The California Supreme Court has held that a supervisor's "sexual favoritism" shown to a subordinate employee with whom the supervisor was having a consensual affair may create a hostile work environment allowing other employees who have been adversely affected by the favoritism to sue for sexual harassment under California's Fair Employment and Housing Act (FEHA). Miller v. Department of Corrections, 36 Cal. 4th 446, 30 Cal.Rptr.3d 797 (2005).


The Facts

Over a seven-year period, a state prison warden had consensual sexual affairs with three subordinate female employees. Plaintiffs Edna Miller and Frances Mackey, two other subordinate female employees, alleged that the warden's affairs unfairly led to promotions for his lovers and to threats, verbal abuse, assaults and lost job opportunities for plaintiffs. Miller claimed the warden pressured the prison's selection committee to promote one of his lovers despite the committee's conclusion that she was neither eligible nor qualified for the job. Similarly, Miller alleged she lost a promotion to another lover because of the latter's romance with the warden and the fact that the warden sat on the interviewing panel. The lover said that the warden would have to promote her over Miller, or she would "take him down" by revealing "every scar on his body."

The warden's sexual affairs were well known to employees throughout the prison. The lovers openly fought with each other about their affections for the warden, and one of them fondled the warden at a work-related event. When Miller and Mackey complained about the warden's obvious favoritism, their work was undermined, they received more onerous duties, and they were subjected to verbal abuse and even a physical assault by one lover who had been promoted to associate warden. Both plaintiffs resigned and sued the California Department of Corrections for hostile work environment sexual harassment under the FEHA, claiming that the terms and conditions of their employment had been adversely affected by the supervisor's "sexual favoritism."


The Supreme Court's Decision

The trial court dismissed the plaintiffs' claims, finding that their complaints established "unfairness" but did not amount to actionable harassment under the FEHA. The Court of Appeal affirmed. The California Supreme Court unanimously reversed.

The Supreme Court relied heavily on a 1990 policy statement by the U.S. Equal Employment Opportunity Commission entitled "Policy Guidance on Employer Liability Under Title VII for Sexual Favoritism," Statement No. N-915-048, issued January 12, 1990. The statement addresses three types of conduct: isolated favoritism, preferential treatment in return for coerced sexual favors and widespread favoritism of consensual sexual partners.

Guided by the statement, the Supreme Court noted that an isolated instance of favoritism by a supervisor toward a paramour ordinarily would not constitute sexual harassment. However, the Supreme Court held that "when such sexual favoritism... is sufficiently widespread it may create an actionable hostile work environment in which the demeaning message is conveyed to female employees that they are viewed by management as 'sexual playthings' or that the way required for women to get ahead in the workplace is by engaging in sexual conduct with their supervisors or the management."

The Supreme Court rejected the Department of Correction's argument that validating the plaintiffs' claims would contravene public policy by allowing courts to intrude into private, consensual relationships in the workplace. The Supreme Court emphasized that the relevant inquiry for purposes of its decision was the adverse impact these relationships had on other employees in the workplace, not the relationships themselves.


How the Decision Impacts California Employers

The office romance long has been a source of legal problems for employers. However, these problems usually are confined to the employees in the relationship. Under the Miller decision, employers now face much broader potential liability from employees who are not parties to the relationships or otherwise direct victims of unwelcome sexual advances. The personnel decisions of any supervisor affecting a subordinate employee with whom he or she is having an affair could be second-guessed by any other subordinate employee or group of them as "sexual favoritism" creating a "hostile work environment."

There are no easy solutions for avoiding this problem. On the one hand, a blanket prohibition on consensual romantic relationships in the workplace is difficult to enforce. Any policy regulating such relationships, if not carefully drafted and implemented, may run afoul of the privacy rights afforded by the California Constitution and Labor Code §96 (k), which restricts employers from taking adverse action against employees for engaging in "lawful conduct during nonwork hours." However, to the extent an office romance may discredit a supervisor's personnel decisions affecting other employees, the specter of potential liability makes the problem too serious to ignore.

In light of Miller, employers should consider the following actions:

		Adopt a non-fraternization policy prohibiting relationships between supervisors and subordinates. The policy should emphasize that the employer views such relationships as inappropriate given the potential conflict of interests involved. Employers should consult with legal counsel to ensure that any such policy is tailored to comply with the privacy laws mentioned above.
		Revise the company's anti-harassment policy and training program to include information about the problem of "sexual favoritism" that may result from romantic relationships at work, especially those between a supervisor and subordinate.
		Respond to employee complaints of sexual favoritism in the same manner as other complaints of sexual harassment. The employer's response should include a prompt and thorough investigation of the complaint and, when necessary, remedial action to prevent any further incidents of "favoritism" from occurring.

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©2005 Thelen Reid Brown Raysman & Steiner LLP