The State of California’s Department of Fair Employment and Housing (DFEH) states that it is committed to creating safe and harassment-free workplaces. Now it is the ministry itself that is harassing.
DFEH was created to arbitrate disagreements between workers and business owners. These days, the agency is going straight to war — hiring private law firms to sue California companies and funding its operations from the resulting million-dollar settlements. This strategy often deprives complainants of money to which you might assume they are entitled.
This is all clear in the department’s high-profile ongoing case against Santa Monica-based Activision, the company behind global games like “World of Warcraft,” “Call of Duty” and “Overwatch.”
Following a lengthy investigation, DFEH sued the video game maker in July over a “pervasive ‘frat boy’ work culture” that DFEH said caused female employees to quit. Two months later, Activision settled a separate lawsuit with the Federal Equal Employment Opportunity Commission (EEOC) agreeing to establish an $18 million fund for alleged victims.
That’s when things got weird – weird California.
Alleging Governor Gavin Newsom was interfering with his trial, Janette Wipper, the DFEH’s chief counsel, resigned from the case against Activision. Newsom fired her. Then Wipper’s deputy resigned, citing interference from the governor.
But a closer reading of roster changes at DFEH suggests a department that has gone rogue and a governor trying to contain it.
Under Wipper, DFEH attempted to block the EEOC settlement with Activision to pursue its own case, which could take years to conclude. The decision delays victims’ access to the $18 million fund created by the EEOC settlement and prompted the EEOC to rebuke the DFEH for its questionable tactics.
Why would a state agency do this? For starters, the DFEH, unlike the EEOC, does not pay out all of the settlement money to victims of harassment or discrimination. Instead, he relies on massive settlements to help defray the costs of running the agency, including outsourcing work to private law firms.
This financial motivation explains the tendency of the DFEH to go too far. In a case against Riot Games, the state stepped in to block a settlement in a lawsuit brought by the company’s employees. Outraged, the plaintiffs complained that the California agency was trying to hijack a case they had already settled – delaying payments they had won by three years.
Activision isn’t alone in battling the state juggernaut. Take the case of Tesla. In February, DFEH sued the California automaker for systematic racial discrimination and harassment. Focusing on the workforce at Tesla’s Fremont factory, the lawsuit cites dozens of media articles and administrative complaints. But the DFEH has never independently investigated the allegations. Without investigating, the state suit calls the plant “racial segregation” and a “slave ship.”
Although DFEH personnel did not visit Tesla to verify the allegations, thousands of members of the public and even senior government officials visited the factory. In a blog post, Tesla points out that there is no real evidence on file. “Over the past five years, the DFEH has been approached nearly 50 times by individuals who believe they have been the victims of discrimination or harassment to investigate Tesla. On each occasion when the DFEH has closed an investigation, it has not found no misconduct on Tesla’s part.
Prior to filing its complaint, the DFEH declined several requests to provide Tesla with the specific allegations or factual basis.
Watching a self-proclaimed civil rights agency block or delay payments to victims would seem extraordinary to most people. But it’s a pattern of abuse at DFEH, and one that runs through the Activision case. This abuse is certainly evident to the Federal EEOC. Early in the investigation, the federal government and state regulators signed a work-sharing agreement: While the EEOC was reviewing the harassment allegations, the DFEH was supposed to be reviewing pay equity and related issues. The DFEH expressly agreed not to investigate allegations of sexual harassment.
But the DFEH broke its agreement with the EEOC, violated its own procedures and filed a surprise lawsuit in the 11th hour against Activision when it learned that the company was set to settle with the EEOC. The DFEH has not completed the independent investigation it launched to determine the accuracy of the allegations in its lawsuit. This lawsuit also did not focus on pay equity, but instead made allegations of sexual harassment outside the stated scope of its investigation.
DFEH’s intervention here is unprecedented, but even more extraordinary is the EEOC’s response: it accused state prosecutors of ethical misconduct because they worked the Activision case at the EEOC, then continued this work at DFEH without disclosing their prior work – a California violation. rules of legal ethics.
California’s Fair Employment and Housing Act established the DFEH and clearly states that the department must investigate all claims and arbitrate disagreements – not immediately take legal action without investigating the facts and finding avenues for improvement. In a 1997 opinion, California Supreme Court Justice Janice Rodgers Brown concluded that the law was clear: the role of the DFEH is to avoid litigation and “to protect both the interests of the individual to employment without discrimination and the broader public interest by upholding this policy while maintaining a healthy business climate in California.
Somewhere in its evolution, the Department of Fair Housing and Employment lost sight of the “healthy business climate” part of its mission. Today, the agency is engaged in a war on corporations — one of the causes of the mass exodus of California businesses to other states.
Will Swaim is president of the California Policy Center and co-host of National Review’s Radio Free California podcast.
