Appellate Panel Challenges Peers' Ruling in Exclusive Remedy Decision

"when employers' behavior constitutes 'egregious and unwarranted treatment,' courts have traditionally found that applicants have the grounds to pursue a remedy outside the workers' compensation system..."   Alan Gurvey

A California appellate court panel ruled that an employee may pursue a tort claim against her supervisor for intentional infliction of emotional distress, creating a conflict with another panel's reading of a 2008 state Supreme Court opinion.

The 1st Division of the 4th District court decided Tuesday that Miklosy v. Regents of the University of California allows Melony Light to sue her supervisor for intentional infliction of emotional distress because her supervisor's behavior may have violated the Fair Employment and Housing Act. The 3rd Division of the same court reached a contradictory decision in another case.

 Attorneys anticipate that the high court will have the final say on who is right. 

"It looks like the 1st has stuck a sharp stick in the eye of the 3rd and really thrown down the gauntlet," said defense attorney Nate Halprin of Tobin Lucks after reading Light v. California Department of Parks and Recreation. "They're urging the Supreme Court to revisit Miklosy."

The 1st Division panel, ruling in Light's case, wrote that a large body of case law supports the view that "conduct in violation of FEHA is not part of the employment relationship or the compensation bargain at the heart of the workers' compensation system."

In a 2014 case called Yau v. Santa Margarita Ford, the 3rd Division examined a case with similar claims at its heart. Though auto mechanic Eddie Yau did not explicitly accuse his employer of violating FEHA, he did allege intentional infliction of emotional distress.

The 3rd Division found that Yau's claim was barred by the workers' compensation exclusivity provision, tracing its reasoning to the 2008 Miklosy ruling. The panel said that, under the decision, applicants may sue their employers only when they are wrongfully discharged in violation of public policy. 

But the 4th DCA said Miklosy recognizes a second exception to workers' compensation exclusivity: conduct that "exceeds the risks inherent in the employment relationship."

"We believe Yau reads Miklosy too narrowly," the 4th DCA wrote. 

The 4th DCA said that Light's harassment did not count as a "risk inherent in the employment relationship."

"Neither discrimination nor harassment is a normal incident of employment," the court wrote, quoting its 2000 decision in Murray v. Oceanside Unified School District. 

"Nobody bargains for a violation of their civil rights," said Oakland employment attorney Jean Hyams, president of the California Employment Lawyers Association. "It's a completely different issue and completely distinguishable from someone who suffers an injury in the course and scope of their employment."

Light gets the 'kiss of death'

Melony Light worked at the Ocotillo Wells State Vehicular Recreation Area, an off-road vehicle area in San Diego County adjacent to the 600,000-acre Anza-Borrego Desert State Park. She held various temporary and seasonal stints as an office assistant, working under supervisor Linda Seals.

Seals often harassed Light's coworker and friend, Delane Hurley, for her perceived sexual orientation, according to the opinion. She tried to get Light to join in or stop being friends with Hurley. She also teased Light about her friendship with Hurley. 

Hurley eventually took medical leave for stress. Seals ordered Light to clean out Hurley's desk. Light objected, but Seals insisted. 

When Light was cleaning out Hurley's desk, she found a small telescope that is traditionally attached to rifles to help the shooter see better. When Seals found out, she told her own supervisor, Kathy Dolinar. Seals told Dolinar that Light was afraid for her safety, even though Light hadn't said that. When Light found out, she told Dolinar directly that she wasn't afraid for her safety. 

Dolinar nonetheless invited a counselor to the office to address conflicts between Hurley and other employees. The meeting "turned into a discussion about what a terrible employee Hurley was, how she had destroyed trust in the workplace, and how she had terrorized management and employees," court documents say. 

Light didn't believe any of this and maintained her support for Hurley, but she was afraid to say anything. She attempted to stay after the meeting and talk to the counselor alone, but Seals and Dolinar remained in the room.

Hurley filed a complaint with the Department of Parks and Recreation's Human Rights Office. She alleged sexual harassment, discrimination based on sex, sexual orientation and marital status, and retaliation. She specifically named Seals in the complaint. 

The Department sent investigators to the Ocotillo Wells District in January 2012. Seals told Light that she and Dolinar expected her to protect her supervisors. 

"If you're not on (Dolinar's) team, your career will be over," Seals allegedly said. She also told another employee, Kathryn Gravett, that she needed to "show team support" unless she wanted to suffer retaliation. 

After Light met with the investigators, Seals called her at home. She didn't pick up. The following Monday, Seals called Light into her office to ask her how the interview had gone. 

Light responded, "It was one of the most debilitating experiences of my life, one that I hope not to repeat."

Seals then gave Light a hug. Light said she could tell that all was not well, and Seals suspected Light had gone against her wishes. She also could tell that Seals resented the fact she would not disclose what happened with the investigators. 

But Seals said, "You've been there for me, and I just want you to know how much I appreciate that," and kissed Light on the cheek. 

Light told the court that she felt like she had received "the kiss of death."

Retaliation

The following month, an angry Seals called Light into her office. She accused Light of "cutting her down" to other employees and launched into a heated recounting of Light's history at Ocotillo Wells. She said she never should have hired Light, and after May 30 she would be transferred to work with park rangers because "they don't follow orders, either." 

When Light, upset, tried to leave the office, Seals blocked her way. When Light eventually got past her and back into her own office, Seals barged in, hitting Light with the door. About a month later, Light filed her own complaint with the parks department's human rights office. 

The investigation lasted two years. When it concluded, Seals was placed on administrative leave for retaliating against Light and "verbally attacking" her. Seals never returned to Ocotillo Wells, and Light eventually lost her job there as well. She was told that funding for the office assistant position had been eliminated. 

Shortly before her departure from Ocotillo Wells, Light went on medical leave and sought workers' compensation benefits for anxiety, nausea, loss of appetite, migraines, asthma attacks, body aches and pains, digestive problems, vomiting, severe abdominal cramps and tightness in the chest. She received a workers' compensation award of $12,765. Her psychologist diagnosed her with post-traumatic stress disorder and panic disorder. 

Light eventually returned to work at Ocotillo Wells as a full-time staff services analyst. Dolinar and Seals no longer worked there. Shortly after returning, Light filed a lawsuit against Dolinar, Seals and the department, alleging harassment, retaliation, disability discrimination, assault and intentional infliction of emotional distress. 

The trial court disposed of several claims at the pleading stage, then granted a motion for summary judgment on the remaining claims on exclusive remedy grounds. Light appealed. 

The DCA intervenes

The DCA found that Light's claims of retaliation, intentional infliction of emotional distress and assault should not have been summarily adjudicated. 

The court did not publish the portions of the opinion related to Light's disability discrimination and assault claims, but it published the "discussion of the interplay between workers' compensation exclusivity and intentional infliction of emotional distress" because it addressed "an important legal issue, and our interpretation differs from a recent opinion by our colleagues in Division 3 of this court."

Porter Ranch applicants' attorney Robert Rassp said that the 4th DCA is likely trying to prompt action from the Supreme Court. 

"This is the district essentially telling the Supreme Court that this is two separate districts with two separate views on the same issue, and they want the Supreme Court to reconcile the differences," Rassp said. 

Oakland applicants' attorney Julius Young agreed. 

"I can't imagine the Supreme Court won't end up having to look at this," he said. "It seems like they're almost inviting the Supreme Court to clarify on this."

Halprin pointed out the fact that the 4th DCA prefaced its decision with the phrase "absent further guidance from the Supreme Court." 

"Absent further guidance from our Supreme Court, we are unwilling to abandon the longstanding view that unlawful discrimination and retaliation in violation of FEHA falls outside the compensation bargain, and therefore claims of intentional infliction of emotional distress based on such discrimination and retaliation are not subject to workers' compensation exclusivity," the full statement reads. 

Applicants' attorney Alan Gurvey said that when employers' behavior constitutes "egregious and unwarranted treatment," courts have traditionally found that applicants have the grounds to pursue a remedy outside the workers' compensation system, even if workers' compensation has already been sought. 

But "the workers' compensation attorney must be very diligent to make sure any potential workers' compensation settlement does not have language resolving the FEHA claim, which could derail the civil suit down the line," said San Diego applicants' attorney John Don. 

"I actually had a defense attorney sneak in an FEHA waiver into a C&R a couple of years ago, so it's very important to read the settlement to make sure only the work comp case is being resolved," Don said. 

Published 8/10/2017 by WorkComp Central, authored by Emily Brill