State Supreme Court makes claims easier for whistleblowers

The state Supreme Court, addressing a question by the 9th U.S. Circuit Court of Appeals, made it easier Thursday for plaintiffs in whistleblower retaliation lawsuits to pursue their claims.

The ruling makes it clear that a 2003 California law, which reduces the evidentiary burden on plaintiffs, is the proper standard. Lawson v. PPG Architectural Finishes Inc., 2022 DJDAR 967 (Cal., filed Dec. 8, 2020).

Justice Leondra R. Kruger wrote that "some courts have persisted in instead applying a well-worn, but meaningfully different, burden-shifting framework" borrowed from a 1973 U.S. Supreme Court decision. McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).

Under that framework, plaintiffs must produce sufficient evidence that an employer's stated reason for firing them was pretextual when they file complaints under California Labor Code section 1102.5.

Kruger, however, wrote the 2003 state law, adopted in the aftermath of Enron Corp. and other corporate scandals, does not require California plaintiffs to get through the three-step McDonnell Douglas framework.

"Under [Labor Code] section 1102.6, a plaintiff does not need to show that the employer's nonretaliatory reason was pretextual," she wrote.

"To the contrary, placing this unnecessary burden on plaintiffs would be inconsistent with the Legislature's evident purpose in enacting section 1102.6: namely, 'encourag[ing] earlier and more frequent reporting of wrongdoing by employees and corporate managers when they have knowledge of specified illegal acts' by 'expanding employee protection against retaliation,'" Kruger added.

The ruling is good news for Wallen Lawson, a former manager of a PPG Industries Inc. paint-making subsidiary who was fired by the company and filed a whistleblower retaliation lawsuit.

U.S. District Judge Andrew J. Guilford of Santa Ana, now retired, dismissed Lawson's complaint on summary judgment, citing McDonnell Douglas. His attorneys appealed the case to the 9th Circuit, which sought the California Supreme Court's guidance on state labor law.

Chaka Okadigbo, Los Angeles managing partner of HKM Employment Attorneys LLP, argued Lawson's case before the state Supreme Court and hailed the ruling.

"It's not part of the plaintiff's burden to prove the employer's alleged legitimate, independent reasons for the adverse action were pretextual," Okadigbo said in a phone interview. "That is the employer's burden to prove."

Robert W. Pritchard, a shareholder with Littler Mendelson PC who represented PPG Industries before the state Supreme Court, could not be reached for comment by phone or email. In his brief, he argued there is "no reason to believe" that the purpose of the 2003 law was to lower a plaintiff's burden of proof for a whistleblower retaliation lawsuit on summary judgment even if it applied at trial.

Kruger disagreed. "Nothing in the text of section 1102.6 supports this bifurcated approach, where one standard would govern section 1102.5 cases on summary judgment and a different standard would govern cases at trial," she wrote.

The state Supreme Court's decision was unanimous. Douglas P. Miller, a 4th District Court of Appeal justice, sat on the panel because the court only has six justices.

The California Department of Industrial Relations' Division of Labor Standards Enforcement weighed in with an amicus brief defending the 2003 law.

While McDonnell Douglas is a U.S. Supreme Court ruling, Okadigbo said it does not bind complaints filed in state court. "That's why the 9th Circuit certified the question," he said.