A Supervisor, but Not Your Supervisor: Doe v. Wells Fargo Limits FEHA Strict Liability for Harassment
When a supervisor harasses an employee in California, the employer is strictly liable under the Fair Employment and Housing Act (FEHA). Its good intentions, its policies and how quickly it responded do not change that result.
But what if the alleged harasser supervises other people, and not the employee bringing the claim?
On October 5, 2026, the California Court of Appeal answered that question in a published opinion, Doe v. Wells Fargo Bank, N.A. The answer is a clear one for employers: strict liability applies only when the harasser is the plaintiff’s own supervisor, acting in the capacity of a supervisor when the harassment occurs. A manager of other employees stands in the shoes of a coworker as to everyone he does not supervise.
The case at a glance
• Case: Jane Doe v. Wells Fargo Bank, N.A., No. B344642
• Court: Court of Appeal of the State of California, Second Appellate District, Division Four
• Filed: October 5, 2026; certified for publication
• Appeal from: Los Angeles County Superior Court, No. 23STCV02273 (Judge Tony L. Richardson)
• Opinion by: Acting Presiding Justice Tamzarian, with Justices Daum and Kim concurring
• Result: Summary judgment for Wells Fargo affirmed
Two ways an employer can be liable for harassment under FEHA
FEHA’s harassment provision, Government Code section 12940, subdivision (j)(1), sets up two different standards depending on who did the harassing. As the California Supreme Court explained in State Dept. of Health Services v. Superior Court (2003) 31 Cal.4th 1026:
• Supervisor harassment: the employer is strictly liable. The statute never actually says “strict liability.” Courts derived the rule because FEHA imposes a negligence standard only for harassment “by an employee other than an agent or supervisor,” which by implication makes the employer strictly liable for harassment by a supervisor.
• Coworker harassment: the employer is liable only if it was negligent, meaning it (a) knew or should have known of the harassing conduct and (b) failed to take immediate and appropriate corrective action.
FEHA also makes employers strictly liable for harassment by their “agents,” but that theory was not at issue in this case.
The difference between the two standards is enormous in practice. Under the negligence standard, an employer that responds promptly and appropriately to a complaint has a path to defeating the claim. Under strict liability, that path largely disappears.
What happened in Doe v. Wells Fargo
The plaintiff was a wealth advisor in Wells Fargo’s private bank division. The alleged harasser was a senior investment strategist, later given the title of managing director (with no change in pay or responsibilities), who worked on many of her client teams. She regarded him as “a superior” with “power and influence.”
Critically, though, he was not her supervisor, and she conceded that point. He was not formally designated as a supervisor of anyone. He and the support staff assigned to him (called associates) reported to the same regional manager. He could not hire, fire, approve expenses or approve time off, although he provided input to those who reviewed the associates’ performance.
The plaintiff alleged that he sexually harassed and assaulted her during a 2020 business trip. He denied the allegations and said the encounter was consensual. After she reported to the company’s ethics hotline in November 2020, Wells Fargo flagged the complaint for expedited investigation, assigned an internal investigator and placed the accused employee on paid administrative leave. The investigator found the sexual harassment and assault allegations unsubstantiated but found other policy violations, and the company issued the accused employee a “final notice” warning.
The plaintiff sued in 2023. Wells Fargo won summary judgment on two grounds: (1) it could not be strictly liable because the alleged harasser was not her supervisor, and (2) it was not liable under the negligence standard because it took prompt and appropriate corrective action.
The holding: the relationship that matters is the one with the plaintiff
On appeal, the plaintiff argued that the relationship between the harasser and the victim does not matter. As long as the harasser supervises somebody, she argued, strict liability applies. Her evidence focused on his relationship with the associates, support staff who were at least one level below her.
The Court of Appeal rejected that argument. Assuming, without deciding, that the strategist was a supervisor of the associates, the court held:
“An employer can only be strictly liable for sexual harassment by a supervisor if the harasser is the plaintiff’s supervisor acting in the capacity of a supervisor when the harassment occurs.”
And more specifically: “where, as here, the alleged harasser is not the plaintiff’s supervisor and only supervises other employees, strict liability does not apply.”
Why the court drew the line there
The statute is ambiguous, so purpose controls
The court found that section 12940(j)(1) does not have a plain meaning on this question. FEHA’s definition of “supervisor” in section 12926, subdivision (t) depends on a person’s relationship with other employees. Read together, the court concluded, the statute’s reference to a “supervisor” can reasonably be read to mean the plaintiff’s supervisor. With no helpful legislative history, the court interpreted the statute to serve FEHA’s purpose of protecting employees from harassment while avoiding “unreasonable, impractical, or arbitrary results.”
Strict liability exists because of the power differential
Harassment by one’s own supervisor is “qualitatively worse,” the court explained, because of the power imbalance and the implied threat that resistance will be punished. A manager who supervises only other people does not hold that power over the plaintiff. “As to the plaintiff, the harasser is a coworker.”
The plaintiff’s rule would produce arbitrary results
The court illustrated the problem with two coworkers of equal rank, “Pat” and “Morgan.” Pat’s job includes directing subordinates; Morgan’s equally important job does not. Under the plaintiff’s rule, the employer would be strictly liable if Pat harassed Morgan, but liable only for negligence if Morgan harassed Pat. The court also noted that the rule would make an employer strictly liable for a mid-level manager’s harassment of her own boss, or a shop foreman’s harassment of an executive, even though neither harasser is acting as anyone’s supervisor in that scenario.
Prior case law points the same way
The court relied on Health Services, which described strict liability as arising from harassment by “the victim’s supervisor” and assumed the supervisor was “acting in the capacity of supervisor when the harassment occurs.” It also cited Chapman v. Enos (2004) 116 Cal.App.4th 920, Atalla v. Rite Aid Corp. (2023) 89 Cal.App.5th 294, and Kruitbosch v. Bakersfield Recovery Services, Inc. (2025) 114 Cal.App.5th 200.
Older agency decisions and out-of-state law did not persuade
The plaintiff relied on two 1980s decisions of the now-abolished Fair Employment and Housing Commission holding that strict liability applies to all supervisors. The court declined to follow them, noting that they predated Health Services and decades of case law, and that FEHA did not even define “supervisor” at the time. The court also distinguished Massachusetts authority and expressly disagreed with the Illinois Supreme Court’s majority opinion in Sangamon County Sheriff’s Dept. v. Illinois Human Rights Com. to the extent the Illinois statute is analogous.
What the court did not decide
Employers should be careful not to read the decision too broadly. The court expressly noted several limits:
• It did not limit strict liability to direct supervisors. “To be clear, we are not holding that an employer can only be strictly liable for sexual harassment by the plaintiff’s direct or immediate supervisor or a supervisor successively higher in the employer’s hierarchy.” FEHA’s broad definition can make others the plaintiff’s supervisor, too.
• It did not decide whether the strategist was a supervisor of anyone. The court simply assumed he was.
• It did not review the negligence ruling. The plaintiff did not argue the negligence theory on appeal, so she forfeited it. The court likewise declined to consider a “ratification” theory she raised for the first time on appeal, and did not decide whether a FEHA claim can be based on common law ratification.
• It did not address agent liability, because the plaintiff did not argue that theory.
Practical takeaways for California employers
The following recommendations are our own practical guidance, informed by the decision. They are not part of the court’s holding.
1. Know who actually supervises whom
After Doe, the question is not whether someone is “a supervisor” in the abstract, but whether he or she is the complaining employee’s supervisor. Titles can mislead in both directions: the alleged harasser here was given a “managing director” title with no change in responsibilities. Review whether your job descriptions, reporting lines and actual practices line up, especially in matrixed teams, project-based roles and client service groups where senior employees direct work without formal authority.
2. Remember how broad “supervisor” is
Section 12926(t) covers anyone with authority to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward or discipline other employees, or to direct them, adjust their grievances, or “effectively to recommend” such action, when that authority requires independent judgment. A project lead who assigns work to or meaningfully shapes the evaluations of the complaining employee may be that employee’s supervisor, whatever the org chart says.
3. The negligence standard still has teeth
Even where strict liability does not apply, an employer is liable for coworker harassment if it knew or should have known and failed to take immediate and appropriate corrective action. The employer’s response in this case (expedited intake, prompt leave for the accused, a documented investigation, and discipline for the policy violations it did find) is what carried the negligence issue in the trial court.
4. Train managers to escalate every complaint
Under section 12940(j)(1), knowledge by the employer’s “agents or supervisors” can count. Make sure everyone with supervisory responsibility knows that an informal comment, hallway conversation or text about harassment must be escalated, not dismissed.
5. Treat business travel and after-hours events as part of the workplace
The opinion notes that whether a supervisor is acting in a supervisory capacity often overlaps with whether off-site or after-hours conduct is work related. Set clear expectations for conduct on business trips and at work-sponsored dinners and events, including alcohol.
6. Watch for further review
The opinion was filed October 5, 2026, and the plaintiff may seek rehearing or California Supreme Court review. We will update this post if the case is taken up or depublished.
The bottom line
Doe v. Wells Fargo draws a clear line: an employer is strictly liable under FEHA only for harassment by the plaintiff’s own supervisor, acting as a supervisor. A manager of other employees is treated as a coworker toward everyone else. That is a meaningful clarification for employers, but it is not a free pass. FEHA’s definition of “supervisor” is broad, and the negligence standard still requires a prompt, thorough and appropriate response to every complaint.
Frequently asked questions
What does strict liability for supervisor harassment mean under FEHA?
It means the employer is liable for a supervisor’s harassment of the employees he or she supervises without the employee having to prove the employer was at fault. The employer’s prompt response, policies and training do not defeat liability, although the court in Health Services noted those efforts can affect damages.
Does Doe v. Wells Fargo mean an employer is never strictly liable when a manager harasses someone outside the manager’s team?
No. The court held that strict liability does not apply where the harasser “only supervises other employees.” It stressed that strict liability is not limited to the plaintiff’s direct or immediate supervisor, and that FEHA’s broad definition can make others the plaintiff’s supervisor. Whether someone is a particular employee’s supervisor depends on the facts.
Who counts as a “supervisor” under FEHA?
Government Code section 12926(t) defines a supervisor as anyone with authority, in the employer’s interest, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward or discipline other employees, or to direct them, adjust their grievances or effectively recommend such action, where that authority is not merely routine or clerical and requires independent judgment.
If strict liability does not apply, can the employer still be liable for harassment?
Yes. For harassment by a non-supervisor, the employer is liable if it knew or should have known of the conduct and failed to take immediate and appropriate corrective action.
Is Doe v. Wells Fargo binding on California courts?
The opinion is certified for publication, which means it can be cited as precedent. As a decision of a single Court of Appeal division, it is generally followed by California trial courts unless another appellate court reaches a conflicting result or the California Supreme Court grants review.
Havey Law Offices represents employers in California, Nevada and Japan in employment counseling and litigation, including harassment prevention, workplace investigations, and PAGA and class action defense. If you’d like to review your harassment policies, reporting structure or investigation process, contact us at www.haveylawoffices.com.
This article provides general information, not legal advice. Reading it does not create an attorney-client relationship. Outcomes depend on specific facts and current law.