After decades of dispute, the Ninth Circuit determined the legal standard to apply in claims arising out of California’s whistleblower protection statute

By Jordan Brickman

On February 9, 2022, the Ninth Circuit resolved a decades long dispute involving claims under the California whistleblower protection statute in Wallen Lawson v. PPG Architectural Finishes Inc [1] The Court determined that the test prescribed in Cal. Lab. Code § 1102.6 is the correct legal framework for claims of whistleblower retaliation. [2]

In actions alleging retaliation, the typical standard used by federal courts is the McDonnell-Douglas burden-shifting test,[3] which when applied makes it more difficult for a plaintiff to prove his or her termination of employment was retaliatory. To defeat a claim of retaliation under this standard, an employer need only show that there was a legitimate, nondiscriminatory reason for the decision to terminate the employee.[4]  The district court in the Wallen Lawson case applied the burden-shifting test to the plaintiff’s claim of retaliation and found that the plaintiff’s poor performance reviews were sufficient to show a legitimate, nondiscriminatory reason for his termination.

However, the Ninth Circuit determined that an employee does not need to satisfy the McDonnell-Douglas test to make an unlawful retaliation claim under California’s labor code. In applying the test prescribed by Cal. Lab. Code § 1102.6,[5] the plaintiff need only show by a preponderance of evidence that retaliation merely factored into the termination of his employment.[6] Upon establishing this fact, to defeat the claim, the employer must then show by clear and convincing evidence that it would have taken the same action against the employee for reasons independent of the protected activity.[7] Unlike the burden-shifting test, this standard places a higher burden of proof on the employer to defeat the employee’s claim of whistleblower retaliation.[8]

Takeaway

The Ninth Circuit’s decision in Wallen Lawson confirms that courts should use a more employee-friendly test when analyzing whistleblower retaliation claims under the California Labor Code. Please contact the attorneys at Campbell Litigation, P.C. to assist with questions when analyzing these claims.

[1] Wallen Lawson v. PPG Architectural Finishes Inc., No. 19-55802, 2022 WL 396025, at *1 (9th Cir. Feb. 9, 2022).

[2] An employer shall not retaliate against an employee for disclosing information to a person with authority to investigate, discover, or correct the violation or noncompliance, if the employee has reasonable cause to believe that the information discloses a violation of state or federal law. Cal. Lab. Code § 1102.5.

[3] McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).

[4] Id.

[5] 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. Cal. Lab. Code § 1102.6.

[6] Id.

[7] Id.

[8] Id.