The Department of Fair Employment and Housing (DFEH) is the largest civil rights agency in the country, established to enforce non-discrimination laws in the private and public sectors. The department is an independent, quasi-judicial administration agency that investigates, mediates and prosecutes violations of the Fair Employment and Housing Act, the Disabled Persons Act, the Unruh Civil Rights Act and the Ralph Civil Rights Act. The department is in the new Business, Consumer Services and Housing Agency. As part of a 2013 reorganization, the department absorbed the duties previously performed by the Fair Employment and Housing Commission, which was eliminated.

About Us (DFEH website)

California first introduced anti-discrimination legislation in 1945, four years after President Franklin Roosevelt issued an executive order establishing a national Fair Employment Practices Commission to handle complaints about race, creed, color and national origin bias. It didn’t pass that year and was reintroduced in 1949 . . . and 1951 . . . and 1953. 

The state Legislature finally passed, and Governor Edmund “Pat” Brown signed, the Fair Employment Practices Act (FEPA) in 1959. The act covered employers of five or more people, labor organizations and employment agencies and prohibited discrimination in employment based on race, religion, national origin and ancestry. It was fairly limited legislation whose remedies consisted of criminal penalties, injunctive relief and administrative orders for reinstatement. The act established the Division of Fair Employment and Housing within the Department of Industrial Relations, and the Fair Employment and Housing Commission.

The state also passed the Unruh Civil Rights Act that year—which prohibited discrimination by business establishments, including property owners—and the Hawkins Act, which prohibited discrimination in publicly assisted housing.

In 1963, the state passed the Rumford Fair Housing Act, which protected Californians from discrimination in rental properties with four or more units. A year later, California voters passed Proposition 14, which nullified the act, but the state Supreme Court found the proposition violated the U.S. Constitution and the U.S. Supreme Court agreed in Reitman v. Mulkey on a 5-4 vote.

All the California legislation predated the first comprehensive federal anti-discrimination law, the Civil Rights Act of 1964. 

In 1968, the California Disabled Persons Act declared that physically disabled people are entitled to the same rights of access to streets and public facilities as able-bodied people. DFEH was charged with enforcement of the act, which also declared that disabled persons are entitled equal access to other places the public is invited, such as hotels and amusement parks and other places of public accommodation.  

The division became an independent department in 1980 when Governor Jerry Brown and the Legislature retooled civil rights enforcement by combining the Rumford Act and FEPA and renaming it the Fair Employment and Housing Act (FEHA). Enforcement of the Unruh Act was included. The new Department of Fair Employment and Housing (DFEH) was given the power to investigate, mediate and prosecute discrimination complaints and its sister panel, the Fair Employment and Housing Commission, was empowered to promulgate regulations and adjudicate bias claims.

In 1992, the state amended FEHA to mirror federal legislation to allow both actual and punitive damages and reasonable attorneys’ fees to the prevailing party, assuming it is not the state. As anti-discrimination legislation continued to evolve, Fair Employment and Housing Commission decisions bolstered the authority and broadened the scope of the department’s activities while court rulings embellished the power of the state to fight bias. For instance, Hubert v. Williams in 1982 ruled that the Unruh Act protected against sexual orientation discrimination in housing 17 years before that provision was formally added to FEHA.

In 1993, the California Family Rights Act became law and fell under the administration of the department. The act ensures secure leave rights to employees for the birth of a child, during placement of a child in the employee’s home for adoption or foster care, for the serious health condition of the employee’s child, parent or spouse, and for the employee’s own serious health condition.

In 2008, passage of the Ralph Civil Rights Act added hate crimes to the list of activities prohibited by the state, extending the jurisdiction of the Department of Fair Employment and Housing.

In December 2010, the department reached a $6 million settlement of a class-action suit that alleged Verizon repeatedly violated the California Family Rights Act by denying or delaying employees’ time off for serious health issues, to care for newborns and to take care of seriously ailing relatives. It was the largest settlement in the department’s history and followed a two-year probe by its special investigation unit.

Department Director Phyllis Cheng moved forward with administrative reforms effective October 2011 to transition from individual complaints and toward “high impact” cases of systemic discrimination. The reforms streamlined the administrative remedies a complainant must navigate before a case can be filed for a court trial. The new procedure made it easier to request that the department investigate an issue by eliminating strict verification, signatures and time limits to file, permitting a more liberal construction of the complaint.

But even bigger changes occurred the next year when the Legislature approved Governor Jerry Brown’s government reorganization, which eliminated the Fair Employment and Housing Commission and moved its responsibilities to the department.

Senate Bill 1038 created a Fair Employment and Housing Council within the department to take over the commission’s rulemaking and regulatory functions, but the law’s biggest impact will be in the way charges of discrimination are handled. Instead of the department referring charges against an employer to the commission, it will invoke mandatory arbitration and, if that doesn’t work, proceed directly to civil court.

The changes will take place as the department transitions from the State and Consumer Services Agency to the new Business, Consumer Services and Housing Agency by July 1, 2013.

Transformative Year for Civil Rights in CA (by DFEH Director Phyllis W. Chen) (pdf)

A Review of the Most Significant Cases (California Labor and Employment Bulletin) (pdf)

Struggle to the Stars: A History of California's Fair Housing Law (DFEH website) (pdf)

Hubert v Williams (1982) (Lawlink)

Postwar Activism: The Rumford Fair Housing Act (by Mary Ann Irwin)

A Six Million Dollar Reminder of the Importance of the Family Rights Act (by Elizabeth Tom Arce, San Francisco Daily Journal)

Celebrating the FEHA’s 50^th Anniversary: A Review of the Most Significant Cases (pdf)

The Department of Fair Employment and Housing (DFEH) is  an independent, quasi-judicial administration agency that conducts investigations and either prosecutes discrimination cases or conducts mediation.

The department is charged with enforcing the state Fair Employment and Housing Act, the Unruh Civil Rights Act, the Ralph Civil Rights Act and the Disabled Persons Act.

It also routinely offers technical assistance regarding regulations to employers, businesses and housing providers. And it provides outreach services to the public that include civil rights case law alerts, legislative summaries, information on fair housing, a newsletter and webinars.

The department is run by a director appointed by the governor and confirmed by the senate. It investigates, conciliates, mediates and prosecutes about 20,000 discrimination, harassment and retaliation complaints a year. The vast majority (about 92%) of cases filed with the department concern employment; about 6% are housing, and the rest are Ralph Act hate crimes and other forms of discrimination.

Of the 18,353 employment discrimination cases filed in fiscal year 2008-09, 7,223 dealt with mental and physical disability; 5,942 involved claims of retaliation, 3,865 had to do with race or color; 3,835 involved sexual harassment claims; 3,757 alleged age discrimination (40 or older); and 1,883 involved national origin or ancestry.

That year, half the 1,039 housing discrimination cases dealt with mental and physical disability; 237 involved familial status (children); 206 had to do with race or color; and 95 were about national origin or ancestry.

Although the complaint process is similar for employment, housing and public accommodations, there are some differences. But generally, filing a compensation case is free. The department weeds out baseless claims and refers other cases to the FEHC. Cases are also filed with the federal Equal Employment Opportunity Commission (EEOC), if applicable.

Once the department accepts a complaint, it conducts an investigation to decide if there is sufficient evidence to bring a state or federal case. If no compromise can be reached through mediation, the department provides free legal representation to the injured party.

The case can end up in court or be heard by a commission lawyer, known as an administrative law judge, with each decision reviewed by the full panel of judges. If emotional distress damages or administrative fines are sought, the defendant may elect to move to a civil court. The losing side has the option for an appeal.

Discrimination cases can be very hard to disprove for the defense, especially with employment discrimination. About half of registered complaints are moved to civil litigation. The remaining, usually small monetary discrimination complaints are processed by an administrative system using administrative judges.

Emotional distress damages and administrative fines are limited to a total of $150,000 per defendant in employment cases. An additional award of up to $25,000 may be ordered for hate crimes. If the case is moved to Superior Court then there is no limit to emotional damages. Punitive damages may be administered and the winning party may recover additional costs, such as lawyer fees.

Remedies in first-violation housing cases can range up to $10,000 for out-of-pocket expenses, injunctive relief, access to the housing previously denied, emotional distress, and civil penalties.

A joint study by Rand and UCLA in 2009 laid out what happened to a typical 1,000 complaints received by the department. One-fourth ended up directed to the federal EEOC. Half of the remaining 750 complaints were accompanied by an “immediate right to sue” request and were not pursued by the department. Of those, 165 were filed in Superior Court but only two made it to a jury verdict.

Of the 375 processed by the department, 165 were dismissed for lack of probable cause that a violation occurred, around 70 were rejected for investigation, 33 were tossed for reasons not related to merit, 34 ended when the complainant requested a “right to sue” letter and 20 got dismissed for insufficient evident.

Forty-six were settled or resolved during the administrative process, resulting in 27 receiving a median settlement of $4,000 and the other something unspecified. Only three or four are sent to the department’s legal division for possible action and two or three result in an accusation being filed with the Fair Employment and Housing Commission.

A 2012 government reorganization that eliminates the commission by July 1, 2013, also changes the way discrimination cases are handled. Instead of the department referring charges against an employer to the commission, it will invoke mandatory arbitration and, if that doesn’t work, proceed directly to civil court.

The Elimination of the Fair Employment and Housing Commission Provides Far Greater Authority to the Department of Fair Employment and Housing (by Matthew D'Abusco, California Workplace Law Blog)

California Fair Employment and Housing Act (FindUsLaw)

2009 DFEH Annual Report (pdf)

The state General Fund pays for about 75% of the department’s budget ($21.7 million in FY 2011-12); the rest comes from the federal government. The department spends three-quarters of its budget on its 187 employees and the rest on operating expenses and equipment.

Top 10 Contractors: The department lists the following suppliers as its largest  contractors in 2012:

3-Year Budget (pdf)

2011-12 Budget (Ebudget) (pdf)

DFEH v. Verizon

In the largest settlement in its history, the Department of Fair Employment and Housing settled a $6 million class-action suit against Verizon in November 2010 over denial of family medical leave. Verizon agreed to pay the money to members of its voice, data and video operations in California for actions taken between 2007-2010.

The lawsuit followed a two-year investigation by the department’s special investigations unit of Verizon’s practices under the California Family Rights Act. It alleged that the company denied or delayed attempts by employees to get time off for serious health issues, to care for a newborn or to take care of a seriously ailing relative. All are covered by the act. Some employees were allegedly fired for taking the time off anyway.

The settlement is equal to a typical year of department enforcement division settlements. While not admitting any wrongdoing, Verizon agreed to train its employees to use the family rights act and revise its own policies and procedures accordingly.

The settlement divided the claimants into three tiers for the purpose of assigning payment. Claimants who were denied leave but not punished for asking get a maximum of $3,000. Those who were disciplined but not fired can get up to $6,000. And those who were fired, though not necessarily disciplined or denied leave, are eligible for $25,000. More than 1,000 current and former employees submitted claims. The settlement is ultimately subject to court review.

In May 2011, the department announced it was building on its successful lawsuit by  partnering with the University of California, Irvine School of Law to develop an innovative civil rights clinic to “train a future generation of lawyers to combat systemic discrimination, and to develop a pipeline for law students interested in future employment with the DFEH and related state agencies.”

Class Action Settlement (DFEH website)

State Reaches Multimillion Dollar Settlement with Telecommunications Company (DFEH press release) (pdf)

A Six Million Dollar Reminder of the Importance of the Family Rights Act (by Elizabeth Tom Arce, San Francisco Daily Journal)

Settlement Agreement (pdf)

A Phoenix Rises from the Budgetary Ashes (by DFEH Director Phyllis Cheng) (pdf)

State Launches DFEH-UCI Civil Right Clinic (DFEH press release) (pdf)

Cancer Patient Gets $846,300

In its largest administrative award ever, the Department of Fair Employment and Housing fined Acme Electric Corporation $846,300 for firing an employee because he had cancer.

Charles Richard Wideman, Acme’s western regional sales manager from 2004-2008, developed kidney cancer in 2006 and prostate cancer the next year. The company gave Wideman time off for surgeries, other treatment and recuperative leave, but balked when he asked for accommodation related to travel requirements of the job. He was given an unsatisfactory job evaluation that cited his travel limitations and fired him in 2008. Wideman’s region had led the company in sales growth in 2007, but the company said he had failed to make personal contact with customers and spent too much time at home.

After a three-day hearing before the Fair Employment and Housing Commission, Wideman was awarded $748,571 for lost wages, $22,729 for out-of-pocket expenses and $50,000 for the emotional distress. Acme was ordered to pay the state $25,000 as an administrative fine.

Wideman’s compensation was based on his annual $106,000 salary and benefits, and his stated intent to work at Acme until retirement in 2015.

Record Award for Man Fired During Cancer Recovery (by Egelko, San Francisco Chronicle)

State Department of Fair Employment and Housing Achieves Historic Victory (DFEH News Brief) (pdf)

Procedural Recommendations

New internal regulations adopted by the Department of Fair Employment and Housing in October 2011 will have an effect on future procedures for filing, investigating and processing cases. The changes make it easier to file complaints and initiate department investigations. Employers may no longer argue that having an open door policy provided sufficient opportunity for employees to press their claims with the company, thus invalidating the employees’ claims.

It is anticipated that the result may be few requests for automatic “Right to Sue” letters and thus fewer lawsuits and more reliance on the department’s mediation services.

Labor and Employment Law: What to Expect in 2012 (by Crystal O’Brien)

Rand/UCLA Study

A report commissioned in 2009 at the behest of department Director Phyllis Cheng   offered a number of suggested reforms.

Noting that the department is hampered by budgetary constraints, the Rand/UCLA study recommended “imposing a fair employment practices regulatory fee of 10 cents per month on both employers and employees [that] would triple the current budget of the DFEH.”

It further recommended that the department be more aggressive in having its attorneys pursue cases outside the administrative venue where courts might provide a better bang for their buck. A portion of that bang, the report suggested, might then be used to fund nonprofit organizations to represent people who would not otherwise be able to afford a court remedy with private counsel.

The study also recommended that both the department and the Fair Employment Housing Commission be moved from the State and Consumer Services Agency to the Labor and Workforce Development Agency, a suggestion made earlier by Governor Arnold Schwarzenegger’s California Performance Review.

California Employment Discrimination Law and Its Enforcement: The Fair Employment and Housing Act at 50 (by Gary Blasi and Joseph W. Doherty, UCLA Law/Rand Center for Law and Public Policy) (pdf)

Stopping Discrimination

A fundamental assumption of the Department of Fair Employment and Housing is that discrimination can be curtailed by applying penalties that discourage parties from exhibiting intentional bad behavior.

Does it work?

2010 Civil Rights Renaissance (DFEH website)

6 Million Votes for Yes 

When the department won a $6 million class-action suit settlement from Verizon in November 2010 over violations of the California Family Rights Act, companies took notice. The deal equaled a typical year’s worth of department settlements and prompted a preemptory attempt by companies to ensure they weren’t vulnerable to accusations of discrimination.

In September 2011, the department announced its largest administrative award ever, $846,300 against Acme Electrical Corporation for firing an employee because he had cancer. Acme was also required to adopt policy changes and training requirements to prevent further discrimination. Other typical suits include a $618,000 settlement of a housing discrimination class-action against an Orange County apartment complex, a state order that Terra Linda Farms pay $111,000 for refusing to rehire a farmworker who complained of sexual harassment, and a six-figure settlement of a suit against United Air Lines on behalf of a disabled mechanic.

As DFEH Director Phyllis Cheng has pointed out, 50 years ago there was no case law that addressed employment discrimination. There was no private bar and no public agencies seeking to prevent discrimination. It was agencies like hers that paved the way —with groundbreaking case law—for creation of dual systems, public and private, that have somewhat different goals and accomplish different tasks.

Cheng argued that a Rand-UCLA study which in some ways unfavorably compared the accomplishments of the public sector to private attorneys was comparing apples and oranges by focusing on the size of awards given to complainants. Her department and other public agencies often wring the kind of policy and procedural reforms from employers that private attorneys don’t pursue. These affirmative forms of relief help prevent further discrimination down the road. 

Complainants in the public system keep most if not all of their settlement winnings, while those with private attorneys pay a heavy contingency fee. The public system is open to all complainants regardless of their economic status while, as the Rand/UCLA study pointed out, wealth was a major determinant in selection of a private lawyer and success of those cases.

Response to the UCLA Rand Report (by DFEH Director Phyllis Cheng in testimony before the Legislature) (pdf)

State Department of Fair Employment and Housing Achieves Historic Victory (DFEH website) (pdf)

Why DFEH is the Canary in the Mineshaft for Employment Law (by DFEH Director Phyllis Cheng) (pdf)

No.

When Director Cheng asked Rand Corporation and UCLA to do a study of the 50-year-old department’s record involving employment discrimination, she hardly expected them to question a fundamental pillar of its existence.

The 2009 Rand/UCLA study said researchers in social psychology and the neurosciences disagree with the premise—embraced by the department—that discrimination is largely caused by intentional, individual action and can be deterred by economic penalties. Instead, most discrimination is caused by the structure of markets and institutions and the unintended actions of bad actors.

But that was merely an aside to the researchers’ primary focus: a consideration of the department on its own terms as a force for deterring discrimination, providing compensation to victims and changing discriminatory practices. They concluded that “what we have found raises serious questions regarding whether enforcement of the Fair Employment and Housing Act is either fair or efficient.”

The researchers found that African-Americans filed more than twice as many claims per 1,000 employees as whites and people with disabilities filed more than four times as many. But the biggest determinant of success was access to a lawyer and that greatly favored whites for various socio-economic reasons. Lower income complainants tended to stay in the administrative system more than upper income complainants who sought private representation. Although information on those who opted out of the system was sketchy, the study concluded they fared better than those who pursued a solution through the DFEH.       

California Employment Discrimination Law and Its Enforcement: The Fair Employment and Housing Act at 50 (by Gary Blasi and Joseph W. Doherty, UCLA Law/Rand Center for Law and Public Policy) (pdf)

Calif. Employment Discrimination Law: Two Systems, Separate and Unequal (by Lauri Gavel, UCLA News)

Access to Salary Should Not Determine Access to Justice, Says Swanson (Assemblywoman Sandre R. Swanson’s website)

Phyllis Cheng, 2008-2014

Wanda J. Kirby, 2007-2008

Suzanne M. Ambrose, 2004-2007

Jill C. Peterson, 2003-2004 (Interim)

Dennis W. Hayashi, 1999-2003

Nancy C. Gutierrez, 1991-1999