Harris v. County of Orange

Under the California Fair Employment and Housing Act, the rule requiring a plaintiff to exhaust all administrative remedies before filing a lawsuit may be met where an individual class member files a complaint with the administrative agency; the filing need not be on behalf of the class as a whole.

To avoid insolvency, Orange County restructured its employee health benefits by eliminating a subsidy and grant paid to retired employees. This had the effect of raising insurance premiums for retired employees. Gaylan Harris, on behalf of a class of retired Orange County employees (“Retirees”), brought several claims, including claims that the County’s reform of employee health benefits amounted to age discrimination under the California Fair Employment and Housing Act (“FEHA”), and a breach of implied contract. The County argued that that there was no implied promise, nor any “explicit legislative or statutory authority,” that required the County to continue to subsidize the health benefits. The district court agreed, dismissing the Retirees’ claim. The district court also held that claim preclusion barred several of the Retiree’s claims because of an existing lawsuit filed against the County by an employee association representing the Retirees. Finally, the district court found that the Retirees failed to exhaust administrative remedies before filing a lawsuit, as required by FEHA. The Court reversed the district court’s holding, finding that no claim preclusion resulted when the first party, the association, did not have the legal capacity to seek the remedies sought by the Retirees. Thus, the Retirees should have the opportunity to amend their complaint to specify the authority on which their claim rests. Finally, the Court held that the rule requiring the Retirees to exhaust all administrative remedies is satisfied when an individual member of the class files a complaint with the administrative agency. The filing need not be on behalf of the entire class. REVERSED and REMANDED.