Judge: Colin Leis, Case: 23STCV04913, Date: 2023-11-17 Tentative Ruling

Case Number: 23STCV04913    Hearing Date: November 17, 2023    Dept: 74

Omar Noorzai v. The Regents of the University of California, et al.

Defendants Deloitte Consulting LLP and Roy Mathew’s Demurrer

The court considered the moving papers, opposition, and reply.

BACKGROUND 

            This action arises from an employment dispute.

            On March 6, 2023, Plaintiff Omar Noorzai filed a complaint against Deloitte Consulting, LLP and Roy Mathew (Deloitte Defendants), in addition to The Regents of the University of California, Lucy Avetisyan, and Michael Beck (UCLA Defendants). The complaint alleges causes of action for violation of California Whistleblower Retaliation Act and retaliation in violation of Labor Code section 1102.5.

            On May 9, 2023, Deloitte Defendants filed this demurrer.

LEGAL STANDARD         

            A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (¿¿Blank v. Kirwan (1985) 39 Cal.3d 311, 318¿¿.) “¿To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.¿” (¿¿C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872¿¿.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (¿Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967¿.) A demurrer “¿does not admit contentions, deductions or conclusions of fact or law.¿” (¿¿Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713¿¿.)

DISCUSSION 

First Cause of Action – Violation of California Whistleblower Act (Gov. Code, § 8547 et seq.)

            Deloitte Defendants argue the court should sustain their demurrer for this cause of action because they were not Plaintiff’s employer during the relevant timeframe. Rather, only UCLA Defendants employed Plaintiff.  Under Government Code section 8547.10, subdivision (c), though, “[A]ny person who intentionally engages in acts of reprisal, retaliation, threats, coercion, or similar acts against a university employee . . . for having made a protected disclosure shall be liable in an action for damages brought against him or her by the injured party.” A plain reading indicates that this statute applies to any person who engages in retaliatory acts, not just the employer. If the legislature had intended to limit the reach of this statute to employers, it would have expressly done so, as in Labor Code section 1102.5. Additionally, the court is not persuaded that Government Code section 8547.2, subdivision (d), limits the definition of “person” in the way Deloitte urges. Moreover, Plaintiff alleges that Deloitte Defendants recommended to UCLA Defendants that Plaintiff’s department be eliminated. (Complaint, ¶ 34). Plaintiff further alleges that Deloitte Defendants made this recommendation because Plaintiff reported improper activity by all Defendants. (Complaint, ¶¶ 32, 34.) The trier of fact could construe the recommendation as a reprisal for the purposes of Government Code section 8547.10, subdivision (c). Thus, the court overrules Deloitte Defendants’ demurer for this cause of action.

Second Cause of Action – Whistleblower Retaliation (Labor Code, § 1102.5, subd (b).)

            Likewise, Deloitte Defendants argue the court should sustain their demurrer for this cause of action because they were never Plaintiff’s employer. Under Labor Code section 1102.5, subdivision (b), “An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing 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 . . .” Plaintiff in turn contends Deloitte Defendants count as persons acting on behalf of UCLA Defendants. But the statute’s legislative history suggests that persons acting on behalf of the employer would be employees in this context. (S.B. 666, 2013 Cal. Legis. Serv. Ch. 577 (2013).) Plaintiff also invokes Raines v. U.S. Healthworks Medical Group (2023) 15 Cal.5th 268, 273 (Raines) for the proposition that an employer’s business entity agents can be held directly liable under the Fair Employment and Housing Act (FEHA) for employment discrimination in certain circumstances. But the holding in Raines does not apply to violations of Labor Code section 1102.5.

            In addition, Plaintiff argues Deloitte Defendants could be liable under the theory of aiding and abetting. “Liability may . . . be imposed on one who aids and abets the commission of an intentional tort if the person . . . knows the other’s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act . . .” (Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 846.) To that end, Plaintiff refers the court to paragraph 11 of the complaint. There, Plaintiff alleges Deloitte Defendants knew UCLA Defendants were engaging in conduct that constituted a breach of duty to Plaintiff. (Complaint, ¶ 11.) Plaintiff also alleges Deloitte Defendants substantially assisted and encouraged UCLA Defendants to so act. (Complaint, ¶ 11.) While these allegations may be general, less specificity is required in pleading matters of which the Defendants have superior knowledge. (Foster v. Sexton (2021) 61 Cal.App.5ht 998, 1028.) Here, Deloitte Defendants are in a better position to know the extent to which they assisted or encouraged UCLA Defendants to retaliate against Plaintiff. Thus, Plaintiff has alleged facts sufficient to support a cause of action under Code of Civil Procedure, section 1102.5 via the theory of aiding and abetting. The court overrules Deloitte Defendants’ demurrer for this cause of action.

CONCLUSION 

            Based on the foregoing, the court overrules the demurrer.

            Deloitte Defendants shall file and serve their answer within 20 days.

Deloitte Defendants shall give notice.