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Court Affirms $7.1 Million Whistleblower Verdict
Thursday, June 20, 2024

Zirpel v. Alki David Prods., Inc., 93 Cal. App. 5th 563 (2023)

Karl Zirpel worked as the vice president of operations for Alki David Productions (“ADP”) before the principal of ADP, Alki David, fired him for allegedly disclosing information that Zirpel reasonably believed evidenced a violation of safety standards and for disclosing information about ADP’s working conditions. The jury returned a special verdict in Zirpel’s favor, finding ADP had violated state whistleblower statutes (Cal. Lab. Code §§ 232.5 and 1102.5), and awarded Zirpel $369,000 in economic damages; $700,000 in emotional distress damages; and $6 million in punitive damages. The Court of Appeal affirmed the judgment, holding that substantial evidence supported the jury’s finding that Zirpel reasonably believed he had disclosed to ADP and city inspectors unsafe working conditions and code violations at the location in question. Further, ADP did not argue in its post-trial motions that it had sustained its burden under Section 1102.6 to demonstrate by clear and convincing evidence that Zirpel was fired for reasons other than his disclosures concerning the absence of a construction permit and the city inspectors’ disapproval of the work done to date on the construction project. The Court also affirmed the punitive damages award on the basis that there was sufficient evidence of reprehensible conduct (e.g., David’s verbal abuse of Zirpel, which was “laced with obscenities and homophobic epithets”), which justified a 6:1 ratio of punitive to compensatory damages.

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