 |
Better
to exhaust than be sorry.
|
This week, California’s Third
Appellate District issued a decision dealing with whistleblower-retaliation
claims under Labor Code that begs for a judicial or legislative response. In MacDonald v. State of California, Case
No.C069646, the court held that an employee must exhaust the administrative
remedy set forth in section 98.7 before filing suit in superior court for
retaliatory discharge in violation of Labor Code sections 1102.5 and 6310. The
court recognized that its decision directly and deliberately conflicts with the
Second Appellate District’s decision in Lloyd
v. County of Los Angeles (2009)
172 Cal. App. 4th 320, which holds that no such requirement exists.
Labor
Code section 98.7 provides a statutory scheme that allows any person to file a
complaint with the Labor Commissioner if that person “believes that he or she
has been discharged or otherwise discriminated against in violation of any law
under the jurisdiction of the Labor Commissioner.” The plain language of the code
is discretionary, allowing that an aggrieved employee “may file a complaint”
within six months of the alleged adverse action.
Over
the years, federal district courts have taken conflicting positions on whether
an employee who has been a victim of whistleblower retaliation under section
1102.5 must first file a complaint with the Labor Commissioner under section
98.7. See MacDonald, Slip
op. 6, n.4. But federal courts can only speak persuasively regarding the
requirements of California Law.
Some
employees and their counsel have treated the complaint process as permissive,
and for good reason. In 2007, the DLSE issued an opinion letter advising that: “The DLSE’s position is
that the wiser course is not to require exhaustion of Labor Code section 98.7
procedures prior to raising a statutory claim in a civil action.” Later, in Lloyd v. County of Los Angeles (2009) 172 Cal. App. 4th 320, the
Second Appellate District held that “[t]here is no requirement that a plaintiff
pursue the Labor Code administrative procedure prior to pursuing a statutory
cause of action” for retaliation; rather, section 98.7 “merely provides the
employee with an additional remedy, which the employee may choose to pursue.”
According
to the court in MacDonald,
the Second Appellate District got it wrong in Lloyd (and by extension, so did
the DLSE in its 2007 opinion letter), by failing to consider Campbell v. Regents of University
of California (2005) 25
Cal.4th 311. The Third Appellate District held:
The rule of exhaustion of
administrative remedies is well established in California jurisprudence. “In
brief, the rule is that where an administrative remedy is provided by statute,
relief must be sought from the administrative body and this remedy exhausted
before the courts will act.” (Campbell, supra, 35 Cal.4th at p. 321, quoting Abelleira [v. District Court of Appeal (1941)]
17 Cal.2d [280], 292). This is so even where the administrative remedy is
couched in permissive, as opposed to mandatory, language. (See Williams v.
Housing Authority of Los Angeles (2004)
121 Cal.App.4th 708, 734.) Here, an administrative remedy is provided in
section 98.7. Thus, in accordance with Campbell,
we conclude that plaintiff was required to exhaust that remedy prior to
pursuing the underlying action.
Slip
op. at 6.
With
conflicting decisions in the Third and Second Appellate Divisions, cautious
employees and counsel will take care to file a complaint with the Labor
Commissioner before they consider filing section 1102.5 or 6310 claims in
court. The DLSE can expect to process an increased volume of retaliation
complaints going forward.
The
Supreme Court or the State Legislature would be wise to speak decisively on the
issue of exhaustion raised by MacDonald and Lloyd,
as well as related issues arising from the conflict, so as to provide clarity
for employees, lower courts, and the DLSE.
NOTE: Nothing in this posting is intended to provide
legal advice about your particular case and it does not form an attorney-client
relationship with any reader. It is intended to be information about a subject
of general interest for the general public. In order for Bryan
Schwartz Law to represent
you, you must have a signed representation agreement with the firm.
