Weeks v. Baker & McKenzie (63 Cal. App. 2d 1128, 1998)

Opinion

STEIN, J.

A jury found that Martin R. Greenstein, a partner in the law firm of Baker & McKenzie, sexually harassed his secretary, plaintiff Rena Weeks and awarded her $50,000 in compensatory damages from both Green-stein and Baker & McKenzie. The jury further awarded Weeks $225,000 in punitive damages from Greenstein and $6.9 million in punitive damages from Baker & McKenzie. The latter award was reduced to $3.5 million by the trial court. The court awarded Weeks $1,847,437.86 in attorney fees and expenses. This figure was calculated, in part, by fixing reasonable hourly fees for each legal professional representing Weeks, multiplying those figures by the number of hours reasonably devoted by the respective professional to the case, and multiplying that amount by a factor of 1.7.

We will affirm the judgment both as to the award of compensatory damages and as to the award of punitive damages. In so doing, we find, in part, that subdivision (a) of California’s punitive damages statute, Civil Code section 3294, states the general rule that punitive damages may be awarded only upon a showing that the defendant was guilty of oppression, fraud or malice. Subdivision (b), however, governs awards of punitive damages against employers, and permits an award for the conduct described there without an additional finding that the employer engaged in oppression, fraud or malice. We reject Baker & McKenzie’s contention that subdivision (b) establishes a kind of vicarious liability for employers such that the award of punitive damages against an employer cannot exceed the award of punitive damages assessed against the employee. We also find that California’s “private attorney general” statute, Code of Civil Procedure section 1021.5, does not authorize an award of attorney fees in an action such as this, brought by a single individual to redress her own economic injury. Finally, we find that although attorney fees were properly awarded under the Fair Employment and Housing Act (FEHA), Government Code section 12900 et seq., the trial court’s enhancement of those fees was not supported by the factors it cited as justifying the use of a multiplier of 1.7.

Facts

We recite the facts, resolving, as we must, all conflicts in the evidence and all legitimate and reasonable inferences that may arise therefrom in favor of the jury’s findings and the verdict. (Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 925-926 [101 Cal.Rptr. 568, 496 P.2d 480]; J.R. Norton Co. v. General Teamsters, Warehousemen & Helpers Union (1989) 208 Cal.App.3d 430, 444 [256 Cal.Rptr. 246].)

Greenstein joined the Chicago office of Baker & McKenzie in 1971, becoming an income partner in 1978 and a capital partner in 1982. In spring 1987, a secretary in the Chicago office told Linda Johnson, the director of administration, that Greenstein had committed acts of sexual harassment against her. The secretary apparently threatened legal action. As manager of the nonlegal staff, Johnson lacked authority over Greenstein, but she told him that his conduct hád been inappropriate. She also reported the matter to . Robert Cunningham, the chairman of the Chicago office committee, telling Cunningham that she had just prevented a sexual harassment charge from being filed by the secretary. Neither Cunningham nor any other person with authority over Greenstein took action as a result of Johnson’s report.

In fall or winter 1987, Johnson told Cunningham she would resign from the firm if approval was given for a salary increase sought by Greenstein for someone on his staff. Johnson told Cunningham that the increase was to prevent someone from filing a sexual harassment suit against the firm. Johnson stated that if such a suit were filed, she would be the first or second person to testify against Greenstein. The salary increase was approved, and Johnson did indeed resign. Cunningham and John Coleman, another partner on the office committee, met with Greenstein about Johnson’s allegations. Greenstein denied having engaged in any improper acts. Cunningham and Coleman took no action other than to tell Greenstein to stay away from Johnson during her remaining days with the firm and to be ultrasensitive in his future actions. Although Cunningham wrote a memorandum about the circumstances, he did not place the memorandum in Greenstein’s personnel file or otherwise establish a record of the accusations made against Green-stein. Cunningham simply kept the memorandum in his own office.

In early summer or late spring of 1988, Greenstein began to bother Melinda Faier, a young associate attorney. He sent her a vulgar note. He brushed up against her. Once, when she was wearing shorts and a tank top while working over the weekend, Greenstein leaned over her, telling her that he was turned on by what she was wearing. On one or two occasions he threw a pencil at her breasts. On another occasion, when Faier was working late in the library and had kicked off her shoes, Greenstein crawled underneath the table to tickle her feet. Faier told one of Baker & McKenzie’s partners, Leslie Bertagnolli, about the incidents. Bertagnolli reported Faier’s statements to the head of the department, who reported them to Coleman, who reported them to Cunningham. Cunningham and Coleman again met with Greenstein, who again denied having engaged in inappropriate behavior. Cunningham and Coleman told Greenstein that he should never put himself in a position where any employee was made uncomfortable by his acts, and that if it were to happen again, they would take steps to bring it to the attention of the firm after which they would take action against Green-stein as directed by the firm. Coleman told Greenstein that if Greenstein ever put himself into a situation where the same kind of comment or allegation might be made against him, Coleman would “kick his ass to China.” The administrative committee later heard that Faier was making statements to other associates about Greenstein’s sexual harassment of her, that she felt that she was being “set up” and unfairly treated by the firm and that she would make her claims of harassment public if her concerns were not addressed. Faier was called in and asked about these statements. She denied making them. A memorandum of the reports and Faier’s denial was written and placed in her personnel file. No other investigation was made of Faier’s claims. No documentation was made of them or of the action taken in response to them. No documentation about the claims was placed in Green-stein’s personnel file. Faier left the firm in the summer of 1989, to take a clerkship with the federal Court of Appeals. She contacted Baker & McKenzie after the clerkship ended, but was not invited to return to the firm.

By late 1988, Greenstein was developing an intellectual property practice in Palo Alto, California, where he relocated in 1990. Cunningham and Coleman spoke about Greenstein to Virginia Gibson, a San Francisco partner acting as liaison for Greenstein’s relocation to California. They told Gibson that Greenstein was very bright and talented, but that he tended to engage in juvenile conduct and they had received a complaint about him from one of the associates. Gibson relayed the information to the administrative partner, Jonathan Kitchen, and to Ed Burmeister, who later succeeded Kitchen as administrative partner. When Burmeister was succeeded by Bill Atkin, Gibson told Atkin about her conversation with Cunningham and Coleman. None of these persons told individuals who might be working with Green-stein, including the personnel manager in the Palo Alto office, that Green-stein could cause problems. Gibson testified, however, that she did warn Greenstein that conduct such as had been reported would be unacceptable in Palo Alto. Greenstein denied that he had engaged in the conduct.

Notwithstanding Gibson’s warning, Greenstein’s offensive conduct continued. In 1989, Greenstein met Donna Blow, a secretary in Baker & McKenzie’s San Francisco office. By July 1989 Blow became concerned about Greenstein’s conversations with her. Although Greenstein was married at the time, he would ask Blow out to dinner or over to his motel to join him in a hot tub. He commented on her appearance. He made her extremely uncomfortable. Blow attempted to evade Greenstein’s invitations, but he persisted. Finally, after Greenstein sent a proposition over a “current machine” (an early form of electronic mail), Blow sent back a message that she didn’t date married people, but even if she did, she would not be inclined to date a married man because she was gay. The telephone rang about a minute later. Greenstein was on the line, breathing heavily. He said that she shouldn’t send messages like that. He then asked her if she really was gay, and when she confirmed that she was, said, “Do you think you and one of your friends, one of your girlfriends could come down and we could have a three-way?” Blow hung up. She was very upset and found herself unable to work. She went to the personnel manager, Nancy Muller, telling her about Greenstein’s conduct. Muller called Mary Contreras, the office manager of the Palo Alto office, who had responsibility for the nonlegal staff. Contreras responded: “Oh, gosh, I am going to have to talk to Bill [Atkin] about this. None of the secretaries in the Palo Alto office will work with Marty at night anymore.” It does not, however, appear that any action was taken as a result of Muller’s report.

A 1989 incident involved Elyce Zahn, a secretary in the Palo Alto office. Zahn was in the office kitchen, unloading the dishwasher. Greenstein came up behind her, pulled the strap of her brassiere out of her sweater, and said, “Are you wearing a black bra?” Another attorney walked into the kitchen, and Greenstein turned away from Zahn. Zahn, telling herself she “didn’t need this crap,” walked out of Baker & McKenzie’s offices, threw her key to the office into a dumpster, and never went back. A few months later Zahn told a coworker, Myles Walker, about Greenstein’s conduct. Walker told Contreras that Zahn would not be back because she did not like working for Greenstein. There is no evidence that anyone from Baker & McKenzie spoke further with Zahn about the incident or her reasons for walking away from her job.

In December 1989, Julie Haydock-Davis was working for Baker & McKenzie as a temporary receptionist. Greenstein started telling her off-color jokes, making her uncomfortable. By the third day of Haydock-Davis’s employment, Greenstein was discussing his hot tub, suggesting that she might like to join him in it. He started to rub her arm gently, stating he would show her how to do massage and one never knows where that might lead. Haydock-Davis was so uncomfortable that she called her father, who told her to “get the hell out of there now.” Haydock-Davis called the temporary agency, saying she would not be going back to Baker & McKenzie. She made a formal statement, explaining her reasons. Haydock-Davis’s complaint was reported to Contreras. Contreras told persons on the firm’s administrative committee, including Burmeister, about the report. No one told Contreras to investigate the matter further. No one told her that there had been other complaints about Greenstein or that the committee intended to take any further action about the matter. The committee, however, decided that John McKenzie, another partner, should speak with Greenstein. No one informed McKenzie of the prior complaints against Greenstein. McKenzie did speak with Greenstein, who denied any knowledge of the incident. McKenzie cautioned Greenstein that he needed to be more sensitive to the way others might perceive his words or actions.

McKenzie’s meeting with Greenstein was no more effective than any of the earlier meetings with him. From January through April 1990, Vicki Gardner worked as a secretary in Greenstein’s department, working primarily for Greenstein’s brother Neil and for Myles Walker, Greenstein’s paralegal. Greenstein made her uncomfortable. He told her he liked to get together in a hot tub with three or four people. He looked her over, telling her that he liked the high collar blouse she was wearing. It reminded him of his first wife. He stated that he also really liked “low collared.” He asked her if she had a boyfriend. When she said she did not, he asked how long it had been since she had a boyfriend. Once when she was working late, he came up behind her, put his hand on her shoulder in what she perceived to be a suggestive way, and said, “Oh, are you putting in an all-nighter?” If he was nearby when she entered or exited the department, he stroked his hands across her shoulder as she went by. He would touch her, look her up and down, stand very close or back her into a wall. Gardner complained about Greenstein’s behavior to Walker and to Twila Carlsen, who also worked in the department.

In September 1990, Greenstein came up behind Gardner as she leaned over her desk, put his hands on her hips and pressed his body into hers. Later the same week, he put his hands on her hips as they passed in the hall. Gardner became afraid to go to her desk. The next time she was called into Contreras’s office, she blurted out that she would return to her desk only “if Marty would keep his hands to himself.” Gardner told Contreras about Greenstein’s conduct. Contreras called Atkin, then the administrative partner in San Francisco. A meeting was set up between Gardner, Atkin and Contreras. Gardner described her problems with Greenstein. Atkin appeared to be surprised about Gardner’s report, but told Gardner that he took her word for it and was willing to act on her complaints. Gardner stated that she wished to be physically removed from Greenstein’s department, that she wanted to make no written complaint, wanted her name kept out of the process and wanted Greenstein to get counseling. Gardner also suggested that they speak with Walker, and later, after receiving Twila Carlsen’s permission, that they speak with Carlsen. Atkin suggested that Gardner tell Neil Greenstein her reasons for transferring, and seek his permission to move.

Atkin later told Gardner that he and three other partners had met with Greenstein. He suggested that Gardner speak with a counselor personally. Gardner was in favor of the idea, although she hoped she could speak anonymously. She asked that other secretaries also be allowed to speak anonymously to the counselor. At some point Gardner asked that the firm distribute information as to how to handle complaints such as hers. Gardner was transferred, temporarily, away from Greenstein. She was told to work for Mary Rossman. Gardner did not want to work for Rossman because it would mean that she would be stationed close to Greenstein, and because she was of the opinion that Rossman was being pushed out of the firm. Gardner was concerned that she was being set up to be fired. She called the California Department of Fair Employment and Housing (DFEH), making an appointment for late November. In late October, Gardner was called to a meeting with Contreras and Neil Greenstein. She was told that she had to work for Rossman and that if she refused she would be considered to be insubordinate. She refused, and walked out.

Gardner called Atkin, telling him that she was disappointed with the response to her complaints, that she had an appointment with the DFEH, and that she believed she was being set up to be fired. She asked him what was being done to make the environment safe for secretaries. She testified that no information on filing complaints had been distributed, but a joke or cartoon had been placed on the wall that seemed to treat harassment as a joke. Gardner was not comforted by Atkin’s reply. He told her that “I had made an allegation. Marty had made a denial. He said as regards my access to a counselor, he said counseling input by the victim is discretionary, so he wouldn’t give me the name of the counselor. He said we are not a judge and a jury. You’d have to go to court for that. He said, we’ll not be dictated to by secretaries as to their assignments.”

Gardner testified that she continued to work for Neil Greenstein, but her work load changed. She was assigned more work, but her support was decreased. Neil Greenstein began to ridicule her as a person and to ridicule her work. Gardner was told that there were no other options available to her in Palo Alto. She ultimately requested transfer to an opening in word processing. Contreras told her that the new position would have less desirable hours and would involve working for anyone at the Palo Alto branch of Baker & McKenzie. Gardner stated that those conditions were fine. Contreras told her that the new position would involve a reduction in pay. Gardner said that would not be fine. She wanted to treat the word processing job as a transitional position where she would stay only until a more permanent position became available. Contreras later told Gardner that she could keep her present salary but “that it would not be transitional and there would be a termination date of February 28, 1991, that there was no place for [Gardner] at Baker McKenzie.” Gardner left the firm at the end of February.

In the meantime, as Gardner had suggested, Contreras spoke to Twila Carlsen. Carlsen told her that Greenstein made her uncomfortable. He made “dumb blonde” jokes around her, suggesting that she was a dumb blonde. He asked her if she had a social disease. He put his face uncomfortably close to hers. On one occasion Carlsen was sitting at her desk when she felt something poke into her back. Greenstein was behind her. When she asked him what was in her back, he said, “Just happy to see you.” Carlsen stated that she did not want to work for Greenstein. Contreras later told Carlsen that Baker & McKenzie’s management was aware of problems between Green-stein and women employees, but they could not compel him to go into counseling. Atkin recalled that no counseling occurred because Contreras was unable to find a counselor willing to work with Greenstein unless Gardner was willing to give up her anonymity.

During this time period another employee, Stephanie Brookins, told Contreras that she wanted to speak to her about Greenstein. The subject of Brookins’s planned discussion had nothing to do with sexual harassment, but before she began to speak, Contreras asked her, “Is this about sexual harassment?”

Weeks began to work as Greenstein’s secretary on July 23, 1991. She had little to do with Greenstein at first as she was attending training classes to learn about a new computer system. On August 8, the Thursday of her third week at the firm, Weeks had lunch with several persons, including Green-stein, at a local restaurant. As they left the restaurant, Greenstein gave her some M&M candies, which she put into the breast pocket of her blouse. A short time later, as they walked to Greenstein’s car, Greenstein pulled Weeks back, put his arm over her shoulder, put his hand in her breast pocket and dropped more candies into the pocket. He then put his knee in her lower back, pulled her shoulders back, and said, “Let’s see which breast is bigger.” Weeks was shocked, and found it hard to concentrate on her work for the rest of the day. The following day she spoke with Greenstein’s other secretary, Sandra Tischler-Bass, who told her that it sounded like something Greenstein would do and to let Tischler-Bass take care of it. The following week Greenstein was highly critical of Weeks’s work. On August 14, Weeks ran into Greenstein as he was carrying a box. He put the box down, lunging towards her with his hands cupped. When she moved back, crossing her hands over her chest, he asked if she was afraid that he was going to grab her. The following day Weeks and several others, including Greenstein, had lunch at a local restaurant. Weeks’s food arrived first, but Greenstein grabbed it and wolfed it down. He later turned to Weeks, asking her, “What’s the wildest thing you have ever done?” In the meantime, Greenstein continued to be critical of Weeks’s work, yelling at her and calling her an imbecile. She was becoming petrified. A short time later, Weeks agreed to help Tischler-Bass move some file cabinets out of Greenstein’s office into Tischler-Bass’s van and then to Greenstein’s house. At one point Weeks was leaning over the van, arranging things, when she felt someone grab her buttocks. It was Greenstein. Tischler-Bass then pulled her along, saying, “You are coming with me.” Weeks testified that Greenstein’s conduct left her petrified, angry and confused.

On August 23, an employee handbook was left on Weeks’s desk. In it Weeks found a statement of the firm policy on sexual harassment. After reading it, Weeks contacted Contreras. She told Contreras about the problems she was having with Greenstein, describing the behavior she perceived to be sexual harassment. Contreras sent Weeks home for the day. Contreras later told her that the administrative committee felt that it was best that Weeks transfer to another department. Contreras made notes of her conversations with Weeks, placing them in Weeks’s file. Nothing, however, was placed in Greenstein’s file. The administrative committee gave Contreras no instructions about investigating Weeks’s claims other than to tell her to speak with Tischler-Bass. Contreras reported back to the committee that she believed Weeks’s claims had substance.

Weeks was assigned to work for a paralegal, Mary Boyd, and an attorney, John Peterson. Although Greenstein was only infrequently in that part of the office, Weeks was nervous about him. Shortly after she returned to work, Greenstein walked to the desk next to her and just stared at her for perhaps a minute. No one spoke with Weeks about her claims. Contreras, Boyd and Peter Astiz (an attorney on the administrative committee) did meet with Weeks in mid-September, but not about her claims of sexual harassment. Boyd was unhappy with Weeks’s performance. Contreras told Weeks that she had not worked out since the beginning and was still not working up to the firm’s expectations. When Weeks protested that she had been affected by Greenstein’s behavior, she was told that had nothing to do with it. Weeks left Baker & McKenzie at the end of September.

In the meantime, on August 30, 1991, the administrative committee met about Greenstein. The committee suggested that Greenstein attend sexual harassment counseling. Greenstein agreed to the counseling. The committee asked Contreras to obtain some referrals to counselors. The committee interviewed a recommended counselor, Trisha Brinkman, within two weeks of Weeks’s complaint. In February, Greenstein attended two sessions with Brinkman, for which he was charged personally. Brinkman reported that the training was successful and that she did not see an immediate need for additional counseling.

In December 1991, Weeks filed a claim with the federal Equal Employ- ' ment Opportunity Commission (EEOC). The EEOC asked Baker & McKenzie about the existence of any complaints of sexual harassment other than those made by Weeks. Baker & McKenzie responded that there may have been one other claim, but it had been withdrawn. The EEOC declined to pursue the matter further. By this time Weeks was meeting with a psychologist, and had determined that she needed to take some action to keep from feeling like a victim. She found an attorney and filed her complaint on May 20, 1992. She testified that she started to feel better after legal proceedings were initiated and learned that other women had had experiences with Greenstein similar to hers.

Baker & McKenzie monitored the proceedings initiated by Weeks. The firm did not itself investigate Greenstein’s conduct or take any action against him for over a year. As late as April 1993, Baker & McKenzie’s position was that it would take appropriate action when the judicial process had been completed. Nonetheless, at the end of August 1993, and before the judicial process had been completed, Baker & McKenzie did act to remove Green-stein from the partnership. The decision to remove Greenstein, however, was precipitated not by his acts of sexual harassment, but by the deposition testimony of Greenstein’s paralegal, Timothy Wollaston, that Greenstein had been back-dating documents. Within two days of the deposition, Baker & McKenzie initiated an investigation into Wollaston’s allegations. Greenstein was asked to resign on August 27, and his practice put into receivership within a few days of that request. Greenstein was told that he would be removed in October if he failed to leave on his own accord. Greenstein resigned on October 11, 1993.

Discussion

I.

Sexual Harassment Under the Fair Employment and Housing Act (Gov.

Code, § 12900 et seq.; FEHA)

The FEHA makes unlawful the sexual harassment of an employee by any person. (Gov. Code, § 12940, subd. Under Government Code section 12940, subdivision (h)(1), an employer is strictly liable for acts of sexual harassment committed by an agent or supervisor. (Kelly-Zurian v. Wohl Shoe Co. (1994) 22 Cal.App.4th 397, 415 [27 Cal.Rptr.2d 457].) In addition, Government Code section 12940, subdivision (i) makes it unlawful “[f]or an employer ... to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring.” Sexual harassment is defined as including “ ‘ “[u]nwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature.” ’ ” {Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 607 [262 Cal.Rptr. 842].) It typically is viewed as taking one or both of two forms: (1) quid pro quo harassment, where submission to sexual conduct is made a condition of concrete employment benefits, and (2) hostile work environment, defined as conduct having the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment. (Ibid.) Weeks’s theory here was that she had been subjected to a hostile working environment. She did not claim quid pro quo harassment.

II.

Evidence of Sexual Harassment

(2) Baker & McKenzie does not attack the jury’s finding that it was liable for compensatory damages, and does not complain that the evidence failed to support the jury’s finding that Greenstein sexually harassed Weeks. Greenstein, however, does attack that finding as being unsupported by the evidence. He concedes that there was evidence that he reached into Weeks’s breast pocket, gestured as if to cup her breasts in his hands, touched her buttocks and quizzed her about the wildest thing she had ever done. In addition to these conceded actions, there was evidence that Greenstein pulled Weeks’s shoulders back to “see which breast is bigger.” Greenstein downplays the probable effect of this conduct, but Weeks testified that Greenstein’s conduct left her petrified, angry and confused, and made it difficult for her to concentrate on her work. The evidence thus supports the finding that Greenstein’s conduct unreasonably interfered with Weeks’s work performance and/or created an intimidating, hostile, or offensive working environment.

Employer’s Liability for Punitive Damages Under the FEHA

The FEHA does not itself authorize punitive damages. It is, however, settled that California’s punitive damages statute, Civil Code section 3294, applies to actions brought under the FEHA, including actions brought for sexual harassment. (Commodore Home Systems, Inc. v. Superior Court (1982) 32 Cal.3d 211 [185 Cal.Rptr. 270, 649 P.2d 912]; Kelly-Zurian v. Wohl Shoe Co., supra, 22 Cal.App.4th at pp. 419-420.)

III.

Civil Code section 3294 provides in relevant part:

“(a) In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.

“(b) An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director or managing agent of the corporation.”

Prior to 1980, section 3294 did not expressly address the question of employer liability for punitive damages for the actions of an employee. Such liability, however, was well established. As explained in the 1974 case of Hale v. Farmers Ins. Exch. (1974) 42 Cal.App.3d 681 [117 Cal.Rptr. 146] (overruled on other grounds in Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 822, fn. 5 [169 Cal.Rptr. 691, 620 P.2d 141]): “California follows the rule laid down in Restatement of Torts, section 909, which provides punitive damages can properly be awarded against a principal because of an act by an agent if, but only if ‘(a) the principal authorized the doing and the manner of the act, or (b) the agent was unfit and the principal was reckless in employing him, or (c) the agent was employed in a managerial capacity and was acting in the scope of employment, or (d) the employer or a manager of the employer ratified or approved the act.’ ” (Hale, supra, at p. 691.)

Comment b to section 909 of the Restatement Second of Torts states the rationale behind imposing punitive damages liability on employers for the wrongful conduct of employees: “The rule stated in this Section results from the reasons for awarding punitive damages, which make it improper ordinarily to award punitive damages against one who himself is personally innocent and therefore liable only vicariously. It is, however, within the general spirit of the rule to make liable an employer who has recklessly employed or retained a servant or employee who was known to be vicious, if the harm resulted from that characteristic. . . . Nor is it unjust that a person on whose account another has acted should be responsible for an outrageous act for which he otherwise would not be if, with full knowledge of the act and the way in which it was done, he ratifies it, or, in cases in which he would be liable for the act but not subject to punitive damages, he expresses approval of it. . . . In these cases, punitive damages are granted primarily because of the principal’s own wrongful conduct, [¶] Although there has been no fault on the part of a corporation or other employer, if a person acting in a managerial capacity either does an outrageous act or approves of the act by a subordinate, the imposition of punitive damages upon the employer serves as a deterrent to the employment of unfit persons for important positions.” (Rest.2d Torts, § 909, com. b, at p. 468.)

By 1980, proponents of tort reform, concerned that existing law could be interpreted too broadly, drafted Senate Bill No. 1989 (1979-1980 Reg. Sess.). It was felt that under existing law employers might be found liable for punitive damages when the employers’ actions were merely negligent or reckless. It therefore was proposed that “malice,” “fraud” and “oppression,” in the context of employer liability for punitive damages, be defined in a manner that would preclude liability for reckless or negligent acts. A second concern was that an employer might be found liable for negligently or recklessly failing to investigate the backgrounds of employees, and it was noted that other laws prohibit employers from using certain information in making hiring decisions. As a result, proponents of Senate Bill No. 1989 (1979-1980 Reg. Sess.) promoted the use of the term “conscious disregard” in place of “reckless” as it appeared in the Restatement of Torts. Proponents also were concerned about a recent Supreme Court decision, Egan v. Mutual of Omaha Ins. Co, supra, 24 Cal.3d 809. The Supreme Court determined there that an employing insurance company might be liable for punitive damages because of the conduct of two employees who caused harm while acting within their authority, but who were not classified as “managerial employees.” The Supreme Court reasoned that employer liability should turn not on the employees’ classification, but on the extent of the discretion conferred upon them. “ ‘Defendant should not be allowed to insulate itself from liability by giving an employee a nonmanagerial title and relegating to him crucial policy decisions.’ ” (Id. at p. 823, quoting from the dissenting opinion in Merlo v. Standard Life & Acc. Ins. Co. (1976) 59 Cal.App.3d 5, 25 [130 Cal.Rptr. 416].) Senator Kenneth L. Maddy, who introduced Senate Bill No. 1989, wrote to Governor Brown that under Egan and the Restatement Second of Torts, an employer might be liable for punitive damages for conduct of an employee acting in a “managerial capacity.” “In other words, the employer may be found to have authorized his employee’s outrageous acts merely by authorizing the employee to act on his behalf.” Senator Maddy explained: “SB 1989 repudiates this standard altogether by dispensing with the vague term ‘managerial capacity.’ In its place the term ‘managing agent’ is used to describe the lowest level person within a corporation who must be ‘personally guilty of oppression, fraud [or] malice’ or possess the requisite ‘advance knowledge’ and ‘authorize or ratify’ the conduct at issue before punitive damages can be assessed against the corporation. The term ‘managing agent’ is, of course, a term of art that refers to a function, and not a mere title. It remains for the ‘judiciary’ to flesh out a meaning for ‘managing agent’ in the factual context of each case before it.” (Letter from Senator Kenneth L. Maddy to Governor Brown (Sept. 2, 1980) p. 4.)

Senate Bill No. 1989 (Sept. 2, 1980) (1979-1980 Reg. Sess.) was adopted in 1980. (Stats. 1980, ch. 1242, § 1, p. 4217.) As a result, the existing provisions of Civil Code section 3294 were restated in a newly created subdivision (a), and subdivisions (b) and (c) were added. Subdivision (b) essentially restates prior law but, as Senator Maddy promised, limits employer liability to actions taken by “managing agents” and employs the phrase “conscious disregard” to prevent liability from attaching for the reckless or negligent employment of an injuring employee. Subdivision (b) is not a model of clarity, but in light of California’s history of employer liability for punitive damages and of the Legislature’s reasons for enacting subdivision (b), we have no doubt that it does no more than codify and refine existing law. Subdivision (b) thus authorizes the imposition of punitive damages on an employer in three situations: (1) when an employee was guilty of oppression, fraud or malice, and the employer with advance knowledge of the unfitness of the employee employed him or her with a conscious disregard of the rights or safety of others, (2) when an employee was guilty of oppression, fraud or malice, and the employer authorized or ratified the wrongful conduct, or (3) when the employer was itself guilty of the oppression, fraud or malice.

In addition, in proposing Senate Bill No. 1989, proponents of tort reform sought to protect defendants from being subjected to extensive and expensive pretrial discovery into their financial affairs until a plaintiff establishes that he or she is likely to prevail on a punitive damages claim. (Letter from Senator Maddy to Governor Brown, supra, p. 4.) The Legislature therefore enacted Civil Code section 3295. Among other things, Civil Code section 3295 requires trial courts, at the request of a defendant, to bifurcate the proceedings so as to preclude the admission of evidence of a defendant’s profits or financial condition until after the trier of fact has returned a verdict for the plaintiff awarding actual damages and finding the defendant liable for punitive damages.

The trial here was bifurcated in accordance with Civil Code section 3295. At the close of the first phase of the trial, and in order to determine whether it might hear evidence of Baker & McKenzie’s financial worth, the jury was asked the following questions, submitted to it on a special verdict form:

“Has plaintiff Rena Weeks proved by clear and convincing evidence that defendant Martin Greenstein was guilty of oppression or malice in his conduct upon which you base your finding of sexual harassment?”

“Has plaintiff Rena Weeks proved by clear and convincing evidence that defendant Baker & McKenzie (a) had advance knowledge of the unfitness of defendant Martin R. Greenstein and with a conscious disregard of the rights or safety of others continued to employ him, or (b) ratified the conduct of Mr. Greenstein which is found to be oppression or malice?”

The jury answered “yes” to each question. Baker & McKenzie nonetheless argues that the award of punitive damages against it was improper for any of several reasons.

A. Necessity of Proving the Employer Itself Was Guilty of Malice, Oppression or Fraud

Baker & McKenzie argues that the jury could not assess punitive damages directly against it absent a showing that Baker & McKenzie itself was guilty of oppression, fraud, or malice. Baker & McKenzie complains that the jury here made no such finding, and indeed, was not asked whether Baker & McKenzie itself was guilty of oppression, fraud or malice.

Baker & McKenzie thus interprets Civil Code section 3294 as permitting an award of punitive damages directly against an employer only upon a showing that the employer both engaged in the conduct defined by subdivision (b), and was itself guilty of fraud, oppression or malice, i.e., the conduct authorizing liability for punitive damages under subdivision (a). The history of the statute, however, does not support that interpretation. To the contrary, it seems that proponents of Senate Bill No. 1989 understood and accepted that employers might be found directly liable for punitive damages in any of the situations outlined in Civil Code section 3294, subdivision (b), without an additional explicit finding that the employer was guilty of fraud, oppression or malice. Senator Maddy thus urged the use of the term “managing agent” “to describe the lowest level person within a corporation who must be ‘personally guilty of oppression, fraud [or] malice’ or possess the requisite ‘advance knowledge’ and ‘authorize or ratify’ the conduct at issue before punitive damages can be assessed against the corporation.” (Letter from Senator Maddy to Governor Brown, supra, p. 4, italics added.) Even absent this expression of legislative understanding, Baker & McKenzie’s interpretation renders surplusage the third alternative for employer liability set forth in subdivision (b), i.e., that the employer itself have been guilty of “oppression, fraud or malice.” It is a cardinal rule of statutory construction that a construction that renders some words surplusage is to be avoided. (City of Huntington Park v. Superior Court (1995) 34 Cal.App.4th 1293, 1300 [41 Cal.Rptr.2d 68]; Shoemaker v. Myers (1990) 52 Cal.3d 1, 22 [276 Cal.Rptr. 303, 801 P.2d 1054; 20 A.L.R.5th 1016].)

It is true, as Baker & McKenzie points out, that the court in College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704 [34 Cal.Rptr.2d 898, 882 P.2d 894] at page 721 held that Civil Code section 3294, subdivision (b) imposes “additional” requirements on plaintiffs attempting to hold an employer liable for punitive damages based upon the acts of an employee. College Hospital does not, however, stand for the proposition that the plaintiff has the burden of showing that the employer engaged in oppression, fraud or malice over and above the conduct described in subdivision (b). Instead, the court there recognized that the conduct described in subdivision (b) is the equivalent of oppression, fraud, or malice. “California has traditionally allowed punitive damages to be assessed against an employer (or principal) for the acts of an employee (or agent) only where the circumstances indicate that the employer himself was guilty of fraud, oppression, or malice. Thus, even before section 3294, subdivision (b) was added to the Civil Code in 1980, the courts required evidence that the employer authorized or ratified a malicious act, personally committed such an act, or wrongfully hired or retained an unfit employee.” (8 Cal.4th at p. 723.) The “additional” burden on a plaintiff seeking punitive damages from an employer is to show not only that an employee acted with oppression, fraud or malice, but that the employer engaged in conduct defined in subdivision (b).

B. Employer Liability Under Civil Code Section 3294, Subdivision (b) as Only “Vicarious.”

A second argument is that even if punitive damages might be assessed against an employer without a showing that the employer itself engaged in oppression, fraud or malice, employer liability is merely vicarious. Baker & McKenzie contends that because its liability is merely vicarious, the award of punitive damages assessed against it can be no greater than the award assessed against Greenstein.

Civil Code section 3294, subdivision (b) does not authorize an award of punitive damages against an employer for the employee’s wrongful conduct. It authorizes an award of punitive damages against an employer for the employer’s own wrongful conduct. Liability under subdivision (b) is vicarious only to the extent that the employér is liable for the actions of its officer, director or managing agent in hiring or controlling the offending employee, in ratifying the offense or in acting with oppression, fraud or malice. It is not vicarious in the sense that the employer is liable for the wrongful conduct of the offending employee. Civil Code section 3294 contains no provision expressly limiting the award of punitive damages assessed against an employer to the amount assessed against the employee, and there is not the faintest suggestion that the Legislature intended to so limit the damages assessed against an employer. The purpose for awarding punitive damages is to punish wrongdoing and thereby protect the public from future misconduct, either by the same defendant or other potential wrongdoers. (Adams v. Murakami (1991) 54 Cal.3d 105, 110 [284 Cal.Rptr. 318, 813 P.2d 1348].) An employer only vicariously liable for an employee’s actions should not be punished at all because the employer is free from wrongdoing. On the other hand, where the employer itself is guilty of wrongdoing, limiting an award of punitive damages to the amount assessed against the employee could have little deterrent effect. “ ‘[O]bviously, the function of deterrence . . . will not be served if the wealth of the defendant allows him to absorb the award with little or no discomfort. . . .’” (Ibid.) It therefore is hardly surprising that no court has adopted Baker & McKenzie’s position, and that a number of courts have affirmed awards that are inconsistent with that position. (E.g., Roberts v. Ford Aerospace & Communications Corp. (1990) 224 Cal.App.3d 793 [274 Cal.Rptr. 139] [$750,000 punitive damages assessed against employer, no punitive damages assessed against employees]; Pusateri v. E. F. Hutton & Co. (1986) 180 Cal.App.3d 247 [225 Cal.Rptr. 526] [$160,000 punitive damages against the employer, no punitive damages against any employee]; Greenfield v. Spectrum Investment Corp. (1985) 174 Cal.App.3d 111 [219 Cal.Rptr. 805], overruled on other grounds in Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 644, 664 [25 Cal.Rptr.2d 109, 863 P.2d 179] [$400,000 punitive damages against employer, $42,500 punitive damages against the employee].)

Baker & McKenzie cites language in Civil Code section 3295 as supporting its position. It will be recalled that section 3295 was enacted to prevent discovery or disclosure of a defendant’s financial worth until some showing is made that punitive damages would be awarded against that defendant. Baker & McKenzie cites subdivision (d): “The court shall, on application of any defendant, preclude the admission of evidence of that defendant’s profits or financial condition until after the trier of fact returns a verdict for plaintiff awarding actual damages and finds that a defendant is guilty of malice, oppression, or fraud .... Evidence of profit and financial condition shall be admissible only as to the defendant or defendants found to be liable to the plaintiff and to be guilty of malice, oppression, or fraud.” (Italics added.) Baker & McKenzie reads this provision as precluding disclosure of an employer’s financial condition unless and until there is a finding that the employer itself engaged in oppression, fraud or malice. The argument is that where an employee has been found guilty of oppression, fraud or malice under Civil Code section 3294, subdivision (a), but employer liability is based on the findings required by subdivision (b), only the employee’s financial condition may be disclosed and the amount of punitive damages must be limited to those assessed against the employee. Adoption of this argument would mean that the Legislature intended to alter existing substantive law governing assessment of punitive damages by means of a provision regulating the introduction of evidence. “[I]t should not be presumed that the legislative body intends to overthrow long-established principles of law unless such intention is made clearly to appear either by express declaration or by necessary implication.” (People v. Davenport (1985) 41 Cal.3d 247, 266 [221 Cal.Rptr. 794, 710 P.2d 861].) In our opinion, the language of Civil Code section 3295, subdivision (d), simply confirms that the Legislature views the conduct described in section 3294, subdivision (b) as the equivalent of employer oppression, fraud or malice.

C. Employer’s Duty to Terminate Errant Employee

Baker & McKenzie interprets Civil Code section 3294, subdivision (b) as requiring an employer to terminate the employment of an “unfit” employee or be subject to liability for punitive damages. Baker & McKenzie therefore contends that “[t]he punitive damages award against Baker can stand only if the information possessed by Baker prior to July 1991 (when it first employed Plaintiff) was sufficient to brand Greenstein ‘unfit’ so that nothing short of termination was acceptable. Affirmation of that award would require this court to say that, as a matter of law, Baker had no alternative but to fire Greenstein. That conclusion would have profound and serious consequences for California’s labor force.” Baker & McKenzie thus emphasizes the duty owed by an employer to its employees to continue employment unless severe wrongdoing has been proven, and even then to take measures short of termination if such measures may prevent the recurrence of the wrongful behavior. A related argument is that whether termination is justified should be a question of law for the court to resolve and that it therefore was error to submit the question here to a jury.

Baker & McKenzie’s argument falls short if Civil Code section 3294, subdivision (b) is read not as imposing a duty on an employer to terminate a harassing employee, but as imposing a duty on the employer to take reasonable measures to prevent a known harasser from committing future acts of harassment. As Baker & McKenzie correctly asserts, there are methods of forestalling harassment that fall short of outright termination, and it is unreasonable and probably violative of public policy to require an employer to terminate any and every employee that might be expected to act inappropriately towards his or her fellow workers. Nothing in the language of Civil Code section 3294 itself mandates that it be interpreted to require termination of abusive employees. It is true that the phrase “employed him or her with a conscious disregard of the rights or safety of others” is susceptible to the interpretation that an employer must terminate employees that are likely to abuse other employees. That language, however, is equally susceptible to the interpretation that the employer may not employ the abusive employee without taking reasonable steps to prevent him or her from being or continuing to be abusive. We interpret the letter of the law, if possible, to conform to the spirit of the act. (Whitman v. Superior Court (1991) 54 Cal.3d 1063, 1072 [2 Cal.Rptr.2d 160, 820 P.2d 262].) Statutes should be given “a reasonable and commonsense interpretation consistent with the apparent purpose and intention of the Legislature, practical rather than technical in nature, and which, when applied, will result in wise policy rather than mischief or absurdity. [Citations.]” (Beaty v. Imperial Irrigation Dist. (1986) 186 Cal.App.3d 897, 902 [231 Cal.Rptr. 128].) A reasonable attempt to curb or prevent the abusive behavior of employees does not demonstrate the conscious disregard of the rights or safety of third persons that would permit an award of punitive damages under Civil Code section 3294. The public policy at issue is not to fire errant employees, but to protect employees from abusive or hostile work environments and/or from abusive and hostile coworkers. The question, therefore, is not whether the employee’s misconduct was such that termination was the only option, but whether the employer took reasonable steps to prevent the misconduct. The better approach to the phrase “employed him with a conscious disregard of the rights or safety of others,” therefore, is to interpret it as meaning that the employer may not employ or continue to employ the errant employee without taking action reasonably designed to protect the rights or safety of others.

Baker & McKenzie warns that construing Civil Code section 3294, subdivision (b) as authorizing punitive damages for the failure to take reasonable steps to prevent abuse exposes employers to punitive damages for conduct no more egregious than that which permits an award of compensatory damages under Government Code section 12940, subdivision (i) (i.e., for failing “to take all reasonable steps necessary to prevent discrimination and harassment from occurring”). As Baker & McKenzie itself points out in a later portion of its opening brief, however, liability under Civil Code section 3294, subdivision (b) requires actual knowledge by an employer, while liability under Government Code section 12940 does not. Liability attaches under section 12940, subdivision (i) for an “employer’s” failings. “Employer” is defined as including “agents or supervisors.” Under Civil Code section 3294, subdivision (b), liability attaches only if the employer or an “officer, director, or managing agent” fails to act. Liability under Government Code section 12940, subdivision (i) may be predicated on negligent conduct. Liability under Civil Code section 3294 requires “conscious disregard,” a phrase specifically included in the statute to prevent liability from attaching from the reckless or negligent employment of an injuring employee. Finally, liability under Government Code section 12940, subdivision (i) authorizes an award of compensatory damages for the failure to take “all” reasonable steps. Because an award of punitive damages under Civil Code section 3294, subdivision (b) may be had only where the employer’s acts or omissions demonstrate “conscious disregard,” an employer need only take such steps as demonstrate that it is making a good faith attempt to protect the rights or safety of others.

Under our interpretation of Civil Code section 3294, subdivision (b), there is no real question but that the evidence supports the finding that Baker & McKenzie or a managing agent of Baker & McKenzie had advance knowledge that Greenstein was likely to sexually harass employees such as Weeks, and that it exhibited conscious disregard for the rights and safety of others by failing to take reasonable steps to prevent Greenstein’s misconduct. There was evidence that by spring 1987, Greenstein’s propensity to engage in harassing conduct had come to the attention of managing agents of the firm. Baker & McKenzie, however, failed to take any formal action to prevent further misconduct until after Weeks’s complaints. Notwithstanding Baker & McKenzie’s failure to take corporate responsibility for Greenstein’s behavior, informal reports of Greenstein’s conduct followed him. Indeed, it can be inferred from the evidence that it was common knowledge that Greenstein harassed female employees. Greenstein was occasionally warned or chastised about the misconduct, but the misconduct continued. The ineffectiveness of the warnings given Greenstein may have resulted from Baker & McKenzie’s failure to make any useful documentation of Greenstein’s misconduct, or may have resulted from a corporate desire to avoid alienating a productive partner despite the injury he could be expected to cause to employees. Whatever the cause of Baker & McKenzie’s inaction, it certainly tended to communicate both to Greenstein and to those who worked around him that Baker & McKenzie did not take his misconduct seriously. There is evidence that persons who complained about Greenstein’s actions were transferred or were themselves terminated as employees with the firm. There is evidence that Bill Atkin, the head of the administrative committee both before and after Weeks was employed, knew that a number of allegations had been made against Greenstein, and indeed believed that Greenstein had engaged in serious misconduct. There is evidence that one of the earlier claimants (Vicki Gardner) pressed Atkin to see to it that Greenstein received counseling. She also asked that information about sexual harassment be distributed to Baker & McKenzie employees. There is evidence that Atkin took no steps to protect Gardner or other employees from Greenstein, except that he held yet another ineffectual meeting with Greenstein, even after Gardner complained that someone later had posted an offensive cartoon near her work station. Gardner, like the other lower level employees who complained about Greenstein, was transferred and ultimately told to leave the firm. In sum, there is evidence that although the firm kept records on complaints made about lower level employees, and took action against those employees as a result of complaints, it turned a blind eye to complaints made about Greenstein. There is evidence that the firm’s attitude towards complaints by a lower level employee was to ignore it or dismiss it on the grounds that it was just that employee’s word against Greenstein’s, even if the employee’s word in fact was supported by other evidence.

In all events, there is substantial evidence that at the time Weeks was hired, Baker & McKenzie and its relevant managing agents were well aware that Greenstein was likely to create a hostile work environment for women, and that Baker & McKenzie consistently failed to take measures reasonably designed to protect women from Greenstein’s abuse. The failure to place reports of Greenstein’s misconduct in his own personnel file so as to warn future supervisors of that conduct in and of itself demonstrates a conscious disregard for the rights and safety of other employees. No formal action was taken by the firm to prevent Greenstein from creating a hostile work environment. No effective informal action was taken to prevent Greenstein’s wrongful conduct, notwithstanding specific requests and suggestions by at least one person injured by that conduct. The evidence suggests that Weeks was a highly foreseeable target of Greenstein’s misconduct, but that no steps were taken to prevent that misconduct, to warn her that it might occur or to inform her of her rights and options if it did occur. The evidence thus supports the jury’s conclusion that Baker & McKenzie itself engaged in conduct justifying an award of punitive damages against the firm.

IV.

Admission of Evidence of Greenstein’s Conduct Towards Other Employees

Baker & McKenzie complains that the jury was permitted to hear evidence of Greenstein’s conduct towards employees occurring prior to Weeks’s employment, that Weeks’s counsel was permitted to cite that evidence to the jury during argument and that the jury was asked, by means of a special verdict form, if Baker & McKenzie had failed to take all reasonable steps to prevent the sexual harassment of Weeks. Baker & McKenzie contends that such evidence was relevant only to the theory that it was liable for compensatory damages under Government Code section 12940, subdivision (i) (making it unlawful for an employer “to fail to take all reasonable steps necessary to prevent discrimination [or] harassment from occurring”). Baker & McKenzie contends that the evidence was improperly admitted because this theory became moot when it stipulated it would be liable for compensatory damages under Government Code section 12940, subdivision (h)(1) if the jury found that Greenstein had sexually harassed Weeks.

We accept without analysis Baker & McKenzie’s contention that by stipulating to liability for compensatory damages resulting from Greenstein’s acts of sexual harassment, Baker & McKenzie established grounds for objecting to evidence introduced to support the theory that it was liable for failing to take all reasonable steps necessary to prevent discrimination or harassment from occurring. It does not follow, however, that evidence of Greenstein’s earlier conduct became inadmissible. The majority of the evidence at issue was relevant not only to the question of Baker & McKenzie’s liability for compensatory damages under Government Code section 12940, subdivision (i), but also to the question of its liability for punitive damages under Civil Code section 3294, subdivision (b). (See Bihun v. AT&T Information Systems, Inc. (1993) 13 Cal.App.4th 976, 990-991 [16 Cal.Rptr.2d 787], overruled on other grounds in Lakin v. Watkins Associated Industries, supra, 6 Cal.4th at p. 664.) The evidence therefore was admissible whether or not Baker & McKenzie’s stipulation rendered moot Weeks’s theory that Baker & McKenzie should be liable for failing to protect her from sexual harassment.

We reject the argument that error occurred because the only evidence relevant to Baker & McKenzie’s liability for punitive damages was evidence that Greenstein’s misconduct had been reported to a managing agent. The evidence was that most of the conduct at issue was reported to a managing agent or at least had come to the attention of a managing agent before Weeks was hired, and we cannot find unfair prejudice to Baker & McKenzie in the admission of evidence of the few remaining acts of misconduct. In short, there was significant evidence that the firm’s managing agents had actual knowledge that Greenstein posed a danger to other employees and was likely to harass Weeks, but that the firm, with conscious disregard for Weeks’s rights and safety, failed to take any reasonable action to prevent that harassment. This evidence was believed by the jury. After reviewing the complete record, we find no likelihood that the jury would have reached a different conclusion had the court excluded evidence relating only to Weeks’s Government Code section 12940, subdivision (i) claims.

In a related argument, Baker & McKenzie contends that the jury must have become confused when both Weeks’s Government Code section 12940, subdivision (i) claim, and her claim for punitive damages, were submitted to it. In Baker & McKenzie’s opinion, the jury must have confu