When Can a Supervisor be Held Individually Liable for Discriminating an Employee on Military Status?

Most employers are aware of the federal law known as the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) which is designed to protect those who serve in the armed forces from discrimination and retaliation. However, many California employers are unaware that section 394 of the California Military and Veterans Code also prohibits employers from discriminating against members of the armed forces (“Section 394”). Therefore, an employee who believes he/she has been discriminated against based on his/her military status has the right to pursue a claim under one or both laws.

However, a recent case has declared that who the plaintiff-employee can sue is different under federal and state law. In Haligowski v. Superior Court (Mario Pantuso, real party in interest) (11/10/11), Plaintiff Mario Pantuso was called to active duty with the Navy while he was employed by Safway Services, LLC (“Safway”). When Pantuso returned from his six-month deployment in Iraq and asked for his job back, his immediate supervisor at Safway, Mike Haligowski, and the regional manager, Greg Chomenko, informed Pantuso that he was terminated from his employment with Safway. Pantuso sued Safway, Haligowski, and Chomenko for discrimination and retaliation in violation of Section 394, and Safway for wrongful termination in violation of public policy. He claimed that because of his membership in the Navy, the defendants discriminated against him by: 1) giving him negative performance evaluations after he informed his supervisors that he would be deployed; 2) terminating his employment; 3) refusing to re-employ him; and 4) failing to pay him an allegedly earned bonus.

The two individual defendants demurred to the complaint on the grounds that as supervisors, they cannot be held individually liable under Section 394 for employment-related decisions. The trial court overruled the demurrer based on the plain language of Section 394 and the individual defendants petitioned for a writ of mandate to the court of appeal. The court of appeal looked at the plain language of Section 394 to determine if it supported the trial court’s decision. The relevant parts of Section 394 read as follows:

Section 394(a): “No person shall discriminate against any officer, warrant officer, or enlisted member of the military or naval forces of the state or of the United States because of that membership.”

Section 394(d): “No employer or officer or agent of any corporation, company or firm, or other person, shall discharge any person from employment because of the performance of any ordered military duty or training or by reason of being an officer, warrant officer, or enlisted member of the military or naval forces of this state… .”

The appellate court said it could perceive two possible constructions of the use of the words “person” and “agent” in Section 394. First, as Pantuso argues and the trial court ruled, it could be determined that the Legislature intended to hold individual supervisors personally liable for discrimination under the statute. Second, and consistent with the California Supreme Court’s interpretation of other employment discrimination laws like California’s Fair Employment and Housing Act (“FEHA”), it could be determined that the use of the words “agent” and “other person” was “intended only to ensure that employers will be held liable if their supervisory employees take actions later found discriminatory, and that employers cannot avoid liability by arguing that a supervisor failed to follow instructions or deviated from the employer’s policy.” (Citing the California Supreme Court’s 1998 decision in Reno v. Baird, wherein the Court analyzed the words “any person” in the FEHA and concluded that individuals who do not themselves qualify as employers may not be sued under the FEHA for alleged discriminatory acts.)

The Haligowski court said that the language of Section 394 is parallel to that used in the FEHA and, given the similarity in the language of, and goals behind, these employment discrimination statutes, “…it would be illogical and incongruous to hold that the word “person” in Section 394 subjects supervisory employees to personal liability whenever they engage in a discriminatory act against a member of the military forces when they are not otherwise personally at risk for managerial acts that discriminate on the basis of race, gender, age, or disability.”

The court rejected Pantuso’s argument that the courts must import the USERRA definition of “employer” into Section 394. The court pointed out that USERRA was not analogous to Section 394, in that it’s definition of “employer” was much broader and clearly spelled out Congress’ intent to hold a supervisor personally liable. Therefore, the court ruled that there is no personal liability under Section 394.