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Netflix has recently been the subject of high-profile discrimination cases. Following ex-Labor Relations Executive Nhu-Y-Phan’s legal action over allegedly being fired for reporting on misconduct by higher-ups, Amy Takahara, former Director of Kids and Family Global Content Acquisitions and Co-comissions says she was subjected to a “pervasive and hostile environment” by her boss Edward Horasz, that impeded her work at the streaming giant, and lead to her sudden dismissal after she challenged him.
Whatever the outcomes, the cases certainly aren’t positive for Netflix’s reputation as an employer and, if proven, may even be damaging to its consumer brand too.
We spoke to legal expert Robert B. Hinckley Jr., Managing Shareholder of law firm Buchalter Denver, who gave us an exclusive analysis of the merits of the Takahara case for both the plaintiff and Netflix…
What legal standards does a court apply to determine whether a workplace environment is hostile or, in this case, "toxic" under California law?
California’s Fair Employment and Housing Act (FEHA) prohibits discrimination and harassment in employment and protects individuals from discrimination based on race, gender, sexual orientation and other protected characteristics. A hostile work environment is a workplace where unwelcome conduct based on a protected characteristic is severe or pervasive enough that it creates a work setting that a reasonable person would find hostile or abusive, and that the plaintiff found the conduct to be abusive.
In Takahara v. Netflix, Takahara alleges a pervasive and hostile environment rising to the level of repeated discrimination and harassment, including disparaging comments and exclusion based on her gender and sexual orientation. These types of allegations could potentially meet the hostile work environment threshold if the facts show a consistent, unwelcome pattern of behavior.
California law imposes a duty on employers to promptly, thoroughly, and impartially investigate discrimination or harassment complaints
At this stage, however, they remain allegations - the ultimate legal determination will depend on the totality of evidence, including frequency, severity, and context.
In response, Netflix has denied these allegations and stated Takahara was terminated due to elimination of her position as a result of downsizing within the organization. California is an at-will employment state and an employer can terminate an employee for any reason or no reason, as long as the termination is based on non-discriminatory reasons. This includes termination based on elimination of a position.
How significant is it that the plaintiff allegedly made repeated complaints to HR and that no formal investigation was launched?
California law imposes a duty on employers to promptly, thoroughly, and impartially investigate discrimination or harassment complaints. Failing to do so can constitute a violation of FEHA, especially if the failure allows the alleged misconduct to continue. The duty is triggered when an employer knew or should have known about misconduct.
Here, it is alleged that Takahara made multiple complaints to HR without triggering a formal investigation. If proven, this may significantly bolster her claim that Netflix failed in its obligation to maintain a discrimination-free workplace. However, FEHA only requires employers to take reasonable steps to prevent and correct discriminatory conduct, and Netflix may very well have met this burden. Further information in this regard may become available when Netflix provides a formal response to the Complaint.
How do courts typically view alleged comments such as “you can’t handle male-based shows” or references to a “lesbian agenda” when assessing bias and intent?
Courts commonly look to direct and circumstantial evidence in assessing bias and intent. These types of comments could constitute direct evidence of discriminatory bias and intent. Under FEHA, courts consider evidence of stereotyping or animus based on a protected category, when considering bias and discriminatory intent.
In Takahara, derogatory comments allegedly made about Takahara’s ability to manage male-focused shows and another co-worker’s sexual orientation may be viewed by the court as stereotyping and animus and therefore reflect bias and intent, particularly if there’s corroboration or a pattern of similar remarks. It will be important to determine whether these statements can be corroborated and whether the statements were exaggerated or lack context. Generally, for a statement to qualify as harassment in California, it must be either severe or pervasive. Here, Netflix may argue a single derogatory statement, if made, was not sufficiently severe as to create a hostile work environment.
Does the claim that Netflix offered severance, rather than attempting to find the plaintiff another role within the company, carry legal weight in demonstrating possible retaliation or constructive dismissal?
Offering severance is not unlawful. However, if the facts suggest that this offer was made by human resources shortly after Takahara reported complaints of discrimination to human resources, a court could determine the offer was a form of illegal retaliation. This offer could also be interpreted as implicit acceptance of harassment and discrimination and rejection of Takahara’s complaints by Netflix, as alleged by Takahara in the Complaint.
Netflix may argue a single derogatory statement, if made, was not sufficiently severe as to create a hostile work environment
The court will examine whether the severance offer, if truly made, followed a protected activity; i.e. the reported complaints about harassment and discrimination to human resources; and whether Netflix followed its typical practices for internal mobility if they did not instead offer her a different position within the organization.
It is likely that additional facts exist here which have not been described in the Complaint. Notably, Netflix indicated in a subsequent press release that Takahara’s position with Netflix was eliminated after her team was downsized. This is a very different position than what is described in the Complaint, and if true, would qualify as a legally appropriate basis to terminate Takahara in California.
How do courts weigh anecdotal allegations (in this case mocking pregnant employees) when determining whether a pattern of discriminatory behavior existed?
California courts may allow so-called “me too” (evidence or allegations involving other employees) if it is relevant, specific, and not overly prejudicial. If the conduct alleged by others is similar and involves the same decision-makers, it can be instructive in establishing a pattern of behavior, intent or motive.
Failure to investigate may also result in a loss of trust in the HR professional, loss of trust in and reputational damage for the organization and an increase in frustration and resentment for employees
Anecdotal references to the mistreatment of pregnant employees and describing “lesbian agendas” with other female employees may help demonstrate that the environment was not only toxic for the plaintiff but reflected a broader tolerance of discriminatory behavior against women. However, employers like Netflix can counter “me too” evidence by arguing the evidence can’t be corroborated, is too remote in time, is unrelated to the specific conduct in question or that other employees were not similarly situated to Takahara.
What is the legal burden of proof for retaliation claims in California, and what evidence would Takahara’s team need to produce to meet it?
To establish retaliation under FEHA, the plaintiff must prove:
- Engagement in protected activity – i.e. activities legally protected under FEHA
- An adverse employment action – include termination, demotion, suspension, etc.
- A causal connection between the two – i.e. a link between the protected activity and the adverse employment action.
In Takahara, protected activities identified include reporting harassment/discrimination to human resources and Mr. Horasz directly. The adverse employment action identified by Takahara would be her termination. And the causal connection would be the argument by Takahara that reporting discrimination/harassment resulted in the termination.
In response, Netflix may argue Takahara was not engaged in protected activities and that there was a different, legal, basis for her termination. Here, the purported basis for the termination was elimination of her position due to organizational downsizing. If correct, Takahara would likely not have a cognizable cause of action for retaliation.
How much weight is given to the fact that similar lawsuits have been filed recently against the same employer? Is that relevant to establishing a broader pattern of misconduct?
In California, in some situations, juries can consider evidence of similar lawsuits and complaints. Oftentimes this occurs in the context of “me too” evidence. However, the court will weigh the helpfulness of the evidence against the possible prejudicial effect of it in determining whether to allow the evidence to be considered by the jury as well as the other considerations described above.
What are the potential legal risks for HR professionals if they are seen to have failed to act on credible discrimination or harassment complaints?
Potential legal risks include the potential that an employee may file a complaint with the Equal Employment Opportunity Commission (EEOC) as well as civil complaint for employment discrimination/harassment. Failure to investigate may also result in a loss of trust in the HR professional, loss of trust in and reputational damage for the organization and an increase in frustration and resentment for employees.
For these reasons and others, it is always best practice that HR professionals follow a structured process that focuses on compliance, fairness, thoroughness and timeliness.
Given Netflix’s public denial and claim of role elimination, how might the court evaluate whether this was a legitimate business decision or a pretext for retaliation?
Given the very different stories told by the two sides thus far, discovery (written interrogatories, requests for production of documents, requests for admissions, depositions) and maybe a trial will be required to determine whether Netflix did in fact terminate Takahara based on role elimination or whether her termination was instead based on improper retaliation, discrimination or harassment.
