February 23, 2011

Shaw v. Long Drug Stores: retail chain's regional manager qualifies as "managing agent"

In this unpublished opinion, the California Court of Appeal (Second Appellate District, Division Five) permits a plaintiff in an employment case to seek punitive damages from her employer.

The plaintiff, a drug store employee, accused her supervisor of sexual harassment.  She sued her employer for compensatory and punitive damages, but the trial court granted the defendant's motion for summary adjudication on the issue of punitive damages.  The court ruled that the plaintiff presented no evidence that her supervisor's misconduct was was approved by a corporate "managing agent," as required to obtain punitive damages against a corporation under California Civil Code section 3294.

The Court of Appeal disagreed.  It said the plaintiff presented evidence that she complained to the defendant's regional manager, who was responsible for managing every aspect of the day-to-day operations at approximately 25 stores.  The court said this evidence demonstrated a sufficient level of independent discretionary authority to support a finding that the regional manager was a managing agent.  Curiously, the court did not cite Roby v. McKesson, the California Supreme Court's latest decision on the requirements for establishing managing agent status.