Court first step for whistle-blower claim?

Does an employee who reports unsafe working conditions have to file a Labor Commissioner complaint before filing a court case for whistle-blower retaliation?

The Second District Court of Appeal recently decided whether an employee had to file a Labor Commissioner complaint before filing a whistle-blower claim in court. In Sheridan v. Touchstone Television Productions, LLC (Cal. App. 2d Dist. Oct. 20, 2015) 2015 Cal. App. LEXIS 920, Touchstone hired Ms. Sheridan in 2004 to play a character on Desperate Housewives. During a 2008 rehearsal, Ms. Sheridan alleges that she attempted to question the show’s creator about the script, and he hit her in response. Ms. Sheridan reported the alleged battery to Touchstone. After Touchstone did not renew her contract for the 2009 season, Ms. Sheridan sued her employer for wrongful termination in violation of public policy.

The trial court dismissed this claim but permitted Ms. Sheridan to allege a whistle-blower claim based on a report of unsafe working conditions (Labor Code section 6310). The court rejected Touchstone’s request to dismiss the new claim on grounds Ms. Sheridan did not file a Labor Commissioner complaint before coming to court (“exhaustion of administrative remedies”). Touchstone sought review of that decision with the court of appeal. While that review was pending, the Third District Court of Appeal decided that a Labor Commissioner complaint was required before filing a Labor Code section 6310 claim in court. But that decision was later de-published.

Then, in October 2013, the California Legislature amended the Labor Code to specifically state that no exhaustion of administrative remedies, i.e., a Labor Commissioner complaint, is required before filing a section 6310 claim.

After several decisions by the trial and appellate courts on what to do with Ms. Sheridan’s case, the matter came back to the court of appeal. The question was whether Ms. Sheridan was required to exhaust her administrative remedies before filing suit under section 6310.

The court of appeal began with a review of applicable portions of the Labor Code. Section 6312 states that an employee who believes that she suffered retaliated for reporting unsafe working conditions to her employer may file a complaint with the Labor Commissioner consistent with another section of the Labor Code. That other section (98.7) provides that any employee who believes her rights under the jurisdiction of the Labor Commissioner have been violated may file a complaint within six months of the violation. It also states that an employee may also pursue remedies under any other law.

Based on this language, the appellate court determined that the Labor Code (before the amendments that became effective January 1, 2014) did not require exhaustion of administrative remedies. The court relied on the Legislature’s use of the term “may” instead of “shall.” Because exhaustion was not required before the amendments, those amendments clarified, rather than changed, the law.

The court of appeal rejected Touchstone’s assertion that two prior California Supreme Court decisions had rendered the question of administrative exhaustion unsettled prior to the 2013 amendments. Both of those cases (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280 and Campbell v. Regents of University of California (2005) 35 Cal.4th 311) merely addressed the general requirement of exhaustion under laws that specifically require it and did not concern sections 98.7 and 6310.

With this decision, the Second District Court of Appeal has joined the First District Court of Appeal (Satyadi v. West Contra Costa Healthcare Dist. (2014) 232 Cal.App.4th 1022) for the proposition that employees can go straight to court with whistle-blower claims under the Labor Code, even if the retaliation occurred prior to 2014. The Third District Court of Appeal takes a contrary position.

Posted by deanroyerlaw