## Facts

- Gay Law Students Association, a gay-rights organization, several individual plaintiffs, and another organization sued Pacific Telephone & Telegraph Company (PT&T), a regulated public utility, and the California Fair Employment Practice Commission (FEPC).
- Plaintiffs alleged PT&T maintained employment policies that:
  - Refused to hire applicants identified as homosexual.
  - Discharged employees discovered to be homosexual.
  - Denied employment or advancement to persons associated with or supporting organizations advocating equal employment rights for homosexuals.
- Plaintiffs sought declaratory, injunctive, and monetary relief against PT&T and a writ of mandate compelling FEPC to take jurisdiction over sexual-orientation discrimination complaints.
- The trial court sustained PT&T’s demurrer without leave to amend and denied mandamus against FEPC; the Court of Appeal affirmed.

## Issues

1. Whether a regulated public utility may lawfully discriminate in employment against homosexuals, or whether such discrimination violates duties and public policy constraints applicable to public utilities.
2. Whether a public utility may discriminate against applicants or employees based on membership in or support for organizations advocating homosexual rights, consistent with constitutional protections for speech and association.
3. Whether FEPC had statutory authority under the then-existing Fair Employment Practice Act (FEPA) to entertain claims of discrimination based on sexual orientation.

## Decision

- The California Supreme Court reversed the judgment for PT&T and remanded, holding the complaint stated claims that PT&T, as a public utility, could not engage in arbitrary employment discrimination against homosexuals.
- The Court held plaintiffs also stated a claim that PT&T could not penalize employees or applicants for constitutionally protected advocacy and association with organizations supporting homosexual rights.
- The Court affirmed the judgment for FEPC, holding FEPA did not authorize FEPC to act on discrimination claims based solely on sexual orientation.

## Legal Principles

- Regulated public utilities are subject to special duties arising from their public character and may be barred from arbitrary discrimination in employment even absent a generally applicable statute covering private employers.
- A public utility may not condition employment on the surrender of constitutionally protected speech or associational activity; employment actions taken solely to punish protected advocacy can be unlawful.
- An administrative agency’s jurisdiction is limited to its enabling statute; absent legislative inclusion of sexual orientation as a protected category, FEPC lacked authority to pursue such claims under FEPA as then written.
- At the pleading stage, allegations of discriminatory utility policies and retaliation for protected association may be sufficient to survive demurrer and proceed to factual development and remedies determination.

## Conclusion

The court permitted claims to proceed against a regulated public utility for alleged arbitrary discrimination against homosexuals and for penalizing protected advocacy and association, while holding the state civil-rights agency lacked statutory jurisdiction under the then-current FEPA to address sexual-orientation discrimination.


Gay Law Students Ass'n v. Pac. Tel. & Tel. Co., 24 Cal. 3d 458, 595 P.2d 592 (Cal. 1979)