In a significant judicial precedent, the California Supreme Court has ruled that agents of employers can be directly subjected to litigation under FEHA (Fair Employment and Housing Act) claims, as shared in a judicial summary on JD Supra.
This ruling came about in the case of Raines v. U.S. Healthworks Medical Group, in which the concept of third-party agents being deemed as employers under FEHA for liability purposes was unequivocally established. This decision could have far-reaching implications for corporations and their often complex systems of third-party contract relationships. It places an additional layer of accountability on third-party agents, potentially exposing them to complainant claims.
The California Fair Employment and Housing Act (FEHA) is a piece of legislation that protects employees from unlawful discrimination, harassment, or retaliation in employment. The broad perspective the court adopted in categorizing third-party agents as employers for the purpose of FEHA liability could likely increase the scope of individuals and entities that can be sued under the act.
This development is of particular importance for legal professionals working in large corporations and law firms, as litigation against third-party agents under FEHA could become more common given the outcome of this case. It underlines the need for these businesses to take greater care in their associations with third-party agents, ensuring these agents fully comply with FEHA provisions. They should also continually review and update their contractual relationships with these agents.
The full ramifications of this ruling will become evident over time, as it is applied in forthcoming FEHA violation cases. However, it undoubtably errs on the side of grant more protection to employees’ rights, and potentially expanding litigation against third party agents.