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Lales v. Wholesale Motors Co.

Supreme Court of Hawaii

February 13, 2014

GERARD R. LALES, Respondent/Plaintiff-Appellant,
v.
WHOLESALE MOTORS COMPANY, dba JN AUTOMOTIVE GROUP, JOHNNY MARTINEZ, and GARY MARXEN, SR., Petitioners/Defendants-Appellees.

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (ICA NO. 28516; CV. NO. 03-1-2415)

Christopher J. Muzzifor petitioner

Daphne E. Barbee for respondent

RECKTENWALD, C.J., NAKAYAMA, AND McKENNA, JJ., CIRCUIT JUDGE BROWNING, ASSIGNED IN PLACE OF POLLACK, J., RECUSED, WITH ACOBA, J., CONCURRING AND DISSENTING SEPARATELY.

OPINION

RECKTENWALD, C.J.

Gerard R. Lales filed a civil complaint against his former employer and supervisors for discriminatory conduct he allegedly suffered while employed as a car salesman.[1] Lales alleged that he was subjected to derogatory comments about his French national origin, and that he was terminated because he complained about the discriminatory conduct. Lales alleged state harassment and retaliation claims, federal harassment and retaliation claims, unlawful termination as against public policy, and breach of his employment contract. All of the claims were alleged against each of the Defendants. Defendants asserted that Lales was not discriminated against during his employment, and that he was terminated because he lied to a customer.

The circuit court granted summary judgment in favor of Defendants. On appeal, the Intermediate Court of Appeals vacated in part and affirmed in part, and remanded to the circuit court for further proceedings. Lales v. Wholesale Motors Co., No. 28516, 2012 WL 1624013 (Haw. App. May 9, 2012) . Specifically, the ICA vacated the circuit court's grant of summary judgment in favor of the employer and one of Lales's supervisors on the state harassment and retaliation claims, and vacated the grant of summary judgment in favor of the employer on the federal harassment and retaliation claims, as well as the public policy claim. The ICA affirmed the circuit court's grant of summary judgment on the remaining causes of action.[2]

As set forth below, we affirm in part and vacate in part the judgment of the ICA. Specifically, we conclude that individual employees are not liable as "employers" under HRS §§ 378-2(1)(A) and 378-2(2). Accordingly, we vacate the ICA's judgment on COAs 1 and 2, with respect to supervisor Marxen, and affirm the circuit court's grant of summary judgment in favor of Marxen on those causes of action.

We affirm the ICA's judgment with respect to the remaining causes of action. Specifically, with regard to the federal harassment claim against JN, we conclude that the affirmative defense set forth in Faragher v. City of Boca Raton, 524 U.S. 775 (1998), does not support summary judgment because there remain issues of material fact as to whether JN's actions culminated in Lales's termination. We also take this opportunity to clarify that the Faragher affirmative defense is not applicable under Hawaii's anti-discrimination laws because the administrative rules of the Hawai'i Civil Rights Commission hold employers strictly liable for the discriminatory conduct of their agents and supervisory employees. Finally, we conclude that there were genuine issues of material fact regarding whether JN's proffered reasons for Lales's termination were pretextual, that Lales produced sufficient evidence to raise genuine issues of material fact as to his state and federal harassment and retaliation claims, and that the basis for Lales's public policy claim is not clear from the record.

I. Background

The following factual background is taken from the record on appeal.

A. Discrimination Complaints

Lales filed a discrimination complaint against his employer, JN, and his supervisor, Marxen, with the Equal Employment Opportunity Commission (EEOC). In a declaration attached to his complaint, Lales alleged that he was employed as a salesperson with JN Chevrolet from July 18, 2001, until June 23, 2002. During that time, Lales alleged that he was subject to derogatory remarks based on his French national origin by his supervisor Marxen, other supervisors, and co-workers. For example, Lales alleged the following:

Gary Marxen, the General Sales Manager, called me Frenchy[], and he wanted that name on my business card. I protested, however I was called "Frenchy" on a daily basis by Gary Marxen, other supervisors and co-workers. Gary Marxen frequently referred to me as a "french bastard", and told me to go back to my country because America does not need French people.
Gary Marxen told Johnny Martinez, a salesperson who started at about the same time I did, "to go and kick the ass of that French bastard." Johnny Martinez repeatedly harassed me by calling me "Frenchy" and telling me that "the French are useless bastards". I complained about Johnny Martinez' derogatory remarks and threats.
Johnny Martinez was promoted to Sales Manager in approximately November, 2001. Despite my complaints about his discrimination and harassment I was transferred to his sales team. I told Gary Marxen that I opposed this transfer. He responded by saying, "fuck you, you French mother fucker, then you are fired." I did not want to lose my job so I remained on Johnny Martinez' sales team. While on his sales team Johnny Martinez continued to harass me and discriminate against me. I protested the discrimination and harassment and months later was allowed to transfer to Carlton Hill's team. On April 2, 2002 Johnny Martinez threatened my [sic] me. At the time of this threat Johnny Martinez had just returned from a suspension for threatening an electrician who worked on property. He was again suspended for threatening me.
In late May, Johnny Martinez again threatened me. I told Gary Marxen and Johnny Martinez that I was going to contact my lawyer. After I threatened to contact a lawyer, Johnny Martinez was terminated.
Shortly after Johnny Martinez'[s] termination I was transferred to Joey Dempsey's sales team. Joey Dempsey was a friend of Johnny Martinez. On my first day on his team Joey Dempsey told me that he was going to get me fired. I was terminated about 3 days later.
I was terminated on June 23, 2002.

The EEOC issued a "determination as to the merits of the subject charge" (EEOC Determination). The EEOC determined that it was unable to conclude that Lales was discharged in retaliation for opposing discrimination in the workplace, but that "there [was] reasonable cause to believe that [JN] discriminated against [Lales] because of his national origin." The EEOC also transmitted the complaint to the HCRC.

The HCRC subsequently issued Lales a "Notice of Dismissal and Right to Sue" letter (Right to Sue Letter). The Right to Sue Letter informed Lales of his right to "file a private lawsuit against the Respondent in the State [c]ircuit [c]ourt[.]"

B. Circuit Court Proceedings

Lales filed a civil complaint in the circuit court against Defendants. He subsequently filed an amended complaint, asserting six causes of action (COA) against Defendants: (1) "discriminatory acts" in violation of Hawai'i Revised Statutes (HRS) chapter 378 (COA 1 or state harassment claim); (2) retaliatory discharge in violation of HRS chapter 378 because Lales filed a discrimination complaint (COA 2 or state retaliation claim); (3) breach of the employment contract (COA 3 or employment contract claim); (4) unlawful termination as against public policy (COA 4 or public policy claim); (5) "discriminatory acts" in violation of section 703 of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e-2[3] (COA 5 or federal harassment claim); and (6) retaliatory discharge for opposing Defendants' harassment in violation of section 704(a) of Title VII, 42 U.S.C. § 2000e-3(a)[4] (COA 6 or federal retaliation claim).

1. Marxen's motion for summary judgment

Marxen filed a motion for summary judgment and argued, inter alia, that Lales did not obtain a Right to Sue Letter against Marxen.[5] Marxen asserted that the EEOC Determination and the Right to Sue Letter did not mention or refer to Marxen as a party, nor did Marxen receive notice that he was a party to the complaint. In the alternative and citing Maizner v. State of Hawai'i Department of Education, 405 F.Supp.2d 1225 (D. Haw. 2005), Marxen asserted that HRS chapter 378 precluded Lales from filing suit against individuals.

Attached to Marxen's motion for summary judgment was his declaration, in which he stated, inter alia, that he was JN's General Car Sales Manager and that his duties included "hiring and firing of sales personnel, evaluation of sales personnel and managing sales personnel." Marxen stated that Lales was not subject to discrimination or retaliation based on national origin, Lales was transferred from Martinez's sales team because of a "personality conflict, " and Lales had not submitted any written complaints or made any oral complaints alleging discrimination or harassment. Marxen further stated that Lales referred to himself as "Frenchy, " and asked and encouraged others to do the same. Marxen also stated the following:

8. [] Lales received his termination notice on June 23, 2002 for missing a mandatory sales meeting and lack of production in sales. Thereafter, [] Lales approached me and pleaded to keep his employment promising he could improve his sales figure. Based upon his representations, I withdrew the termination notice.
9. [] Lales sold a vehicle to [customers] that did not have air conditioning but [] Lales represented to the [customers] that the vehicle did come with air conditioning.
10. On June 24, 2002, [] Lales' [s] termination was reinstated after an investigation revealed that [] Lales was told the vehicle he sold did not have air conditioning but he misrepresented to the customers that it did. The termination notice was changed to reflect the June 24, 2002 termination date and reason for termination as lying to a customer.

Various exhibits were also attached to Marxen's motion for summary judgment. Attached as Exhibit D was Lales's Response to Defendants' Request for Admissions, in which Lales admitted that, while employed by JN, he used the nickname "Frenchy" when referring to himself, referred to himself as "Frenchy" in written documents, and he did not submit any written complaints of discrimination or harassment by co-workers or management based upon his national origin.

Attached as Exhibit E to Marxen's motion for summary judgment was a copy of the Termination Report dated June 23, 2002, in which Lales was dismissed from the company for "missed training meeting - 6/17/02" and "lack of production." Attached as Exhibit F was a copy of the June 23, 2002 Termination Report that had been subsequently re-dated June 24, 2002, and that had additional comments: "lied to customer and the Used Car Manager[] causing us to install air conditioning[.]"

Lales filed a memorandum in opposition to Marxen's motion. Lales conceded that Marxen could not be held individually liable under Title VII, but that pursuant to HRS §§ 378-1 and 378-2 and Hawai'i case law, he was allowed to file discrimination and retaliation complaints against Marxen individually. Attached to the memorandum in opposition was Lales's declaration, in which he stated, inter alia:

5. ... Marxen referred to me as "fucking French bastard, " "Frenchie, " made derogatory remarks about French people, told . . . Martinez to "beat my fucken French ass, " and made remarks about French people. I was also subjected to ancestry harassment by [] Martinez and other employees at my workplace .... During my work at [JN], someone placed feces on my car, for which a police report was made.
6. [] Martinez was my immediate supervisor and referred to me as "French fries, " "Pepe Le Pieu, " I was told that I stink, that French women are just whores, "French are whimps [sic]" and other derogatory remarks. I asked to be transferred because of [] Martinez's behavior towards me which included threats.
10. I was told I could participate in [a] radio show, however, this was stopped by [] Marxen who said he did not want my French accent on the radio to sell American cars.
12. I was terminated for false reasons, specifically that I did not sell enough vehicles. This is untrue. The sales statistics show that I did not have the lowest sales at the time of my termination.
13. I was not told I was terminated for selling a truck which did not contain air conditioning to a customer. I did not see the termination notice . . . and did not sign that notice. I deny that I told the customer the truck had air conditioning.
14. I was told I was terminated for not attending a meeting. However, I was not aware of a sales meeting and did not recall receiving notice concerning this meeting. I have not known anybody to be terminated for not attending a sales meeting.
15. Before I was terminated, I complained orally to [] Marxen that I did not appreciate the remarks made concerning my ancestry. I also complained to my co-workers and others. I even sought advice from an attorney . . . about the hostile work environment and anti-discrimination on the basis of ancestry.

The circuit court subsequently granted summary judgment in favor of Marxen. The circuit court stated that, with regard to the federal discrimination and retaliation claims (COAs 5 and 6), Lales conceded that suit against individuals was "impermissible." As to COAs 1-4, the circuit court determined that Lales did not receive a Right to Sue Letter against Marxen because Marxen was not mentioned in the HCRCs right to sue letter.

2. JN's motion for summary judgment

JN also filed a motion for summary judgment. JN argued that it was entitled to summary judgment on Lales's retaliation claims (COAs 2 and 6) because there was a strong inference that JN had no discriminatory motive, and Lales could not produce any evidence that he was engaged in a protected activity.[6] JN also argued that it was entitled to summary judgment on Lales's discrimination claims (COAs 1 and 5) because Lales failed to provide evidence that he was subjected to unwelcome verbal or physical conduct based on his national origin, Lales did not follow JN's procedure for filing harassment complaints, and there was no evidence that Lales suffered any injury because of the alleged discriminatory actions. Finally, JN asserted that it was entitled to summary judgment on Lales's breach of contract claim (COA 3) because it had no knowledge of the alleged discriminatory conduct. Although JN requested summary judgment as to all COAs, it did not provide any arguments to support summary judgment on the public policy claim (COA 4).

JN attached to its motion for summary judgment the declarations of several of its employees and numerous exhibits. The declarations and exhibits set forth a version of the work environment and the events that led to Lales's termination that differed from the facts set forth in Lales's declaration. Several individuals declared that Lales introduced himself, and requested that he be called, by the nickname "Frenchy." Marxen's son, the Used Vehicle Manager for JN, declared that he specifically asked Lales, before Lales sold the truck to the couple, whether Lales had informed the couple that the truck did not have air conditioning. Lales responded that he told the customers that the truck did not come with air conditioning. According to the declarations of Marxen, two Assistant Sales Managers, and the deposition of the husband, the couple returned the day following their purchase and demanded that JN provide air conditioning based on Lales's assurances.

Attached as Exhibit Q to JN's motion for summary judgment was Lales's amended response to the request for admissions, wherein Lales admitted that, while employed by JN, he did not submit any written complaints to JN regarding people calling him "Frenchy" instead of Alex or Gerard, and he requested to be transferred to another sales team because he had a personality conflict with Martinez.

Lales filed a memorandum in opposition to JN's motion for summary judgment. Lales argued that he established a prima facie case of retaliatory termination and that he raised facts that supported an inference that JN's proffered reason for his termination was pretext. Lales also asserted that summary judgment was not warranted because he presented material issues of fact in regard to his claim of harassment. Specifically, Lales pointed to his own declaration, in which he asserted that he was subjected to derogatory remarks and slurs about his French ancestry and national origin by JN employees. In addition, Lales argued that he presented material issues of fact that he suffered damages and that he should be awarded punitive damages for JN's "egregious [and] outrageous" conduct. Lales did not contest the dismissal of the breach of contract claim against JN.

Attached to Lales's opposition was his declaration, which relayed facts substantially similar to those in the declaration he submitted in opposition to Marxen's motion for summary judgment. In addition, Lales declared:

18. In late May 2003, [7] I verbally complained to [] Marxen about the harassment and [] Martinez
19. [] Marxen told me "You Fucking French Bastard, get out of my office". He told [] Martinez to "beat his f French Ass".
24. On June 23, 2006, within a month after I complained to [] Marxen, I was terminated for false reasons, specifically that I did not sell enough vehicles by [] Marxen. This is untrue. The sales statistics show that I did not have the lowest sales at the time of my termination. I was told I was terminated for not attending a meeting. However, I was not aware of a sales meeting and did not recall receiving notice concerning this meeting. I have not known anybody to be terminated for not attending a sales meeting. After questioning these reasons, [] Marxen changed his mind and allowed me to continue to work.
25. On June 24, 2006, I was terminated and told to leave for selling a Truck without air conditioning in it. This reason is false. I did not see nor sign the termination notice dated June 24, 2006. I deny that I told the customer the truck had air conditioning. The sales agreement does not list that the Truck had air conditioning. The Blue Book document given to [the customer] show the Truck was sold "as is", without air conditioning.
26. Other employees told [the customer] that the Truck had air conditioning in it and were not fired.

Lales also attached numerous exhibits to his opposition to JN's motion for summary judgment. Attached as Exhibit 11 were excerpts from Lales's deposition. Lales stated that he complained to Marxen approximately one month before he was terminated that he was "really tired" of Martinez's behavior toward him, specifically, "the way he treated me, the way he would almost on a daily basis threaten me physically to go to the boneyard and retaliating against me on a daily basis." The following conversation occurred:

Q. What did Martinez do to retaliate against you?
A. To retaliate against me, Martinez would – the only way Martinez could pick on me was the way I was different. I was different in the bunch. I mean, I was a different person. I mean, I'm French, and I was different. So he couldn't pick on me at my work, my attendance, so he would pick on me the way I am. I'm French.
Q. Is there anything else you told [] Martinez?
A. Oh, I told [] Marxen that all this Frenchy thing already, I was just . . . fed up with it. It had to stop. And not only that, [] Marxen didn't only tolerate this abuse, daily abuse to me, he encouraged it.
Q. And you told [] Marxen that?
A. I did.
Q. Is there anything else you told [] Marxen?
A. Yes. I don't recall at this time right now, but we had a good 20 minutes. Martinez was present.
Q. [] Martinez was present?
A. Yes, he was.
Q. Okay. And what did [] Martinez say?
A. [] Martinez said you French bastard, F-you, F- you, F-you, F-you. And . . . Marxen told [] Martinez to kick this French bastard ass.
Q. At the meeting?
A. Yeah, at that meeting one month before I got retaliated[.]

In his deposition, Lales also discussed working on Martinez's sales team, and then stated that Paul Tucker, the desk manager, transferred Lales to another team after Lales complained about Martinez. Lales stated that he told Tucker that Martinez was discriminating against him, harassing him, and physically threatening him.

The circuit court granted JN's motion and subsequently entered its Final Judgment. The circuit court subsequently filed an Amended Final Judgment, entering judgment in favor of Defendants and against Lales on all of Lales's COAs. Lales appealed the Amended Final Judgment.

C. ICA Appeal

Lales's Opening Brief raised five points of error, three of which are relevant to his application. Lales argued that the circuit court erred in granting summary judgment in favor of Marxen because Lales had a Right to Sue Letter that allowed him to file suit against Marxen for his discriminatory actions. Lales also contended that the circuit court erred in granting summary judgment in favor of JN because the circuit court: (1) viewed the evidence in the light most favorable to JN, contrary to the legal standard of viewing evidence in the light most favorable to the non-moving party; (2) "erroneously ruled that when the same actor is both responsible for hiring and firing of an employee, a strong inference arises that there was no discriminatory motive"; and (3) erroneously applied the affirmative defense set forth in Faragher v. City of Boca Raton, 524 U.S. 775 (1998), to Lales's state harassment claim. Specifically, Lales, citing HAR § 12-46-175, asserted that JN was strictly liable for the discriminatory actions of its supervisory employees.

In their Answering Brief, Defendants argued that the circuit court properly granted summary judgment in favor of Marxen because Marxen's name was not contained in the HCRCs Right to Sue Letter. With regard to summary judgment in favor of JN, Defendants contended that "the only evidence [Lales] could produce to support his contentions was his own conflicting testimony and inadmissible hearsay." Defendants noted "numerous discrepancies in [Lales's] testimony[.]" Defendants also argued that, contrary to Lales's assertion, HRS chapter 378 does not mandate that an employer be held strictly liable for harassment by its supervisors. Defendants further argued that the circuit court properly granted summary judgment because there was no breach of contract and there was no public policy violation.

On May 9, 2012, the ICA issued a memorandum opinion vacating in part and affirming in part the circuit court's Final Amended Judgment. Lales, 2012 WL 1624013, at *1, *18. In regard to the circuit court's grant of summary judgment in favor of Marxen on COAs 1 and 2 (state harassment and retaliation claims), the ICA concluded that the HCRC s Right to Sue letter was sufficient to authorize Lales to file suit against Marxen. Id. at *9. In addition, citing the plain language of HRS § 378-2 and the definition of "employer" in HRS § 378-1, the ICA determined that "an individual employee, who is an agent of an employer, can be held individually liable as an ''employer.'" Lales, 2012 WL 1624013, at **10-12. Moreover, the ICA noted that employees are subject to individual liability when they aid and abet prohibited discriminatory practices, as set forth in HRS § 378-2(3). Id. at *10. The ICA then cited with approval the federal district court's decision in Sherez v. State of Haw. Pep't of Educ., 396 F.Supp.2d 1138, 1146-48 (D. Haw. 2005), because Sherez offered a "persuasive" rationale that employees could indeed be held individually liable for discriminatory conduct. Id. at *11.

The ICA also cited cases from this court that "support the conclusion that liability under HRS § 378-2 extends to employees in their individual capacity." Lales, 2012 WL 1624013, at *12 (citing Steinberg v. Hoshijo, 88 Hawai'i 10, 960 P.2d 1218 (1998); Sam Teague, Ltd. v. Haw. Civil Rights Comm'n, 89 Hawai'i 269, 275-77, 971 P.2d 1104, 1110-12 (1999); and Schefke, 96 Hawai'i 408, 32 P.3d 52). Thus, the ICA determined that Lales was entitled to file suit against Marxen in his individual capacity under HRS § 378-2, and therefore, the circuit court erred in granting summary judgment in favor of Marxen on COAs 1 and 2. Lales, 2012 WL 1624013, at *12, *18.

The ICA then addressed the circuit court's grant of summary judgment in favor of JN. Id. at **13-18. With regard to COA 1 (state harassment claim), the ICA determined that under HAR § 12-46-175, employers are strictly and vicariously liable when a supervisor harasses an employee. Lales, 2012 WL 1624013, at **13-15. The ICA then discussed the rule set forth in Faragher, as applied to Title VII claims. Id. at **14-15. The ICA stated that an employer may raise the Faragher affirmative defense only when no tangible employment action is taken against an employee, and noted that the defense requires that: (1) the employer exercised reasonable care to prevent and correct any harassing behavior, and (2) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer. Id. at **14. The ICA stated that because the alleged harassment by Marxen did not culminate in Lales's discharge, the Faragher affirmative defense did not apply. Id. at **15. The ICA further stated that because the requirements set forth in Faragher were not met in this case, there was no need to address whether the affirmative defense would apply under HRS chapter 378. Id. Finally, the ICA stated that the circuit court erred in applying Faragher. Id.

The ICA then determined that when the evidence was viewed in the light most favorable to Lales, the circuit court erred in granting summary judgment in favor of JN on the state and federal harassment claims (COAs 1 and 5), because "the matters set forth in Lales's declaration . . . established that there were genuine issues of material fact regarding his claims[.]" Id. at **15-16.

In regard to the circuit court's grant of summary judgment in favor of JN on COAs 2 and 6 (retaliation claims), the ICA stated that, given the conflicting evidence of the parties, which must be viewed in the light most favorable to Lales, there was sufficient evidence to establish a prima facie case of retaliation and that "Lales presented sufficient evidence to establish genuine issues of material fact regarding whether JN's proffered reasons for Lales's termination were pretextual." Id. at **16-17.

The ICA further determined that the circuit court erred in granting summary judgment in favor of JN on COA 4 (public policy claim) because Lales was not given a fair opportunity to respond inasmuch as JN did not address this claim in its motion for summary judgment. Id. at *18. Additionally, the ICA noted that "to the extent that Lales's COA 4 is based on public policy derived from the provisions of HRS [c]hapter 378, it would be barred." Id. However, the ICA determined that because the substance of the public policy claim was "unclear, " and given that it was remanding the case for further proceedings, it would also vacate the circuit court's grant of summary judgment in favor of JN as to COA 4. Id.

Accordingly, the ICA vacated the circuit court's Amended Final Judgment to the extent that it entered summary judgment in favor of Marxen on COAs 1 and 2, and entered judgment in favor of JN on COAs 1, 2, 4, 5, and 6. Id. The ICA affirmed the Amended Final Judgment on all other causes of action.[8] Id. The ICA remanded the case to the circuit court for further proceedings. Id.

The ICA filed its Judgment on Appeal on July 6, 2012. Defendants timely filed an application for writ of certiorari, and raise the following questions:

I. Did the ICA make grave errors of fact by (1) largely ignoring the evidence presented by [Defendants], and only viewing [Lales's] "evidence" in the light most favorable to him; (2) relying on conflicting "evidence" and uncorroborated self-serving statements submitted by [Lales] in a sham declaration; and (3) considering [Lales's] other inadmissible evidence[?]
II. Did the ICA err in concluding that individual employees can be held liable as an employer under HRS § 378-2(1) and (2) in reliance on Sherez v. State of Hawai'i [Dep't] of Educ, , 396 F.Supp.2d 1138 (D. Haw. 2005), which has not been followed by the [United States District Court] since the Ninth Circuit ruled to the contrary in a memorandum decision in Lum v. Kauai County Council, 358 Fed.Appx. 860, 862 (9th Cir. [] 2009)?
III. Did the ICA err by ignoring a substantial body of federal law to the contrary when it concluded that the Faragher affirmative defense cannot apply where a supervisor's harassment culminates in tangible employment action?
IV. Did the ICA err when it concluded that [Lales] had submitted sufficient evidence that the reason for his firing was pretextual, because the ICA evaluated whether the reason for [Lales's] termination was objectively correct rather than whether the [Defendants] believed that reason was correct?
V. Did the ICA err when it held that the [c]ircuit [c]ourt should not have granted summary judgment on Count 4? (Formatting altered).

II. Standards of Review

A. Summary Judgment

"On appeal, the grant or denial of summary judgment is reviewed de novo." First Ins. Co. of Haw, v. A&B Props., Inc., 126 Hawai'i 406, 413, 271 P.3d 1165, 1172 (2012) (citing Nuuanu Valley Ass'n v. City & County of Honolulu, 119 Hawai'i 90, 96, 194 P.3d 531, 537 (2008)). Furthermore,

[S]ummary judgment is appropriate if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties. The evidence must be viewed in the light most favorable to the non-moving party. In other words, we must view all of the evidence and inferences drawn therefrom in the light most favorable to the party opposing the motion.

Id. at 413-14, 271 P.3d at 1172-73 (citation omitted).

B. Statutory Interpretation

"Statutory interpretation is a question of law reviewable de novo." First Ins., 126 Hawai'i at 414, 271 P.3d at 1173 (citation omitted).

III. Discussion

A. Marxen was not subject to individual liability under HRS §§ 378-2(1)(A) and 378-2(2) for Lales's state harassment and retaliation claims (COAs 1 and 2)

The Defendants argue that Marxen was not subject to individual liability for Lales's state harassment claim (COA 1) under HRS § 378-2(1)(A), or his state retaliation claim (COA 2) under HRS § 378-2(2), because those sections do not impose liability on individual employees.[9] We agree. The legislature's inclusion of "agent" in the definition of "employer" under HRS § 378-1 did not signal an intent to impose liability on individual employees. Instead, by using the term "agent, " the legislature did nothing more than ensure that employers would be liable for the discriminatory conduct of their agents. Individual employees are therefore not personally liable as "employers" for harassment and retaliation claims under HRS §§ 378-2(1) (A) and 378-2(2).

It is well established that the "fundamental starting point for statutory interpretation is the language of the statute itself." State v. Wheeler, 121 Hawai'i 383, 390, 219 P.3d 1170, 1177 (2009) (citation omitted). Where the statutory language is plain and unambiguous, this court's sole duty is to give effect to its plain and obvious meaning. Id. As relevant here, HRS § 378-2 (Supp. 2002)[10] provided the following:

It shall be an unlawful discriminatory practice:
(1) Because of race, sex, sexual orientation, age, religion, color, ancestry, disability, marital status, or arrest and court record:
(A) For an employer to refuse to hire or employ or to bar or discharge from employment, or otherwise to discriminate against any individual in compensation or in the terms, conditions, or privileges of employment;
(2) For any employer, labor organization, or employment agency to discharge, expel, or otherwise discriminate against any individual because the individual has opposed any practice forbidden by this part or has filed a complaint, testified, or assisted in any proceeding respecting the discriminatory practices prohibited under this part;
(3) For any person whether an employer, employee, or not, to aid, abet, incite, compel, or coerce the doing of any of the discriminatory practices forbidden by this part, or to attempt to do so[.]

Because HRS §§ 378-2(1)(A) and 378-2(2) clearly limit liability for engaging in discriminatory conduct to an "employer, " whether an individual employee - like Marxen - may be held personally liable for conduct prohibited under those sections turns on the definition of "employer."

Section § 378-1 defines an "employer" as "any person, [11] including the State or any of its political subdivisions and any agent of such person, having one or more employees, but shall not include the United States." This language is subject to two possible interpretations. Under the first interpretation, an "employer" for purposes of HRS § 378-1 includes "any person . . . having one or more employees." Under this reading, the definition of "employer" does not encompass individual employees.

A number of federal courts have adopted this reading and have concluded that the reference to "any agent of such person" in HRS § 378-1's definition of "employer" does not extend liability to individual employees under HRS §§ 378-2(1)(A) and 378-2(2). See, e.g., White v. Pac. Media Group, 322 F.Supp.2d 1101, 1114 (D. Haw. 2 0 04); Maizner v. Haw. Dep't of Educ, 4 05 F.Supp.2d 1225, 1237-39 (D. Haw. 2005); Lum v. Kauai County Council, Civ. No. 06-00068 SOM/LEK, 2007 WL 3408003, at *2-13 (D. Haw. Nov. 9, 2007), aff'd, 358 Fed.Appx. 860 (9th Cir. 2009).

However, Lales argues that HRS §§ 378-2(1)(A) and 378-2(2) impose liability on an "employer, " and that HRS § 378-1 defines an "employer" as "any person . . . having one or more employees" and "any agent of such person." Thus, Lales argues that Marxen - as an agent of JN - is considered an "employer" for purposes of HRS § 378-1, and is therefore subject to personal liability under HRS §§ 378-2(1)(A) and 378-2(2). A number of federal courts have adopted Lales's reading of HRS § 378-1 in concluding that a supervisory employee, as an "agent" of his or her employer, is a statutory "employer" who may be held individually liable for his or her discriminatory conduct. See, e.g., Black v. City & County of Honolulu, 112 F.Supp.2d 1041, 1056-57 (D. Haw. 2000); Hale v. Publ'ns, Inc., 468 F.Supp. 2d. 1210, 1226-29 (D. Haw. 2006); Sherez v. State of Haw. Dep't of Educ., 396 F.Supp.2d 1138, 1146-48 (D. Haw. 2005) .

We respectfully reject that interpretation of "employer" under HRS § 378-1. In our view, the legislature's inclusion of "agent" in the definition of employer did not signal an intent to impose liability on individual employees. As set forth below, the history of Hawaii's employment discrimination law and the legislature's stated purposes in enacting that law give no indication that the legislature intended to impose liability on individual employees. Instead, the legislature's use of the word "agent, " "simply represented an unremarkable expression of respondeat superior - that discriminatory personnel actions taken by an employer's agent may create liability for the employer." Lissau v. S. Food Serv., Inc., 159 F.3d 177, 180 (4th Cir. 1998) (quotation marks and citations omitted) (analyzing analogous provision under Title VII of the Civil Rights Act) .[12]

Because the definition of employer under HRS § 378-1 is ambiguous, this court has various tools at its disposal to determine its meaning, including: (1) examining the context with which the ambiguous words, phrases, and sentences may be compared, in order to ascertain their true meaning; (2) considering the reason and spirit of the law, and the cause which induced the legislature to enact it, in order to discover its true meaning; and (3) rejecting every construction which leads to an absurdity. See HRS § 1-15; Estate of Roxas v. Marcos, 121 Hawai'i 59, 68, 214 P.3d 598, 607 (2009).

We first note that section 378-1 should not be viewed in isolation, but rather evaluated in the context of the entire statute. See Ah Mook Sang v. Clark, 130 Hawai'i 282, 297, 308 P.3d 911, 926 (2013) ("[W]e must read statutory language in the context of the entire statute and construe it in a manner consistent with its purpose." (quotation marks and citation omitted)). In this regard, elsewhere in HRS § 378-2 the legislature explicitly and unambiguously provided for employee liability, and in doing so recognized that "employers" and "employees" are distinct categories. Specifically, the legislature imposed aider-and-abettor liability on employees in HRS § 378-2(3), which makes it an unlawful discriminatory practice "[f]or any person, whether an employer, employee, or not, to aid, abet, incite, compel, or coerce the doing of any of the discriminatory practices forbidden by this part, or to attempt to do so." Thus, as the United States District Court observed in White, "the legislature clearly knew ...


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