Carter

Plaintiff and respondent Helga Carter worked as a nurse in a veterans' residence facility administered by defendant and appellant, the Department of Veterans Affairs (the employer). Plaintiff sued the employer, alleging it was liable for sexual harassment on a hostile environment theory. The alleged hostile environment was created, not by a coemployee, but by one of the patient residents of the facility. The trial court held that an employer may be liable under the California Fan-Employment and Housing Act (FEHA) (Gov. Code, §12900 et seq.) for the harassing conduct of clients or customers, and gave judgment for plaintiff. The employer appeals.

The employer, an agency of the State of California, owns and operates certain "Veterans' Homes," to care for "aged and disabled" veterans. [1] The Veterans' Homes provide varying levels of care, from independent living to skilled nursing care. Plaintiff, a registered nurse, was hired in 1996 and assigned to work in the ambulatory care clinic, which provides outpatient services to the veterans occupying independent living facilities.

Elbert Scott Brown, a veteran, was a tenant resident of the independent living facilities of the…