Jenna Leyton-Jones Quoted in The Daily Transcript

Court recognizes rights of perceived whistleblowers
By LYLE MORAN, The Daily Transcript
February 6, 2015

A California appellate court has ruled that perceived whistleblowers have the same protections from retaliation as employees who actually make complaints about illegal conduct, in a case headed back to San Diego Superior Court later this month.

The Fourth District Court of Appeal’s decision in Diego v. Pilgrim United Church of Christ marks the first time a California court has ruled that suspected whistleblowers can bring common law claims alleging wrongful termination in violation of public policy.

It follows amendments to the state labor code that took effect in 2014, and after the Diego case had been filed, providing statutory safeguards for employees that an employer believes may disclose or have disclosed information.

The wrongful termination case was filed by Cecilia Diego, former assistant director of Pilgrim United Church of Christ’s preschool in Carlsbad.

She alleges she was fired in August 2011 because her employer suspected she made a complaint to the licensing division of the California Department of Social Services, prompting an unannounced inspection of the school.

Diego, who had worked at Pilgrim United for almost 10 years and lives north of Temecula, did not make the complaint.

San Diego Superior Court Judge Randa Trapp granted summary judgment to Pilgrim United. Trapp based her decision on Diego’s failure to cite “any case holding that an employer’s mistaken belief that the employee reported a violation can support a claim for wrongful termination in violation of public policy,” according to the appeals court.

However, the Fourth District reversed the judgment on the wrongful termination cause of action and remanded the matter back to the trial court with direction to deny Pilgrim’s summary judgment motion on that front.

In a published opinion issued late last year, the appellate court pointed to the whistleblower protections in California Labor Code Section 1102.5(b) before the recent amendments, and highlighted that their purpose is to encourage employees to report suspected violations of law.

“This policy applies to preclude retaliation by an employer not only against employees who actually notify the agency of the suspected violations, but also against employees whom the employer suspects of such notifications,” the court wrote.

“Otherwise, the policy to encourage the reporting of alleged violations will be frustrated.”

Joshua Gruenberg, Diego’s attorney, said he was thrilled with the court’s ruling that perceived whistleblowers cannot be retaliated against, as well as the broader implications of the decision.

“The court wants to encourage employees who witness illegal conduct in the workplace to come forward,” said Gruenberg, founder of Gruenberg Law. “It also is not letting companies off the hook because it turns out they were wrong about who made a complaint.”

Jon Williams, a partner at Williams Iagmin and the attorney who handled the appeal for Diego, said it was an important step for the court to recognize that a perceived whistleblower can be hurt just as much as an actual whistleblower by an employer’s “discriminatory animus.”

“If you gave immunity to employers who retaliate against the wrong person, it would have a massive chilling effect on whistleblowing,” said Williams, a certified appellate specialist.

Williams said the ruling paves the way for suspected whistleblowers who suffer adverse action from their employers to file common law complaints alleging wrongful termination in violation of public policy, known as Tameny claims, in addition to statutory claims.

The Diego decision, said Williams, also could provide a legal avenue for perceived whistleblowers allegedly retaliated against before the updates to Labor Code Section 1102.5 that took effect last year.

Robert Brockman, an attorney from Daley & Heft LLP representing Pilgrim United, did not respond to requests for comment.

Jenna Leyton-Jones, a shareholder at Pettit Kohn Ingrassia & Lutz said the Diego case should serve as a reminder that employers must be especially careful if they are going to mete out disciplinary action in close proximity to when whistleblowing actions may have occurred.

Leyton-Jones says she gives that advice because temporal proximity can play a significant role in the outcome of retaliation claims brought by employees.

Diego was fired one week after the unannounced inspection of the preschool that Pilgrim United allegedly believed was prompted by Diego.

“If an employer has an independent basis to discharge an employee, but knows that within the past few weeks or months they have been a whistleblower or may have been one, the employer should think twice before taking the action and consult with employment counsel,” said Leyton-Jones, a management-side attorney.

Under state law, if an employee demonstrates that their employer took an adverse action against them based on protected activity, an employer must provide “clear and convincing” evidence that it would have taken the same action for legitimate, independent reasons.

The legitimate reason Pilgrim United offered was that it fired Diego for insubordination and a hostile attitude for her alleged failure to attend meetings, according to the appellate court.

The only specific example given was Diego’s Aug. 25, 2011, refusal to attend one meeting on Aug. 26, the day she was terminated, according to the appellate court.

Lonny Zilberman, a labor and employment partner at Wilson Turner Kosmo, said among other things, the case highlights the importance for employers to have compelling, documented reasons for terminating an employee.

“The takeaway for employers is you need to make sure you have good documentation for disciplinary action up to, and including, termination,” Zilberman said. “Also, that documentation has to be legitimate and lay a foundation for the adverse action you are going to take.”

A status conference in the Diego case is scheduled before Judge Trapp at 9:15 a.m. Feb. 27.

Gruenberg said he remains confident in his client’s case and looks forward to returning to court.

*This article first appeared online in The Daily Transcript on February 6, 2015.