Can a company escape a harassment judgment by arguing that's just how the boss is, or that a small startup should be held to a looser standard?

A California Court of Appeal said no, affirming a judgment in full for an employee after a multi-day bench trial.

Our client was hired as director of sales and marketing. Over the course of her employment, the company's CEO called her "my girl" and "my wife," commented repeatedly on her appearance and her sex life, hugged and attempted to kiss her over her objections, and sent her a suggestive photograph in the middle of a workday. He terminated her weeks after she made clear she wanted only a professional relationship. She experienced severe anxiety, insomnia, headaches, and stomachaches, and began working remotely from another state to limit contact with him.

The trial court found for her on two claims under the Fair Employment and Housing Act: hostile work environment based on sexual harassment (Gov. Code, § 12940, subd. (j)) and, against the corporate defendants, failure to prevent harassment (Gov. Code, § 12940, subd. (k)). It awarded $150,000 and $50,000 respectively, plus $257,161.80 in attorney fees and $20,439.92 in costs.

The defendants appealed, arguing the conduct was "occasional, isolated, sporadic and trivial," that hugging and kissing was simply the CEO's custom with everyone, that the informality of a business run out of his garage made his behavior natural, and that our client had led him on. They also asked the Court of Appeal to impose a new requirement that a worker document a complaint before proving a pervasive hostile work environment.

The Court of Appeal affirmed the judgment in full. It held that substantial evidence supported the trial court's findings, noted that under Government Code section 12923 the standard for sexual harassment does not vary by type of workplace, and declined to create a documentation requirement, observing that courts interpret the law rather than write it. On the failure-to-prevent claim, the court held the corporate defendants had forfeited their challenge to "employer" status by raising it for the first time after trial.

Andrew S. Pletcher of Pletcher Law, APC handled the appeal for the employee, in collaboration with D. Aaron Brock and Cory H. Hurwitz of Brock & Gonzales. Mr. Pletcher wrote the respondent's brief and argued the case before the Court of Appeal.

Elizabeth v. Palumbo, No. D086913 (Cal. Ct. App., 4th Dist., Div. One, June 26, 2026) (unpublished). This opinion was not certified for publication and may not be cited as authority under California Rules of Court, rule 8.1115. Prior results do not guarantee a similar outcome.

Is your workplace being excused because it's "just how he is"?
A small company, a casual office, or a boss with no filter are not defenses under California law. If you're dealing with harassment at work, the sooner you talk to someone, the more options you have.
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PALUMBO — FAQs

Does California sexual harassment law apply differently at a small company or a startup?

No. Government Code section 12923(d) states that the legal standard for sexual harassment should not vary by type of workplace. An informal office, a small team, or a business run out of someone's home does not lower the standard.

Do I have to make a formal written complaint to HR to win a harassment case in California?

No. In Elizabeth v. Palumbo (2026), the Court of Appeal declined to create a requirement that an employee document a complaint in order to prove a pervasive hostile work environment. Courts have recognized that employees often stay silent because they need the job.

What counts as a hostile work environment under FEHA?

Harassing conduct that is unwelcome, based on sex or another protected characteristic, and severe or pervasive enough to alter the conditions of employment. It does not require unwanted sexual advances, and the required severity varies inversely with how often the conduct occurs — frequent lesser conduct can be enough.

Is my employer responsible if my supervisor is the one harassing me?

Generally yes. Under California law, when the harasser is a supervisor, the employer is strictly liable for the supervisor's conduct.

What is a "failure to prevent harassment" claim?

It's a separate claim under Government Code section 12940(k), which requires employers to take all reasonable steps to prevent harassment and discrimination. In Palumbo, the trial court awarded $50,000 on this claim in addition to the harassment award, in part because the company had no harassment or anti-retaliation policies at all.

Can I bring a harassment claim if I was classified as an independent contractor?

Possibly. Whether someone is an employee or an independent contractor turns on the actual working relationship — particularly who controls how the work is done — not on what the contract calls you.