On January 27, 2022, the California Supreme Court settled an inconsistency that has divided the courts of appeal with respect to the proper evidentiary standard for whistleblower retaliation claims under California Labor Code section 1102.6.  It ruled that the “contributing-factor” standard applies.  Lawson v. PPG Architectural Finishes, Inc., No. S266001, __ P.3d __, 2022 WL 244731 (Cal. 2022).

Background

Plaintiff-appellant Lawson, who was discharged by his employer PPG Architectural Finishes for alleged poor performance, brought a whistleblower claim against PPG after he allegedly uncovered and reported a supervisor’s scheme to mis-tint unpopular paint colors to avoid buyback requirements.  The district court, applying the three-step framework of McDonnell Douglas v. Green, concluded Lawson did not meet his burden of demonstrating that PPG’s legitimate, non-retaliatory reason for discharging him was pretextual.  Lawson appealed to the Ninth Circuit, which certified to the California Supreme Court the question of which evidentiary standard applies to whistleblower claims under California law.

Ruling

The California courts of appeal have not all applied the same evidentiary standard to whistleblower retaliation claims.  Some courts applied the three-part burden shifting framework established by the U.S. Supreme Court in McDonnell Douglas v. Green, under which (1) the employee first must establish a prima facie case of retaliation, (2) the employer then has the burden to show a legitimate reason for the adverse employment action, and (3) the burden then shifts back to the employee to show the reason given by the employer is pretextual.

Other courts have applied the contributing-factor standard, under which (1) an employee must demonstrate by a preponderance of the evidence that their whistleblowing activity was a contributing factor to the adverse action taken by their employer against them, and then (2) the employer has the burden to show by clear and convincing evidence that they would have taken that action anyways for legitimate, independent reasons, regardless of the employee’s alleged protected activity.

After considering the legislature’s intent behind and the legislative history of section 1102.6, the plain text of the statute, as well as how other courts have addressed and interpreted similar statutes at the federal level, the California Supreme Court rejected the McDonnell Douglas burden-shifting standard in favor of the “contributing-factor” standard.

Implications

Plaintiff’s attorneys are apt to try to capitalize on this ruling, as the “contributing-factor” standard enables a whistleblower to meet their burden by showing their whistleblowing activity was just one factor that contributed to the adverse action, even when there are other, legitimate factors for the employer’s decision.