Employees May Pursue Internal Appeals Without Jeopardizing Right to Pursue State Discrimination Complaints

January 13, 2009 by Beeson Tayer & Bodine

Two recent California court decisions have clarified the rules for employees filing discrimination complaints when their employer has an internal appeal procedure available.

In Ortega v. Contra Costa Community College (2007) 156 Cal.App.4th 1073, the Appellate Court considered whether a Union member has to exhaust a union contract’s grievance procedure prior to filing a complaint under California’s Fair Employment and Housing Act (FEHA). The plaintiff brought a lawsuits charging illegal discriminated because of his race under FEHA. The trial court held that the lawsuit was barred because the plaintiff did not first take his claim through the grievance procedure under his union contract. The Appellate Court disagreed and reinstated his claim.

The court concluded that the union contract’s grievance procedure does not eliminate the right to a jury determination of the FEHA statutory rights afforded to workers, unless the union contract has a “clear and unmistakable” agreement to resolve the worker’s FEHA claims by arbitration and the arbitration procedures “allow for full litigation and fair adjudication of the FEHA claim.” In Ortega the union contract did not have such a provision and thus the employee was allowed to bypass the grievance procedure.

More recently, the California Supreme Court held that when an employee voluntarily pursues an internal remedy prior to filing a complaint under FEHA, the statute of limitations for filing a FEHA claim is equitably tolled or extended. McDonald v. Antelope Valley Community College District, (2008) 45 Cal.4th 88.

The Court’s decision allows employees to pursue internal and informal remedies without fear of forfeiting their FEHA claim provided certain requirements are met. For equitable tolling to apply there must be: (1) timely notice; (2) lack of prejudice; and (3) reasonable and good faith conduct on the part of the employee. The first two requirements are met where the employee’s informal claim is filed within the statutory period and the informal claim is sufficiently similar to the employee’s FEHA claim so that the employer’s investigation of the first enables it to fairly defend against the second claim. The Court did not define reasonable and good faith conduct, but did stress the need for the formal FEHA claim to be filed a “short time” after the end of the tolling period.

While the Court’s ruling in McDonald provides guidance on how employees may first pursue an alternative internal remedy before filing a formal FEHA discrimination complaint, it is important to remember that employees are not required to pursue internal remedies first but may instead choose to file a complaint directly with the DFEH.

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