Statutory Whistleblower Retaliation Claims Clarified

Mon, 02/21/22

On January 27, 2022, the California Supreme Court rendered an important decision that will, in effect, make it more difficult for employers to defend whistleblower retaliation suits brought pursuant to the California Labor Code, going forward. In resolving a long-standing disagreement among the appellate courts as to what standard should apply in evaluating such whistleblower complaints, in Lawson v. PPG Architectural Finishes, Inc. (2022) 12 Cal.5th 703, the Supreme Court definitively ruled that, in retaliation suits brought pursuant to the Labor Code, courts should apply the standard set forth in California Labor Code section 1102.6, rather than the test articulated in the United States Supreme Court decision McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792 (known as the “ McDonnell Douglas test”), which both California and federal courts (mistakenly and inconsistently) applied for 30 years. 

Under the McDonnell Douglas test, plaintiffs had the burden to demonstrate that the employer’s proffered legitimate reason for [the] adverse employment action was a “pretext” for retaliation. But now, after Lawson, plaintiffs have a lighter burden to demonstrate by a mere preponderance of the evidence (i.e., more likely than not) that retaliation was a contributing factor (potentially of many) behind an employer’s adverse employment action, while employers have the higher burden to demonstrate by “clear and convincing evidence” (a much more demanding standard than a “preponderance of the evidence”) that the adverse action “would have occurred for legitimate, independent reasons” even if the employee had not engaged in protected whistleblowing activities.

Plaintiffs will be more likely to survive summary judgment, as to do so they need only present evidence creating a triable issue whether retaliation was “ a contributing factor” to the employment determination. However, as the Supreme Court in Lawson pointed out, defendants will be able to raise a “same decision” defense, i.e., that it would have reached the same decision to take adverse employment action, even absent the plaintiff’s whistleblowing. See, e.g., Texas v. Lesage (1999) 528 U.S. 18, 20-21. 

As a result of Lawson, expect to see more whistleblower retaliation claims pursuant to Labor Code section 1102.5 coming down the pipeline.