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Appellate Court Overturns $1.2M Judgement in Employment Case Based on Workers' Compensation Exclusive Remedy

From the Desk Of:  Scott M. Tilley, Esq.

Managing Attorney, San Bernardino

Certified Specialist, Workers' Compensation Law,

The State Bar of California,

Board of Legal Specialization

 

 

Mrs. Stepp was hired by Fidelity National Title Group in May 2010 as an in-house attorney. On her first day of work, she told her manager that she was pregnant and intended to take maternity leave in September 2010. Her manager at the time indicated that was fine and that he was happy to have her working there. However, one coworker, Mr. Rygh, was not happy that Mrs. Stepp failed to inform the company of her pregnancy when she was interviewed.  Later that same year, Mr. Rygh became Mrs. Stepp's supervisor.  When Mrs. Stepp returned from maternity leave, Mr. Rygh was unaccommodating in a variety of ways: not providing a lactation room, failing to provide a lock to Mrs. Stepp's office for lactation purposes, refusing to provide refrigeration for breast milk, forcing the applicant to share a hotel room during a month-long trial with another female attorney (while male attorneys were provided separate rooms), and repeatedly asking Mrs. Stepp if she intended to have additional babies.  

 

Ultimately, Mr. Rygh decided to terminate Mrs. Stepp's employment August 6, 2012. The listed reason for the termination was unsatisfactory performance. On March 20, 2014 Mrs. Stepp filed a lawsuit against Fidelity alleging several causes of action including harassment in violation of FEHA, including: sexual harassment; discrimination based on gender, pregnancy, physical disability and medical condition in violation of FEHA; retaliation for opposing discriminatory practices in violation of FEHA; failure to accommodate Mrs. Stepp's physical disability and medical condition in violation of FEHA; intentional infliction of emotional distress.  

 

The case went to a jury trial. Mrs. Stepp dismissed her sexual harassment claim. The jury returned a verdict in favor of Fidelity on the causes of action for discrimination and retaliation. The jury found that Mrs. Stepp's pregnancy, maternity leave, concerns for future pregnancy and gender were not substantial motivating reasons for the termination of her employment. However, the jury did find Fidelity's conduct to be "outrageous" and found them liable for intentional infliction of emotional distress. The jury found Mrs. Stepp was entitled to damages in the total amount of $1,173,849.

 

Fidelity appealed the jury finding to the Court of Appeals of the State of California, 2nd Appellate District. The Court of Appeals found Mrs. Stepp failed to prove unlawful discrimination or retaliation by Fidelity. Thus, her claim for intentional infliction of emotional distress based on the same conduct does not fall outside the workers’ compensation exclusivity provisions. Had the jury in the lower court found that Fidelity was guilty of unlawful discrimination and retaliation in violation of FEHA, the appellate court would have found that workers' compensation exclusivity did not apply.

 

In making its determination, the appellate court found that even if the employer's conduct is "manifestly unfair, outrageous, harassing, or intended to cause emotional disturbance resulting in disability" the exclusivity provisions of the workers’ compensation system apply. Only when such activity becomes unlawful discrimination and retaliation does such conduct take it out of the exclusive remedy of the workers’ compensation system.   This decision follows a line of cases that hold that intentional infliction of emotional distress, without unlawful action, arises out of and in the course of employment and is subject to the workers' compensation system.  In short, if the employer's conduct is found to violate FEHA, the employee will likely not be limited to workers’ compensation remedies.  Most prudent plaintiff attorneys in such situations would file both in the workers’ compensation system and Superior Court. It is not clear why Mrs. Stepp's attorney failed to avail themselves of the workers' compensation system.

 

In this case, barring an appeal to the California Supreme Court, the applicant loses out on the 1.2-million-dollar judgment. In addition, the question arises as to whether the applicant would now be time-barred for a workers’ compensation claim based on the statute of limitations.  If you wish to read the case in its entirety you may find it here:  https://casetext.com/case/stepp-v-fid-natl-title-grp-inc .

 

Our firm  stands ready to help you with any complicated workers’ compensation issue you might have. Feel free to contact us.  

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