Tuesday, February 18, 2020

A Victory for Whistleblowers in the Workplace

California’s workplace protections for whistleblowers who expose public corruption got a boost from the Court of Appeals this month in Hoeper v. City & County of San Francisco. The court upheld a $5 million jury verdict for whistleblower retaliation for former San Francisco deputy city attorney Joanne Hoeper, broken down into $2.4 million for attorney’s fees and $2.6 million in damages for lost earnings and emotional distress.

Back in 2011, Ms. Hoeper began to investigate what she believed to be a kickback scheme happening within the City Attorney’s office. Ms. Hoeper alleged that the City of San Francisco was awarding millions of dollars in contracts to private contractors to fix sewers based on fraudulent claims. When her investigation pointed to the involvement of attorneys within the City Attorney’s office, she was retaliated against: demoted, transferred, and fired. A unanimous jury in 2017 ruled in her favor regarding whistleblower retaliation, and now a California court of appeals has upheld the jury’s verdict. It’s an important reminder that whistleblower retaliation is illegal – no matter if your employer is a private or public entity.

            Bryan Schwartz Law has written about whistleblower retaliation before. If you have blown the whistle at work and then were retaliated against, contact Bryan Schwartz Law today.

Blowing the Whistle—When Can You Go to Court about Retaliation?

Whistleblowers—employees who sound the alarm on their employer’s or coworkers’ illegal activity—are vital to protect the public from corporate and government wrongdoing. But there are understandable reasons that employees choose not to speak out, including fear of retaliation. Whistleblower protection laws are designed to prohibit retaliation and encourage whistleblowing.

California’s whistleblower protection laws are some of the nation’s most expansive. A central component of California’s whistleblower protection scheme is Section 1102.5 of the California Labor Code, which, among other protections, prevents employers from retaliating against employees who make complain internally, make whistleblowing reports to government agencies, or participate in government investigations. Section 1102.5 aims to encourage employees to speak out against wrongdoing. The 2003 amendments also codified the California appellate court decision in Gardenhire v. City of Los Angeles Housing Authority (2000) 85 Cal.App.4th 236, to clarify that a government employee’s report to the agency where they work constitutes whistleblowing activity.

But when do government whistleblowers get to enforce their rights in court? Sometimes, government employees who are subject to retaliatory acts—such as termination, demotion, official discipline, etc.—file administrative complaints. Such a complaint can involve a hearing, presentation of evidence, and legal representation, among other formal aspects. Sometimes, the administrative process will eliminate an individual’s right to proceed in court altogether. If an administrative decision lacks the “requisite judicial character” to constitute a full resolution of the legal issue, a court may step in. Sometimes an administrative decision will not be considered a final decision if that would go against the legislature’s intent, given that the legislature created the administrative body in the first place.   

The Ninth Circuit Court of Appeals recently considered the legislative intent exception as it applies to public sector employees alleging whistleblower retaliation in Bahra v. County of San Bernardino. The plaintiff, Eric Bahra, was employed by San Bernardino County’s Department of Children and Family Services, which investigates referrals regarding child abuse, among other duties. While investigating allegations of abuse against a foster parent, Bahra discovered that the foster parent had a prior history of child abuse and neglect, but this history was not reflected in the agency’s database due to errors in previous entries.

He told his manager. Later that day, he witnessed his manager and another agency employee looking through the files on his desk. Next, the agency initiated an investigation into Bahra, assigned him to desk duty, then placed him on administrative leave. Eventually, the agency provided Bahra with a notice of proposed dismissal. He contested it in an initial administrative hearing in 2013, but the hearing officer ruled for the County and the agency dismissed Bahra. He appealed and requested a full evidentiary hearing at the County’s Civil Service Commission. After a 14-day hearing and testimony from 27 witnesses in 2014, the Commission’s hearing officer, in 2015, rejected Bahra’s retaliation claims, and the Commission adopted the hearing officer’s report. Although he was informed that he could seek a writ of mandamus pursuant to California Code of Civil Procedure 1094.5, he elected not to do so. Instead, he filed a civil suit in the United States District Court, bringing claims under Section 1102.5 and 42 U.S.C. § 1983. The District Court dismissed the complaint in 2018 on grounds of issue preclusion and claim preclusion, meaning, that because the matter had been fully adjudicated administratively, it could not be brought in court.

On December 30, 2019, the Ninth Circuit reversed as to Bahra’s Section 1102.5 claim. The court analyzed two state court decisions: Taswell v. Regents of University of California 23 Cal.App.5th 343 (2018), in which the California Court of Appeals held that administrative findings by a state agency do not preclude retaliation claims brought under Section 1102.5; and, Murray v. Alaska Airlines 50 Cal.4th 860 (2010), where the California Supreme Court held that a federal employee’s retaliation claim was precluded. The agency argued that Murray indicated that the California Supreme Court would disagree with Taswell.

The Ninth Circuit rejected this argument. First, the court stated that Murray was highly specific to the factual and legal circumstances of the case. It did not purport to apply to all administrative decisions, especially in light of federalism issues at play in Murray but absent in Bahra. Second, Murray analyzed the first exception—the “sufficiently judicial character” exception—and not the legislative intent exception. Third, the Ninth circuit looked to California Supreme Court precedent more recent than Murray, including decisions on which Taswell relied, which suggested that the California Supreme Court would agree with Taswell. Accordingly, the Ninth Circuit ruled that the Department of Child and Family Services decision did not preclude Bahra from bringing his Section 1102.5 claim to court.

But it was not a total victory for Bahra; the Ninth Circuit ruled against him with respect to his Section 1983 claims. Bahra had not argued that giving preclusive effect to the Section 1983 decision would go against legislative intent, so the Ninth Circuit did not address the issue. Instead, the court looked exclusively to the judicial character of the proceeding and, finding it sufficient, held that the Section 1983 claim was precluded, affirming the lower court.
If you have suffered workplace retaliation for whistleblowing activity, contact Bryan Schwartz Law.

Monday, February 10, 2020

Discriminated Against? Both the Staffing Agency and Your Assigned Workplace Are Likely on the Hook

Are you employed through a staffing agency? Do you have an employment discrimination case against the company where the staffing agency placed you? Companies love to dodge responsibility by saying that workers hired through staffing agencies aren’t employees. But they’re likely wrong.

In the recently issued case of Jimenez v. U.S. Cont'l Mktg., Inc. (2019) 41 Cal.App.5th 189, 197-98, the California Court of Appeals reminded companies that the “general principle—that an individual may be held to have more than one employer in the temporary-staffing context—has ‘long been recognized for the purposes of applying state and federal antidiscrimination laws.’” (quoting Bradley v. Dep’t of Corr. & Rehab. (2008) 158 Cal. App. 4th 1612, 1626).

Jimenez brought several claims under California’s Fair Employment and Housing Act (FEHA, which prohibits discrimination, harassment, and retaliation in the workplace) against both a staffing agency (Ameritemps) and her contracting employer (USCM). To determine whether the contracting employer was indeed Jimenez’s employer, the court held that “factors under the contractual control of the temporary-staffing agency (such as hiring, payment, benefits, and timesheets being handled by a temporary-staffing agency) are not given any weight in determining the employment relationship with respect to the contracting employer.” Jimenez, 41 Cal.App. at 193. In other words, the factors used to determine whether a staffing agency is someone’s employer are different from the factors used to determine whether a contracting employer is someone’s employer. Just because a staffing company oversees hiring, payment, benefits, and time-tracking does not mean the contracting employer is off the hook.

Why are the factors different? The factors that make a staffing agency someone’s employer are “outside the scope of the terms and conditions of the temporary employee’s employment with the contracting employer.” Jimenez, 41 Cal.App. at 193. Liability for harassment or discrimination under FEHA is “‘predicated” on allegations “‘involving the terms, conditions, or privileges of employment under the control of the employer[.]’” Id. (quoting Bradley v. Department of Corrections & Rehab. (2008) 158 Cal.App.4th 1612, 1629).

What matters when determining whether a contracting employer is responsible for alleged violations of FEHA is whether the employer exercised “direction and control” over the employee. Jimenez, 41 Cal.App. at 197. Examples of direction and control are whether the employee must obey instructions from the employer and whether the employer can fire the employee at any time. Id. Other examples the court cited were the fact that (1) Jimenez reported to an USCM employee; (2) she supervised both employees hired by USCM and employees hired through staffing agencies; (3) she was subject to USCM’s employee handbook; (4) she participated in company trainings and was able to use USCM’s clinic for on-the-job injuries; (5) she was subject to USCM’s disciplinary policies; and (6) USCM employees supervised and train (and are supervised and trained by) employees hired through staffing agencies. Id. at 199-200.

While the court declined to adopt a bright-line rule that every worker placed through a staffing agency is an employee of the contracting company, it did make clear that companies can’t dodge responsibility for discrimination and harassment that happens under their watch simply by pointing out that staffing agencies are responsible for the things staffing agencies are normally responsible for, namely hiring, payment, benefits, and time-tracking. A company will need to show that it did not exercise direction and control over the employee. This is a win for employees and a win for FEHA, whose purpose is “to protect and safeguard the right and opportunity of all persons to seek and hold employment free from discrimination.” Id. at 71-72.

Bryan Schwartz Law has written about FEHA before. If you believe you are being discriminated against in the workplace and were hired through a staffing agency, contact Bryan Schwartz Law today.