Wednesday, April 9, 2003
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Whistleblower Must Exhaust Grievance Procedures Before Suing, Court of Appeal Rules
By a MetNews Staff Writer
A common-law wrongful termination suit may be dismissed if the employee has not exhausted the employer’s internal grievance procedures, this district’s Court of Appeal ruled yesterday.
The court, in a ruling by a divided panel in Div. Seven, affirmed Los Angeles Superior Court Judge Helen Bendix’s order granting summary judgment to the University of California in a suit by former UCLA employee Patricia Palmer. Palmer, a clinical laboratory technologist at the UCLA Medical Center for 21 years, was laid off in 1997.
She claims that she was terminated for reporting to university officials that the lab was not complying with state regulations regarding review of results and accuracy of data.
Initially, her case was dismissed on the ground that she was limited to a statutory whistleblower action under Labor Code Sec. 1102.5(b), prohibiting retaliation against an employee for reporting a violation of law to a government agency, and could not make out a claim because she had only reported the matters internally.
The Court of Appeal reversed two years ago, in an unpublished opinion, saying she had stated a common law wrongful termination claim under Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167.
But the university successfully moved for summary judgment a second time, asserting that she failed to follow either of two comprehensive grievance procedures—one being the systemwide UC complaint resolution policy, the other being a specific “whistleblower” policy adopted by UCLA.
Presiding Justice Dennis Perluss, writing for the appellate court yesterday, said the trial judge was correct. He cited Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, in which the Supreme Court held a physician’s failure to pursue a hospital’s internal grievance process barred his civil suit for damages based on the hospital’s purportedly improper denial of staff privileges.
He distinguished California Supreme Court decisions such as
Rojo v. Kliger (1990) 52 Cal.3d 65 and Stevenson v. Superior Court (1997) 16 Cal.4th 880, which allowed plaintiffs to bring common-law wrongful termination suits even though their failure to pursue administrative remedies barred the bringing of Fair Employment and Housing Act suits.
The distinction, Perluss explained, is that Westlake deals with internal administrative procedures, while the other cases deal with external procedures created by state law.
“[V]ery different policy considerations support the requirement that an employee pursue to completion internal grievance procedures before initiating a lawsuit concerning an adverse employment decision — principally, the desire to provide an opportunity for the employer (not an outside administrative agency) to quickly and efficiently redress a grievance and thereby minimize or even eliminate injury to the plaintiff,” Perluss, joined by Justice Fred Woods, wrote.
Perluss also noted that the California Whistleblower Protection Act, which creates new remedies for employees—specifically including those of the UC—who have been subjected to retaliation for disclosing improper acts, has a mandatory exhaustion of remedies requirement.
The jurist acknowledged that strictly applying that requirement to the plaintiff would run contrary to the law-of-the-case doctrine. “Nonetheless, the Legislature’s decision to require University employees to exhaust internal grievance procedures as a prerequisite to filing a whistle blower suit pursuant to [the act] reinforces our conclusion that Westlake applies to the case at bar and that the trial court properly granted the Regents’s motion for summary judgment based on Palmer’s failure to utilize the internal grievance procedures available to her.”
Justice Earl Johnson Jr. dissented, arguing that Westlake does not apply because it is not an employment case.
He wrote:
“The issue before us is whether the plaintiff in a common law action for wrongful discharge in violation of public policy should be judicially required to resort to her employer’s internal grievance procedure when no statute, contractual provision, or pertinent public policy requires her to do so. I would decline to impose such a requirement under the facts and circumstances of this case and would therefore reverse the judgment for defendants.”
Attorneys on appeals were Herbert Abrams and Lauren Mayo-Abrams for the plaintiff and Plaintiff James C. Romo and Sukhi K. Sandhu of Atkinson, Andelson, Loya, Ruud & Romo, for the university.
The case is Palmer v. Regents of the University of California, B154868.
Copyright 2003, Metropolitan News Company