Finding the Facts - Disciplinary and Harassment Investigation

grounds that it had a good faith reasonable belief that Silva had harassed two employees. The trial court found no triable issues of fact and entered judgment for Lucky. Silva appealed.

The Court of Appeal affirmed. Basing its decision on the new standard set forth in Cotran v. Rollins Hudig Hall Internat., Inc. , the Court held that there were no triable issues of fact under the Cotran standard. Under Cotran, three factual determinations are relevant to the question of employer liability: (1) did the employer act with good faith in making the decision to terminate; (2) did the decision follow an investigation that was appropriate under the circumstances; and (3) did the employer have reasonable grounds for believing the employee had engaged in the misconduct. Silva conceded that Lucky did not breach the implied covenant of good faith and fair dealing. With regards to Lucky’s investigation, the Court noted that while the investigation was not perfect, Lucky presented substantial evidence of the appropriateness of its month-long extensive investigation. The Court also found that there was no triable issue of fact as to whether Lucky’s decision to terminate Silva’s employment for violation of company policies was based on a reasoned conclusion supported by substantial evidence under Cotran. Therefore, the Court held that the trial court did not err in granting summary judgment for defendant. 226 Alissia Myers was a salesperson for Trendwest Resorts. Ayman Damlahki, Myers’ supervisor, repeatedly sexually harassed Myers. It was common practice for salespeople to follow home customers who had failed to bring their checkbook or credit card, also known as “driving for dollars.” Although this practice was contrary to Trendwest’s policy, Trendwest was aware of the policy and benefited from it. Most of Damlahki’s sexual advances took place while he and Myers were on “driving for dollars” trips. For example, during one trip in May 2003, Damlahki lured Myers to his residence and grabbed at her breasts and groin area while the two of them were in his closed garage. Myers went on a disability leave after she suffered mental breakdowns, allegedly as a result of Damlahki’s conduct. Trendwest eventually terminated Myers’ employment. Myers sued Trendwest for sexual harassment and failure to take reasonable steps to prevent sexual harassment under the Fair Employment and Housing Act. The trial court granted summary judgment in favor of Trendwest on the ground that Damlahki’s actions were not related to his employer’s interests. The California Court of Appeal reversed and held that Damlahki’s physical groping during the “driving for dollars” incidents defeated summary judgment. Under FEHA, an employer is strictly liable for harassment by a supervisor if the supervisor is acting in the capacity of supervisor when the harassment occurs. The employer is not strictly liable if the harassment results from a completely private relationship unconnected with the employment and not occurring at the workplace or during normal work hours. Here, although the harassment occurred outside the workplace, and Damlahki was acting for his personal interests, the harassment was not a result of a completely private relationship. The “driving for dollars” excursions were connected with Damlahki’s employment and of obvious benefit to Trendwest. Although Trendwest arguably did not approve of the practice, it was aware of the practice, benefited from it, and did nothing to stop it. Employer Can Be Liable for Supervisor’s Harassment of Employee Outside Work Hours and Away from the Workplace

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