Judge: Christopher K. Lui, Case: 23STCV28223, Date: 2024-11-06 Tentative Ruling
Case Number: 23STCV28223 Hearing Date: November 6, 2024 Dept: 76
Plaintiff alleges that he was terminated for complaining about and refusing to participate in his employer’s fraudulent scheme of submitting inflated invoices to insurance companies.
Defendants Carl Tetiva, Craig Tom, and Frank Murphy demur to the First Amended Complaint.
TENTATIVE RULING
Defendants Carl Tetiva, Craig Tom, and Frank Murphy’s demurrer to the first cause of action is SUSTAINED without leave to amend as to Defendants Carl Tetiva, Craig Tom, and Frank Murphy.
ANALYSIS
Demurrer
Meet and Confer
The Declaration of Drew M. Tate reflects that Defendants’ counsel satisfied the meet and confer requirement set forth in Civ. Proc. Code, § 430.41.
Discussion
Defendants Carl Tetiva, Craig Tom, and Frank Murphy demur to the Complaint as follows:
1. First Cause of Action (Violation of Labor Code § 1102.5).
Defendants argue that Plaintiff’s retaliation claim fails because individual Defendants cannot be held liable under Labor Code § 1102.5. Neither party cites state cases which decide the issue. Defendant cites only federal cases holding that individuals cannot be held liable under Labor Code, § 1102.5.
Based upon statutory construction, the Court finds that the Legislature intended that, although an employer can be held liable for acts performed by “any person acting on behalf of the employer,” (Lab. Code, § 1102.5(a) – (c)), an employee can only recover damages from an “employer,” but not the “person acting on behalf of the employer.” (See Lab. Code § 1105 [bold emphasis added].)
The first cause
of action alleges a violation of Labor Code, § 1102.5(a) – (c), which provides:
(a) An employer, or any person acting
on behalf of the employer, shall not make, adopt, or enforce any rule, regulation,
or policy preventing an employee from disclosing information to a government or
law enforcement agency, to a person with authority over the employee, or to another
employee who has authority to investigate, discover, or correct the violation or
noncompliance, or from providing information to, or testifying before, any public
body conducting an investigation, hearing, or inquiry, if the employee has reasonable
cause to believe that the information discloses a violation of state or federal
statute, or a violation of or noncompliance with a local, state, or federal rule
or regulation, regardless of whether disclosing the information is part of the employee’s
job duties.
(b) An employer, or any person acting
on behalf of the employer, shall not retaliate against an employee for disclosing
information, or because the employer believes that the employee disclosed or may
disclose information, to a government or law enforcement agency, to a person with
authority over the employee or another employee who has the authority to investigate,
discover, or correct the violation or noncompliance, or for providing information
to, or testifying before, any public body conducting an investigation, hearing,
or inquiry, if the employee has reasonable cause to believe that the information
discloses a violation of state or federal statute, or a violation of or noncompliance
with a local, state, or federal rule or regulation, regardless of whether disclosing
the information is part of the employee’s job duties.
(c) An employer, or any person acting
on behalf of the employer, shall not retaliate against an employee for refusing
to participate in an activity that would result in a violation of state or federal
statute, or a violation of or noncompliance with a local, state, or federal rule
or regulation.
(Lab. Code § 1102.5(a) – (c)[bold emphasis
added].)
“In all prosecutions under this chapter, the employer is responsible for the acts of his managers, officers, agents, and employees.” (Lab. Code § 1104 [bold emphasis added].)
“Nothing in this chapter shall prevent the injured employee from recovering damages from his employer for injury suffered through a violation of this chapter.” (Lab. Code § 1105 [bold emphasis added].)
It is clear that the Legislature knew when it needed to refer to “any person acting on behalf of the employer “(Lab. Code, § 1102.5) and its reference to only an “employer” in Lab. Code, § 1105 suggests that the Legislature intended that an injured employee only be able to recover damages from an “employer,” but not “any person acting on behalf of the employer.” The Legislature knows how to say what it intends within the context of the statute. (See Bartold v. Glendale Federal Bank (2000) 81 Cal.App.4th 816, 832.)
“‘“When we interpret a statute, ‘[o]ur fundamental
task … is to determine the Legislature’s intent so as to effectuate the law’s purpose.
We first examine the statutory language, giving it a plain and commonsense meaning.
We do not examine that language in isolation, but in the context of the statutory
framework as a whole in order to determine its scope and purpose and to harmonize
the various parts of the enactment. If the language is clear, courts must
generally follow its plain meaning unless a literal interpretation would result
in absurd consequences the Legislature did not intend. If the statutory language
permits more than one reasonable interpretation, courts may consider other aids,
such as the statute’s purpose, legislative [*539] history, and public policy.’ [Citation.] ‘Furthermore,
we consider portions of a statute in the context of the entire statute and the
statutory scheme of which it is a part, giving significance to every word, phrase,
sentence, and part of an act in pursuance of the legislative purpose.’”‘” (Meza
v. Portfolio Recovery Associates, LLC (2019) 6 Cal.5th 844, 856–857 [243 Cal.
Rptr. 3d 569, 434 P.3d 564] (Meza).)
(In re N.R. (2023) 15 Cal.5th 520, 538-39 [bold emphasis added].)
Given the foregoing, the Court concludes that the Legislature did not intend to hold individuals, i.e., persons acting on behalf of the employer, liable in a civil action for damages brought by an employee.
As such, the
demurrer to the first cause of action is SUSTAINED without leave to amend
as to Defendants Carl Tetiva, Craig Tom, and Frank Murphy.