A recent ruling by the California Supreme Court will likely make it easier for employees to bring and maintain Labor Code § 1102.5 whistleblower claims against employers. In Lawson v. PPG Architectural Finishes, Inc., the federal Ninth Circuit asked the California Supreme Court to clarify the framework used determining a section 1102.5 claim. Section 1102.5 generally protects employees from retaliation for reporting a suspected violation of a local, state, or federal law or for refusing to participate in a suspected violation of local, state, or federal law.
When Section 1102.5 was enacted in 1984, the statute did not establish how to prove a whistleblower claim. As such, many courts adopted the McDonnell Douglas burden-shifting framework used for retaliation claims brought under the Fair Employment and Housing Act (the “FEHA”). Under McDonnell Douglas, an employee relying on circumstantial evidence of retaliation has the initial burden of proving that she engaged in a protected activity, was subject to an adverse employment action, and that there was a causal link between the two. If the plaintiff has established this prima facie case, the burden shifts to the employer to establish a “legitimate, nondiscriminatory reason for the adverse employment action.” Once this is established, the burden shifts back to the employee to demonstrate that the employer’s proffered reason is pretext for impermissible retaliation.
Section 1102.5 was amended in 2003, which included adding Labor Code § 1102.6. Section 1102.6 seemed to provide the framework for whistleblower retaliation claims, providing in its entirety:
“In a civil action or administrative proceeding brought pursuant to Section 1102.5, once it has been demonstrated 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.”
Many courts, including the trial court in Lawson, however, continued to use the McDonnell Douglas framework when evaluating whistleblower retaliation cases. Given this, the Ninth Circuit asked the California Supreme Court to weigh in and provide guidance.
Unsurprisingly, the Court held that section 1102.6 was the controlling framework for whistleblower retaliation claims, not the McDonnell Douglas test. Under section 1102.6, the employee must first demonstrate, by a preponderance of the evidence, that her whistleblowing activity was a contributing factor in the termination or other adverse employment action. Once this is established, the burden shifts to the employer to demonstrate, by clear and convincing evidence, that the adverse employment action would have occurred “for legitimate, independent reasons,” even if the employee did not engage in protected whistleblower activities.
PPG argued, and rightly so, that this test will make it difficult for employers to bring summary judgment motions on section 1102.5 claims. Even if the employer introduces evidence on summary judgment that it would have taken the same adverse employment action against the employee regardless of the protected activity, a court is likely to deny summary judgment and leave the issue up to a jury to decide. The Lawson court acknowledged that the ruling would likely reduce the ability to dismiss meritless claims at summary judgment, but stated that “PPG’s remedy lies with the Legislature that selected this standard, not with this court.”
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Matthew Wallin is a senior associate in the Los Angeles office where he practices labor and employment law. He has extensive experience defending private business and public entities in litigation and advising clients on labor compliance issues.
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