An out-of-state employer sued in California can usually remove on diversity, unless the employee also sues a California supervisor. A local defendant destroys complete diversity. Employers may still remove by showing the supervisor was fraudulently joined, but in the Ninth Circuit that’s a heavy burden. Under Grancare, LLC v. Thrower (2018), the case goes back to state court if there’s any possibility a state court would find a claim against the supervisor. Harassment claims are the hardest to get past, because California makes harassers personally liable.
Why does naming a supervisor block removal?
Because diversity has to be complete. Federal diversity jurisdiction requires that no plaintiff share citizenship with any defendant. A California employee who sues an out-of-state company alone can usually be removed if the amount in controversy is met. Add a California manager as a defendant and that path closes.
A second rule adds to it. Under 28 U.S.C. section 1441(b)(2), a case “otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” A California supervisor who was properly joined and served blocks removal of a case filed in California even apart from complete diversity.
Both rules turn on proper joinder. That’s where fraudulent joinder comes in.
What does fraudulent joinder require in the Ninth Circuit?
Showing the supervisor can’t be liable. In Grancare, LLC v. Thrower (9th Cir. 2018) 889 F.3d 543, the court restated the rule that a federal court must find that a defendant was properly joined and remand the case to state court if there is a “possibility that a state court would find that the complaint states a cause of action against any of the [non-diverse] defendants.”
The court rejected the argument that the test is the same as a motion to dismiss. As the opinion explains, “A standard that equates fraudulent joinder with Rule 12(b)(6) conflates a jurisdictional inquiry with an adjudication on the merits.” A complaint can be poorly pleaded against the supervisor and still defeat removal, because the court asks whether the defect could be cured by amendment.
Evidence from the supervisor isn’t enough by itself. The court noted that “a denial, even a sworn denial, of allegations does not prove” fraudulent joinder. The employer has to show the supervisor can’t be liable on any theory, not that the supervisor didn’t do what the complaint says.
Which claims against a supervisor give the employer an opening?
The ones California law doesn’t allow against individuals. Under the Supreme Court of California’s decisions, individual supervisors generally aren’t personally liable under FEHA for discrimination or for retaliation based on personnel decisions. Wrongful termination in violation of public policy runs against the employer, not individual managers. When the only claims against a California supervisor are of those types, the employer has a real fraudulent joinder argument, because no amendment can create liability the law doesn’t recognize.
The argument works best when it’s built on the complaint’s own theory. If every allegation against the supervisor describes hiring, firing, discipline, scheduling, or performance reviews, those are personnel management acts, and California law treats them as the employer’s conduct. The removal notice should map each claim against the supervisor to the rule that bars it, so the federal court can see that no amendment would change the result.
Harassment is different. Government Code section 12940(j)(3) provides that an employee of a covered entity “is personally liable for any harassment prohibited by this section that is perpetrated by the employee.” A harassment claim against a supervisor will almost always defeat fraudulent joinder, even when it looks thin, because the plaintiff can usually amend to add more facts. The firm’s post on harasser personal liability under section 12940(j)(3) covers that rule.
Tort claims sit in the middle. Intentional infliction of emotional distress or defamation against a supervisor can survive if the facts allege conduct outside normal personnel management. Workers’ compensation exclusivity and the managerial privilege may defeat some of those claims, but courts applying Grancare tend to remand unless the defense is clear from settled law.
| Claim against the supervisor | Individual liability under California law | Fraudulent joinder prospects |
|---|---|---|
| FEHA discrimination | Generally not available | Reasonable, if it’s the only claim |
| FEHA retaliation | Generally not available | Reasonable, if it’s the only claim |
| FEHA harassment | Personally liable under § 12940(j)(3) | Poor |
| Wrongful termination in violation of public policy | Generally against the employer only | Reasonable |
| Emotional distress or defamation | Depends on the facts alleged | Uncertain; often remanded |
How fast does an employer have to decide?
Thirty days, usually. 28 U.S.C. section 1446(b)(1) requires the notice of removal to be filed “within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief.” That’s a short window to evaluate citizenship, the amount in controversy, and whether each claim against the supervisor is legally possible.
There’s also an outside limit. Under section 1446(c)(1), a case can’t be removed on diversity “more than 1 year after commencement of the action, unless the district court finds that the plaintiff has acted in bad faith” to block removal. A plaintiff who names a supervisor and then dismisses that person after a year can leave the employer stuck in state court unless the employer can prove bad faith.
Fees are a risk on the other side. A federal court that remands can award the plaintiff’s fees when the removal lacked an objectively reasonable basis. A weak fraudulent joinder argument costs time and money and may hand the plaintiff a fee award.
Is federal court worth the fight?
Often, but not always. Federal courts apply Rule 56 summary judgment standards, require unanimous jury verdicts, and tend to move cases on firmer schedules. For a single-plaintiff FEHA case, those differences can change settlement value. But a removal that ends in remand costs months, and some judges and juries in state court are perfectly workable for employers. The choice should be made case by case, with the venue in mind.
Class actions follow different rules. Wage and hour class claims can often be removed under the Class Action Fairness Act without complete diversity. The firm’s post on CAFA removal of wage class actions covers that path.
When an employee sues the company and a supervisor
- Preserve the personnel file, the supervisor’s communications with the plaintiff, the emails and texts about the challenged decisions, and the policies in effect, under a litigation hold.
- Calendar the 30-day removal deadline from service, the response date on the summons, and the one-year mark from filing, and check for an arbitration agreement and an EPLI policy with notice requirements.
- Identify the named supervisor’s citizenship and role in each decision, and avoid any action against the employee that could look like retaliation.
- Pull the complaint’s claims against the supervisor one by one, and the facts the company has on each.
- Have counsel decide on removal, joint representation of the supervisor, and any conflicts before the first deadline passes.
Venue fights are an early part of many FEHA cases. The firm’s page on defense of employment claims in California describes how those cases are handled.
Fraudulent joinder questions
Can the company represent the supervisor too?
Often, yes. It’s common. Joint representation can save cost and keep the defense consistent. It requires a conflict analysis and informed written consent, because the supervisor’s interests may diverge from the company’s, most of all on harassment claims where the supervisor faces personal liability. Indemnification under Labor Code section 2802 may also be at issue.
What if the plaintiff dismisses the supervisor later?
If the supervisor is dismissed and the case becomes removable, the employer may have 30 days from the paper that made it removable to file. The one-year limit still applies unless the employer can show the plaintiff acted in bad faith to prevent removal. A voluntary dismissal soon after the one-year mark can support that argument.
Can a fictitious “Doe” defendant block removal?
No. Federal law disregards the citizenship of defendants sued under fictitious names when deciding diversity. A plaintiff who later substitutes a real California supervisor for a Doe defendant may defeat jurisdiction at that point, and the federal court then decides whether to allow the substitution and remand.
Does the amount in controversy matter for single-plaintiff cases?
Yes. Diversity requires more than $75,000 in controversy. In FEHA cases with emotional distress, punitive damages, and fee claims, that threshold is usually met, but the employer has to support it with a plausible estimate in the notice of removal and with evidence if the plaintiff challenges it.
If your company and a manager have both been sued
If your company has been sued along with a California supervisor, the claims against that individual usually decide whether the case can move to federal court. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving removal and individual supervisor defendants. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The statutes are 28 U.S.C. section 1441, 28 U.S.C. section 1446, and Government Code section 12940. The case is Grancare, LLC v. Thrower (9th Cir. 2018) 889 F.3d 543.
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.