In a significant ruling for California workers, the California Supreme Court recently clarified that a whistleblower retaliation plaintiff and others like him have a lower bar to sue their employers.
The high court’s Jan. 27 ruling came after the U.S. Court of Appeals for the Ninth Circuit asked it to clear up California courts’ mixed approach to what evidentiary standard applies in these cases.
Some courts have applied the McDonnell Douglas test — named for the 1973 U.S. Supreme Court case McDonnell Douglas Corp. v. Green — to employees’ cases, which plaintiffs have argued was contrary to the more relaxed evidentiary standard set out in California Labor Code section 1102.6.
Under the McDonnell Douglas test, an employee must first establish that they have all the elements necessary for a claim of unlawful discrimination or retaliation. Once established, the burden shifts to the employer to prove they had a legitimate reason for taking an adverse action against the employee. The burden again shifts back to the employee to show that the employer’s given legitimate reason was pretextual – that is, it wasn’t the real reason why the employer discriminated or retaliated against the employee.
Section 1102.6: A Lower Bar
In comparison to the standard set in McDonnell Douglas, California law sets out a lower bar for plaintiffs to meet in California Labor Code section 1102.6.
First, an employee needs to establish by a preponderance of the evidence that retaliation was a contributing factor in their termination, demotion or other adverse action. In other words, they need to show that it’s more likely true than not that retaliation was a contributing factor for the employer’s action against the employee.
Next, the employer bears the burden of demonstrating by clear and convincing evidence – a higher standard than a preponderance of the evidence – that the employer would have taken the same action “for legitimate, independent reasons.”
The California Supreme Court ruled that the latter standard applies. It held that requiring a plaintiff to satisfy the McDonnell Douglas test would place an unnecessary burden on plaintiffs that was inconsistent with the state legislature’s purpose in enacting section 1102.6.
Court revives whistleblower suit
After the California Supreme Court issued its ruling, on Feb. 9, the 9th Circuit reversed a lower court ruling in the case of Lawson v. PPG Architectural Finishes, Inc., allowing a whistleblower’s retaliation suit to proceed in the U.S. District Court for the Central District of California.
The whistleblower in the case is Wallen Lawson, who worked as a territory manager for PPG, a paint and coatings manufacturer. Lawson was responsible for stocking and merchandising paint in Southern California Lowe’s stores before he was terminated in 2017.
Lawson alleged he was wrongly terminated after blowing the whistle on his supervisor, whom he said ordered him to intentionally tint slow-selling paint products to the wrong color so that PPG could avoid buying back unsold paint from Lowe’s.
He accused PPG of violating California Labor Code section 1102.5 by firing him because of his actions as a whistleblower.
The California Supreme Court’s ruling is good news for plaintiffs, who will not be held to a higher standard to bring their cases forward.
Want to report wrongdoing?
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With over 30 years of experience litigating fraud and employment cases, and billions recovered for its clients, Keller Grover is in a unique position to represent whistleblower clients. For advice about how to proceed as a whistleblower, contact Keller Grover for a free and confidential consultation.