Lawson v. PPG Architectural Finishes, Inc. ( 2022 )

IN THE SUPREME COURT OF
CALIFORNIA
WALLEN LAWSON,
Plaintiff and Appellant,
v.
PPG ARCHITECTURAL FINISHES, INC.,
Defendant and Respondent.
S266001
Ninth Circuit
19-55802
Central District of California
8:18-cv-00705-AG-JPR
January 27, 2022
Justice Kruger authored the opinion of the Court, in which
Chief Justice Cantil-Sakauye and Justices Corrigan, Liu,
Groban, Jenkins, and Miller*concurred.
*
Associate Justice of the Court of Appeal, Fourth Appellate
District, Division Two, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.
LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
S266001
Opinion of the Court by Kruger, J.
The question in this case concerns the proper method for
presenting and evaluating a claim of whistleblower retaliation
under Labor Code section 1102.5. Since 2003, the Labor Code
has prescribed a framework: Once an employee-whistleblower
establishes by a preponderance of the evidence that retaliation
was a contributing factor in the employee’s termination,
demotion, or other adverse action, the employer then bears the
burden of demonstrating by clear and convincing evidence that
it would have taken the same action “for legitimate,
independent reasons.” (Lab. Code, § 1102.6, added by Stats.
2003, ch. 484, § 3, pp. 3518–3519.) But in the years since section
1102.6 became law, some courts have persisted in instead
applying a well-worn, but meaningfully different, burden-
shifting framework borrowed from the United States Supreme
Court’s decision in McDonnell Douglas Corp. v. Green (1973) 411
U.S. 792 (McDonnell Douglas). Noting the lack of uniformity,
the United States Court of Appeals for the Ninth Circuit has
asked us to decide which of these frameworks governs section
1102.5 retaliation claims. Unsurprisingly, we conclude courts
should apply the framework prescribed by statute in Labor Code
section 1102.6. Under the statute, employees need not satisfy
the McDonnell Douglas test to make out a case of unlawful
retaliation.
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LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
I.
We take the facts from the Ninth Circuit’s certification
order. From 2015 until he was fired in 2017, plaintiff Wallen
Lawson worked as a territory manager for defendant PPG
Architectural Finishes, Inc. (PPG), a paint and coatings
manufacturer. Lawson was responsible for stocking and
merchandising PPG paint products in Lowe’s home
improvement stores in Southern California. PPG used two
metrics to evaluate Lawson’s performance: his ability to meet
sales goals, and his scores on so-called market walks, during
which PPG managers shadowed Lawson to evaluate his rapport
with Lowe’s staff and customers, among other things. Lawson’s
direct supervisor, Clarence Moore, attended all but the first of
these market walks. On that first market walk, Lawson
received the highest possible rating, but the positive evaluations
did not last and his market walk scores soon took a nosedive.
Lawson also frequently missed his monthly sales targets. In
spring 2017, PPG placed Lawson on a performance
improvement plan.
According to Lawson, that same spring, Moore began
ordering him to intentionally mistint slow-selling PPG paint
products — that is, to tint the paint to a shade the customer had
not ordered. Lowe’s would then be forced to sell the paint at a
deep discount, enabling PPG to avoid buying back what would
otherwise be excess unsold product. Lawson did not agree with
this mistinting scheme and filed two anonymous complaints
with PPG’s central ethics hotline. He also told Moore directly
that he refused to participate. The complaints led to an
investigation. PPG eventually told Moore to discontinue the
practice, but Moore remained with the company, where he
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LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
continued to directly supervise Lawson and oversee his market
walk evaluations.
Some months later, after determining that Lawson had
failed to meet the goals outlined in his performance
improvement plan, both Moore and Moore’s supervisor
recommended that Lawson be fired. He was.
Lawson filed suit in the United States District Court for
the Central District of California. As relevant here, Lawson
claimed that PPG had fired him because he blew the whistle on
Moore’s fraudulent mistinting practices, in violation of the
protections codified in Labor Code section 1102.5 (section
1102.5). PPG moved for summary judgment. Invoking a line of
authority that traces back to Patten v. Grant Joint Union High
School Dist. (2005) 134 Cal.App.4th 1378 (Patten), the district
court applied the three-part burden-shifting framework laid out
in McDonnell Douglas, supra, 411 U.S. 792 to evaluate Lawson’s
section 1102.5 claim. Under that approach, the employee must
establish a prima facie case of unlawful discrimination or
retaliation. (McDonnell Douglas, at p. 802.) Next, the employer
bears the burden of articulating a legitimate reason for taking
the challenged adverse employment action. (Ibid.) Finally, the
burden shifts back to the employee to demonstrate that the
employer’s proffered legitimate reason is a pretext for
discrimination or retaliation. (Id. at p. 804.)
As to the first step of McDonnell Douglas, the district court
concluded that Lawson had established a prima facie case of
unlawful retaliation based on his efforts to stop the paint
mistinting scheme. Moving to the second step of the framework,
the court determined that PPG had sustained its burden of
articulating a legitimate, nonretaliatory reason for firing him —
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LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
namely, Lawson’s poor performance on market walks and
failure to demonstrate progress under the performance
improvement plan. Finally, the district court concluded Lawson
had failed to produce sufficient evidence that PPG’s stated
reason for firing Lawson was pretextual. Because Lawson could
not satisfy this third step of the McDonnell Douglas test, the
court granted summary judgment in favor of PPG on the
whistleblower retaliation claim.
On appeal to the Ninth Circuit, Lawson argued that the
district court erred in applying McDonnell Douglas. He
contended the court should instead have applied the framework
set out in Labor Code section 1102.6 (section 1102.6). Under the
statutory framework, Lawson contended, his burden was merely
to show that his whistleblowing activity was “a contributing
factor” in his dismissal, not to show that PPG’s stated reason
was pretextual. The Ninth Circuit determined that the outcome
of Lawson’s appeal hinged on which of those two tests applied
but signaled uncertainty on this point. (Lawson v. PPG
Architectural Finishes, Inc. (9th Cir. 2020) 982 F.3d 752, 755.)
It observed that our state’s appellate courts do not follow a
consistent practice and that this court has never ruled on the
issue. (Id. at pp. 755–759.) It asked us to consider the question
and we granted the request.
II.
Section 1102.5 provides whistleblower protections to
employees who disclose wrongdoing to authorities. As relevant
here, section 1102.5 prohibits an employer from retaliating
against an employee for sharing 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”
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LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
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. (§ 1102.5, subd. (b).) “This
provision,” we have explained, “reflects the broad public policy
interest in encouraging workplace whistle-blowers to report
unlawful acts without fearing retaliation.” (Green v. Ralee
Engineering Co. (1998) 19 Cal.4th 66, 77.) An employee injured
by prohibited retaliation may file a private suit for damages.
(Lab. Code, § 1105; see Gardenhire v. Housing Authority (2000)
85 Cal.App.4th 236, 241.)
When section 1102.5 was first enacted in 1984, the statute
supplied only a set of substantive protections against
whistleblower retaliation, unaccompanied by any provision
setting forth procedures for proving retaliation. (Stats. 1984,
ch. 1083, § 1, p. 3698.) So to give life to those substantive
protections, courts looked to analogous statutory schemes for
procedural guidance. Much as courts had done in employment
discrimination and retaliation cases brought under the Fair
Housing and Employment Act (FEHA), courts in section 1102.5
cases generally adopted the three-part McDonnell Douglas
burden-shifting framework. (See Morgan v. Regents of
University of California (2000) 88 Cal.App.4th 52, 67–69
(Morgan); Akers v. County of San Diego (2002) 95 Cal.App.4th
1441, 1453; see also Guz v. Bechtel National, Inc. (2000) 24
Cal.4th 317, 354 (Guz) [applying McDonnell Douglas to a
discrimination claim under FEHA; citing cases]; Yanowitz v.
L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1042 [applying
McDonnell Douglas to a FEHA retaliation claim; citing cases].)
As we explained in Guz, the high court established the
McDonnell Douglas framework for trying claims of intentional
discrimination — there, intentional employment discrimination
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LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
in violation of title VII of the Civil Rights Act of 1964 (42 U.S.C.
§ 2000e et seq.) — based on circumstantial rather than direct
evidence. (Guz, supra, 24 Cal.4th at p. 354.) Courts applying it
to section 1102.5 retaliation cases adapted the test for that
context, describing it as follows: First, a plaintiff who seeks to
rely on circumstantial evidence must establish a prima facie
case of retaliation, meaning “ ‘ “a plaintiff must show that she
engaged in protected activity, that she was thereafter subjected
to adverse employment action by her employer, and there was a
causal link between the two.” ’ ” (Morgan, supra, 88 Cal.App.4th
at p. 69.) Second, if the plaintiff has established a prima facie
case, the burden of production shifts to the employer to come
forward with evidence of “a legitimate, nondiscriminatory
reason for the adverse employment action.” (Id. at p. 68.) Third,
if the employer produces substantial evidence of a legitimate,
nondiscriminatory reason, then the plaintiff bears the burden of
proving the reason was a pretext for impermissible retaliation.
(Id. at pp. 68–69.)
Courts imposed no similar burden-shifting requirements
in cases built on direct evidence of retaliation. Morgan,
however, cited out-of-state authority for the proposition that
“[w]here a plaintiff offers direct evidence of discrimination that
is believed by the trier of fact, the defendant can avoid liability
only by proving the plaintiff would have been subjected to the
same employment decision without reference to the unlawful
factor.” (Morgan, supra, 88 Cal.App.4th at pp. 67–68, citing,
inter alia, Price Waterhouse v. Hopkins (1989) 490 U.S. 228,
244–245.) In other words, the test, as Morgan described it,
allowed the employer to avoid liability upon a showing the
employer would have made the same decision even absent any
retaliatory motive.
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LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
In 2003, the Legislature amended the Labor Code’s
whistleblower protections in response to a series of high-profile
corporate scandals and reports of illicit coverups. (Stats. 2003,
ch. 484, § 3, pp. 3518–3519.) Specifically citing “the recent spate
of false business reports and other illegal activity by Enron,
WorldCom and others” (Assem. Com. on Judiciary, Analysis of
Sen. Bill No. 777 (2003–2004 Reg. Sess.) as amended May 29,
2003, p. 1), legislators expressed concern that new laws were
“needed in order to prevent the kind of damage to shareholders,
investors, employees and the market that Enron and
WorldCom, and now HealthSouth continue to cause.” (Sen.
Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of
Sen. Bill No. 777 (2003–2004 Reg. Sess.) as introduced Feb. 21,
2003, p. 6.) The amendments, the Assembly Committee on the
Judiciary explained, were designed to “encourage earlier and
more frequent reporting of wrongdoing by employees and
corporate managers when they have knowledge of specified
illegal acts” by “expanding employee protection against
retaliation.” (Assem. Com. on Judiciary, Analysis of Sen. Bill
No. 777, supra, as amended May 29, 2003, p. 1.)
As pertinent here, the 2003 amendments added a
procedural provision, section 1102.6, which states in full: “In a
civil action or administrative proceeding brought pursuant to
Section 1102.5, once it has been demonstrated by a
preponderance of the evidence that an activity proscribed by
Section 1102.5 was a contributing factor in the alleged
prohibited action against the employee, the employer shall have
the burden of proof to demonstrate by clear and convincing
evidence that the alleged action would have occurred for
legitimate, independent reasons even if the employee had not
engaged in activities protected by Section 1102.5.”
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LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
After section 1102.6 took effect, some California courts
identified that provision as supplying the applicable standards
for claims of whistleblower retaliation under section 1102.5,
without relying on McDonnell Douglas’s burden-shifting
framework. But other courts have continued to rely on the
McDonnell Douglas framework without mentioning section
1102.6. (See Patten, supra, 134 Cal.App.4th at p. 1384 [“The
elements of a section 1102.5(b) retaliation cause of action
require that (1) the plaintiff establish a prima facie case of
retaliation, (2) the defendant provide a legitimate,
nonretaliatory explanation for its acts, and (3) the plaintiff show
this explanation is merely a pretext for the retaliation”]; Mokler
v. County of Orange (2007) 157 Cal.App.4th 121 [same]; Hager
v. County of Los Angeles (2014) 228 Cal.App.4th 1538, 1540
[same].)
As the Ninth Circuit explained in its certification order,
“Although neither Hager, Patten, nor Mokler even cites, much
less meaningfully deals with, section 1102.6, these cases have
sown widespread confusion as to which evidentiary standard
actually applies to section 1102.5 retaliation claims.” (Lawson
v. PPG Architectural Finishes, Inc., supra, 982 F.3d at p. 757.)
This confusion is reflected in the decisions of the federal courts,
which have taken a variety of approaches to the issue. (Compare
Monaghan v. Telecom Italia Sparkle of North America, Inc.
(C.D.Cal., July 22, 2013, No. CV 13-00646 ABC (PLAx)) 2013
WL 12171957, p. *10 [describing § 1102.6 as setting forth the
burden of proof for a § 1102.5 claim], Greer v. Lockheed Martin
Corp. (N.D.Cal. 2012) 855 F.Supp.2d 979, 989 [same], and
Kumar v. Alameda County Medical Center (N.D.Cal., Mar. 25,
2011, No. 09-4312 EDL) 2011 WL 13244636, pp. *13, *16 [same]
with Nikmanesh v. Walmart Inc. (9th Cir. 2019) 789 Fed.Appx.
8LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
30, *31–*32 [applying McDonnell Douglas to the plaintiff’s
§ 1102.5 claim], Sorensen v. National Railroad Passenger Corp.
(9th Cir. 2019) 786 Fed.Appx. 652, *653, *655 [same], and
Canupp v. Children’s Receiving Home of Sacramento (E.D.Cal.
2016) 181 F.Supp.3d 767, 789, 795 [describing both McDonnell
Douglas and § 1102.6 as the governing evidentiary tests].)
III.
To resolve the confusion, we now clarify that section
1102.6, and not McDonnell Douglas, supplies the applicable
framework for litigating and adjudicating section 1102.5
whistleblower claims.
By its terms, section 1102.6 describes the applicable
substantive standards and burdens of proof for both parties in a
section 1102.5 retaliation case: First, it must be “demonstrated
by a preponderance of the evidence” that the employee’s
protected whistleblowing was a “contributing factor” to an
adverse employment action. (§ 1102.6.) Then, once the
employee has made that necessary threshold showing, the
employer bears “the burden of proof to demonstrate by clear and
convincing evidence” that the alleged adverse employment
action would have occurred “for legitimate, independent
reasons” even if the employee had not engaged in protected
whistleblowing activities. (Ibid.)
PPG suggests that the sole pertinent effect of section
1102.6 was to codify a kind of defense available to employers,
colloquially known as the “same-decision defense,” and to
impose a heightened burden to prove the defense by “clear and
convincing evidence.” (Harris v. City of Santa Monica (2013) 56
Cal.4th 203, 239 (Harris).) Section 1102.6 indeed does those
things, but that is not all it does. The first prong of the statute
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LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
also tells us what plaintiffs must prove to establish liability, and
by what evidentiary standard. Specifically, plaintiffs must
show, by a preponderance of the evidence, that whistleblowing
was a contributing factor in the employer’s decision. This is a
complete set of instructions for the presentation and evaluation
of evidence in section 1102.5 cases; it is not merely the
codification of an affirmative defense.
It is true, as PPG points out, that much of the legislative
history of section 1102.6 focuses on the employer’s same-
decision defense — particularly the Legislature’s interest in
prescribing a more demanding standard for establishing the
defense. (Assem. Com. on Judiciary, Analysis of Sen. Bill
No. 777, supra, as amended May 29, 2003, p. 2 [bill provides
employer “an affirmative defense against retaliation claims” by
“clear and convincing evidence” standard]; Enrolled Bill Mem.
to Governor on Sen. Bill No. 777 (2003–2004 Reg. Sess.) Oct. 6,
2003, p. 1 [“This bill extends the current protection of the state
whistleblower law by . . . increasing the burden of proof on the
employer to a clear and convincing evidence standard”].) But
even though the codification of the plaintiff’s burden received
less attention in the legislative history, the Legislature
undoubtedly understood what is clear from the face of the
statute it enacted: that section 1102.6 established “the
evidentiary burdens of the parties participating in a civil action
or administrative hearing involving an alleged violation of the
bill’s provisions.” (Legis. Counsel’s Dig., Sen. Bill No. 777
(2003–2004 Reg. Sess.) 5 Stats. 2003, Summary Dig., p. 222,
italics added; see Jones v. Lodge at Torrey Pines Partnership
(2008) 42 Cal.4th 1158, 1169 [the Legislative Counsel’s Digest
is “ ‘printed as a preface to every bill considered by the
Legislature’ ” to “ ‘assist the Legislature in its consideration of
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LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
pending legislation’ ”].) That is, section 1102.6 sets forth the
evidentiary burdens of both sides in a whistleblower retaliation
suit, not just one.
Even accepting that section 1102.6 establishes a complete
set of instructions for both sides, PPG argues that courts need
not choose between employing the section 1102.6 and McDonnell
Douglas frameworks because one does not replace the other. On
the contrary, PPG contends, McDonnell Douglas continues to
govern at the first step of the section 1102.6 analysis. After all,
PPG reasons, that first step of the section 1102.6 framework still
requires plaintiffs to prove the employer’s retaliatory intent,
and determining an employer’s intent is the purpose of the
McDonnell Douglas test. (See Guz, supra, 24 Cal.4th at p. 354.)
PPG’s premises are correct, but its conclusion does not
follow. Liability under section 1102.6 does require proof of
retaliatory intent, and McDonnell Douglas does offer a method
for proving such intent. (Guz, supra, 24 Cal.4th at p. 355.) But
McDonnell Douglas is not the only possible method of proving
discriminatory or retaliatory intent. (See, e.g., Trans World
Airlines, Inc. v. Thurston (1985) 469 U.S. 111, 121 [McDonnell
Douglas does not apply when the plaintiff presents direct
evidence of discrimination].) Nor is it a method of proof well
suited to litigation under the section 1102.6 framework.
Section 1102.6 requires whistleblower plaintiffs to show
that retaliation was a “contributing factor” in their termination,
demotion, or other adverse action. This means plaintiffs may
satisfy their burden of proving unlawful retaliation even when
other, legitimate factors also contributed to the adverse action.
(See, e.g., State Comp. Ins. Fund v. Ind. Acc. Com. (1959) 176
Cal.App.2d 10, 17 (State Comp. Ins. Fund) [describing a
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LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
contributing factor standard as one in which the conduct at issue
need not be the “exclusive cause” of the plaintiff’s injuries];
Rookaird v. BNSF Ry. Co. (9th Cir. 2018) 908 F.3d 451, 461
(Rookaird) [“ ‘A “contributing factor” includes “any factor, which
alone or in connection with other factors, tends to affect in any
way the outcome of the decision” ’ ”].) But as we explained in
Harris, the three-part McDonnell Douglas test was not written
for the evaluation of claims involving multiple reasons for the
challenged adverse action. McDonnell Douglas was decided at
a time when the law generally presumed “that the employer has
a single reason for taking an adverse action against the
employee and that the reason is either discriminatory or
legitimate.” (Harris, supra, 56 Cal.4th at p. 215.) The
McDonnell Douglas framework reflects that presumption: “By
hinging liability on whether the employer’s proffered reason for
taking the action is genuine or pretextual, the McDonnell
Douglas inquiry aims to ferret out the ‘true’ reason for the
employer’s action.” (Ibid.) This focus on identifying the single,
true reason for the adverse action creates complications in a so-
called mixed-motives case, in which the employer is alleged to
have acted for multiple reasons, some legitimate and others not:
“What is the trier of fact to do when it finds that a mix of
discriminatory and legitimate reasons motivated the employer’s
decision?” (Ibid.)
Although we acknowledged in Harris that courts have
adopted the McDonnell Douglas test for FEHA employment
discrimination cases that do not involve mixed motives, we
declined to adopt the same test to govern mixed-motives cases.
We instead explained that the plaintiff in a mixed-motives case
bears an initial burden of showing that discrimination “was a
substantial factor motivating his or her termination,” without
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Opinion of the Court by Kruger, J.
ever suggesting that the plaintiff must satisfy the McDonnell
Douglas test to carry this burden. (Harris, supra, 56 Cal.4th at
p. 241; cf. id. at p. 239 [contrasting the causal standard in FEHA
with the “contributing factor” standard in § 1102.6].)
Other courts addressing burden-shifting frameworks
similar to section 1102.6 have similarly found McDonnell
Douglas inapplicable. For instance, nearly all courts to address
the issue have concluded that McDonnell Douglas has no role to
play in the adjudication of First Amendment retaliation claims
under the burden-shifting framework of Mt. Healthy City Board
of Ed. v. Doyle (1977) 429 U.S. 274, which closely resembles the
section 1102.6 framework. Mt. Healthy assigns to plaintiffs the
initial burden of showing that conduct protected by the First
Amendment was a “ ‘substantial’ ” or “ ‘motivating’ ” factor in an
employer’s adverse employment decision, then assigns to the
defendant the burden of showing it would have made the same
decision in the absence of the protected conduct. (Mt. Healthy,
at p. 287.) In such cases, “almost every circuit to have
considered whether McDonnell Douglas should apply . . . has
thought the idea a poor one.” (Walton v. Powell (10th Cir. 2016)
821 F.3d 1204, 1210; see id. at pp. 1210–1212 [cataloging
cases].)1
Much the same is true of courts interpreting federal
statutes similar to section 1102.6. For instance, the federal
Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) (18 U.S.C.
1
The “almost” is a nod to the Eighth Circuit, whose
precedent has been somewhat inconsistent on the issue, though
more recent precedent suggests McDonnell Douglas does not
apply to First Amendment retaliation claims. (See Wagner v.
Jones (8th Cir. 2011) 664 F.3d 259, 270 [distinguishing the Mt.
Healthy framework from McDonnell Douglas].)
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Opinion of the Court by Kruger, J.
§ 1514A(b)(2)(A)) — which was enacted shortly before the
Legislature enacted section 1102.6 — contains a nearly identical
burden-shifting framework for the adjudication of whistleblower
cases. The courts to address the issue have generally concluded
that framework displaces McDonnell Douglas rather than
supplementing it. (See, e.g., Day v. Staples, Inc. (1st Cir. 2009)
555 F.3d 42, 53 & fn. 6; Allen v. Administrative Review Bd. (5th
Cir. 2008) 514 F.3d 468, 475–476; Barrick v. PNGI Charles
Town Gaming, LLC (4th Cir. 2020) 799 Fed.Appx. 188, 189;
Johnson v. Stein Mart, Inc. (11th Cir. 2011) 440 Fed.Appx. 795,
801; see also Araujo v. New Jersey Transit Rail Operations, Inc.
(3d Cir. 2013) 708 F.3d 152, 157–158 [“when a burden-shifting
framework other than McDonnell Douglas is present in a
statute, Congress specifically intended to alter any presumption
that McDonnell Douglas is applicable”]; Fraser v. Fiduciary
Trust Co. Intern. (2d Cir. 2010) 396 Fed.Appx. 734, 735
[declining to decide the question but noting that “Sarbanes-
Oxley provides its own burden-shifting framework”]; Beacom v.
Oracle America, Inc. (8th Cir. 2016) 825 F.3d 376, 379 [setting
out separate Sarbanes-Oxley framework without any mention of
McDonnell Douglas]; Bechtel v. Administrative Review Bd., U.S.
(2d Cir. 2013) 710 F.3d 443, 447 [same].) Courts have generally
reached similar conclusions with respect to other statutes
containing similar burden-shifting schemes. (Trimmer v. U.S.
Dept. of Labor (10th Cir. 1999) 174 F.3d 1098, 1101–1102
[McDonnell Douglas displaced by similar statutory framework
in whistleblower provisions of Energy Reorganization Act of
1974]; Araujo, supra, 708 F.3d at pp. 158–159 [same conclusion
under whistleblower provisions of Federal Railroad Safety Act].)
We reach a similar conclusion here. It would make little
sense to require section 1102.5 retaliation plaintiffs to satisfy
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McDonnell Douglas for the sake of proving that retaliation was
a contributing factor in an adverse action. The central problem
lies at the third step of McDonnell Douglas, which requires the
plaintiff to prove that an employer’s proffered legitimate reason
for taking an adverse action was a pretext for impermissible
retaliation. (Morgan, supra, 88 Cal.App.4th at pp. 68–69.)
Under section 1102.6, a plaintiff does not need to show that the
employer’s nonretaliatory reason was pretextual. Even if the
employer had a genuine, nonretaliatory reason for its adverse
action, the plaintiff still carries the burden assigned by statute
if it is shown that the employer also had at least one retaliatory
reason that was a contributing factor in the action. There is,
then, no reason why whistleblower plaintiffs should be required
to satisfy the three-part McDonnell Douglas inquiry — and
prove that the employer’s proffered legitimate reasons were
pretextual — in order to prove that retaliation was a
contributing factor under section 1102.6. To the contrary,
placing this unnecessary burden on plaintiffs would be
inconsistent with the Legislature’s evident purpose in enacting
section 1102.6: namely, “encourag[ing] earlier and more
frequent reporting of wrongdoing by employees and corporate
managers when they have knowledge of specified illegal acts” by
“expanding employee protection against retaliation.” (Assem.
Com. on Judiciary, Analysis of Sen. Bill No. 777, supra, as
amended May 29, 2003, p. 1, italics omitted.)
At oral argument, counsel for PPG acknowledged the
apparent mismatch between McDonnell Douglas and section
1102.6’s contributing factor standard, but suggested that we
should adapt McDonnell Douglas for purposes of guiding courts
in the proper application of that standard. We see no indication
that the courts are in need of this sort of guidance. The
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contributing factor standard is not an unfamiliar one. (See, e.g.,
State Comp. Ins. Fund, supra, 176 Cal.App.2d at p. 17;
Rookaird, supra, 908 F.3d at p. 461.) And we are not persuaded
that introducing to the law yet another burden-shifting
framework — a framework inspired by McDonnell Douglas, yet
not McDonnell Douglas itself — would clarify matters more
than it would confuse them.
PPG argues the legislative history reflects an intent to
preserve a role for McDonnell Douglas in the adjudication of
section 1102.5 retaliation cases. PPG’s argument centers on a
bill analysis prepared by the Senate Rules Committee. Citing
both Morgan and McDonnell Douglas, the bill analysis
characterized existing law as follows: “[A]fter a plaintiff shows
by a preponderance of evidence that the action taken by the
employer is proscribed by the whistleblower statute, the burden
shifts to the employer to show by a preponderance of the
evidence that the alleged action would have occurred for
legitimate, independent reasons even if the employee had not
engaged in activities protected by the whistleblower statute.”
(Sen. Rules Com., Off. of Sen. Floor Analyses, analysis of Sen.
Bill No. 777 (2003–2004 Reg. Sess.) as introduced Feb. 21, 2003,
p. 3.) The analysis went on to say: “This bill instead requires
the employer to make that showing by clear and convincing
evidence.” (Ibid.) PPG sees this as evidence that the
Legislature intended to preserve McDonnell Douglas,
emphasizing that the bill analysis concerns only the codification
of the burden on the employer to make out its same-decision
defense and evinces no intent to displace “existing case law”
(ibid.) insofar as existing law placed the burden on plaintiffs to
establish retaliation under the McDonnell Douglas test.
Lawson, by contrast, understands the bill analysis to mean that
16
LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
the Legislature recognized that McDonnell Douglas was part of
then-existing law and meant to change it.
In truth, the bill analysis yields no clear answers on the
McDonnell Douglas question. That is because the existing law
the bill analysis attributes to McDonnell Douglas bears little
resemblance to the test actually set out in McDonnell
Douglas — as opposed to, for example, the meaningfully
different Mt. Healthy burden-shifting framework. (See p. 13,
ante.) Since the bill analysis does not acknowledge any
understanding of the three-part McDonnell Douglas test as it
had been applied in section 1102.5 retaliation cases, it is difficult
to discern any legislative intent to either displace or preserve it.
Fortunately, however, better evidence of the Legislature’s intent
on that point exists in the form of the text of the statute it
ultimately enacted — which, as we have already explained, is
best read as allowing plaintiffs to establish liability under
section 1102.5 without requiring reliance on McDonnell
Douglas.
PPG also contends that even if section 1102.6 rather than
McDonnell Douglas supplies the governing framework for the
presentation of evidence at trial, McDonnell Douglas should
govern at summary judgment for purposes of determining
whether the plaintiff can meet the statutorily assigned burden
of demonstrating that retaliation was a contributing factor in an
adverse employment decision.
We reject the contention. Nothing in the text of section
1102.6 supports this bifurcated approach, where one standard
would govern section 1102.5 cases on summary judgment and a
different standard would govern cases at trial. As we have
already explained, PPG’s argument is simply incompatible with
17
LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
the contributing factor standard set out in section 1102.6. That
is no less true at summary judgment than at trial. Were we to
adopt PPG’s bifurcated approach, employee plaintiffs might
never have the opportunity to show at trial that retaliation was
a contributing factor in an adverse action, because they would
have first been required to show at summary judgment that
retaliation was, in effect, the only factor. The purpose of
summary judgment is not to weed out cases that might prove
meritorious at trial. For that reason, the parties’ burdens of
proof at summary judgment generally depend on their burdens
of proof at trial. (Aguilar v. Atlantic Richfield Co. (2001) 25
Cal.4th 826, 851 & fn. 15.) This case presents no reason to
depart from that rule.
PPG expresses concern that applying section 1102.6’s
contributing factor standard at summary judgment instead of
McDonnell Douglas will allow too many “meritless claims” to go
to trial. To the extent PPG assumes that employers will not be
able to raise a same-decision defense on summary judgment,
that assumption is incorrect. (See, e.g., Texas v. Lesage (1999)
528 U.S. 18, 20–21 [upholding a grant of summary judgment
based on the same-decision defense].) In any event, PPG’s
concern about more cases going to trial is not a sufficient reason
to march every case through the McDonnell Douglas three-step
solely for purposes of summary judgment. To the extent PPG is
concerned that the existing framework sets the plaintiff’s bar
too low by requiring only a showing that retaliation was a
contributing factor in an adverse decision, PPG’s remedy lies
18
LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
with the Legislature that selected this standard, not with this
court.2
IV.
We answer the Ninth Circuit’s question as follows:
Section 1102.6 provides the governing framework for the
presentation and evaluation of whistleblower retaliation claims
brought under section 1102.5. First, it places the burden on the
plaintiff to establish, by a preponderance of the evidence, that
retaliation for an employee’s protected activities was a
contributing factor in a contested employment action. The
plaintiff need not satisfy McDonnell Douglas in order to
discharge this burden. 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.
2
We disapprove Hager v. County of Los Angeles, supra, 228
Cal.App.4th 1538, 1540, Mokler v. County of Orange, supra, 157
Cal.App.4th 121, 138, and Patten v. Grant Joint Union High
School Dist., supra, 134 Cal.App.4th 1378, 1384 to the extent
they are inconsistent with this opinion.
19
LAWSON v. PPG ARCHITECTURAL FINISHES, INC.
Opinion of the Court by Kruger, J.
KRUGER, J.
We Concur:
CANTIL-SAKAUYE, C. J.
CORRIGAN, J.
LIU, J.
GROBAN, J.
JENKINS, J.
MILLER, J.*
*
Associate Justice of the Court of Appeal, Fourth Appellate
District, Division Two, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.
20
See next page for addresses and telephone numbers for counsel who
argued in Supreme Court.
Name of Opinion Lawson v. PPG Architectural Finishes, Inc.
__________________________________________________________
Procedural Posture (see XX below)
Original Appeal
Original Proceeding XX on request by 9th Circuit (Cal. Rules of
Court, rule 8.548)
Review Granted (published)
Review Granted (unpublished)
Rehearing Granted
__________________________________________________________
Opinion No. S266001
Date Filed: January 27, 2022
__________________________________________________________
Court:
County:
Judge:
__________________________________________________________
Counsel:
HKM Employment Attorneys, Patrick Leo McGuigan, Chaka
Okadigbo; Obermayer Rebmann Maxwell & Hippel, Bruce C. Fox and
Andrew J. Horowitz for Plaintiff and Appellant.
Littler Mendelson, Michael W. M. Manoukian, Theodore A. Schroeder,
Robert W. Pritchard, Everett Clifton Martin; Hopkins & Carley and
Karin M. Cogbill for Defendant and Respondent.
Nicholas Patrick Seitz, Cristina Schrum-Herrera, David L. Bell,
Dorothy A. Chang and Phoebe Liu for Department of Industrial
Relations, Division of Labor Standards Enforcement as Amicus Curiae.
Counsel who argued in Supreme Court (not intended for
publication with opinion):
Chaka Okadigbo
HKM Employment Attorneys LLP
700 South Flower Street, 10th Floor, #1067
Los Angeles, CA 90017
(213) 431-6209
Robert W. Pritchard
Littler Mendelson, P.C.
625 Liberty Avenue, 26th Floor
Pittsburgh, PA 15222
(412) 201-7628