In Mathews v. Happy Valley Conference Center, Inc., the Court upheld a jury verdict against a religious institution for illegal employment practices. Plaintiff Jeremiah Mathews worked as a maintenance supervisor and a cook for defendant Happy Valley Conference Center, Inc., which hosts seminars, retreats, and camps on a 30-acre property in the Santa Cruz Mountains. Happy Valley is a subordinate affiliate of defendant Community of Christ (the Church). When a younger male employee confided in plaintiff that Happy Valley’s female executive director had been sending him sexually inappropriate text messages, plaintiff reported the allegation to a member of Happy Valley’s board of directors and to the Church’s general counsel. The executive director admitted sending the messages, was reprimanded, and was allowed to continue supervising plaintiff and the younger male employee. Plaintiff was terminated less than a month after reporting the harassment. Plaintiff sued defendants, alleging retaliatory termination under several legal theories. The jury returned special verdicts in plaintiff’s favor on all causes of action. Defendants were ordered to pay almost $900,000 in damages (including punitive damages) and almost $1 million in attorney’s fees. Defendants contested most of the jury’s findings. Relevant to most appellate issues, defendants argued the Church cannot be held liable for Happy Valley’s actions because the two are separate entities that do not fall within the single employer doctrine. They further argued that the trial court’s single employer doctrine jury instruction was prejudicially erroneous. Defendants also contested their liability under the California Fair Employment and Housing Act (FEHA) because they are exempt religious entities, and contended the trial court erred in finding they had waived or were estopped from claiming the religious entity exemption. Defendants asserted that they are not liable under the version of the whistleblower statute in effect at the time of the events at issue (rather than the amended statute reflected in the parties’ proposed jury instructions). They also argued that the evidence was insufficient to support a finding that the Church breached an implied or actual contract with plaintiff. Regarding damages, defendants contend the trial court awarded damages under Title VII beyond the maximum value allowed by that statutory scheme; noneconomic and punitive damages not recoverable for breach of contract; excessive punitive damages; and attorney’s fees not recoverable as a matter of law. The Court found no prejudicial error regarding most of defendants’ appellate arguments and upheld almost all of the judgment. The only modification was that to show that defendants are exempt from FEHA liability as religious organizations. Still, everything else was valid and the judgment upheld.
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