Were the disclosures by an employee to his supervisor about a federal law violation protected under the California Whistleblower Protection Act?
Background
Aaron Killgore appealed the dismissal of his case in favor of his former employer, SpecPro. While consulting on an environmental project for the U.S. Army Reserve, he thought he was being required to prepare an environmental assessment in a way that violated federal law. He believed that consideration of prior helicopter activity at the site was significant for an evaluation of the proposal. Prior helicopter missions had been happening for more than a decade, but there was no data as to their environmental impact on the site. He thought there may have been prior refueling missions, which required consideration of potential oil spills, the introduction of invasive species, soil erosion, and other environmental impacts.
Killgore was fired shortly after reporting the suspected illegality to the client and to his supervisor at SpecPro. In his lawsuit, he alleged he was fired in violation of the California Whistleblower Protection Act, Cal. Labor Code § 1102.5(b) and (c). Killgore claimed that he was retaliated against for disclosing what he reasonably believed to be violations of federal law in the preparation of the environmental assessment and because he was fired for refusing to participate in illegal activity.
What is Whistleblower Retaliation?
To assert a claim for whistleblower retaliation in violation of section 1102.5, a plaintiff must:
establish, by a preponderance of the evidence, that retaliation for an employee's protected activities was a contributing factor in a contested employment action…Once the plaintiff has made the required 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 had the plaintiff not engaged in protected activity.
The district court determined that Killgore's disclosures to his supervisor weren’t actionable because his boss wasn’t "a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance." Although the district court accepted that Killgore discussed the potential illegality of the project with him, it found that his disclosures to his boss were immaterial and insufficient to establish a whistleblower violation under section 1102.5(b).
The Ninth Circuit Disagrees
Judge Gabriel Sanchez and the Ninth Circuit held that the district court misapplied California law. The district court erroneously found that Killgore's disclosures weren’t protected under the state whistleblower statute and therefore disregarded evidence material to his claims. But Judge Sanchez and the Ninth Circuit said that when properly considered, the evidence raised genuine disputes of material fact as to the nature of Killgore's disclosures, whether he had reasonable cause to believe that federal law was being violated, and whether his whistleblowing activity was a contributing factor in his termination of employment. As a result, the Ninth Circuit reversed the district court's entry of summary judgment as to claims of retaliation and wrongful termination that were based on his protected disclosures.
The district court concluded that Killgore’s supervisor, as a private citizen in the employ of a private environmental compliance firm, lacked the power to correct the Army Reserve's alleged noncompliance and therefore disclosing these matters to him was "irrelevant under [section] 1102.5(b)." In doing so, the district court interpreted section 1102.5(b) to mean that a protected disclosure must be made to "a person with authority over the employee" who also has the authority to "investigate, discover, or correct" the violation.
However, Judge Sanchez said that California courts apply the "last antecedent rule" when interpreting statutes. Applying it, the clause "who has the authority to investigate, discover, or correct the violation or noncompliance" modifies only the immediately preceding phrase—"another employee." Accordingly, Judge Sanchez said that Killgore's disclosures to his boss—as a "person with authority over the employee"—provided an independent ground for asserting a whistleblower retaliation claim under section 1102.5(b).
The California Supreme Court explained that section 1102.5(b) protects employees who share "information the employee 'has reasonable cause to believe . . . discloses a violation of state or federal statute' or of 'a local, state, or federal rule or regulation' with a government agency, with a person with authority over the employee, or with another employee who has authority to investigate or correct the violation." The Court predicted that the California Supreme Court would hold that section 1102.5(b) prohibits employers from retaliating against employees who disclose potential wrongdoing to any one of several enumerated avenues: government or law enforcement agencies, a person with authority over the employee, other employees with authority to investigate, discover, or correct the violation or noncompliance, or any public body conducting an investigation, hearing, or inquiry.
Thus, under California law, an employee disclosing information he or she reasonably believes to be a violation of law to a "person with authority over the employee" is a protected disclosure under section 1102.5(b). Because the district court wrongly concluded that disclosures to Killgore’s supervisor were not protected under the whistleblower statute, it did not consider this evidence in ruling on SpecPro's motion for summary judgment. Viewing that evidence in the light most favorable to the nonmoving party, the Ninth Circuit concluded that the evidence created a genuine dispute of material fact as to whether SpecPro retaliated against Killgore for engaging in protected whistleblower activity.
Are the Disclosures Not Protected Because This was Part of Killgore's Supervisor’s Normal Job Duties?
The district court presumed, without explaining why, that Chief Caballero was Killgore's supervisor with authority over him, but the evidence didn’t support this, Judge Sanchez held. The chief was an employee of the Army Reserve and was SpecPro's client. There was no evidence that he had the right to hire, fire, or otherwise direct Killgore's conditions of employment at SpecPro, and she affirmatively disclaimed any such authority. But she was an employee of a "government agency” (the U.S. Army Reserve). Thus, Killgore's disclosures to her were properly understood as a disclosure to a "government agency" under the plain language of the statute.
The district court said Killgore's discussions with Chief Caballero of potential violations of law were not entitled to whistleblower protection because reporting NEPA violations were part of his "normal duties" as her supervisee. However, Judge Sanchez noted that section 1102.5(b) was amended to provide that a whistleblower's disclosures are protected "regardless of whether disclosing the information is part of the employee's job duties." So, even if the district court were right that Killgore's reports to Chief Caballero were a normal function of his employment, his disclosures were clearly protected under state law at the time they were made.
As a result, Judge Sanchez and the Ninth Circuit concluded that the district court misapplied California law when it rejected evidence of Killgore's disclosures to Chief Caballero on the basis that reporting was part of his normal job duties.
Did Killgore Present Triable Evidence Sufficient to Support a Reasonable Belief That NEPA was Being Violated?
The final question concerning the section 1102.5(b) claim was whether Killgore had reasonable cause to believe that the information discloses a violation of federal statute or noncompliance with a federal rule or regulation. Under the statute, the relevant inquiry isn’t whether the conduct "actually violated" any specific statute or regulation, but whether the plaintiff "reasonably believed that there was a violation of a statute, rule, or regulation" at the time it was reported. The district court concluded that Killgore couldn’t have reasonably believed there was a violation of NEPA and its regulations because the environmental assessment is a "forward looking" document that "need only assess the potential impacts of the proposed action."
Judge Sanchez said this was incorrect. While the district court is correct that federal agencies have substantial discretion to define the scope of NEPA review, an agency may not disregard its statutory obligation to take a "hard look" at the environmental consequences of a proposed action, including its cumulative impacts, where appropriate.
As Killgore's testimony and evidence identified, the environmental assessment provided no analysis or discussion of the prior helicopter activities which may have had a significant effect on the environment.
The district court erred in determining, as a matter of law, that Killgore had no reasonable cause to believe that they were violating NEPA by failing to consider and include the prior helicopter operations on the site. The district court was affirmed in part, reversed in part, and remanded. Killgore v. SpecPro Pro. Servs. (9th Cir. 10/20/22).
Bottom Line
California law protects employees who share information the employee has reasonable cause to believe discloses a violation of law with a government agency, with a person with authority over the employee, or with another employee who has authority to investigate or correct the violation.
A reasonable belief is all that is required for protection under the California Whistleblower Protection Act.
Danielle G. Eanet can be reached at Eanet, PC in Los Angeles, CA at danielle@eanetpc.com.