Yet Another Blow to California Employers in Supreme Court Ruling

Author: Kathryn Lee Colgan

Guest Editor: Grace Shuman

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March 11, 2022 4:54pm

 

As if employers already didn’t have enough of an upward battle in California pushing back on employment retaliation claims, a recent California Supreme Court decision just upped the ante.  In Lawson v. PPG Architectural Finishes, Inc., the Court eliminated the McDonnell Douglas burden-shifting test.  This test was typically applied to CA Labor Code section 1102.5 retaliation claims.

On January 27, 2022, the California Supreme Court released a new decision confirming a plaintiff-employee who puts forth a claim for retaliation under CA Labor Code section 1102.5 may prevail by showing a retaliatory motive was merely a contributing factor behind an adverse employment action.[i]  Plaintiff/employees are now not required to meet the burden shifting McDonnell Douglas test.

The underlying Lawson case involved a former territory manager who filed a lawsuit in federal court, alleging a section 1102.5 whistleblower retaliation claim against his employer.  The employer’s motion for summary judgment was granted; the federal trial court applied the three-part McDonnell Douglas test to evaluate the 1102.5 claim.  This application holds the “aggrieved” employee must first establish an adverse employment action was somehow causally linked to some protected activity in which the employee engaged.  The employer then has the burden of putting forth a legitimate, non-retaliatory business reason for pursuing the adverse employment action against the employee.  If they provide a legitimate reason for said action, the burden shifts back to the employee to demonstrate the employer’s articulated “legitimate” reason is mere pretext for the alleged retaliation.

In granting summary judgment, the trial court determined the employee met his initial burden.  However, the employer had similarly sustained its burden of articulating a legitimate, non-retaliatory reason for firing him.  The employee did not put forth sufficient evidence showing the employer’s stated reason for firing him was mere pretext.

Plaintiff appealed the decision to the Ninth Circuit.  His argument was that the trial court erred in applying the McDonnell Douglas test, and instead, should have applied CA Labor Code section 1102.6, which: (1) only requires a plaintiff to show that retaliatory motives contributed to the adverse action; (2) does not require a plaintiff to show that the employer’s legitimate reasons were pretextual; and (3) requires the employer to prove through clear and convincing evidence that its legitimate business reasons would have led to the same adverse action.  The Ninth Circuit certified the question regarding the applicability of the McDonnell Douglas test versus the 1102.6 test to the CA Supreme Court.

Unfortunately for employers, the CA Supreme Court held whistleblower retaliation claims under section 1102.5 are now only subject to the framework laid out in section 1102.6 and unanimously rejected the use of the McDonnell Douglas test for claims brought under section 1102.5.  The Court reasoned section 1102.6 expressly provides the standards and burdens of proof for both parties in a section 1102.5 retaliation case.  The Court also rejected plaintiff’s argument about how section 1102.6 was not intended to displace the McDonnell Douglas test, but rather was intended to codify a specific type of affirmative defense available to employers.

This new application of section 1102.6 makes it much easier for employees alleging retaliation to avoid summary judgment/adjudication.  It weakens employers’ ability to push back against these 1102.5 retaliations claims.  Employers can reasonably expect that this new decision could open the floodgates for these types of claims in the near future.

 

 

 


[i] Lawson v. PPG Architectural Finishes, Inc., No. S266001,___ Cal.5th ___.

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