​California Supreme Court clarifies standard for whistleblower retaliation cases

On January 27th, the California Supreme Court clarified the proper method for presenting and evaluating whistleblower retaliation claims under Labor Code § 1102.5. It held that once an employee demonstrates by a preponderance of the evidence that the employee’s protected whistleblowing was a “contributing factor” in an adverse employment action, the burden shifts to the employer to demonstrate by clear and convincing evidence that the alleged adverse employment action would have occurred anyway for legitimate, independent reasons. The Court rejected the employer’s argument that the McDonnell Douglas burden-shifting test applied.  The case, Lawson v. PPG Architectural Finishes, Inc., S266001, is available here.
 
Plaintiff Wallen Lawson was responsible for stocking and merchandising paint products in stores in Southern California. He alleged that his supervisor instructed him to incorrectly mix customer orders of less popular paint types so that the stores would have to offer them at a discount, and they would subsequently be sold, instead of being returned to his employer. Lawson complained to his company’s central ethics hotline twice about this practice. Lawson’s performance approval ratings were already low, and Lawson was subsequently fired, with the Company asserting that the termination was based on low performance ratings.  Lawson brought a claim for retaliation against his employer in federal court in Los Angeles, and the court applied the McDonnell Douglas burden-shifting test, finding that Lawson could not demonstrate that his employer’s proffered legitimate reason for firing him was a pretext for retaliation. On appeal, the Ninth Circuit found that the case would likely turn on the issue of which test to apply, and certified the question to the California Supreme Court.

The California Supreme Court sided with Lawson, finding that the district court should have applied the "contributing factor" test outlined in Labor Code § 1102.6. This test is more plaintiff-friendly, and recognizes that there may be multiple reasons for a termination, rather than viewing a termination as wholly legitimate or illegitimate. It allows for a more nuanced consideration of the motives of an employer, requires a heighted “clear and convincing” showing by the employer, and does not require the employee to show pretext. The court stated that McDonnell Douglas contains a presumption of “exclusive cause” for firing, which makes it particularly unsuitable for a mixed-motive standard like that outlined in 1102.6. 

​Posted by Stanton Baker (Law Clerk)