Government Liability Update

Under Labor Code Section 1102.6, the "Same Reason" Defense Is a Complete Defense to Whistleblower Liability under Section 1102.5

In Ververka v. Department of Veterans Affairs, ordered published May 22, 2024, the First District Court of Appeal, Division 1 affirmed a trial court's denial of a motion to vacate a jury verdict.  The plaintiff alleged that the state agency he worked for removed him from his administrator position based on whistleblowing.  He sued the agency for unlawful whistleblower retaliation under Labor Code section 1102.5.  At trial, the jury found that some of the plaintiff's reports to his employer were protected disclosures under the statute.  It further found that the disclosures were contributing factors in the agency's recommendation to the Governor's Office to remove the plaintiff as administrator.  But the jury found in favor of the agency because it had proved by clear and convincing evidence that it would have made the same recommendation at that time for legitimate, independent reasons.  The plaintiff contended that the judgment should be vacated on the ground that despite the jury's finding, he was entitled to declaratory relief, injunctive relief, reasonable attorney's fees, and costs.  He relied on Harris v. City of Santa Monica (2013) 56 Cal.4th 203, in which the California Supreme Court held that a "same decision" finding in a FEHA action barred an award of damages, but that the plaintiff may still be entitled to declaratory and injunctive relief and attorney fees and costs where the employer was found to have committed an unlawful employment action.  The trial court denied the plaintiff's motion to vacate the judgment.

The appellate court agreed that Harris does not apply to a cause of action under Labor Code section 1102.5.  Under Labor Code section 1102.6, a showing under a preponderance of the evidence that activity proscribed by section 1102.5 was a contributing factor in the action against the employee shifts the burden of proof to the employer to demonstrate by clear and convincing evidence the alleged action would have occurred for legitimate, independent reasons even if the employee had not engaged in the protected activities.  The language of section 1102.6 demonstrates the legislative intent that under section 1102.6 a "same decision" showing is a complete defense to any relief for a violation of section 1102.5.

Elected Official Is Not an Employee of Public Entity for Purposes of Labor Code § 1102.5 Whistleblower Action

In Brown v. City of Inglewood, ordered published June 30, 2023, the Second District Court of Appeal, Division 1 reversed in part a trial court decision denying an anti-SLAPP special motion to strike.  The plaintiff was the elected treasurer of the defendant city.  She alleged that after she reported concerns about financial improprieties, the city and members of the city council retaliated against her by reducing her duties and authority, reducing her salary by 83 percent, taking away her seat on the dais at council meetings, and temporarily locking her and her staff out of her office.  The defendants produced declarations and other evidence that the reduction in authority and salary plaintiff complained of were enacted by ordinances passed by the council; that because she is not a member of the council, the treasurer has no standing to sit on the dais, and that a previous practice of allowing the treasurer to sit on the dais was discontinued when plaintiff purportedly became disruptive during meetings; and that the plaintiff's entry badge was temporarily deactivated when she failed to present a negative COVID-19 test.  The trial court granted the anti-SLAPP motion as to the plaintiff's claim for defamation, and her intentional infliction of emotional distress claim to the extent it was based on defamation, but denied it as to the plaintiff's claim under Labor Code section 1102.5 (protection from liability for whistleblower employees) and for IIED based on alleged retaliation.  The defendants appealed denial of the anti-SLAPP motion.

The appellate court held that the retaliation-based claims against the individual defendants arose from activity protected under anti-SLAPP.  The individual defendants did not have authority to reduce the plaintiff's authority or salary except by voting on ordinances or policies.  After they pass an ordinance or policy, the acts implementing the ordinance or policy are the city's rather than the individuals.  Elected officials' votes taken after a public hearing are protected activity under anti-SLAPP.  The plaintiff alleged that the individual defendants also retaliated against her by removing her from the dais.  But that removal alone is not sufficiently  material to satisfy the elements of her retaliation claims.  The court then analyzed the second prong of anti-SLAPP:  Whether the plaintiff could demonstrate that the claims were legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted is credible.  The section 1102.5 retaliation claim was not legally sufficient, because an elected official is not an "employee" for purposes of that statute.  Although the Legislature has defined "employees" to include elected officials in other statutes, it chose not to do so in section 1102.5.  The retaliation-based IIED claim against the individual defendants failed, because it is subsumed under the exclusive remedy provisions of worker's compensation.  The worker's compensation statutes, unlike section 1102.5, do include elected officials in their definition of "employees."  The trial court therefore should have granted the anti-SLAPP motion as to the individual defendants.

Public Employer That Establishes by Undisputed Evidence It Had Legitimate Independent Reasons for Releasing Employee from Probation Entitled to Summary Judgment against Whistleblower Claim

In Vatalaro v. County of Sacramento, ordered published June 1, 2022, the Third District Court of Appeal affirmed summary judgment for the defendant county in a whistleblower retaliation suit under Labor Code section 1102.5.  The plaintiff, an administrative analyst, was promoted to an administrative services officer position.  The position was probationary for six months.  The plaintiff complained about her job duties in her new position, which she believed did not rise to the level of her position.  After her report, the plaintiff felt mistreated on several occasions, which she believed was attributable to her complaints.  Her supervisor eventually recommended that the plaintiff be released from probation on the alleged grounds that she had been insubordinate, disrespectful, and dishonest in her actions.  The trial court granted the county's motion for summary judgment, ruling that the county had met its burden of showing plaintiff could not allege a prima facie cause of retaliation because she had not alleged or presented evidence of protected conduct under section 1102.5, because she did not have a reasonable belief the county had violated a specific federal, state, or local law or regulation, but instead had only shown she complained about internal personnel matters.  The court further ruled that the county had presented evidence it had a legitimate business reason for releasing the plaintiff, and the plaintiff had failed to raise a triable issue of material fact to support that the reason was pretext.

The appellate court ruled that the trial court's analysis was incorrect, but nevertheless affirmed summary judgment.  The three-stage analysis the trial court had applied was disapproved for Labor Code section 1102.5 cases in Lawson v. PPG Architectural Finishes, Inc. (2022) 12 Cal.5th 703, because it fails to acknowledge Labor Code section 1102.6.  Section 1102.6 provides that once the plaintiff demonstrates by a preponderance of the evidence that an activity proscribed by Section 1102.5 was a contributing factor in the alleged prohibited action against the employee, the employer shall have the burden of proof to demonstrate by clear and convincing evidence that the alleged action would have occurred for legitimate, independent reasons even if the employee had not engaged in activities protected by Section 1102.5.  Therefore, under section 1102.6, once the plaintiff has met her burden, the burden shifts to the employer to demonstrate, by clear and convincing evidence, that it would have taken the action for legitimate, independent reasons even had the plaintiff not engaged in protected activity.  The plaintiff need not show the reason was pretextual.  The appellate court also questioned whether the correct test for a prima facie case is whether the plaintiff had a "reasonable belief," as multiple cases hold, since section 1102.5 actually refers to a "reasonable cause to believe."  The appellate court ultimately did not resolve that issue, because it ruled that the trial court properly granted summary judgment on the ground that the county had carried its burden under section 1102.6 by presenting undisputed evidence that it had a legitimate business reason to release the plaintiff--that she was insubordinate, disrespectful, and dishonest in her actions.

A Public Employer Is Not Liable for Retaliation under Labor Code section 1102.5(c) Unless the Plaintiff Proves the Employer Actually Engaged in an Activity That Violates Law

In Nejadian v. County of Los Angeles, published October 1, 2019, the Second District Court of Appeal, Division 4, reversed a judgment after jury trial against the defendant county, and ordered judgment entered in the county's favor.  The plaintiff, an Environmental Health Specialist, alleged that he was retaliated against for declining to allow home rebuilding plans after a wildfire.  He alleged that county decisions approving the rebuilding plans violated the County Code.  He also alleged age discrimination.  He sued under Labor Code section 1102.5(c) and FEHA.  The jury found against the plaintiff on his age discrimination claims, but found retaliation against him under section 1102.5(c) and FEHA.

The appellate court ruled that the verdict on section 1102.5(c) retaliation was erroneous, because the plaintiff had failed to prove that the conduct he declined to participate in violated a statute, rule, or regulation.  labor Code section 1102.5(c) prohibits “[a]n employer, or any person acting on behalf of the employer, . . . [from] retaliate[ing] against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation."  The plaintiff has the burden of proving that the activity actually violates a statute, rule, or regulation.  That is a legal question for the court.  No findings of fact are necessary to decide it.  The court must decide that issue before the claim goes to the jury.  If the court decides the activity violates a statute, rule, or regulation, then the jury determines whether the plaintiff refused to participate and if so whether that refusal was a contributing factor in the defendant’s decision to impose an adverse employment action on the plaintiff.  The appellate court determined that the plaintiff failed to prove that the activities he declined to participate in violate a statute, rule, or regulation.  The appellate court also ruled that the trial court erred in instructing the jury that the plaintiff could prove FEHA retaliation by proving he was retaliated against for refusal to participate in activities that would violate statutes, rules, or regulations.  That is not a basis for FEHA liability.  The court also concluded that there was no substantial evidence that the county took adverse employment actions against him in retaliation for his refusal to participate in the alleged conduct.  Therefore, there was no need to remand the case for retrial.

Prosecutor's Disclosure to Superiors of Lack of Probable Cause to Prosecute Defendant Is Protected under Whistleblowing Statute

In Ross v. County of Riverside, ordered published June 10, 2019, the Fourth District Court of Appeal, Division 1 reversed summary judgment in favor of the defendant county on the plaintiff's claims for violation of Labor Code section 1102.5 and the disability discrimination provisions of FEHA.  The plaintiff, a deputy district attorney, inherited a case from another attorney, who informed her superiors and the plaintiff that she believed the defendant was innocent and that the defendant's confession was coerced.  The plaintiff repeatedly informed his superiors that he believed the DA's office lacked probable cause to prosecute the defendant.  He sent evidence out for DNA testing, obtained results that exculpated the defendant, and turned the results over to defense counsel.  The DA eventually dismissed the charges against the defendant.  Meanwhile, the plaintiff underwent testing for suspected neurological and autoimmune conditions, and requested that he be accommodated by minimizing his stress at work and not assigning him new cases until his testing was complete.  The DA's office allegedly failed to accommodate him.  The plaintiff left his position, alleging constructive termination.  The DA's office eventually declared he had abandoned his job.  The trial court granted the county summary judgment on the grounds that the plaintiff could not establish he engaged in activity protected under section 1102.5 and that he could not establish he was disabled.

The appellate court ruled that the evidence, if credited by a trier of fact, showed that the plaintiff had disclosed information protected by Labor Code section 1102.5, subdivision (b).  That subdivision forbids an employer from retaliating against an employee for disclosing information to a government or law enforcement agency, or a person with authority over the employee, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation.  Disclosing information to his superiors that he reasonably believed disclosed a violation or noncompliance with the federal and state law applying to criminal prosecutions and prosecutors is protected by subdivision (b).  That includes a prosecution that the disclosure reasonably believes violates the defendant's due process rights and a prosecutor's ethical duties under state law.  The appellate court did not determine whether there was a triable issue on whether the DA's office retaliated against the plaintiff based on the disclosure.  The appellate court also determined the evidence raised a triable issue of fact on whether the plaintiff was temporarily disabled at the time he requested accommodation.