In 2016, after being released on probation from her position with Sacramento County, Cynthia Vatalaro sued the County for unlawful retaliation under Labor Code Section 1102.5. Vatalaro alleged that her discharge was retaliation against her for reporting that she was working below her service classification. The superior court granted summary judgment for the County. Vatalaro appealed. The California Court of Appeal affirmed the County’s win and simultaneously clarified the precise standard for evaluating Labor Code Section 1102.5 claims.
Until recently, courts evaluated 1102.5 claims using a three-part framework. However, the California Supreme Court held that instead, courts are required to use the framework outlined in Labor Code Section 1102.6. Labor Code Section 1102.6 places the burden on the employee to establish that retaliation for the employee’s protected activities was a contributing factor in a contested employment action. In other words, an employee must show a prima facie claim of retaliation under Labor Code Section 1102.5. Once the employee has made this showing, the burden shifts to the employer to demonstrate, by clear and convincing evidence, that it would have taken the employment action for legitimate, independent reasons even if the employee had not engaged in protected activity.
Labor Code Section 1102.5 states that “An employer . . . shall not retaliate against an employee for disclosing information . . . to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance . . . if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation….” (emphasis added).
The Court of Appeal held that Vatalaro could not satisfy the “reasonable cause to believe” component of the prima facie case of retaliation because she admitted in a deposition that she did not have the belief that the content of her job description violated civil service rules. In the initial phase of this litigation, both Vatalaro and the County interpreted that phrase to mean “reasonably believes.” However, the Court of Appeal stated that this interpretation was incorrect and that the two phrases are not equivalent. Indeed, the Court of Appeal noted, a person may have reasonable cause to believe that something is true even if she does not in fact reasonably believe it to be true.
Having established this academic point, the Court of Appeal ended its analysis of this crucial phrase because it found that the trial court’s decision could be upheld on another ground. The Court then moved on to the next component of the Labor Code Section 1102.6 framework; whether the employer can demonstrate that it would have taken the contested action for a legitimate, independent reason even had the employee not engaged in protected activity.
Here, the Court of Appeal held that the County had clearly established that it would have taken the action in question for legitimate reasons, even if Vatalaro had not complained she was doing low-level duties. In doing so, the Court relied heavily on the evidence that Vatalaro had been insubordinate, disrespectful, and dishonest. The Court of Appeal found that Vatalaro was unable to rebut any of the three charges and the County was entitled to summary judgment.
Vatalaro v. County of Sacramento, 79 Cal. App. 5th 367 (2022).
Note:
This case serves as an important reminder of the updated standard for whistleblowing claims. Not only must the correct standard be used, but whistleblowing cases may hinge on the difference between whether an employee “reasonably believes” she has blown the whistle or whether she has “reasonable cause to believe” so. Employers now must satisfy the more demanding burden of showing that they would have taken the challenged employment action for a legitimate reason, instead of simply showing a legitimate reason for the action existed.
