Notice Failure Shouldn't Bar Employee Civil Suits
As appeared in the Los Angeles Daily Journal
By Fernando A. Vicente
Plaintiff employment attorneys around the state were reassured last month when the Court of Appeal handed down a ruling favoring employee rights in California. In keeping with the state's long tradition of protecting employees and consumers, the court unanimously held that a represented employee need only serve the administrative charge of discrimination on the employer if an agency investigation is pending. Wasti v. Superior Court, 140 Cal.App.4th 667 (June 16, 2006).
In order to file an action under the Fair Employment and Housing Act, the employee must first exhaust administrative remedies by filing a complaint with the Department of Fair Employment and Housing and obtaining a right-to-sue letter. See Morgan v. Regents of University of California, 88 Cal. App. 4th 52 (2000); Martin v. Lockheed Missiles & Space Co., 29 Cal. App. 4th 1718 (1994). To exhaust administrative remedies, the employee need only file a charge; exhaustion does not require that the Department of Fair Employment and Housing make an accusation based on the charge or begin an administrative proceeding. See Grant v. Comp USA Inc., 109 Cal. App.4th 637 (2003).
In 2003, the Legislature amended the Fair Employment and Housing Act by changing the way employees are to notify employers of administrative complaints they file. Prior to the change, the Department of Fair Employment and Housing was required to serve the employer with the administrative charge. The 2003 amendment shifted the service requirement to the employee's counsel, if any, when the charge is filed.
Specifically, California Government Code Section 12962 requires an employee represented by counsel, to serve the administrative complaint on the employer within 60 days of the original filing of the complaint with the Department of Fair Employment and Housing. If the employee is not represented, then the agency must notify the employer.
On July 7, 2004, petitioner Selena Wasti (the employee) filed a charge of discrimination against respondent 254 Shoe (the employer). Wasti alleged pregnancy discrimination under the Fair Employment and Housing Act, and requested an immediate right-to-sue letter from the Department of Fair Employment and Housing. On July 9, 2004, she received the right-to-sue letter in which the agency indicated that it would take no further action and authorized her to bring her civil claim in state court.
Wasti never served the administrative complaint on her employer and retained an attorney to represent her on March 1, 2005. On March 29, 2005, Wasti filed a complaint in state court, well within the one-year limitations period. The employer demurred to the complaint on the ground that Wasti had failed to serve the administrative charge on the employer within 60 days of filing and, thus, had failed to exhaust her administrative remedies. The employer argued that this failure constituted a jurisdictional bar to her civil suit. When the trial court sustained the demurrer to Wasti's second cause of action for pregnancy discrimination under the Fair Employment and Housing Act without leave to amend, she petitioned the Court of Appeal for a writ of mandate.
Wasti asserted four main arguments in support of the writ. First, she argued that the plain language of Section 12962 did not require an unrepresented employee to serve the charge on the employer within 60 days, and the Department of Fair Employment and Housing's failure to serve the employer did not bar her civil remedies. Second, because the Fair Employment and Housing Act's legislative history indicated that before the amendment the agency had sole responsibility for service on the employer, notice was not a jurisdictional prerequisite. Third, because the purpose of filing an administrative charge is to initiate an agency investigation, if no investigation occurs, no notice is needed. Here, when Wasti requested and received the right-to-sue letter, the agency investigation was terminated, thereby negating the need for service. Fourth, by filing an administrative charge, and not a request for an actual investigation, Wasti satisfied the requirement of exhausting administrative remedies. Wasti's employer argued that to comply with the act, the employee was required to serve the administrative charge and then plead the notice in the complaint, and Wasti's failure to meet this requirement constituted a jurisdictional bar.
In its June 16 decision, the Court of Appeal held that inasmuch as Wasti was not seeking an investigation but rather a right-to-sue letter, it would create an "absurdity" to require her to serve notice of a "defunct administrative complaint." In addition, the court held that because Wasti was not represented by counsel, it was up to the Department of Fair Employment and Housing to serve any required notice on the employer.
The court held that employees must give notice only if they are represented by counsel and if the agency will be conducting an investigation. If the employee is not represented by counsel, but the agency will be conducting an investigation, then the agency must give the employer notice. If the agency will not be conducting an investigation (because the employee has requested and received a right-to-sue letter), then service is not required because there is nothing to notify the employer about.
Furthermore, the court affirmed its decision in Grant v. Comp USA Inc. supra, by holding that Wasti had exhausted her administrative remedies by simply filing a charge and requesting an immediate right-to-sue letter.
The Wasti decision means that plaintiff attorneys in California must serve the administrative charge on the employer within 60 days of the filing of a request for an administrative investigation. Where the employee does not wish the matter to be investigated and requests a right-to-sue letter instead (the usual practice when an attorney gets involved), the plaintiffs' lawyers do not have to worry about missing a notice requirement deadline.
The court's reasoning is sensible and significantly simplifies the practice for plaintiff employment lawyers and litigants. Defendants can still raise failure to exhaust administrative remedies as a defense, but they can no longer win by means of an arbitrary and unnecessary technicality.
However, the court stopped short of addressing the consequences when the employee is represented by counsel and does not give proper notice of a pending agency investigation.
Although this issue was not before the court in this matter, the court could have clarified this very important question. There is no state law on this issue, which indicates that we may expect to hear more about it from the courts in the future.
Federal law imposes a jurisdictional bar when the employer suffers a substantial prejudice by late or untimely notice of an administrative investigation. The federal cases, while more developed than California, have involved situations where the Department of Fair Employment and Housing, and not an attorney, has failed to give the notice. See, e.g., Brewster v. Shockley, 554 F. Supp. 365 (W.D. Va. 1983); National Organization of Women v. Sperry Rand Corp., 457 F. Supp. 1338 (D. Conn. 1978); Freude v. Bell Tel. Co. of Penn., 438 F. Supp. 1059 (E.D. Pa. 1977); McAdams v. Thermal Industries Inc., 428 F. Supp. 156 (W.D. Pa. 1977); Johnson v. Seaboard Air Line R. Co., 405 F.2d 645 (4th Cir. 1968).
The guiding principle, however, is whether the employer has received due process through proper notice of a pending investigation. See Heath v. D.H. Baldwin Co., 447 F. Supp. 495 (N.D. Miss. 1977); EEOC v.United States Fidelity & Guaranty Co., 420 F. Supp. 244 (D. Md. 1976). The federal cases indicate that the harm to employers caused by the lack of timely service must be significant in order to constitute a jurisdictional bar. See, e.g., EEOC v. Marzetti Co., 411 F. Supp.1036 (S.D. Ohio 1976) (no jurisdictional bar where employer failed to show substantial prejudice); EEOC v. Nicholson File Co., 408 F. Supp. 229 (D. Conn. 1976) (six-month delay in service was insufficient to constitute jurisdictional bar); Clark v. Morgan Austintown Foods Inc., 405 F. Supp. 1008 (N.D. Ohio 1975) (no jurisdictional bar despite three-year delay in service).
After Wasti, in state court at least, the unanswered question remains whether a represented employee's failure to serve notice of the administrative investigation is a jurisdictional bar to civil claims. Where the attorney fails to serve the administrative charge in a timely manner, if the plaintiff is left without a Fair Employment and Housing Act claim, his only remedy may be a malpractice claim against the attorney. However, this path would not necessarily serve the interests of justice or employee rights in California. At the end of the day, the plaintiff may be left without a Fair Employment and Housing Act claim.
Instead, it may be far more beneficial for the courts to conclude that failure of notice in these situations would not automatically bar a civil suit. A contrary decision seems a severe consequence for noncompliance with a requirement that serves such a modest objective.
Fernando A. Vicente is an associate attorney at The Quisenberry Law Firm in Los Angeles, representing employees in wage and hour class actions and other employment claims. He drafted and argued the opposition to demurrer at the trial court level, and also wrote the writ of mandate in Wasti v. Superior Court.
