What is the applicable standard of proof for whistleblower retaliation claims brought under California Labor Code Section 1102.5? Mc Donnel Douglas or the framework more favorable to employees provided for in article 1102.6 of the Labor Code? Courts left this question open for nearly two decades, but the California Supreme Court finally settled the matter by Lawson vs. PPG Architectural Finishes, Inc.—A case certified by the United States Court of Appeals for the Ninth Circuit.
The applicant in Lawson sued his former employer for retaliation under section 1102.5. The district court applied the Mc Donnel Douglas framework, but plaintiff argued that the shifting framework set forth in California Labor Code Section 1102.6 should apply. The Ninth Circuit acknowledged that there were “key differences between the two standards” that could prove material. Specifically, the Ninth Circuit noted that: (1) Section 1102.6 sets forth a true burden shifting evidence standard unlike Mc Donnel Douglas(2) section 1102.6 imposes a “significantly greater” burden on the employer if the employee can retaliate at their threshold, and (3) the application of the more lenient rule Mc Donnel Douglas standard “would overturn the California legislature’s decision to grant” retaliation plaintiffs “increased protection.”
In light of mountains of conflicting case law in state and federal courts, the Ninth Circuit declined to decide the issue and certified the matter to the California Supreme Court, asking it to settle this important issue of California law.
The two tests compared
Under the Mc Donnel Douglas framework, a claimant must first establish a prima facie case of retaliation. Once a prima facie case is established, the employer must articulate a legitimate reason for taking the contested adverse employment action. If the employer can do so, the onus is on the plaintiff to demonstrate that the legitimate grounds invoked by the defendant are a pretext for retaliation.
By comparison, under section 1102.6, a plaintiff must demonstrate by a preponderance of the evidence that an activity prohibited by section 1102.5 was a contributing factor to the alleged employment-injurious action. Once the plaintiff has done so, the burden of proof is on the defendant to demonstrate by clear and convincing evidence that the alleged action would have occurred for legitimate and independent reasons had the plaintiff not exercised activities protected by Article 1102.5.
The California Supreme Court decision
In an opinion written by Judge Leondra Kruger, the California Supreme Court found “that Section 1102.6, not Mc Donnel Douglas, provides the applicable framework for litigating and adjudicating whistleblower claims under Section 1102.5. The court determined that the plain language of the law made this clear. However, beyond that, the court said: “[i]It would make little sense to require section 1102.5 reprisal claimants to satisfy Mc Donnel Douglas for the purpose of proving that the retaliation contributed to an adverse action”. This is because “the McDonnell Douglas three-part test was not written for the assessment of claims involving multiple reasons for the disputed action”, which can often be the case with claims of retaliation under section 1102.5.
Further, consistent with the Ninth Circuit’s analysis, the court found that Section 1102.6 reflected the California Legislature’s goal of encouraging “earlier and more frequent reporting of wrongdoing” and “to extend the protection of employees against retaliation”. To the extent that employers are concerned about “more cases to be tried” in light of the lesser evidentiary ban in s. 1102.6, the court said their “recourse lies with the legislature. who chose that standard, not in this court”.
Key points to remember
In providing long-needed clarification as to what standard of proof applies to Section 1102.5 retaliation claims, California has adopted a decidedly more employee-friendly standard than that set out in Mc Donnel Douglas. Namely, the test is more favorable to plaintiffs because it removes the requirement that a plaintiff prove that their employer’s reason for adverse action is a pretext for retaliation, it imposes the standard of “clear and convincing evidence” of section 1102.6 to employers. Because of these changes, reprisal claims under section 1102.5 will be more likely to survive summary judgment.
Golden State employers should familiarize themselves with the Lawson decision and consult legal counsel to ensure that their managers, supervisors and other decision-makers are sufficiently trained to engage in thorough record-keeping practices that ensure that legitimate non-retaliation reasons for employee discipline can be clearly explained and justified. And of course, employers around the world can take this notice as a reminder to ensure that disciplinary policies and record keeping practices are in order.