©2024 Seyfarth Shaw LLP www.seyfarth.com 2024 Cal-Peculiarities | 105 5.7.4 Plaintiff’s income tax returns privileged from discovery In America generally, plaintiffs seeking lost income in lawsuits against employers must produce income tax returns. In California it’s different. California courts have held that individuals have a privilege to withhold income tax returns from discovery.251 5.7.5 Limits to statutes of limitations California courts liberally apply “equitable estoppel,” “continuing violation,” and other doctrines designed to lengthen the deadlines for filing a lawsuit. Deferring accrual of discrimination claims. Under federal law, an employee challenging a wrongful dismissal generally must sue within a period of time that begins with the notice of the employee’s termination of employment.252 The notice may precede the actual termination of employment by weeks or months.253 In California it’s different. For a California plaintiff, the time to sue for wrongful termination does not start to run until employment actually terminates.254 The same lenient standard favors a plaintiff suing on a breach of contract: the Court of Appeal has held that an employee’s claim against an employer for breaching its promise to permit “senior” employees to continue employment under relaxed sales quotas did not accrue when the employer announced it would no longer honor the promise, but rather accrued only later, when the employer first counseled an employee for failing to meet sales quotas contrary to the relaxed quotas.255 California’s standard for determining when a claim accrues is somewhat less lenient in a failure-to-promote case. In 2021 the California Supreme Court considered a claim that the plaintiff was denied a promotion because she had rebuffed a supervisor’s sexual advance.256 The Supreme Court decided that the claim would have accrued when the employee knew or reasonably should have known of the allegedly unlawful refusal to promote, and remanded for findings on that issue.257 Further, because the statute of limitations is an affirmative defense, the Supreme Court held that the defendant employer has the burden to prove the plaintiff’s actual or constructive knowledge of a refusal to promote.258 This ruling places a premium on the employer’s use of clear, written notice of its employment decisions.259 “Continuing violation.” California discrimination plaintiffs can sue on acts preceding the limitations period if they are “sufficiently connected to unlawful conduct within the limitations period.”260 California courts thus permit suit on unlawful actions occurring beyond the limitations period if a course of conduct, continuing into the limitations period, has not reached a state of “permanence” and consists of acts “sufficiently similar in kind,” occurring with “sufficient frequency,” even if the employee already knew of facts sufficient to sustain a claim at a time preceding the limitations period.261 The Court of Appeal has applied the “continuing violation” doctrine to reverse a summary judgment against a gay CHP officer allegedly subjected to homophobic comments and to related conduct putting his safety at risk.262 The Court of Appeal concluded that the plaintiff had presented evidence of similar misconduct both before and during the limitations period, with reasonable frequency, and that the misconduct had not previously gained permanence because the employer had not definitely rejected the officer’s concerns about the harassment he was experiencing.263 In another “continuing violation” case, the Court of Appeal sustained a female spa employee’s hostile environment claim alleging unwelcome sexual overtures and assault by a company salesman.264 Her complaints to the company were unavailing and when a new owner took over the company the situation deteriorated further.265 Although much of the conduct preceded the limitations period, the Court of Appeal permitted the plaintiff to sue for it, because the new owner claimed to have a “zero tolerance” policy for sexual discrimination and the plaintiff
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