The California Supreme Court in Bailey v. San Francisco District Attorney’s Office (S265223, July 29, 2024) clarified the circumstances under which a single racial slur by a coworker can lead to employer liability and further expounded on the type of conduct that can constitute an adverse employment action giving rise to a claim of retaliation. In doing so, the Court provided an important reminder of the necessity to consider the totality of circumstances whenever such claims are made, and to always take claims made by employees against coworkers seriously.

Plaintiff Twanda Bailey, who is African-American, alleged that a coworker with whom she shared an office and job duties called her the N-word. Ms. Bailey reported the incident to her employer’s human resources manager but alleged that rather than take appropriate action in response to the racial harassment, the manager blocked her from filing of a formal complaint and engaged in a course of intimidating conduct against her. Ms. Bailey sued her employer for race-based harassment and retaliation. The trial court granted summary judgment for her employer, and the California Court of Appeal affirmed, finding as a matter of law that she had failed to allege sufficiently severe or pervasive conduct to support her claim for harassment, and that the subsequent actions by the HR manager did not constitute an adverse action against her in retaliation for raising her claim. Ms. Bailey took her case to the California Supreme Court, which reversed the lower courts’ decisions.

The Court first considered whether the conduct alleged – which happened only once in a private office and was not heard by anyone else but Ms. Bailey – was sufficiently severe or pervasive to alter the conditions of Ms. Bailey’s employment and create an abusive work environment, and if so, whether her employer took immediate and appropriate corrective action in response. The Court acknowledged prior caselaw stating that “simple teasing, offhand comments, and isolated incidents (unless extremely serious)” are not enough to create an actionable claim of harassment. However, the Court stressed that “racially motivated comments or actions may appear innocent or only mildly offensive to one who is not a member of the targeted group . . . but intolerably abusive or threatening when understood from the perspective of a plaintiff who is a member of the target group.” Previous courts have recognized that the use by a supervisor of an unambiguous racial epithet such as the N-word may suffice to create a hostile work environment. “Far more than a ‘mere offensive utterance’ the N-word is pure anathema to African-Americans. . . The N-word carries with it, not just the stab of present insult, but the stinging barbs of history, which catch and tear at the psyche the ways thorns tear at the skin.”

Rejecting the lower courts’ conclusions that the single use of a racial slur was insufficiently severe to support a claim of harassment, the Court said what matters is not that the slur was uttered but one time by a coworker, not a supervisor, but the totality of the circumstances, explaining: “[i]t is of vital importance to consider the nature and extent of coworkers’ interactions. . . A rigid distinction between supervisors and coworkers may ignore informal workplace relationships; not all power appears on an organizational chart . . . Where a supervisor allows a harassing subordinate to act with impunity or appears to ratify their conduct, this may imbue the subordinate with a certain degree of authority to alter the working conditions of their coworkers.”

In this case, Ms. Bailey and her coworker shared an office space, as well as work duties. In addition, Ms. Bailey presented facts indicating that the offending coworker acted with a certain degree of impunity because of her friendship with the employer’s HR manager, making Plaintiff fearful of reporting the behavior. Finally, she also presented evidence that the incident interfered with her work performance, and that the stress of her workplace environment following the incident resulted in her seeking treatment for severe anxiety and depression.

Based on these facts – the “totality of the circumstances” – the Court concluded that they created a question of fact for a jury as to whether the single racial slur by the coworker was sufficiently severe to support a claim for racial harassment.

The Court also considered the employer’s liability for the coworker’s action. Although an employer is strictly liable for acts of harassment by a supervisor, an employer is liable for acts of a coworker only where it “knows or should have known of this conduct and fails to take immediate and appropriate corrective action.” In Ms. Bailey’s case, the actions of the HR manager – the person tasked with receiving and responding to harassment complaints in the workplace – arguably were meant to convey that complaints of harassment would not be taken seriously and actively undermined the remedial efforts of others, creating an issue of fact as to whether the employer’s response was “immediate and appropriate.”

In addition to the claim of harassment, Ms. Bailey also claimed that she was retaliated against for engaging in protected activity as a result of raising her claim. To prevail on a claim for retaliation, a plaintiff must demonstrate that they suffered an adverse employment action as a result of engaging in a protected activity. The Court recognized that minor or relatively trivial adverse actions by employers or fellow employees that are “reasonably likely to do no more than anger or upset an employee” are not actionable. However, like the holistic view the Court said applies to harassment claims, alleged retaliatory acts must be considered collectively rather than individually, and may take the form of a serious of subtle, yet damaging injuries. Here, the HR manager allegedly engaged in a pattern of systematic retaliation in response to Ms. Bailey’s complaint that appeared to be designed to punish her for engaging in protected activity (reporting racial harassment) and threatened further punishment should she persist. The Court held that although individually each incident might be considered mere social slights or ostracism, the fact that they continued over a period of time and were carried out by an HR manager could lead a jury to conclude that the actions were reasonably likely to impair the affected employee’s job performance and leave them unprotected from the very harms the statute was designed to eliminate. 

For employers, the take-aways from this case are clear: even a single racial slur by a coworker may give rise to liability where the perspective of the complaining employee is not appropriately taken into account, and where prompt and effective remedial action is not taken. Further, retaliation can take many forms, and need not be tied to a specific adverse employment action. The Court’s decision also highlights the need for anti-harassment and retaliation policies to clearly provide for more than one avenue to report inappropriate conduct. Managers must be trained to be alert for acts of harassment and retaliation and to report them promptly. Last but not least, all employees must be held to a standard of respectful conduct in the workplace which must be modeled by the people in charge.