Labor Code §3208.3(h) provides an employer a defense to a claimed psychiatric injury if “…the injury was substantially caused by a lawful, non-discriminatory, good faith personnel action.” A new case out of the Fifth District Court of Appeals has now found that a successful use of the good faith personnel action defense will carry over to a later Superior Court race discrimination case and precludes a discrimination suit under the Fair Employment & Housing Act.

In Li v. County of Fresno, the Court of Appeals was confronted with three Fresno County Correctional Officers who claimed they were each subjected to racial discrimination when they were denied various opportunities for shift work, promotions, and imposition of discipline. Each plaintiff was Laotian or Hmong ethnicity. Under the Fair Employment and Housing Act, discrimination based on ethnicity is prohibited and can result in a judgment for back wages, emotional distress, medical expenses, punitive damages, as well as attorney’s fee award.

However, each of the Correctional Officers had previously filed psychiatric injury claims against the County in which the same allegations of racial discrimination had been made. Each of the three Correctional Officers were denied workers’ compensation benefits because the judges in each of the three cases found that the County’s actions were good faith personnel actions.

The Court of Appeals upheld the decision of the Superior Court that the three correctional officer’s workers’ compensation cases fully litigated the issue of racial discrimination and found no triable issue of fact on which to proceed in Superior Court action. The Court of Appeals held that plaintiff’s Fair Employment and Housing Act action raised the identical issue and sought the same damages as the workers compensation cases.

The Court relied on the “primary rights” doctrine to support their findings. That doctrine holds that a plaintiff has a “primary right” not to be subject to discrimination and a defendant has a “primary duty” not to discriminate against the plaintiff. A “primary right” violation entitles a plaintiff to one claim of relief.

While the plaintiffs had two remedies to seek redress for violating of one their “primary right”, they were found in the WCAB to have not been the target of discrimination.

The Court then applied the doctrine of “res judicata” doctrine (claim preclusion) to hold that the plaintiffs could not re-litigate the loss of a primary right in the Superior Court because the same parties and same issue was presented in each of the workers compensation cases.

This is a case in which the stars were all aligned for the defendant. Not every psychiatric injury implicates discrimination nor does every workers’ compensation case result from an injury that implicates a separate civil remedy. Because the WCAB found that the County of Fresno’s conduct was the exercise of a good faith personnel action, that same good faith personnel action foreclosed re-litigation of the issue of discrimination in the Superior Court case.

Employers and their insurers should look at the facts of this case carefully when confronted with claimed injuries that implicate a psychiatric injury that also could result in a claim of discrimination under FEHA. With the right facts a defendant and its insurer could exploit a finding before the WCAB to defend a later claim of discrimination.

The case is Li v. County of Fresno (2017) Cal. App. Lexis 882. My thanks to David Parker, who successfully defended one of the three workers compensation cases noted, for his insight into the good faith personnel action defense.