimination by a business agent. In the Raines case, the potential bias consists of making it mandatory to answer medical questions unrelated to the job in question. Other discriminatory actions may include:

  • Deeming someone capable or incapable of a job based on irrelevant health characteristics
  • Removing someone from consideration for a role when screening resumes based on their protected characteristics
  • Creating compensation or benefit plans that treat people differently based on gender, ability to become pregnant, or need to take protected leave
  • Setting minimum standards for a role that include discriminatory restrictions, such as height, weight, or unnecessary lifting requirements

These types of discriminatory practices would clearly be unlawful if performed directly by an employer. Raines means the agent performing the discriminatory practices can now be held liable instead of or in addition to the employer itself. 

Proving Employment Discrimination by Agents of an Employer

Proving discrimination can be a complicated process. Whether seeking to prove discrimination by an employer or its agents, you must collect evidence to support your claim. This evidence may be direct or indirect. 

Direct evidence is the strongest type, but also the least common. It consists of explicit statements from members of the business that a decision was made based on protected characteristics or other unlawful reasons. 

Indirect or circumstantial evidence is significantly more common. This may include copies of overly invasive medical questionnaires, patterns of discriminatory behavior, noticeable hiring trends, or strongly correlated actions. For example, the revocation of Raines’ job offer after she refused to answer invasive questions by U.S. HealthWorks is an example of circumstantial evidence. 

The most effective way to collect necessary evidence and build your case is to work with an experienced employment law attorney. At Le Clerc & Le Clerc LLP, we are dedicated to advocating for workers who have experienced discrimination. We are prepared to help you seek justice and hold the correct parties accountable for discriminating against you through California’s newly expanded liability provisions. Schedule your consultation today to discuss your case and learn more about how we can assist you. 

  • Recent Posts

  • Archives

  • Categories

  • Rss Feed