It is well-established that the workers’ compensation system serves as the exclusive remedy for an employee who suffers injuries arising during the course and scope of employment, including psychiatric injuries. Recently, however, the Fourth Appellate District of the California Court of Appeal held that claims for injuries that arise out of violations of FEHA (Fair Employment and Housing Act) are compensable under the workers’ compensation system and may be concurrently pursued in civil courts “where the employer’s conduct falls outside the compensation bargain.” Melony Light v. California Department of Parks and Recreation, No. D070361, 2017 WL 3393079 (Cal. Ct. App. August 8, 2017).
Plaintiff Melony Light was an employee of the California Department of Parks and Recreation (the “Department”). Approximately 2 years into her employment, one of Plaintiff’s colleagues filed a complaint with the Department’s Human Rights Office, which triggered an investigation and included interviews of various Department employees, including Plaintiff. Prior to Plaintiff’s interview, Plaintiff’s supervisor approached Plaintiff and told her to lie to the investigators. Her supervisor warned Plaintiff that if she did not “protect” her, she would end Plaintiff’s career. The supervisor began to distance herself from Plaintiff, and eventually recommended to the Department that Plaintiff be transferred to another office. This news upset Plaintiff, and she informed other employees of her displeasure.
After learning Plaintiff was communicating her unhappiness to other employees, Plaintiff’s supervisor called Plaintiff into her office, closed the door, accused Plaintiff of “cutting her down” to the other employees, and leaned toward Plaintiff in a threatening manner. Plaintiff described her supervisor’s demeanor as “full of rage.” When Plaintiff tried to leave the office, her supervisor blocked her way. Plaintiff subsequently filed her own Complaint with the Department’s Human Rights Office for retaliation.
Shortly thereafter, the Department told Plaintiff that while she would remain an employee, there were no more hours available for her due to budget issues. Before Plaintiff’s last scheduled shift, she went on medical leave and sought workers’ compensation benefits for a variety of medical and psychiatric conditions. When Plaintiff was ready to return to work, she requested reassignment to a different office and a higher position, since her last position resulted in a “hostile work environment.” In support, she included a report from her psychologist that found Plaintiff was suffering from posttraumatic stress disorder and panic disorder “because of threats of retaliation made to her  by her supervisor.”
While the Department told Plaintiff it could not promote her, it did offer her employment at her choice of two offices, including the office she worked at prior to going on leave. The Department also informed her that her former supervisor no longer worked for the Department. Plaintiff settled her workers’ compensation claim, took the job at her original office, and subsequently filed a lawsuit against the Department and the former supervisor in the Superior Court for retaliation, disability discrimination, and intentional infliction of emotional distress, among other things.
The trial court granted the Department’s motion for summary judgment on all of Plaintiff’s claims, and found inter alia that the workers’ compensation system provided the exclusive remedy for Plaintiff’s claim for intentional infliction of emotional distress. Plaintiff subsequently appealed.
In its decision, the appellate court emphasized that under the workers’ compensation system: “the employer assumes liability for industrial [injuries] without regard to fault in exchange for [limited] liability,” while the employee receives swift resolution in exchange for giving up a wider range of damages. The court also noted that the California Supreme court has recognized an exception to this rule exists when an employer’s conduct stems from a risk not encompassed within the “compensation bargain.” Recently, a different panel of judges within the same district court of appeal held that this exception is limited to instances of injury arising out of a statutorily prohibited conduct or violation of some fundamental public policy. In Melony Light’s case, a different panel of judges termed that understanding of the exception too narrow and wrote that the right to pursue civil remedies independently of workers’ compensation benefits also may arise from conduct in violation of FEHA. Guided by these principles, the Court found the employer’s conduct in the case at bar, i.e., intentional interference with an investigation into unlawful employment practices, was directly derivative of the FEHA cause of action and therefore fell outside of the “compensation bargain.” Consequently, the Court reversed the trial court’s ruling, and allowed Plaintiff to proceed with her claim for intentional infliction of emotional distress.
The Melony Light decision creates a conflict that may have to be resolved by the Supreme Court. Litigation seeking remedies under FEHA continue to flourish. To the extent that internal or emotional injury is allowed as damages in that litigation, the value of these cases will grow exponentially. Further, the case points to the importance of coordinating workers’ compensation litigation strategy with employment litigation of all sorts.
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