September and October 2020 employment law decisions
Jury verdict in whistleblower case reversed based on questions that allowed the jury to draw negative inferences from an exercise of attorney-client privilege.
October 23, 2020, Third District Court of Appeal, Kathleen Carroll v. Commission on Teacher Credentialing: A jury found in favor of Ms. Carroll in this whistleblower retaliation case and awarded nearly $3 million. On appeal, the Commission contended that a federal court decision that a State Personnel Board (SPB) decision against Ms. Carroll dismissing a federal claim also barred the state law claims that were presented to the jury (claim preclusion). The Third District concluded that the federal court’s dismissal of Ms. Carroll’s case was not on the merits for purposes of federal preclusion law, which means the state court was not precluded from hearing the remaining state law claims. The Commission also argued that the SPB decision barred the state law claims because the same issues presented to the SPB were present in the state case (issue preclusion). The Third District determined that a California Supreme Court decision (State Bd. of Chiropractic Examiners v. Superior Court (2009) 45 Cal.4th 963 (Arbuckle), which held that an SPB decision dismissing a retaliation complaint does not preclude the employee from filing a civil case under the California Whistleblower Protection Act, applied. Finally, the Commission asserted that the trial court abused its discretion by allowing Ms. Carroll’s counsel to question Commission witnesses about why they sought legal advice so that the jury could draw negative inferences from the Commission’s exercise of the attorney-client privilege and refused to issue a curative jury instruction. The court of appeal agreed and reversed the jury verdict.
Employer that fired an employee based on an erroneous criminal conviction history report must reinstate the employee with back pay.
October 15, 2020, First District Court of Appeal, Lilia Garcia-Brower v. Premier Automotive Imports of CA, LLC: The Labor Commissioner determined that Premier Automotive unlawfully terminated Tracey Molina for falsifying her job application based on an erroneous DMV report that Ms. Molina had an active criminal conviction. When Premier Automotive failed to comply with the Labor Commissioner’s order to reinstate Ms. Molina with back pay, the agency filed this enforcement case. The trial court dismissed the action on grounds there was no evidence Premier Automotive was aware at the time it terminated Ms. Molina that her conviction had been judicially dismissed. On appeal, the First District determined that whether Premier Automotive conducted an adequate investigation of the conflicting background checks or information disclosed at a termination meeting before filing Ms. Molina created disputed factual questions about Premier’s motivations for terminating her. The appellate court concluded that Premier Automotive was not insulated as a matter of law from its rushed employment decision in light of the protections embodied in Labor Code sections 98.6 (which prohibits employers from retaliating an employee because they exercised a right protected under the Labor Code) and 432.7 (which prohibits the misuse of criminal offender records information).
Doctor not required to reverse a hospital’s decision to dissolve a referral panel before proceeding with his retaliation claim that he stopped receiving referrals after reporting an illegal referral scheme.
September 29, 2020, Second District Court of Appeal, Arash Alborzi v. University of Southern California: Dr. Alborzi sued USC alleging that after he complained to management that it entered into an illegal referral and kickback scheme to pay below-market rates for hospitalist services it stopped referring patients to him. The trial court dismissed the case (demurrer) on grounds Dr. Alborzi had to first file a special action (writ) to reverse USC’s decision to dissolve the on-call panel from which Dr. Alborzi had received referrals. The Second District found that based on Dr. Alborzi’s allegations, the on-call panel decision was not quasi-legislative, but, rather, targeted at him and retaliatory. The appellate court also concluded that the allegations did not disclose any administrative decision-making process that Dr. Alborzi was required to continue to completion.