By Heather J. Van Meter
Barran Liebman LLP
Oregon law firm,
The Oregon Court of Appeals held on May 5, 2021, that anyone could be sued and held liable for “aiding and abetting” unlawful employment practices, not just employers or employees, as the federal court in Oregon had consistently previously held.
ORS 659A.030(1)(g) makes “aiding and abetting” an unlawful employment practice as itself an unlawful employment practice. But who can be liable for “aiding and abetting”? Just employers and employees, or anyone at all?
In Hernandez v. Catholic Health Initiatives, Reed Group Management, et al., 311 Ct App 70 (May 5, 2021), plaintiff Hernandez was a nurse at Mercy Medical Center hospital, operated by Catholic Health Initiatives. Defendant Reed Group Management managed the hospital’s employee benefits programs. Plaintiff Hernandez was injured at work and made a workers’ compensation claim. She was off work for several months due to her doctor’s work restrictions. While off work, the plaintiff alleges some hospital positions opened that met plaintiff Hernandez’s work restrictions, but the hospital allegedly refused to return her to work in those positions. Then, the hospital allegedly terminated the plaintiff’s employment because she had exhausted her medical leave. Plaintiff Hernandez also alleges that she contacted defendant Reed Group Management, the benefits administrator, to request additional medical leave, but was told she was not eligible because her employment had been terminated.
At issue in this Court of Appeals opinion is Reed Group Management’s potential liability for “aiding and abetting” alleged unlawful employment practices of the hospital. Defendant Reed Group Management argued the “aiding and abetting” liability in ORS 659A.030(1)(g) is limited to employers and employees, not third parties like Reed Group Management. This is the interpretation the federal court in Oregon had previously applied. Plaintiff argued the “aiding and abetting” liability could apply to anyone, not just employers and employees.
The Court of Appeals addressed the legislative history of the statute, ORS 659A.030(1)(g), and agreed with plaintiff Hernandez that anyone could be liable for any action that could be “aiding and abetting” unlawful employment practices. Specifically, Reed Group Management, the employee benefits administrator for Mercy Medical Center hospital, could be held liable for informing plaintiff Hernandez that she was not eligible for additional medical leave because her employment had been terminated.
If the Supreme Court does not review and reverse the decision, the Court of Appeals decision will stand and the case will go back to the trial court in Douglas County and proceed towards a jury trial.
The Court of Appeals did not discuss any limits on who could be held liable for “aiding and abetting” unlawful employment practices; according to the court, it could be “anyone.” This may include co-employers, third-party benefits administrators, third-party human resources coordinators, employee search and hiring firms, background check providers, or others, possibly even including outside general counsel.
Care should be taken in communications with all third-party service providers because those communications may be discoverable in future discrimination lawsuits, especially if the third-party service provider is a named defendant.
While employment discrimination claims were already on the rise, this court decision potentially opens up liability to many more people and entities. For all third-party service providers or others involved in the employment process, contractual indemnity provisions should be reviewed and strengthened as needed. Additionally, all employers could be facing increased indemnity claims from third parties, and contractual protections should be reviewed and revised as needed for these circumstances as well.
The content of this Alert is provided for general information purposes only. It should not be considered legal advice or used as a substitute for consulting an attorney for legal advice.
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