On Jan. 27, 2022, the California Supreme Court issued its unanimous
decision in Lawson v. PPG Architectural Finishes, Inc., clarifying
that whistleblower retaliation claims brought pursuant to Section
1102.5 of the California Labor Code must be analyzed under the more
employee-friendly framework set forth in Section 1102.6 of the Labor Code,
rather than the McDonnell Douglas burden-shifting standard
employed under federal law.
involved a former employee of PPG Architectural Finishes, Inc., a paint and
coatings manufacturer. After an initial positive review, PPG gave Lawson
poor performance ratings, placed him on a performance improvement plan and
eventually terminated his employment. Lawson filed suit against PPG in
federal court, claiming that PPG fired him in violation of Section 1102.5 after
he complained about purportedly fraudulent practices.
PPG moved for summary judgment under the three-part McDonnell Douglas burden-shifting framework that applies to
retaliation claims under the California Fair Employment and Housing Act and
Title VII of the Civil Rights Act. Under that standard, an employee must
first establish a prima facie case of retaliation, at which point
the burden shifts to the employer to state a legitimate reason for the
adverse employment action. If a legitimate reason is proffered, the burden
shifts back to the employee to demonstrate, through substantial evidence,
that the employer’s proffered legitimate reason is a pretext for
retaliation. Applying the McDonnell Douglas standard, the federal
court granted summary judgment in PPG’s favor.
Lawson appealed to the U.S. Court of Appeals for the Ninth Circuit and
asserted that the lower court erroneously applied the McDonnell Douglas standard to his whistleblower claim, as opposed
to the statutory framework set out in Section 1102.6. The California
Legislature added this section to the Labor Code in 2003 to provide that
“[i]n a civil action or administrative proceeding brought pursuant to
Section 1102.5,” an employee has the initial burden to establish by a
“preponderance of evidence” (more likely than not) that retaliation for
whistleblower activity was a contributing factor in an adverse employment
action. Once an employee makes this showing, the burden shifts to the
employer to demonstrate, by clear and convincing evidence, that it would
have taken the action in question for legitimate, independent reasons even
if the employee had not engaged in the protected activity.
When confronted with Lawson’s appeal, the Ninth Circuit noted that, despite
the enactment of Section 1102.6, there continued to be variation and
confusion among courts assessing Section 1102.5 claims as to which legal
standard applied. It asked the California Supreme Court to provide
guidance. In its decision, which it described as “[u]nsurprising,” the
California Supreme Court unanimously concluded that “courts should apply
the framework prescribed by statute in Labor Code section 1102.6” when
evaluating whistleblower retaliation claims brought under Section 1102.5.
Under this standard, employee-plaintiffs will have a much easier time
surviving summary judgment and establishing whistleblower retaliation
claims. They will not need to show that the employer’s nonretaliatory
reason for the adverse employment action was pretextual, and need to show
only that retaliation was a contributing factor in the adverse
Likewise, Section 1102.6 imposes a higher standard on employers to rebut
the employee’s minimal showing, as an employer must present “clear and
convincing” evidence that the adverse action would have been taken for
legitimate reasons even if the employee did not engage in protected
activity. To meet this standard under California law, an employer must show
that it is “highly probable” that its contentions are true, or that the
evidence is “sufficiently strong to command the unhesitating assent of
every reasonable mind.” Notably, the standard of proof for employers is
higher than the standard for employees to show that their whistleblower
activity was a contributing factor to the adverse action.
As a result of this decision, employers can expect to see more retaliation
claims cast as statutory whistleblower claims in the future.
For further information about the impact of this decision, please contact
the authors of this article or your McGuireWoods contact.