Don’t Wait Until Trial Is Over to Raise Objection As to Court’s Jurisdiction, Says California Court

Kim v. Konad USA Distribution, No.  G048443 (June 12, 2014): In a recent decision, the California Court of Appeal held that an employer that waited until a trial ended to raise an objection about exhausting administrative remedies had waived its right to make the objection. The court held that the employer’s objection—that the employee failed to show that she had exhausted her administrative remedies under the Fair Employment and Housing Act (FEHA)—was untimely since a full trial on the merits of the case had already taken place.

Ester Kim was hired by Konad USA Distribution as an account manager in 2006. She worked at Konad USA until November 2010, when she was allegedly fired for complaining that Konad USA’s CEO and sole shareholder, Dong Whang sexually harassed her. The employee brought an action against Konad USA and Whang for sexual harassment, hostile work environment, retaliation, and wrongful termination in violation of public policy.

After a bench trial and after the judge issued a proposed statement of judgment in favor of the employee, the employer objected and—for the first time—raised the issue that the court lacked jurisdiction to decide the case because the employee had not proven that she had exhausted her remedies under FEHA. Konad USA further argued that FEHA only applies to employers with at least five employees at the time of the allegations and that the employee failed to establish this fact. The trial court rejected the employer’s argument and awarded the employee $60,000. Konad USA appealed.

The Court of Appeal agreed with the trial court, noting that whether or not an employee exhausts her administrative remedies does not affect “the fundamental subject matter jurisdiction of the court.” The court found that Konad USA “forfeited any right [it] may have had…for a judgment of dismissal,” by waiting until the trial ended to raise this objection. Regarding the employer’s argument that FEHA applies only to employers with at least five employees, the court noted that in a claim that is based on sexual harassment in violation of FEHA’s public policy, the claim “can be brought against an employer of any size.”