📋 Overview

You've received a demand letter alleging employment discrimination. California's Fair Employment and Housing Act (FEHA) provides broad protections against discrimination based on protected characteristics. This guide helps you evaluate the claim and respond strategically before it becomes formal litigation.

⚠ High-Stakes Claims

Discrimination claims can result in unlimited emotional distress damages, punitive damages, and attorney fees. Early resolution is often preferable.

🕒 Administrative Exhaustion

Employees must file with CRD (formerly DFEH) before suing. A demand letter may precede or follow an administrative complaint.

💰 Protected Categories

FEHA protects 18+ categories including race, religion, age (40+), disability, pregnancy, sexual orientation, and gender identity.

Protected Characteristics Under FEHA

  • Race, color, national origin, ancestry
  • Religion, creed
  • Sex, gender, gender identity, gender expression
  • Sexual orientation
  • Age (40 and over)
  • Physical or mental disability
  • Medical condition (cancer, genetic characteristics)
  • Pregnancy, childbirth, breastfeeding
  • Marital status
  • Military/veteran status
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Case review, professional response letter, up to 2 revisions. Often resolves matters without litigation.

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🔍 Evaluate the Claim

Before responding, conduct a thorough internal investigation. Discrimination claims require the employee to prove disparate treatment based on a protected characteristic.

Risk Assessment Matrix

Allegation Type Potential Damages Risk Level
Discriminatory termination Lost wages + emotional distress + punitives HIGH
Failure to promote Lost wage differential + emotional distress HIGH
Hostile work environment Emotional distress + punitives HIGH
Failure to accommodate disability Back pay + accommodation costs + damages HIGH
Disparate pay Wage differential + liquidated damages MEDIUM

📄 Employment Records

  • ✓ Personnel file and performance reviews
  • ✓ Disciplinary history and write-ups
  • ✓ Emails and communications with employee
  • ✓ Termination documentation and reason

📝 Comparator Evidence

  • ✓ Similarly situated employees' treatment
  • ✓ Promotion/hire decisions for similar roles
  • ✓ Discipline applied to others for same conduct
  • ✓ Decision-maker's history and statements

⚠ Preserve All Evidence

Issue an immediate litigation hold. Preserve all emails, texts, voicemails, and documents relating to the complainant. Spoliation of evidence can result in adverse inference instructions at trial and separate sanctions.

🛡 Your Defenses

Discrimination claims require the employee to show they were treated differently because of a protected characteristic. Here are common employer defenses.

Legitimate Non-Discriminatory Reason

If you can articulate a legitimate, non-discriminatory reason for the adverse action (poor performance, policy violation, reduction in force), the burden shifts to the employee to prove that reason is pretextual.

When to use: Documented performance issues, attendance problems, or business restructuring predating the complaint.

Same Actor Inference

If the same person who hired the employee also made the termination decision, courts may infer the decision was not based on discrimination.

When to use: Same supervisor hired and later terminated the employee within a relatively short time period.

No Knowledge of Protected Status

If the decision-maker was unaware of the employee's protected characteristic, there can be no discriminatory intent.

When to use: Hidden disability, undisclosed religious practice, or protected status not apparent.

Bona Fide Occupational Qualification (BFOQ)

In rare cases, certain characteristics may be legitimately required for the job. This is a narrow exception and does not apply to race or color.

When to use: Authenticity requirements in entertainment, privacy concerns in same-sex facilities.

Statute of Limitations

FEHA claims must be filed with CRD within 3 years of the discriminatory act. Older claims may be time-barred.

When to use: Alleged discrimination occurred more than 3 years before any administrative complaint.

🚨 What NOT to Argue

  • "We treat everyone the same" - This doesn't address specific allegations
  • "They were a poor cultural fit" - Can be seen as code for discrimination
  • "We didn't know they were [protected class]" - Only valid if truly unknown
  • "Other [protected class] employees weren't affected" - Doesn't disprove individual discrimination

⚖ Response Options

Based on your evaluation, choose the appropriate response strategy.

Early Mediation

Offer to mediate the dispute before formal proceedings. CRD offers free mediation services, and private mediation can be confidential.

  • Shows good faith
  • Avoids public record
  • Controls costs

Formal Denial

Send a detailed response denying the allegations and documenting your legitimate business reasons.

  • Preserves defenses
  • May deter weak claims
  • Creates written record

Negotiate Settlement

If the claim has some merit, or litigation costs would exceed settlement, negotiate a resolution with full release.

  • Avoids litigation costs
  • Confidential resolution
  • No admission of liability

Investigate Further

Request specific factual allegations and conduct internal investigation before committing to a position.

  • Identifies exposure
  • Gathers evidence
  • Informs strategy

📊 Cost-Benefit Analysis: Settlement vs. Litigation

Example: Discriminatory termination claim

Lost wages (1 year) $85,000
Emotional distress damages $50,000-$300,000
Punitive damages (if malice shown) $100,000+
Employee attorney fees $150,000+
Your defense costs (through trial) $100,000+
MAX EXPOSURE IF YOU LOSE $500,000+

💡 Settlement Considerations

Discrimination claims are unpredictable at trial. Juries can award significant emotional distress and punitive damages. Even strong cases often settle to avoid the uncertainty and cost of trial. Mediation success rates exceed 70%.

📝 Sample Responses

Copy and customize these response templates for your situation.

Acknowledgment & Investigation
We acknowledge receipt of your demand letter dated [DATE] alleging discrimination based on [PROTECTED CHARACTERISTIC]. We take all such allegations seriously and are committed to maintaining a workplace free from discrimination. We are conducting a thorough investigation into your allegations. To assist in this process, please provide: (1) Specific dates and descriptions of the alleged discriminatory conduct (2) Names of any witnesses to the alleged conduct (3) Any documents supporting your allegations We will respond substantively within [21] days.
Denial - Legitimate Business Reason
We have completed our investigation into your allegations of discrimination and respectfully deny the claim. The employment decision at issue was based entirely on legitimate, non-discriminatory business reasons. Specifically, [describe reason - performance issues, policy violations, restructuring, etc.]. These reasons are documented in your personnel file and performance reviews. The decision was made without regard to your [protected characteristic] and was consistent with how we have treated other employees in similar circumstances. We have applied our policies consistently across all employees regardless of protected characteristics. We maintain our commitment to equal employment opportunity and deny any allegation of discriminatory treatment.
Offer to Mediate
We have reviewed your demand letter and, while we disagree with your characterization of events, we recognize that protracted litigation benefits neither party. In the interest of reaching an amicable resolution, we propose engaging in mediation before a neutral mediator. We suggest: - [Mediator name/organization] - Mediation to occur within [30-45] days - Costs to be shared equally If you are open to this approach, please have your counsel contact us to discuss scheduling. This offer is made without any admission of liability and purely in the interest of efficient dispute resolution.
Settlement Offer
Without admitting any liability or wrongdoing, and solely to avoid the expense and uncertainty of litigation, we are prepared to offer a settlement of [$AMOUNT] in exchange for a full release of all claims. This offer is contingent upon: 1. Execution of a mutual release and confidentiality agreement 2. No admission of liability by any party 3. Withdrawal of any pending administrative complaints This offer will remain open for [14] days. If not accepted by [DATE], we will vigorously defend against any claims through all available legal channels.

🚀 Next Steps

What to do after receiving a discrimination claim demand letter.

Step 1: Litigation Hold

Immediately preserve all documents, emails, and communications related to the complainant.

Step 2: Internal Investigation

Investigate the allegations. Interview witnesses. Review documentation of the decision at issue.

Step 3: Check for CRD Filing

Determine if the employee has filed a complaint with the Civil Rights Department (CRD/DFEH).

Step 4: Engage Counsel

Discrimination claims are complex. Consider engaging employment defense counsel early.

If They File with CRD (Civil Rights Department)

  • Employer Response - You may submit a position statement responding to the allegations
  • Mediation - CRD offers free mediation services at the early stage
  • Investigation - CRD may investigate or issue an immediate right-to-sue
  • Right-to-Sue - Employee can request and receive right-to-sue immediately

If They File a Lawsuit

  • Respond within 30 days - File an answer or face default judgment
  • Discovery - Extensive discovery of employment records, emails, witness depositions
  • Summary Judgment - Consider motion if evidence supports no triable issue

Get Professional Help

Discrimination claims require careful handling. Get a professional response letter drafted on attorney letterhead.

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California Resources

  • CRD Website: calcivilrights.ca.gov - Civil Rights Department
  • FEHA Text: Gov. Code 12900-12996 - Full text of FEHA
  • EEOC: eeoc.gov - Federal anti-discrimination agency