Plaintiff-Friendly Standard Not Extended to Healthcare Whistleblowers
Months after the California Supreme Court issued a ruling making it easier for employees to prove they were retaliated against for reporting business practices they believed to be wrong, another California appeals court has declined to apply that same ruling to healthcare whistleblowers.
In March, the Second District Court of Appeal said that an employer-friendly standard adopted by the U.S. Supreme Court in 1973 should apply to whistleblower claims brought under Health & Safety Code Section 1278.5, instead of a more plaintiff-friendly standard the California Supreme Court adopted in Lawson v. PPG Architectural Finishes, Inc. earlier this year.
In Lawson, the California Supreme Court held that rather than applying a three-part framework to whistleblower retaliation suits brought under Labor Code 1102.5 and the California Whistleblower Protection Act, courts can instead apply the two-step framework in Labor Code 1102.6.
The two-part framework first places the burden on the plaintiff to prove that it was more likely true than not that retaliation was a contributing factor in their termination, then the burden shifts to the defendant to show by “clear and convincing evidence” that it had legitimate, nonretaliatory reasons to terminate the plaintiff.
The issue.
The case raising the question of whether the Lawson standard applies to the healthcare worker whistleblower law is Scheer v. Regents of the University of California. The plaintiff in the case, Arnold Scheer, M.D., sued his former employer and supervisors after he was terminated in 2016 from his job as chief administrative officer of the UCLA Department of Pathology and Laboratory Medicine.
Scheer alleged his firing followed attempts to report numerous issues in the Regents’ facilities, including recurrent lost patient specimens and patient sample mix-ups resulting in misdiagnosis.
His suit alleged violations of Health & Safety Code Section 1278.5, which prohibits retaliation against any employee of a health facility who complains to an employer or government agency about unsafe patient care; Labor Code 1102.5, which protects whistleblowers against retaliation; and the California Whistleblower Protection Act.
The defendants deny Scheer’s claims, saying he was fired instead for bullying and intimidation. They sought and were granted summary judgment in 2019 by the trial court. Scheer appealed the case, and the Second District delayed reviewing the case so that the California Supreme Court could first rule on similar issues raised in Lawson.
After the California Supreme Court issued its ruling in Lawson in January, the Second District reviewed Scheer’s case. The ultimately ruled Lawson does not apply to Health & Safety Code Section 1278.5 because it is structured differently from the Labor Code provision at issue in Lawson.
Although the appeals court determined that the Lawson standard did not apply to Scheer’s Health & Safety Code claim, it determined that the claim could still go forward under the more employer-friendly evidentiary standard.
On Scheer’s remaining claims under Labor Code Section 1102.5 and the California Whistleblower Protection Act, the court upheld the application of the employee-friendly standard from Lawson. The court reversed summary judgment on each of Scheer’s claims, allowing them to proceed in the lower court.
What does this mean for employees?
This ruling is disappointing for healthcare workers, who will still need to clear a higher bar in proving their claims of retaliation under the Health & Safety Code provision.
Would-be whistleblowers who work in healthcare facilities should ensure they’re closely documenting what they are experiencing in the workplace, particularly their employers’ actions before and after whistleblowing activity takes place.
In Scheer’s case, even though the court found that the employer-friendly standard applied on his Health & Safety Code law claim, he was able to proceed with that claim in part because he had evidence of positive reviews from his supervisors and supervisor performance goals which did not refer to any behavioral issues.
What does this mean for employers?
The ruling is a win for health care employers in that it will give them the opportunity to present legitimate, non-retaliatory reasons for employee disciplinary actions, then again shift the burden to plaintiffs to show evidence that their decisions were pretextual.
Still, when it comes to Labor Code 1102.5 and California Whistleblower Protection Act matters, we recommend employers remain vigilant and clearly document their handling of adverse employment actions like firings involving whistleblowers.
Employers especially need to be ready to argue in court that any actions taken against whistleblowers were not due to the worker's whistleblowing activity.
If you are experiencing an employment dispute, contact the skilled attorneys at Berman North. We can help you understand your rights and options under the law. Through our personalized, client-focused representation, we will help find the best solution for you.