Judge Michael Small, Case Number: 23STCV06618, Date: 2023-10-16 Tentative Ruling

Judge: Michael Small, Case: 23STCV06618, Date: 2023-10-16 Tentative Ruling

Inform the clerk if you submit on the tentative ruling. If moving and opposing parties submit, no appearance is necessary.

Case Number: 23STCV06618 Hearing Date: October 16, 2023 Dept: 57

Victor Regla (“Regla”) sued his former employer City of Huntington Park (“the City”) and the City’s director of finance and human resources during his employment with the City, Nita McKay (“McKay”). Regla alleges that the City hired him as an accountant in 2016 and terminated his employment in May 2022. Regla does not allege that McKay was his employer. Regla’s complaint contains two causes of action. The first cause of action asserts a claim against both the City and McKay for retaliation in violation of the whistleblower protections afforded by California Labor Section 1102.5(b). The other cause of action asserts a claim against the City alone for discrimination on the basis of race and ethnicity in violation of California’s Fair Employment and Housing Act (“FEHA”).

Pending before the Court is McKay’s motion for judgment on the pleadings through which she seeks dismissal of the Section 1102.5(b) claim against her (“the Motion”). The basis of McKay’s motion is that Section 1102.5(b) does not impose liability on an individual who works for the plaintiff’s employer but is not himself or herself the employer. The Court agrees with McKay. Therefore, the Court is granting the Motion without leave to amend.

The whistleblower protections of Section 1102.5(b) provide as follows:

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.

(Lab. Code, § 1102.5, subd. (b).)

Prior to January 1, 2014, Section 1102.5 prohibited whistleblower retaliation by “an employer,” and no one else. The provision was amended in 2014 to prohibit retaliation by “[a]n employer, or any person acting on behalf of the employer.” Regla argues that the 2014 amendment imposes individual liability on persons acting on behalf of the plaintiff’s employer. McKay argues that it does not.

There is no California state court precedent on whether the phrase “or a person acting on behalf of an employer” in Section 1102.5(b) imposes individual liability on a person who is not the employer. The California Supreme Court has, however, held that similar language in FEHA does not impose liability on an individual who is not an employer. FEHA’s similar language is contained in that statute’s definition of “employer.” That definition is “any person acting as agent of an employer, directly or indirectly.” (Government Code Section 12926(d)).) In Reno v. Baird (1998) 18 Cal. 4th 640, the Supreme Court held that the FEHA phrase “any person acting as agent of an employer, directly or indirectly,” was not intended to impose liability for employment discrimination on an individual who is not the plaintiff’s employer, but rather, sought to ensure that employer would be liable for discriminatory actions of the plaintiff’s supervisor and prevent the employer from trying to avoid liability by claiming that the supervisor failed to follow the employer’s instructions or policies. (Id. at p. 647.) In the same vein is Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal. 4th 1158. There, the Supreme Court addressed whether FEHA’s “any person acting as agent of an employer, directly or indirectly,” impose liability on individuals for retaliation in violation of FEHA. In line with Reno v. Baird, the answer to that question was no.

Consistent with Reno v. Baird and Jones v. Lodge at Torrey Pines Partnership, many federal district courts exercising diversity jurisdiction have granted motions to dismiss Section 1102.5(b) claims against non-employer individual defendants on the ground that the phrase “[a]n employer, or any person acting on behalf of the employer” in Section 1102.5(b) does not impose individual liability. (E.g., Lopez-Rodriguez v. Kern Medical Surgery Center (E.D. Cal. Dec. 23, 2022) 2022 Westlaw 17904540 at * 14; Mewawalla v. Middleman (N.D. Cal. 2022) 601 F. Supp.3d 574, 608-609; Crone v. Tracy Unified School Dist. (E.D. Cal. Dec. 7, 2020) 2020 Westlaw 7182345 at * 2; CTC Global Corp. v. Huang (C.D. Cal. Mar. 19, 2018) 2018 Westlaw 4849715, at * 4; Bales v. County of El Dorado (E.D. Cal. Sept. 20, 2018) 2018 Westlaw 4558235, at *3.) While these decisions are not binding, this Court is persuaded that their interpretation of Section 1102.5(b) is correct in light of Reno v. Baird and Jones v. Lodge at Torrey Pines Partnerhsip.

The federal cases that Regla’s cites in opposition to the Motion, De La Torre v. Progress Rail Servs. Corp. (C.D. Cal. July 31, 2015) 2015 Westlaw 4607730, at ** 3-5, and Lewis v. Wells Fargo Bank, N.A., (C.D. Cal. Dec. 5, 2016) 2016 Westlaw 7107660, at **2-3, are not to the contrary. Those cases did not involve motions to dismiss Section 1102.5(b) claims on the ground that the statute does not impose individual liability. Rather, they arose in the context of motions for remand of Section 1102.5(b) claims. In particular, the courts had to decide whether to dismiss individual, non-employer defendants whose presence in the case destroyed diversity jurisdiction thus enabling the courts to keep the case instead of remanding. The courts denied the motions to remand, holding that in the absence of controlling California state precedent, they could not conclusively determine that the individual defendants were not subject to liability under Section 1102.5(b). As noted by one of the federal courts that granted a motion to dismiss a Section 1102.5(b) claim against a non-employer defendant, the standard on a motion to remand is not the same on a motion to dismiss. (Mewawalla v. Middleman, supra, 601 F. Supp. 3d at pp. 608-609.)