California Discrimination Claim Response Guide

For Employers | Evaluate Claims | Assert Defenses | Protect Your Business

✍️ Need to Send a Harassment/Discrimination Demand Letter? If you've experienced workplace harassment or discrimination, see my guide on How to Write Harassment Demand Letters →
Understanding Discrimination Claims Against Your Business
You Have Received a Discrimination Demand Letter: An employee or former employee has accused your business of unlawful discrimination. This is a serious allegation that requires a careful, strategic response. Do not ignore this letter. How you respond in the initial stages can significantly impact the outcome of any administrative complaint or lawsuit that may follow.
Protected Classes Under California and Federal Law

Employment discrimination occurs when an employer takes adverse action against an employee based on a protected characteristic. California's Fair Employment and Housing Act (FEHA) provides broader protections than federal law:

Protected Class FEHA (California) Federal Law
Race, Color, National Origin Gov. Code 12940 Title VII (Civil Rights Act)
Sex, Gender, Gender Identity Gov. Code 12940 Title VII (as interpreted)
Sexual Orientation Gov. Code 12940 Title VII (Bostock v. Clayton County)
Religion, Religious Creed Gov. Code 12940 Title VII
Age (40+) Gov. Code 12940 ADEA (Age Discrimination in Employment Act)
Disability (Physical/Mental) Gov. Code 12940 ADA (Americans with Disabilities Act)
Medical Condition Gov. Code 12940 Limited ADA coverage
Genetic Information Gov. Code 12940 GINA
Marital Status Gov. Code 12940 Not federally protected
Military/Veteran Status Gov. Code 12940 USERRA
Ancestry Gov. Code 12940 Title VII (national origin)
FEHA Applies to Smaller Employers: Under FEHA, employers with 5 or more employees are covered for most discrimination claims (harassment claims apply to employers of any size). Federal Title VII applies only to employers with 15 or more employees. California employers face broader liability.
Types of Discrimination Claims
Claim Type Definition Key Defense Considerations
Disparate Treatment Intentional discrimination - treating an individual less favorably because of their protected characteristic Show legitimate, non-discriminatory reason for the decision; challenge evidence of intent
Disparate Impact Facially neutral policy or practice that disproportionately affects a protected group without business justification Demonstrate business necessity and job-relatedness of the policy
Failure to Accommodate Failure to provide reasonable accommodation for disability or religious practice Document interactive process; show undue hardship if applicable
Harassment Severe or pervasive conduct creating a hostile work environment based on protected characteristic Document preventive measures, complaint procedures, and corrective action
Retaliation Adverse action taken because employee engaged in protected activity (complaining, filing charge) Show temporal separation; document independent legitimate reason
The McDonnell Douglas Burden-Shifting Framework

For disparate treatment claims, courts use the McDonnell Douglas burden-shifting framework established by the U.S. Supreme Court:

Step 1 - Prima Facie Case (Employee's Initial Burden):
The employee must establish a prima facie case by showing:
  • They belong to a protected class
  • They were qualified for the position or performing competently
  • They suffered an adverse employment action (termination, demotion, denial of promotion, etc.)
  • Circumstances suggest discriminatory motive (e.g., replaced by someone outside protected class, treated differently than similarly situated employees)
Step 2 - Legitimate Non-Discriminatory Reason (Employer's Burden):
If the employee establishes a prima facie case, the burden shifts to you to articulate a legitimate, non-discriminatory reason for the adverse action. This is a burden of production, not persuasion - you only need to state the reason, not prove it was the actual reason.
Step 3 - Pretext (Employee's Ultimate Burden):
If you provide a legitimate reason, the burden shifts back to the employee to prove that your stated reason is pretextual - a cover-up for actual discrimination. The ultimate burden of proving intentional discrimination always remains with the employee.
Administrative Processes: CRD and EEOC

Before filing a lawsuit, employees typically must exhaust administrative remedies:

Agency Coverage Deadline to File Process
California Civil Rights Department (CRD) - formerly DFEH FEHA claims (California) 3 years from discriminatory act File complaint; CRD investigates or issues right-to-sue notice; lawsuit must be filed within 1 year of right-to-sue
Equal Employment Opportunity Commission (EEOC) Federal claims (Title VII, ADA, ADEA) 300 days in California (work-sharing agreement with CRD) File charge; EEOC investigates; issues right-to-sue letter; lawsuit within 90 days
Right-to-Sue Notice: Under FEHA, an employee can request an immediate right-to-sue notice from CRD without waiting for investigation. Many employees use this to bypass the administrative process and proceed directly to court. If you receive notice that a right-to-sue has been issued, litigation may be imminent.
Potential Damages in Discrimination Cases

Understanding your potential exposure helps inform your response strategy:

  • Back Pay: Lost wages and benefits from the date of adverse action to trial or reinstatement
  • Front Pay: Future lost wages if reinstatement is not feasible
  • Compensatory Damages: Emotional distress, pain and suffering (unlimited under FEHA)
  • Punitive Damages: Available under FEHA if malice, oppression, or fraud is shown (unlimited)
  • Attorney's Fees: Prevailing plaintiffs recover attorney's fees (often the largest component)
  • Costs: Litigation costs including expert fees
No Damage Caps Under FEHA: Unlike federal law, California FEHA has no caps on compensatory or punitive damages. Large verdicts are possible, making early resolution often advisable.
Evaluating Your Position: Assessing the Claim Against You
Thorough Investigation Required: Before responding to a discrimination demand letter, conduct a thorough internal investigation. Gather all relevant documents, interview witnesses, and honestly evaluate whether discrimination may have occurred. Your investigation will inform your response strategy and prepare you for potential litigation.
Step 1: Review the Employment Decision

Examine the adverse employment action that triggered the claim:

Question Why It Matters Documents to Review
What was the specific adverse action? Determines the scope of the claim and potential damages Termination letter, demotion notice, performance improvement plan
When did it occur? Statute of limitations; timeline for pretext analysis Personnel file, HR records, email correspondence
Who made the decision? Identifies key witnesses; same-actor defense potential Decision memos, management communications
What was the stated reason? Forms basis of your legitimate non-discriminatory reason defense Termination documents, performance reviews, disciplinary records
Was the reason documented at the time? Contemporaneous documentation is more credible than after-the-fact explanations Performance evaluations, warning letters, attendance records
Step 2: Document Legitimate Business Reasons

Gather evidence supporting your legitimate, non-discriminatory reason for the action:

Common Legitimate Reasons:
  • Poor Performance: Documented performance deficiencies, failed performance improvement plans, missed goals or metrics
  • Attendance Issues: Excessive absences, tardiness, violation of attendance policies
  • Policy Violations: Documented violations of company policies, safety rules, or code of conduct
  • Misconduct: Insubordination, dishonesty, harassment of others, theft
  • Reduction in Force: Legitimate business restructuring, position elimination, budget cuts
  • Lack of Qualifications: Failure to meet job requirements, lack of necessary credentials or skills
Key Documentation to Gather:
  • Performance evaluations (especially those pre-dating any protected activity)
  • Disciplinary records and progressive discipline documentation
  • Attendance records and time sheets
  • Email communications about performance concerns
  • Witness statements from supervisors and coworkers
  • Job descriptions and qualification requirements
  • Training records and certifications
  • Metrics, sales figures, or other objective performance data
Step 3: Assess Comparator Evidence

Comparator evidence - how you treated similarly situated employees - is often critical in discrimination cases:

Comparator Issue Questions to Answer Favorable for Employer If...
Same Conduct Were employees outside the protected class treated the same way for similar conduct? All employees with similar performance/conduct issues were treated consistently
Same Supervisor Did the same decision-maker treat non-protected employees differently? Same supervisor applied consistent standards across all employees
Similar Positions Were employees in comparable roles treated differently? All employees in similar positions faced same expectations and consequences
Timing Were comparators treated differently during the same time period? Consistent treatment regardless of when issues arose
Warning Signs - Comparator Problems:
  • Employees outside the protected class with similar issues were not disciplined
  • The complaining employee was treated more harshly than others for similar conduct
  • Different supervisors applied rules inconsistently based on employee characteristics
  • Documentation exists only for employees in the protected class
Step 4: Check for Pattern/Practice Concerns

Look for patterns that could suggest systemic discrimination:

  • Workforce Composition: Is the protected group underrepresented in certain positions or departments?
  • Termination Patterns: Have a disproportionate number of employees from the protected class been terminated?
  • Promotion History: Have employees from the protected class been passed over for promotion repeatedly?
  • Complaint History: Have other employees raised similar discrimination concerns?
  • Statistical Analysis: Would statistical analysis reveal disparities in hiring, pay, promotion, or termination?
Step 5: Evaluate Pretext Indicators

Consider whether your stated reason could be attacked as pretextual:

Pretext Red Flags:
  • Shifting Explanations: The reason for the action has changed over time
  • Timing: The action closely followed protected activity (complaint, leave request)
  • Lack of Documentation: No contemporaneous documentation supports the stated reason
  • Policy Deviation: Normal policies or procedures were not followed
  • Inconsistent Treatment: Others with similar issues were not treated the same way
  • Comments or Statements: Decision-makers made comments suggesting bias
  • Implausibility: The stated reason is weak or does not make business sense
Step 6: Honest Assessment
Critical Questions:
  • Based on your investigation, do you have a strong legitimate non-discriminatory reason that is well-documented?
  • Can you demonstrate consistent treatment of all employees?
  • Are there any statements, emails, or witnesses that could suggest bias?
  • Would a jury find your explanation credible?
  • What is your realistic exposure if the case goes to trial?
  • Does early settlement make business sense?
Response Strategies: How to Respond to a Discrimination Demand
Strategic Response Required: Your response to a discrimination demand letter sets the tone for what may become extended litigation. Be factual, professional, and strategic. Preserve your defenses while leaving room for resolution if appropriate.
Strategy 1: Assert Legitimate Non-Discriminatory Reason
When to Use: This is your primary defense strategy when you have a well-documented, legitimate business reason for the employment decision. Under the McDonnell Douglas framework, articulating a legitimate non-discriminatory reason shifts the burden back to the employee to prove pretext.

Key Elements:

  • State the specific, legitimate business reason for the adverse action
  • Reference documentation supporting the reason (performance reviews, disciplinary records)
  • Explain that the decision was made without regard to the employee's protected characteristic
  • Emphasize consistent application of policies to all employees
  • Identify the decision-makers and their legitimate business rationale
Strategy 2: Challenge the Prima Facie Case
When to Use: When the employee cannot establish one or more elements of the prima facie case. If they cannot show they were qualified, suffered an adverse action, or that circumstances suggest discrimination, their claim may fail at the threshold.

Common Challenges:

  • Not Qualified: The employee did not meet the legitimate requirements for the position
  • No Adverse Action: The alleged action was not materially adverse (minor criticism, lateral transfer)
  • No Discriminatory Circumstances: No evidence suggesting the action was motivated by protected characteristic
  • Replacement Evidence: The employee was replaced by someone in the same protected class
Strategy 3: Same-Actor Inference
When to Use: When the same person who made the adverse employment decision also made the original hiring decision. Courts recognize that it is unlikely someone would hire an employee because of their protected characteristic and then discriminate against them for that same characteristic.

Elements to Establish:

  • Identify that the same individual made both decisions
  • Show the hiring decision was made with knowledge of the protected characteristic
  • Demonstrate a relatively short time period between hiring and adverse action
  • Argue that discriminatory animus is unlikely given the hiring decision
Strategy 4: Statistical Defense
When to Use: When workforce data supports your position. Statistical evidence can rebut claims of systemic discrimination or pattern/practice allegations.

Statistical Arguments:

  • Demonstrate diverse workforce composition in relevant positions
  • Show promotion rates are comparable across protected classes
  • Present termination data showing no disparate impact on protected groups
  • Compare your workforce to the relevant labor market
Strategy 5: Deny and Defend
When to Use: When you have strong defenses and the demand is unreasonable. This strategy involves a firm denial of all allegations while preserving all defenses.

Elements:

  • Categorically deny discriminatory intent or conduct
  • Assert that all employment decisions were based on legitimate business reasons
  • State your intent to vigorously defend against any lawsuit
  • Reserve all rights and defenses
  • Preserve attorney-client privilege for investigation findings
Strategy 6: Settlement Discussion
When to Use: When early resolution is in the company's interest. Consider settlement when: litigation costs would be substantial, the case has risk factors, the employee was a long-term worker, or business reputation concerns exist.

Settlement Considerations:

  • Evaluate the cost of defense versus potential settlement amount
  • Consider the strength of your defenses and pretext vulnerabilities
  • Assess the employee's likely litigation strategy and representation
  • Factor in management time and business disruption from litigation
  • Consider confidentiality provisions to protect business reputation
  • Require mutual release of all claims
Response Timing and Format
Consideration Recommendation
Response Deadline Respond before any deadline stated in the letter; request extension if needed for investigation
Format Written response via certified mail and email; maintain professional tone throughout
Attorney Involvement Consider having response reviewed or sent by counsel, especially for complex claims
Privilege Keep internal investigation privileged; do not disclose attorney-client communications
Admissions Avoid admissions; factual acknowledgments can be made without conceding liability
Warning - Avoid These Mistakes:
  • Ignoring the demand letter or missing deadlines
  • Making statements that could be construed as admissions
  • Retaliating against the employee in any way
  • Destroying or altering documents (litigation hold required)
  • Discussing the matter with witnesses without attorney guidance
  • Making emotional or hostile responses
Sample Response Letters
Customize These Templates: These sample letters provide a starting point for responding to discrimination demand letters. Modify them to fit your specific situation, insert accurate facts, and ensure all statements are truthful. Have employment counsel review your response before sending.
Sample 1: Denial with Legitimate Business Reason
[COMPANY LETTERHEAD] [Date] VIA CERTIFIED MAIL AND EMAIL [Employee Name/Attorney Name] [Address] [City, State ZIP] [Email Address] RE: RESPONSE TO DEMAND LETTER DATED [DATE] [Employee Name] - Denial of Discrimination Allegations Dear [Recipient Name]: This letter responds to your correspondence dated [Date] alleging that [Company Name] discriminated against [Employee Name] based on [his/her/their] [protected characteristic]. We have conducted a thorough review of the circumstances and categorically deny any discrimination. DENIAL OF DISCRIMINATION [Company Name] made the decision to [terminate/demote/not promote] [Employee Name] based solely on legitimate, non-discriminatory business reasons. [His/Her/Their] [protected characteristic] played no role whatsoever in this decision. LEGITIMATE BUSINESS REASONS The employment decision regarding [Employee Name] was based on the following documented performance and conduct issues: 1. [PERFORMANCE ISSUE]: [Employee Name] consistently failed to meet performance expectations. Specifically, [describe documented performance deficiencies, e.g., "quarterly sales were 40% below quota for three consecutive quarters," "customer complaint rate was twice the department average," "failed to complete required certifications by the deadline"]. 2. [POLICY VIOLATIONS]: [Employee Name] violated company policies on [dates], including [describe specific violations, e.g., "the attendance policy by accumulating 12 unexcused absences," "the code of conduct by engaging in unprofessional communications with clients"]. 3. [PROGRESSIVE DISCIPLINE]: [Employee Name] received progressive discipline for these issues, including [list discipline, e.g., "a verbal warning on [date], a written warning on [date], and a final written warning on [date]"]. [He/She/They] was given opportunities to improve but failed to do so. This decision was made consistent with how we treat all employees with similar performance and conduct issues, regardless of [protected characteristic]. [Provide example if applicable: "For example, [Employee X], who is not in [Employee Name's] protected class, was terminated in [month/year] for similar performance deficiencies."] NO DISCRIMINATORY ANIMUS We categorically deny that any decision-maker harbored discriminatory intent toward [Employee Name] or any employee. [If applicable: "The same supervisor who made the termination decision also hired [Employee Name] with full knowledge of [his/her/their] [protected characteristic], making discriminatory motive highly implausible."] [Company Name] is an equal opportunity employer with strong anti-discrimination policies. We have a diverse workforce and a track record of hiring, promoting, and retaining employees of all [protected class type]. RESPONSE TO SPECIFIC ALLEGATIONS [Address specific allegations in the demand letter point by point, denying false allegations with factual explanations.] DEMAND We demand that [Employee Name/you] withdraw these baseless allegations. We will vigorously defend against any lawsuit and will seek recovery of attorney's fees if we prevail under any applicable fee-shifting provisions. RESERVATION OF RIGHTS We reserve all rights and defenses, including but not limited to: statute of limitations, failure to exhaust administrative remedies, failure to establish prima facie case, legitimate non-discriminatory reason, after-acquired evidence, and all other defenses available under FEHA, Title VII, and applicable law. LITIGATION HOLD Please note that in light of your allegations, [Company Name] has implemented a litigation hold to preserve all potentially relevant documents. We expect [Employee Name] to do the same. Sincerely, [Signature] [Name] [Title] [Company Name] cc: [Company's Employment Counsel] This letter is sent without prejudice and with full reservation of rights.
Sample 2: Response Asserting Qualification Deficiency
[COMPANY LETTERHEAD] [Date] VIA CERTIFIED MAIL AND EMAIL [Employee Name/Attorney Name] [Address] [City, State ZIP] [Email Address] RE: RESPONSE TO DISCRIMINATION CLAIM [Employee Name] - Failure to Meet Job Qualifications Dear [Recipient Name]: We have received and reviewed your letter dated [Date] alleging that [Company Name] discriminated against [Employee Name] by [describe adverse action, e.g., "not promoting [him/her/them] to the [Position] role," "terminating [his/her/their] employment"]. We deny these allegations in their entirety. THE DECISION WAS BASED ON QUALIFICATIONS [Employee Name] was [not selected for promotion/terminated] because [he/she/they] did not meet the legitimate qualifications required for the position. This decision was based solely on job-related criteria and had nothing to do with [his/her/their] [protected characteristic]. SPECIFIC QUALIFICATION DEFICIENCIES The [Position] requires the following qualifications, which [Employee Name] did not possess: 1. [CREDENTIAL/EDUCATION]: The position requires [describe requirement, e.g., "a bachelor's degree in a relevant field," "Professional Engineer (PE) license," "CPA certification"]. [Employee Name] [does not have this credential/failed to obtain this credential despite being given [X] months to do so]. 2. [EXPERIENCE]: The position requires [describe requirement, e.g., "minimum 5 years of supervisory experience"]. [Employee Name] had only [X] years of such experience at the time of the decision. 3. [SKILLS/COMPETENCIES]: The position requires demonstrated proficiency in [describe skills, e.g., "financial modeling," "project management," "team leadership"]. [Employee Name]'s performance evaluations and work history did not demonstrate these competencies at the required level. THE SUCCESSFUL CANDIDATE WAS BETTER QUALIFIED [If applicable for promotion cases]: The individual selected for the position, [Selected Candidate], met all job qualifications and was objectively better qualified based on [describe qualifications, e.g., "15 years of directly relevant experience," "advanced degree in the field," "proven track record of leading similar projects"]. The selection decision was based on merit. [If applicable]: The selected candidate is [same protected class as complainant/diverse], demonstrating that [protected characteristic] was not a factor in the selection. CONSISTENT APPLICATION OF STANDARDS [Company Name] applies the same qualification standards to all candidates for the [Position] role. Other candidates who lacked the required qualifications were similarly not selected, regardless of their [protected characteristic]. DENIAL OF DISCRIMINATION We categorically deny that [protected characteristic] played any role in the employment decision regarding [Employee Name]. Our decision was lawful, based on legitimate job-related criteria, and consistent with our commitment to hiring and promoting the most qualified candidates. RESPONSE We respectfully decline your demand for [settlement amount/reinstatement/other relief]. We are confident in our legal position and prepared to defend this matter through any administrative or legal proceedings. If [Employee Name] believes [he/she/they] can demonstrate that [he/she/they] met the qualifications for the position, we would be willing to review any additional information. However, absent such evidence, this matter is closed. Sincerely, [Signature] [Name] [Title] [Company Name] cc: [Company's Employment Counsel]
Sample 3: Settlement Discussion Response
[COMPANY LETTERHEAD] [Date] CONFIDENTIAL - SETTLEMENT COMMUNICATION Protected by California Evidence Code Section 1152 and FRE 408 VIA CERTIFIED MAIL AND EMAIL [Attorney Name] [Law Firm] [Address] [City, State ZIP] [Email Address] RE: [Employee Name] - Settlement Discussion WITHOUT PREJUDICE Dear [Attorney Name]: We have received your letter dated [Date] on behalf of your client, [Employee Name], alleging claims of [type of discrimination] discrimination. While [Company Name] denies these allegations and is prepared to vigorously defend against them, we are open to exploring whether a mutually acceptable resolution can be reached to avoid the cost and disruption of litigation. POSITION STATEMENT [Company Name] maintains that all employment decisions regarding [Employee Name] were based on legitimate, non-discriminatory business reasons. We deny any violation of FEHA, Title VII, or any other anti-discrimination law. Nothing in this letter should be construed as an admission of liability. INTEREST IN RESOLUTION Despite our strong legal position, we recognize that litigation is expensive and time-consuming for all parties. In the interest of avoiding protracted legal proceedings, we are willing to engage in good-faith settlement discussions. INITIAL PROPOSAL Without admitting liability and for settlement purposes only, [Company Name] is prepared to offer the following: 1. MONETARY PAYMENT: A confidential settlement payment of $[Amount] in full and final resolution of all claims. 2. NEUTRAL REFERENCE: [Company Name] will provide a neutral employment reference confirming dates of employment and job title only. 3. MUTUAL RELEASE: Both parties will execute a comprehensive mutual release of all claims arising from [Employee Name]'s employment and separation. 4. CONFIDENTIALITY: The terms of the settlement will remain strictly confidential, with mutual non-disparagement obligations. 5. NO ADMISSION: The settlement will contain no admission of liability by [Company Name]. RATIONALE This proposal takes into account: - The cost of defense through trial - The uncertainty inherent in litigation - [Employee Name]'s tenure with the company - The parties' mutual interest in resolution We believe this represents a fair compromise given the disputed nature of the claims. RESPONSE REQUESTED If your client is interested in exploring settlement on these or modified terms, please contact me within [15] days to schedule a settlement conference call. We are open to discussing the structure and terms of any potential resolution. If we do not hear from you, or if your client wishes to proceed with litigation, we are fully prepared to defend this matter and assert all available defenses. This letter is sent for settlement purposes only, is protected by the mediation and settlement privilege, and is inadmissible in any legal proceeding under California Evidence Code Section 1152 and Federal Rule of Evidence 408. Sincerely, [Signature] [Name] [Title] [Company Name] cc: [Company's Employment Counsel] CONFIDENTIAL SETTLEMENT COMMUNICATION - NOT ADMISSIBLE
Legal Defenses to Discrimination Claims
Affirmative Defenses: Beyond simply denying discrimination, California and federal law provide several affirmative defenses that can defeat or limit a discrimination claim. You must raise these defenses; the court will not apply them automatically.
1. Legitimate Non-Discriminatory Reason (LNDR)

The primary defense in disparate treatment cases under McDonnell Douglas:

Elements:
  • Articulate a clear, specific, legitimate business reason for the adverse action
  • The reason must be non-discriminatory (not based on protected characteristic)
  • Documentation supporting the reason strengthens the defense
  • Consistent application of the reason to other employees demonstrates legitimacy
Common LNDRs: Poor performance, policy violations, attendance issues, misconduct, reduction in force, failure to meet qualifications, reorganization, position elimination, insubordination.
2. Bona Fide Occupational Qualification (BFOQ)

A narrow defense where the protected characteristic is essential to job performance:

BFOQ Requirements (Gov. Code 12940(a)(1)):
  • The qualification must be essential to the job's core function
  • No reasonable alternative exists that would serve the business purpose
  • The policy must be based on objective, verifiable criteria
Examples: Authenticity in entertainment (casting), privacy concerns in intimate care settings, certain religious organization positions. Not Available: BFOQ is never a defense for race or color discrimination. It is very narrowly applied and rarely successful.
3. Business Necessity (Disparate Impact Cases)

Defense to disparate impact claims where a facially neutral policy has disproportionate effect:

Elements to Establish:
  • Job-Related: The policy is related to successful performance of the job
  • Consistent with Business Necessity: The policy serves a legitimate business purpose
  • No Less Discriminatory Alternative: No alternative policy would achieve the same result with less impact
Example: Physical fitness requirements for positions requiring physical exertion may be justified by business necessity if job-related, even if they have disparate impact on certain groups.
4. Same Decision Defense (Mixed Motive)

Even if discrimination was a factor, the employer would have made the same decision anyway:

California vs. Federal Approach: Federal (Title VII): Under the Civil Rights Act of 1991, if the employer proves it would have made the same decision absent discrimination, the plaintiff's remedies are limited (no damages, reinstatement, or back pay - only declaratory relief, injunction, and attorney's fees). California (FEHA): California does not recognize the same-decision defense as a complete bar. Under Harris v. City of Santa Monica (2013), if discrimination was a "substantial motivating factor," the plaintiff can recover declaratory relief and attorney's fees, but not compensatory damages if the employer proves it would have made the same decision. Strategic Implication: This defense limits exposure but does not eliminate liability under FEHA.
5. After-Acquired Evidence Defense

Evidence of misconduct discovered after the adverse action that would have justified termination:

Elements (McKennon v. Nashville Banner):
  • Employer discovers employee misconduct after the adverse action
  • The misconduct is serious enough that the employer would have terminated the employee had it known
  • The employer must prove it would have applied this policy to all employees
Effect: Does not bar liability but can limit remedies. Back pay is cut off at the date the misconduct was discovered. No reinstatement is available. Common Examples: Resume fraud, undisclosed criminal history, theft discovered during litigation, falsification of records.
6. Statute of Limitations

Time-barred claims must be raised as an affirmative defense:

Claim Type Agency Filing Deadline Lawsuit Deadline
FEHA (CRD) 3 years from discriminatory act 1 year from right-to-sue notice (or 3 years if immediate right-to-sue requested after 1/1/2020)
Title VII (EEOC) 300 days from discriminatory act (in California due to work-sharing) 90 days from right-to-sue letter
ADEA (EEOC) 300 days from discriminatory act 90 days from right-to-sue letter
ADA (EEOC) 300 days from discriminatory act 90 days from right-to-sue letter
Continuing Violation Doctrine: Be cautious - if the employee alleges ongoing discriminatory conduct (rather than discrete acts), the continuing violation doctrine may extend the limitations period. Each act of harassment in a hostile work environment, for example, may restart the clock.
7. Failure to Exhaust Administrative Remedies

Employees must file with CRD or EEOC before suing:

  • The lawsuit must be based on claims included in the administrative charge
  • Claims not reasonably related to the charge may be barred
  • The employee must obtain a right-to-sue notice before filing in court
  • FEHA allows immediate right-to-sue request, so this defense is less powerful than under federal law
8. Lack of Employer Liability for Harassment

For harassment by non-supervisory coworkers, employers can assert the defense of reasonable prevention and correction:

Avoidable Consequences Defense:
  • The employer exercised reasonable care to prevent and promptly correct harassment
  • The employer had an effective anti-harassment policy and complaint procedure
  • The employee unreasonably failed to use the complaint procedure or take advantage of preventive opportunities
Note: This defense is generally available for harassment by coworkers. For harassment by supervisors, California imposes strict liability if the harassment resulted in a tangible employment action.
9. Undue Hardship (Accommodation Cases)

For failure to accommodate disability or religion claims:

Undue Hardship Elements:
  • The accommodation would require significant difficulty or expense
  • Factors: nature and cost of accommodation, overall financial resources of employer, impact on business operations
  • California's standard is more employer-friendly than federal ADA standard (significant difficulty vs. de minimis cost)
Documentation Required: You must demonstrate you engaged in the interactive process in good faith and that no reasonable accommodation existed that would not cause undue hardship.
Attorney Services
Facing a Discrimination Claim?

Discrimination allegations are serious and can result in substantial liability if not handled properly. I help California employers evaluate claims, develop defense strategies, respond to demand letters, and defend against administrative complaints and lawsuits. Early intervention can significantly improve outcomes.

Employment Litigation Defense Services
  • Demand Letter Response: I analyze the discrimination claim, evaluate your defenses, and prepare strategic response letters that protect your interests
  • Internal Investigation: I conduct privileged investigations to assess the merits of the claim and prepare for potential litigation
  • CRD/EEOC Response: I prepare position statements and respond to administrative complaints filed with the California Civil Rights Department or EEOC
  • Mediation and Settlement: I negotiate favorable settlements that minimize exposure and protect business reputation
  • Litigation Defense: I defend discrimination lawsuits through trial, asserting all available defenses and pursuing dismissal where appropriate
  • Policy Review: I review and strengthen employment policies, handbooks, and procedures to prevent future claims
  • Management Training: I provide training on lawful employment practices to reduce discrimination risk
When to Consult an Attorney
Seek legal counsel immediately if:
  • You receive a discrimination demand letter or administrative charge
  • An employee complains of discrimination or harassment internally
  • You are considering an adverse action against an employee who has raised discrimination concerns
  • The claim involves allegations by multiple employees or pattern/practice issues
  • The employee is represented by an attorney
  • You have concerns about the documentation supporting the employment decision
  • The claim involves a high-level employee or significant damages exposure
  • You receive a right-to-sue notice indicating a lawsuit is imminent
What to Bring to Your Consultation
  • The demand letter, CRD complaint, or EEOC charge
  • The employee's complete personnel file
  • All performance evaluations and disciplinary documentation
  • The termination letter or adverse action documentation
  • Your company's employee handbook and relevant policies
  • Any written complaints from the employee
  • Email communications involving the employee and decision-makers
  • Information about comparator employees (how were others treated)
  • Names and contact information for key witnesses
Schedule a Consultation

Book a call to discuss the discrimination claim against your business. I will evaluate the allegations, assess your defenses, and advise on the best strategy for responding and protecting your company.

Contact Information

Email: owner@terms.law

Frequently Asked Questions
First, do not panic and do not ignore the letter. Immediately implement a litigation hold to preserve all documents related to the employee and the employment decision. Gather the personnel file, performance reviews, disciplinary records, and any communications involving the employee. Conduct a preliminary internal review to understand the facts. Identify the decision-makers and potential witnesses. Note any deadline for response. Consider consulting employment counsel before responding, especially for significant claims. Do not contact the employee directly if they are represented by an attorney.
The McDonnell Douglas framework is the legal test courts use for discrimination claims based on circumstantial evidence. First, the employee must establish a prima facie case (member of protected class, qualified, adverse action, circumstances suggesting discrimination). If they do, the burden shifts to you to articulate a legitimate, non-discriminatory reason for the action. If you do, the burden shifts back to the employee to prove your reason is pretextual and discrimination was the real motive. The ultimate burden of proving discrimination always remains with the employee. Understanding this framework is essential for crafting an effective defense.
A legitimate non-discriminatory reason (LNDR) is any lawful business reason for the employment decision that is not based on the employee's protected characteristic. Common LNDRs include poor job performance, violation of company policies, attendance problems, misconduct, insubordination, reduction in force, failure to meet qualifications, or business reorganization. The key is that the reason must be genuine and supported by documentation. Courts will examine whether the reason is consistent with how you treated other employees and whether documentation supports it. A well-documented LNDR is the foundation of most discrimination defenses.
Under California FEHA, employees have 3 years from the discriminatory act to file a complaint with the Civil Rights Department (CRD). After filing, they can request an immediate right-to-sue notice and then have 1 year to file a lawsuit (or 3 years for claims arising after January 1, 2020 if immediate right-to-sue was obtained). Under federal law (Title VII, ADA, ADEA), employees must file with the EEOC within 300 days in California, and then have 90 days after receiving the right-to-sue letter to file in court. If the claim is time-barred, you must raise statute of limitations as an affirmative defense.
Both prohibit employment discrimination, but FEHA (California) provides broader protections. Key differences: FEHA covers employers with 5+ employees (Title VII requires 15+). FEHA protects additional characteristics like sexual orientation, gender identity, marital status, and medical conditions not covered by federal law. FEHA has no caps on compensatory or punitive damages (Title VII caps vary by employer size). FEHA has a 3-year filing deadline (Title VII has 300 days). FEHA allows private right of action for harassment claims without proving tangible employment action. For California employers, FEHA claims are typically more plaintiff-friendly and pose greater exposure.
This depends on several factors: the strength of your legitimate non-discriminatory reason, quality of your documentation, the existence of pretext indicators, comparator evidence, any statements suggesting bias, the amount of potential damages, litigation costs, and business considerations (management time, reputation, employee morale). Settlement often makes sense when defenses have weaknesses, litigation costs would be substantial, or business disruption is a concern. Fighting makes sense when you have strong documentation, consistent treatment of employees, no evidence of bias, and the claim is meritless. Consult with employment counsel to evaluate your specific situation.
In California FEHA cases, employees can recover: back pay (lost wages from termination to trial), front pay (future lost wages if reinstatement not feasible), compensatory damages for emotional distress (unlimited), punitive damages if malice, oppression, or fraud is shown (unlimited), and attorney's fees (often the largest component). There are no damage caps under FEHA. Federal Title VII cases have caps on compensatory and punitive damages based on employer size ($50,000 to $300,000). This significant exposure under California law makes careful defense strategy and early resolution critical.
The same-actor inference is a legal principle recognizing that when the same person who hired an employee (with knowledge of their protected characteristic) also made the adverse employment decision, discrimination is less likely. The logic is that if a supervisor were biased against a protected class, they would not have hired the person in the first place. Courts consider this inference when evaluating whether the stated reason for the action is pretextual. To use this defense, you must show the same individual made both decisions and was aware of the protected characteristic at the time of hiring. This can be powerful evidence against discriminatory intent.

Related Resources

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Protect Your Business Against Discrimination Claims

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Defending Discrimination Claims Under California FEHA

California's Fair Employment and Housing Act (Government Code Section 12900 et seq.) provides comprehensive protection against employment discrimination. Employers facing FEHA claims must understand the McDonnell Douglas burden-shifting framework and develop strong legitimate non-discriminatory reasons supported by documentation. Early intervention and strategic response can significantly impact case outcomes.

Key Defense Strategies for Employers

Administrative Processes: CRD and EEOC