Raines v. U.S. Healthworks Medical Group, 534 P.3d 40

Background

Plaintiffs Kristina Raines and Darrick Figg alleged they received job offers conditioned on preemployment medical screenings performed by U.S. Healthworks (USHW), a third‑party occupational‑health provider acting as agent for the prospective employers.
The screening questionnaire allegedly contained numerous non‑job‑related medical questions (e.g., reproductive history, HIV, mental illness); Raines declined to answer a question about her last menstrual period, the exam was terminated, and the employer rescinded its offer.
Plaintiffs sued USHW and related entities under FEHA and other laws; after removal and several amended complaints, the federal district court dismissed the FEHA claims on the ground that FEHA does not impose direct liability on an employer’s agent.
The Ninth Circuit certified the question to the California Supreme Court: whether FEHA’s definition of “employer” (Gov. Code §12926(d)) permits direct FEHA liability for a business entity acting as an employer’s agent.
The California Supreme Court held that a business‑entity agent with at least five employees may be held directly liable under FEHA when it carries out FEHA‑regulated activities on an employer’s behalf; it left open the role, if any, of employer control and liability for agents with fewer than five employees.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FEHA’s definition of “employer” permits direct liability for a business‑entity agent	§12926(d) ‘‘includes’’ agents, so an agent acting for an employer is itself an FEHA employer and directly liable	The agent language only incorporates respondeat superior; only the employer — not the agent — should bear liability	A business‑entity agent with ≥5 employees may be directly liable when it carries out FEHA‑regulated activities for an employer
Whether Reno v. Baird and Jones control to bar agent liability	Reno/Jones should not prevent agent liability here because those cases limited liability for individual supervisors, not independent business entities	Reno/Jones foreclose interpreting the agent language to impose direct liability on agents	Reno/Jones do not control; their policy rationales (risk to individual supervisors, small‑employer exemption) are inapplicable or diminished for business‑entity agents with ≥5 employees
Whether common‑law agency or delegation doctrines bar direct statutory liability of agents	FEHA’s text governs; statutory definition can impose independent obligations on agents who perform regulated activities	Agency law means principal bears responsibility; agents shouldn’t be treated as employers absent independent duty to the third party	Statutory language, history, policy permit treating business‑entity agents as employers for FEHA purposes; common‑law agency is not dispositive
Whether agent must meet FEHA’s employee‑count threshold	Plaintiffs argue FEHA’s “includes” enlarges who is an employer but court should still apply statutory thresholds	Agents lacking five employees cannot be FEHA employers; small‑employer exemption matters	Court requires a business‑entity agent to have at least five employees to be directly liable; declined to decide agents with fewer than five employees

Key Cases Cited

Reno v. Baird, 18 Cal.4th 640 (1998) (individual supervisors who are not themselves employers may not be sued under FEHA)
Jones v. Lodge at Torrey Pines Partnership, 42 Cal.4th 1158 (2008) (extends Reno’s rationale to retaliation claims; absence of express personal‑liability language significant)
Los Angeles Dep’t of Water & Power v. Manhart, 435 U.S. 702 (1978) (Title VII prohibits delegating discriminatory programs to avoid liability; Manhart footnote on agents cited)
Spirt v. Teachers Ins. & Annuity Ass’n, 691 F.2d 1054 (2d Cir. 1982) (third‑party pension administrator can be an employer under Title VII where it significantly affects access to employment benefits)
Carparts Distri. Ctr. v. Automotive Wholesaler’s, 37 F.3d 12 (1st Cir. 1994) (ADA agent‑liability theory where agent controls or administers employee benefits)
Williams v. City of Montgomery, 742 F.2d 586 (11th Cir. 1984) (personnel board acting in traditional employer roles may be an employer under Title VII)
DeVito v. Chicago Park Dist., 83 F.3d 878 (7th Cir. 1996) (personnel board may be ADA employer if it meets statutory requirements)
Birkbeck v. Marvel Lighting Corp., 30 F.3d 507 (4th Cir. 1994) (agent language construed as respondeat superior under ADEA)
Miller v. Maxwell’s Int’l Inc., 991 F.2d 583 (9th Cir. 1993) (agent provision read as incorporating respondeat superior under Title VII)
Grant v. Lone Star Co., 21 F.3d 649 (5th Cir. 1994) (agent language interpreted to incorporate respondeat superior under Title VII)