Jeremiah Mathews worked as a maintenance supervisor and cook for Happy Valley Conference Center, which is a subordinate affiliate of Community of Christ (a church). Mathews alleged his employment was terminated in retaliation for his having reported harassment of a younger male employee by Happy Valley's female executive director. Following a trial, a jury awarded Mathews $900,000 in damages (including punitive damages) and almost $1 million in attorney's fees. In this appeal, the Court of Appeal reversed the judgment as to the retaliation claim arising under the Fair Employment and Housing Act ("FEHA"), holding that defendants were entitled to rely upon the "religious association or corporation" exemption of Cal. Gov't Code § 12926(d) and that they had neither waived nor were they estopped from relying upon the exemption. The appellate court otherwise affirmed the judgment in favor of Mathews, upholding the trial court's determination that the church and Happy Valley were a single employer within the meaning of Title VII; that defendants were liable for breach of an implied contract and that they had violated the whistleblower statute (Cal. Lab. Code § 1102.5) for which Mathews was properly awarded $500,000 in punitive damages.
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