Employment Law: California Supreme Court Cases
| Publication year | 2022 |
| Author | Written by Kathleen A. Brewer |
Written by Kathleen A. Brewer*
The California Supreme Court resolved two key issues on the employment law front in 2022. This article analyzes Lawson v. PPG Architectural Finishes, Inc.,1 involving whistleblower protection, and Naranjo v. Spectrum Security Services, Inc.,2 concerning meal and rest break premium pay, with a focus on the decisions' practical consequences and the changes they may portend.
California Labor Code section 1102.5 protects whistleblowing employees from retaliation. An employer "shall not retaliate against an employee for disclosing information . . . to a government or law enforcement agency, to a person with authority over the employee or another employee who has the authority to investigate" a violation, or for providing information to an investigating body, "if the employee has reasonable cause to believe" the information discloses a violation of law.3 Its companion statute, section 1102.6, contains the evidentiary roadmap for trying a section 1102.5 retaliation case. Under section 1102.6, a complaining employee must prove, by a preponderance of evidence, that "an activity proscribed by Section 1102.5" was a "contributing factor" in an adverse employment decision.4 If the employee carries this burden, the employer may avoid liability by demonstrating, under a "clear and convincing" standard, that it would have taken the adverse action "for legitimate, independent reasons even if the employee had not engaged in" protected activities.5
The section 1102.6 instructions are simple, straightforward, and—unlike the assorted tests used to prove FEHA6 discrimination and retaliation—statutory
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Both section 1102.5 and FEHA proscribe taking adverse action against employees "for" or "because of" certain activity or characteristics Section 1105.2 prohibits retaliating against employees for disclosing certain information or for refusing to participate in potentially unlawful activity.7 FEHA forbids discriminating against employees or applicants because of their protected characteristics8 or because the person has opposed FEHA-proscribed practices.9 However, the legislature did not include in FEHA, as it did for section 1102.5 cases, guidance on proving causation. Courts have contrived a winding, and sometimes unnatural, path to "because of" proof, depending on the type of evidence presented (circumstantial vs. direct) and the precision of the employer's motive ("mixed" vs. "single").10 Where an employee relies on circumstantial evidence of discriminatory or retaliatory motive, the burden-shifting framework outlined in McDonnell Douglas Corp. v. Green11 requires the FEHA plaintiff to prove a prima facie case, the employer to then demonstrate a nondiscriminatory reason for taking adverse action, and the employee to then prove the explanation is a pretext for an unlawful motivation.12
Flaws in the McDonnell Douglas test surface when real-life cases fail to fit the tri-pronged framework. For example, many cases involve evidence that supports both an employee's claim that adverse action was taken for a nefarious reason and the employer's claimed legitimate reason. Where both parties' explanations are believed, pretext cannot be established, and McDonnell Douglas fails.13 In this "mixed motive" situation, the employee must first prove that an unlawful motive was a substantial factor in the adverse employment decision.14 The employer may then demonstrate, under a preponderance standard, that it would have made the adverse decision even absent the unlawful motivation.15 An employer who prevails on a same-decision defense in a FEHA case will avoid a damages award but may be subject to adverse injunctive relief and payment of the employee's fees and costs.16
Courts have applied various iterations of the pretext and mixed-motive tests to determine causation in retaliation and discrimination cases Prior to enactment of Labor Code section 1102.6 in 2003, courts analyzed section 1102.5 cases under the McDonnell Douglas pretext framework.17 And, for nearly two decades after enactment of section 1102.6, many state appellate and federal district courts continued to apply the convoluted pretext test, virtually ignoring section 1102.6.18 Despite the presence of a statutory directive and a test that is elegant in its simplicity, some courts apparently could not divorce themselves from the judicially contrived McDonnell Douglas analysis. Parties also often "fail[ed] to acknowledge section 1102.6," instead arguing section 1102.5 cases under McDonnell Douglas.19 In 2022, the California Supreme Court resolved the issue on a certified question from the Ninth Circuit in Lawson v. PPG Architectural Finishes.20 Under Lawson, deciphering esoteric questions of "pretext," "mixed vs. single" motives or direct vs. circumstantial evidence is not necessary in section 1102.5 cases. Section 1102.6 alone governs "the presentation and evaluation of whistleblower retaliation claims brought under section 1102.5."21
The employer in Lawson argued that section 1102.6 did not replace the McDonnell Douglas analysis but merely codified the "same decision" defense used in mixed-motive cases and imposed a clear and convincing standard on employers to prove that defense. Agreeing that section 1102.6 "indeed does those things,"22 the court explained the statute's broader import Section 1102.6 sets forth the plaintiff's evidentiary burden, demarcates the burden-shifting fulcrum, states the defendant's evidentiary burden, and defines the standard of proof for both parties. In short, this single-sentence statute contains "a complete set of instructions for the presentation and evaluation of evidence in section 1102.5 cases; it is not merely the codification of an affirmative defense."23 Section 1102.6 houses the full trial DNA for section 1105.2 whistleblower cases.
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2023 will mark the fiftieth anniversary of the McDonnell Douglas decision. After decades of repeated use, the McDonnell Douglas pretext formula seems securely fixed as the only tool available to courts deciding single-motive discrimination cases. However, the formula, with its court-created glosses, has provoked biting criticism and volumes of scholarly disapproval.24 Commentators have identified numerous problems with its burden-shifting framework, calling it judicially inefficient,25 a distraction from the key inquiry,26 lacking a statutory basis27 and a test that "creates complication and confusion."28 Many complain that McDonnell Douglas increases the burden on plaintiffs, requiring them to prove causation not only by establishing discriminatory intent but also by proving "weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions" in the employer's claimed legitimate reason.29 The increased burden makes surviving summary judgment exceptionally difficult for plaintiffs, prompting one commentator to note, "Unless courts meaningfully reform McDonnell Douglas or adopt a new legal test, most Title VII plaintiffs will never see their claims brought before a jury—a right that Congress deemed critical for victims of employment discrimination."30
Conceptually, the McDonnell Douglas framework should ease the burden on plaintiffs by allowing them to prove discriminatory motive in cases where direct evidence is lacking, and the employer's stated reason is not believable. The lack of believability should give rise to an inference of discriminatory intent.31 However, over time, the McDonnell Douglas test "drifted [far] from its original purpose of easing the process of proving discrimination" and "evolved into a black hole for otherwise colorable claims."32
Over time, jurists also recognized inherent defects in the tri-partite formula and the awkwardness of trying to apply it universally Application of McDonnell Douglas now appears to be limited to single-motive, circumstantial-evidence discrimination cases.33 That limitation, however, may not be enough. Requiring parties to pigeonhole their claims and defenses into mixed- or single-motive cases is unreasonable. Parties rarely wish to allege partially lawful and partially unlawful motives for adverse action. Moreover, compelling courts to categorize cases in this manner in order to determine whether to apply a three-step pretext analysis or a two-step same-decision test is clumsy and unnecessary As one scholar observes, "determining which of these two proof frameworks applies in any given" discrimination case "and discerning how the two models interrelate, remains a muddled mess."34
The 2022 case, Department of Corrections and Rehabilitation v. State Personnel Board35 illustrates one court's attempt to integrate the two models. The employer in Department of Corrections argued that the employee, a FEHA plaintiff, should be required to prove that discrimination was a substantial motivating factor in the challenged employment decisions. Although "substantial motivating factor" appears to be a plaintiff's ultimate burden whether a case relies on a single- or mixed-motive theory,36 the court mapped out a framework that can remove "substantial motivating factor" from single-motive cases. The court first set forth McDonnell Douglas as the proper formula for deciding a FEHA discrimination case.37 The court then noted that "this analytical framework" works only where "'the employer has a single reason for taking an adverse action . . .'"38 Where the evidence supports a mixed-motive finding, "the plaintiff must prove 'discrimination was a substantial factor in the decision.'"39 According...
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