From employer’s perspective
Receiving a notice from the Department of Fair Employment and Housing (DFEH) can be a stressful experience for any business owner. It means an employee or former employee has filed a formal complaint against your company, alleging a violation of California’s robust anti-discrimination laws. While this situation is serious, it doesn’t have to be catastrophic.
Understanding the process, your obligations, and the strategic decisions you can make along the way is the key to managing your risk and achieving a favorable outcome. This guide provides a clear, business-focused overview of what to expect when you are faced with a claim under the Fair Employment and Housing Act (FEHA).
Understanding the Key Agencies and Their Roles
When a claim is filed, you will be dealing with one or both of the following state agencies. Knowing who they are and what they do is critical.
- Department of Fair Employment and Housing (DFEH): The DFEH is the neutral investigative body. When a complaint is filed, the DFEH’s primary role is not to prosecute but to gather facts from both the employee (the “Complainant”) and the employer (the “Respondent”). They will request documents, conduct interviews, and assess whether there is sufficient evidence to suggest a violation of the FEHA may have occurred. The DFEH also has a strong mandate to facilitate resolution through mediation and settlement.
- Fair Employment and Housing Council (FEHC): If the DFEH finds substantial evidence of a violation and cannot broker a settlement, it may choose to prosecute the case. In that event, the FEHC acts as the adjudicator, similar to a court. It holds formal hearings and has the authority to issue binding decisions, order remedies, and impose penalties. While only a small fraction of cases ever reach the FEHC, understanding its authority is important.
For most employers, the entire administrative process will take place solely with the DFEH.
The Life Cycle of a Claim: From Complaint to Resolution
Receiving that first notice triggers a multi-stage process. Here’s a breakdown of what you can expect.
Stage 1: The Complaint and Your Initial Response
The process begins when an employee files a verified complaint with the DFEH. The law requires this to be done within one year of the last alleged discriminatory act. Once filed, the DFEH will formally serve you with a copy of the complaint.
Your Immediate Obligation: You are typically required to provide a written response to the complaint, known as a position statement. This is your first and best opportunity to formally present your side of the story.
A strong position statement should:
- Directly address the allegations made in the complaint.
- Provide a clear narrative of the events from the company’s perspective.
- Reference supporting evidence, such as personnel files, company policies, witness statements, or emails.
This is a critical legal document. It’s highly advisable to work with legal counsel to draft a thorough and persuasive position statement, as it can significantly influence the DFEH’s initial assessment of the case.
Stage 2: The DFEH Investigation
Once your position statement is submitted, the DFEH will begin its investigation. An investigator will be assigned to the case and will act as a neutral fact-finder. Be prepared for the following:
- Requests for Information (RFIs): You will almost certainly receive detailed requests for documents. These can include the complainant’s complete personnel file, payroll records, your company’s anti-harassment policies, records of training, and information about other employees who were treated similarly.
- Witness Interviews: The investigator may wish to interview managers, supervisors, HR personnel, and even other employees who may have knowledge of the situation. Your legal counsel can help prepare your team for these interviews.
Your cooperation is mandatory. Failing to respond or providing incomplete information can be viewed negatively and may hinder your ability to defend the claim effectively.
Stage 3: Mediation and Settlement
The DFEH is heavily focused on resolving disputes without formal litigation. At almost any stage of the investigation, the DFEH will offer voluntary mediation.
Mediation is a confidential process where a neutral third party helps you and the complainant discuss the issues and try to reach a mutually agreeable settlement. This is often the most cost-effective and efficient way to resolve a claim. A settlement can provide finality and allow you to avoid the time, expense, and uncertainty of continued litigation.
The “Right-to-Sue” Letter and the Shift to Civil Court
The DFEH has a massive caseload. As a result, many investigations do not end with a formal finding. Instead, the complainant can request a “right-to-sue” letter from the DFEH at any time.
Once this letter is issued, the DFEH closes its file, and its involvement ends. The complainant then has one year from the date of the letter to file a lawsuit against your company in civil court. This is the most common path for employee-side claims. Even if you believe the claim has no merit, you must be prepared to defend your company in court once this letter is issued.
Key Legal Doctrines and Best Practices for Defense
Understanding the law is the best defense. Here are critical concepts every California business owner should know.
- The Importance of Documentation: The single most important factor in defending a claim is having clear, consistent, and contemporaneous documentation. Performance reviews, disciplinary write-ups, and notes of meetings that were created before the claim was filed are your most powerful evidence. They demonstrate that your employment decisions were based on legitimate, non-discriminatory business reasons.
- “At-Will” Employment is Not an Absolute Defense: While California is an “at-will” employment state, this simply means you can terminate an employee for any reason, or no reason at all—as long as it is not an illegal reason. You cannot terminate someone for reasons that violate the FEHA, such as their race, gender, disability, or for complaining about harassment.
- The Disability / Misconduct Distinction: The duty to accommodate employees with disabilities is broad, but it is not limitless. The law allows employers to distinguish between an employee’s disability and misconduct that stems from it, particularly in cases involving threats or workplace violence. If an employee violates a clear conduct policy, you may be able to take disciplinary action, but this area is extremely complex and requires careful legal analysis.
- Preventative Measures Are Your Best Shield: The ultimate defense is preventing claims from arising in the first place.
- Maintain a clear, up-to-date employee handbook with robust anti-harassment and anti-discrimination policies.
- Conduct regular anti-harassment training for all employees and supervisors. This is legally required for companies with 5 or more employees.
- Train your managers to recognize and escalate potential issues before they become formal complaints.
- Apply your policies consistently to all employees to avoid any appearance of favoritism or targeted action.
Navigating a DFEH claim requires a careful, strategic, and proactive approach. By understanding the process and focusing on sound policies and documentation, you can protect your business and ensure you are in the strongest possible position to defend your decisions.