Judge Jill Feeney, Case Number: 24STCV08639, Date: 2024-06-04 Tentative Ruling

This is an action for whistleblower retaliation and wrongful termination. Plaintiff Lorena Calderon alleges that between March 2023 and October 2023, she worked as a House Care Clinic Manager. (Compl., ¶7.) Plaintiff was terminated after she made complaints regarding medical compliance, patient care, vaccination protocols, expired vaccines, medical referral issues, missed patient appointments, and management illegalities. (Id.)

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Proc., §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 (internal citations omitted).)

A party filing a demurrer “shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., section 430.41(a).) “The parties shall meet and confer at least five days before the date the responsive pleading is due. If the parties are not able to meet and confer at least five days prior to the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer.” (Code Civ. Proc., section 430.41(a)(2).) A failure to meet and confer does not constitute grounds to sustain or overrule a demurrer. (See Code Civ. Proc., sections 430.41 (a)(4).)

The essential elements of a Labor Code, section 1102.5 retaliation claim are that (1) the plaintiff engaged in a protected activity, (2) the employer subjected the plaintiff to adverse employment action, and (3) there is a causal link between the protected activity and the adverse employment action.(Patten v. Grant Joint Union High School District (2005) 134 Cal.App.4th 1378, 1384.) A protected activity is the disclosure of or opposition to a violation of a state or federal statute by the employer and the employee must have reasonable cause to believe the activity violates the law. (Edgerly v. City of Oakland (2012) 211 Cal.App.4th 1191, 1199; Mokler v. County of Orange (2007) 157 Cal.App.4th 121, 139-40.) The employee must disclose the alleged violations 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. (Labor Code, section 1102.5(a).)

Here, the Complaint states Plaintiff “was wrongfully terminated due to Plaintiff’s complaints regarding medical compliance, patient care, vaccination protocols including use of expired vaccines, medical referral issues, patient missed appointments and overall complaints of management illegalities.” (Compl., ¶7.) Plaintiff made these complaints to her Director. (Id., ¶13.) After Plaintiff made the complaints, Defendant prevented Plaintiff from disclosing the work conditions and terminated her for making the complaints. (Compl., ¶¶13, 16.)

The Complaint sufficiently states a cause of action for retaliation under Lab. Code, section 1102.5. Plaintiff alleges she complained about various management illegalities, including the use of expired vaccines, issues with medical referrals, and other activities. It is reasonable to infer that Plaintiff reasonably believed the activity violated the law because she describes the activity as illegal.

Finally, the Complaint alleges Defendant terminated her for making the complaints. At the pleading stage, the ultimate fact that Defendant terminated Plaintiff in retaliation for her complaints is sufficient to show a causal connection between the protected conduct and Plaintiff’s termination.

“The elements of a claim for wrongful discharge in violation of public policy are (1) an employer-employee relationship, (2) the employer terminated the plaintiff’s employment, (3) the termination was substantially motivated by a violation of public policy, and (4) the discharge caused the plaintiff harm.” (Yau v. Allen (2014) 229 Cal.App.4th 144, 154.)

“Labor Code section 1102.5, subdivision (b), which prohibits employer retaliation against an employee who reports a reasonably suspected violation of the law to a government or law enforcement agency, reflects the broad public policy interest in encouraging workplace ‘whistleblowers,’ who may without fear of retaliation report concerns regarding an employer’s illegal conduct. This public policy is the modern day equivalent of the long-established duty of the citizenry to bring to public attention the doings of a lawbreaker.” (Ferrick v. Santa Clara University (2014) 231 Cal.App.4th 1337, 1355.)

“To establish a claim for wrongful termination in violation of public policy, an employee must prove causation. (See CACI 2430 [using phrase ‘substantial motivating reason’ to express causation].) Claims of whistleblower harassment and retaliatory termination may not succeed where a plaintiff ‘cannot demonstrate the required nexus between his reporting of alleged statutory violations and his allegedly adverse treatment by [the employer].’” (Id.)

Here, as discussed above, the Complaint adequately states a cause of action for retaliation under Lab. Code, section 1102.5 in part because it states Defendant terminated Plaintiff because she made complaints about illegal activity to her Director. Because section 1102.5 reflects a broad public policy interest in encouraging whistleblowers to report illegal activity without fear of retaliation, the Complaint sufficiently states that a violation of public policy was substantially motivated by Plaintiff’s complaints. Because the Complaint adequately states facts to support each element of a cause of action for wrongful termination, the demurrer is overruled as to this cause of action.

Defendant moves to strike the following portions of the Complaint on the grounds that the demands for punitive damages and related language are inappropriate and improper. Specifically, Defendant argues that the Complaint fails to allege that Defendant engaged in malicious or oppressive conduct.

2. Page 4, Paragraph 16: “Defendants, including their executives, managers, superiors, and/or supervisors, have acted, as alleged, with the malicious intention of depriving the Plaintiff of employment opportunities and benefits that must be accorded to all employees. This conduct by Defendants was, and is, despicable, cruel, and oppressive. Plaintiff is therefore entitled to an award of punitive damages in an amount proven at trial.”

3. Page 6, Paragraph 26: “Defendants have acted, as alleged, with the malicious intention of depriving the Plaintiff of employment opportunities and benefits that must be accorded to all employees. This conduct by Defendants was, and is, despicable, cruel, and oppressive. Plaintiff is therefore entitled to an award of punitive damages in an amount proven at trial.”

In order to state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in the general punitive damage statute, Civil Code section 3294. (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) These statutory elements include allegations that the defendant has been guilty of oppression, fraud or malice. (Civ. Code, section 3294, subd. (a).)

“Malice is defined in the statute as conduct intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (College Hospital, Inc., supra, 8 Cal.4th at p. 725 [examining Civ. Code § 3294, subd. (c)(1)].) “A conscious disregard of the safety of others may constitute malice within the meaning of section 3294 of the Civil Code. In order to justify an award of punitive damages on this basis, the plaintiff must establish that the defendant was aware of the probable dangerous consequences of his conduct, and that he willfully and deliberately failed to avoid those consequences.” (Taylor v. Superior Court (1979) 24 Cal.3d 890, 895-896.)

“As amended to include [despicable], the statute plainly indicates that absent an intent to injure the plaintiff, ‘malice’ requires more than a ‘willful and conscious’ disregard of the plaintiffs’ interests. The additional component of ‘despicable conduct’ must be found.” (College Hospital, Inc., supra, 8 Cal.4th at p. 725.) The statute’s reference to despicable conduct represents a “new substantive limitation on punitive damage awards.” (Ibid.) Despicable conduct is “conduct which is so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people. Such conduct has been described as ‘having the character of outrage frequently associated with crime.’” (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1287.)

“[T]he imposition of punitive damages upon a corporation is based upon its own fault. It is not imposed vicariously by virtue of the fault of others.” (City Products Corp. v. Globe Indemnity Co. (1979) 88 Cal.App.3d 31, 36.) “Corporations are legal entities which do not have minds capable of recklessness, wickedness, or intent to injure or deceive. An award of punitive damages against a corporation therefore must rest on the malice of the corporation’s employees. But the law does not impute every employee’s malice to the corporation. Instead, the punitive damages statute requires proof of malice among corporate leaders: the ‘officer[s], director[s], or managing agent[s].’” (Cruz v. Home Base (2000) 83 Cal.App.4th 160, 167 [citation omitted].) As to ratification, “[a] corporation cannot confirm and accept that which it does not actually know about.’” (Ibid. [citing College Hospital, Inc., supra, 8 Cal.4th at p. 726 [for ratification sufficient to justify punitive damages against corporation, there must be proof that officers, directors, or managing agents had actual knowledge of the malicious conduct and its outrageous character]].)

Here, as discussed above, the Complaint states Plaintiff was terminated after she made complaints about alleged illegal activity concerning the use of expired vaccines, issues with medical referrals, and other activities. Although the conduct described demonstrates a conscious disregard for Plaintiff’s rights, this conduct alone does not rise to the level despicable conduct sufficient to support a demand for punitive damages. Although Plaintiff also alleges she suffered embarrassment and derision from family, friends, and coworkers as a result of her termination, the Complaint does not allege Defendant participated in the derision. Therefore, the Complaint fails to state facts which show Defendant engaged in despicable conduct.

Although Plaintiff argues the facts alleged in the Complaint are sufficient because Defendant failed to act on Plaintiff’s Complaint except to terminate her, this conduct shows Plaintiff was at most terminated. This conduct without more is not sufficient to show Defendant engaged in despicable conduct.

The Complaint also fails to name an officer, director, or managing agent or that any of those individuals ratified the alleged malicious conduct. Although the Complaint states Plaintiff made complaints to her Director, the Complaint fails to name the Director or allege the Director ratified any malicious conduct. Therefore, the Complaint fails to allege facts sufficient to support a demand for punitive damages from a corporate defendant.