California’s Second Appellate District has issued a significant ruling that reshapes how employers understand harassment liability under the state’s Fair Employment and Housing Act.
On October 5, 2026, the court held in Doe v. Wells Fargo Bank, N.A., No. B344642, that an employer is not strictly liable under FEHA for harassment by a supervisor who does not supervise the plaintiff.
The case involved a wealth advisor at Wells Fargo who alleged that a senior investment strategist sexually harassed and assaulted her during a business trip to another city for client meetings.
The alleged harasser held a senior title and exercised supervisory authority over certain support employees, but had no authority to hire, fire, approve expenses, or approve time off for the plaintiff.
Both the alleged harasser and the support staff who assisted him reported to the same manager, meaning he and the plaintiff were effectively operating as coworkers within the company’s structure.
The trial court granted Wells Fargo summary judgment, finding the company could not be strictly liable because the alleged harasser was not the plaintiff’s supervisor and had responded immediately and appropriately to her complaint.
On appeal, the plaintiff argued that strict liability should apply to any supervisor in the organisation, regardless of whether that supervisor had any authority over the plaintiff specifically.
The Court of Appeal analysed California Government Code section 12940(j), finding the term “supervisor” ambiguous, but ultimately held that strict liability did not apply when the alleged harasser supervised other employees but not the plaintiff.
Under FEHA, employers face strict liability for harassment committed by a plaintiff’s direct supervisor, but only a negligence standard applies when the harasser is a coworker or, as clarified here, a supervisor of other staff only.
The court affirmed the judgment and also determined the plaintiff had forfeited her negligence and ratification arguments on appeal, narrowing the grounds on which the case could have succeeded.
The ruling provides a concrete illustration of how the standard works in practice: a sales manager who sexually harasses an employee in the accounting department would not automatically trigger strict employer liability merely because that manager supervises a sales team.
Critically, the court stopped short of suggesting that only an immediate supervisor can trigger strict liability, leaving room for broader interpretations based on actual authority and relationships.
California Government Code section 12926(t) defines supervisory authority broadly, encompassing the ability to assign work, recommend discipline, influence employment decisions, or direct employees using independent judgment.
Someone not officially listed as a plaintiff’s supervisor may still qualify under FEHA depending on the nature and scope of authority they exercise in practice.
For employers across California, the decision reinforces that job titles alone do not determine the applicable liability standard when harassment allegations arise in the workplace.
Organisations are reminded of the continued importance of investigating harassment complaints promptly and taking appropriate corrective action, regardless of the alleged harasser’s formal role or seniority.