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FEHA administrative claim jurisdictional, but not THAT jurisdictional

June 18, 2014

A new case out of the California Court of Appeal addressed what it really means to exhaust administrative remedies under California workplace discrimination law. The bottom line? Let’s just say your defense should have a bit more going for it than that.

In Kim v. Konad USA Distribution, Inc., plaintiff Esther Kim alleged some seriously lurid sexual harassment by her supervisor. Over a period of years, Ms. Kim’s supervisor Dong Whang (you really can’t make this stuff up) questioned Kim about her sexual activities with her boyfriend, whether she used sex toys, and whether she did Kegel exercises.  He commented on other women’s breasts and buttocks, and told Kim that hers were better.  He told her about a friend that would have sex with women and then go home and have sex with his wife.  He asked Kim to sit in his lap; she declined. He asked her if she thought that he was trying to get her to go to bed with him; she said he was disgusting.  He leered at Kim from his adjacent desk almost on a daily basis and stared at her breasts and legs.  He related stories of monks and their small penises allegedly due to lack of use.  He hugged and touched Kim repeatedly, sometimes for long periods of time. Kim’s co-worker Cathy Lim and corroborated Kim’s account, stating that Whang thought that Kim’s boyfriend was using her mainly for sex and that Whang referred to Kim as a slut.

After a bench trial the judge awarded Kim a bit more than $50,000 in damages. On that kind of a record, you’d think defendants would write a check and walk away happy. But you’d be wrong.

After trial, for the first time, the defendants asserted that Kim had failed to exhaust her administrative remedies — including filing claims with FEHA against both defendants, and alleging the particulars that were the basis for her court claims. The court of appeal made pretty quick work of that one, since the plaintiff had in fact filed a complaint and received a right to sue letter from the DFEH. But defendants wouldn’t give up, asserting (ironically only after completion of the trial) a technical argument that Kim had to prove during trial that verified administrative complaints were filed with DFEH against both defendants with all claims raised in the lawsuit specified in those administrative complaints — or the court lacked subject matter jurisdiction to decide the case.  The court was unimpressed:

“jurisdictional prerequisite” does not mean subject matter jurisdiction in the context of exhaustion of administrative remedies.  The concept of jurisdiction embraces a large number of ideas of similar character, some fundamental to the nature of any judicial system, some derived from the requirement of due process, some determined by the constitutional or statutory structure of a particular court, and some based upon mere procedural rules originally devised for convenience and efficiency, and by precedent made mandatory and jurisdictional. Although earlier cases tended to view the exhaustion doctrine as invalidating a court’s subject matter jurisdiction, thus allowing a defendant to raise it at any time, later cases have generally concluded a defendant waives the defense by failing to timely assert it. The administrative exhaustion requirement does not implicate the court’s subject matter jurisdiction.  It is “jurisdictional” in the sense only that a court’s failure to apply the rule is judicial error and can be corrected by issuance of a writ of prohibition….

It would be grossly unfair to allow a defendant to ignore this potential procedural defense at a time when facts and memories were fresh and put a plaintiff to the time and expense of a full trial, knowing it could assert the failure to exhaust administrative remedies if it received an adverse judgment.

The court also rejected defendants’ attempts to game the system — by raising their defense after trial but holding the plaintiff to only the evidence introduced during trial:

Defendants seek to have it both ways by claiming they can raise exhaustion at any time but the evidence of exhaustion should be limited to that submitted at trial.  If it truly is a question of subject matter jurisdiction, the trial court could — and this court can — reasonably rely on the materials submitted by plaintiff in her opposition to defendants’ posttrial motion to decide the issue.  By arguing otherwise, defendants conflate the question of whether sufficient evidence was admitted at trial to find in plaintiff’s favor on the elements of her FEHA claims with the question of whether subject matter jurisdiction existed at trial and now exists on appeal.

In other words, what’s sauce for the goose is sauce for the gander. If the defendants can introduce evidence on a “jurisdictional” defense after trial, the plaintiff can rebut it with evidence after trial.

Finally, the court reminded employers that while small employers (fewer than five employees) escape some of California’s anti-discrimination laws, liability for sexual harassment isn’t one of them. The court reaffirmed that under both FEHA and the California Constitution an employer will be liable for harassment and wrongful termination even if there is only one employee.

Much of the reason behind the Kim case seems to turn on the gamesmanship of the defendants. It’s hard to argue that they weren’t trying to pull a fast one here. But the opinion will probably have a more direct, and substantive, impact on the exhaustion of remedies issue. If plaintiffs bear any burden beyond showing that they made claims against all defendants and received right-to-sue letters, it is pretty minor. After Kim, defendants asserting that administrative remedies were not properly exhausted will be well advised to assert as much and be ready to prove it, well before trial begins, at the risk of a potential waiver if they do not. That sounds like it’s defendants’ burden of proof, not plaintiffs’. If you’re going to assert it, at least have the guts to say so.

But I suppose if that’s all you’ve got, you’re in some deep trouble anyway.

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