Whistleblower Suit May Be Based on Information Already Known

Thursday, August 7, 2014

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Court of Appeal Holds:

Whistleblower Suit May Be Based on Information Already Known

Opinion by Aldrich Rejects County’s Proposed Rule That Only Provider of ‘First Report’ of Misconduct Be Protected

By a MetNews Staff Writer

A discharged employee is not foreclosed from maintaining a whistleblower retaliation action on the ground that the information he or she provided, believing it to be of value, had already been reported by somebody else, the Court of Appeal for this district has held.

The unpublished opinion by Justice Richard Aldrich of Div. Three, partially affirms a judgment in favor of Darren Hager, fired from his post as a Los Angeles deputy sheriff in 2003. It reverses to the extent of slashing $2 million from his $4.5 million jury award, obtained in the courtroom of Los Angeles Superior Court Judge Victor Chavez.

The shorn damages were for back pay and lost future earnings. Hager had applied for a disability retirement which was granted prior to his termination, Aldrich pointed out, reasoning that he would not have garnered the pay even if he had not been dismissed.

Hager, who had been working with the federal Drug Enforcement Agency in seeking to uncover major methamphetamine operations in the Antelope Valley, supplied information to his department linking Deputy Sheriff Richard Engels to those operations. He passed on disclosures to him that Deputy Sheriff Jonathan Aujay, who had disappeared in 1998, had been slain by operators of a meth lab which Aujay had stumbled upon.

Hager was fired based on conducting an unauthorized investigation into those matters and for misreporting the content of some related FBI wiretaps. He contended in his whistleblower suit, pursuant to Labor Code section 1102.5(b), that those reasons were pretextual.

Status as Whistleblower

The county contended on appeal that Hager did not qualify as a whistleblower because the Sheriff’s Department already knew, from reports by others, of Engel’s alleged ties to a drug operation and the possible slaying of Aujay.

The county relied on the First District’s 2012 opinion in Mize-Kurzman v. Marin Community College District, 202 Cal.App.4th 832. There, the court held, in a whistleblower case, that “[t]he court did not err in instructing that reporting publicly known facts is not a disclosure protected by the California whistleblower statutes at issue here.”

The opinion also stated, more broadly, that “information that was already known did not constitute a protected disclosure,” without specifying that the information have been publicly known.

Aldrich responded:

“The County reads Mize-Kurzman…as limiting the protections of section 1102.5(b) to the first employee who discloses a violation of state or federal law that had not been previously disclosed by another employee. No such ‘first report’ limitation was discussed in Mize-Kurzman, appears in section 1102.5(b), or is addressed in the federal and state cases cited and relied on by the Mize-Kurzman court.”

The jurist commented:

“We also view the ‘first report’ rule the County proposes as contrary to the legislative intent in enacting section 1102.5(b). Protection only to the first employee to disclose unlawful acts would defeat the legislative purpose of protecting workplace whistleblowers, as employees would not come forward to report unlawful conduct for fear that someone else already had done so. The ‘first report’ rule would discourage whistleblowing. Thus, the County’s interpretation is a disincentive to report unlawful conduct. We see no such reason to interpret the statute in a manner that would contradict the purpose of the statute.”

Excluded Evidence

The county also argued that Chavez erroneously relied on the Public Safety Officers Procedural Bill of Rights Act, contained in Government Code § 3300 et seq., to exclude earlier instances of misconduct, such as Hager assaulting his girlfriend and an incident at a motel.

POBRA requires notification of charges in connection with internal investigations and administrative hearings. At trial, the county sought, unsuccessfully, to introduce bases for the decision to terminate Hager’s employment not disclosed in the notice of present charges.

It asserted on appeal that POBRA has no applicability to civil actions, and that where it is incumbent upon the employer to show nonretaliatory bases for a firing it should not be barred from pointing to earlier misconduct.

Aldrich declared that the record demonstrates that Chavez excluded the evidence “on relevancy grounds, and not based upon a POBRA violation.”

He explained:

“The trial court’s evidentiary ruling did not preclude the County from offering into evidence non-retaliatory reasons for terminating Hager based upon the charged policy violations, only evidence of undisclosed reasons that, on balance, had no probative value.”

Opinion on Rehearing

An opinion in the case was initially filed April 11, also unpublished. Both sides sought a rehearing, which was granted.

The county argued that there was no showing in the record that Chavez acted in obedience to Evidence Code §352 by weighing the probative value of the proffered evidence against the prejudicial effect. Aldrich replied, in Tuesday’s opinion:

“Although our original opinion did not fully discuss the trial court’s obligation to weigh the probative value of this evidence against the prejudicial effect, the record contains affirmative indications the trial court fully understood and executed its duty before exercising its discretion. The trial court determined this evidence was not relevant because it was not the basis for the charged policy violations that resulted in Hager’s termination, and by so finding, the admission of this evidence would have been prejudicial, collateral, and an undue consumption of time. The record establishes that the court considered the matter and took time to exercise its discretion. We do not interpret case law as requiring anything more. Under the circumstances of this case, the trial court did not abuse its discretion.”

Future Earnings

In seeking a rehearing, Hager protested that attention was not adequately lent the diminution of his future earning power in light of the “blot on his resume.” Of the $2,006,015 which the jury assessed in economic damages, $1,199,974 had been for future loss of income.

Aldrich cited non-California authority for the proposition that a plaintiff, to obtain damages based on a lost earning capacity, must put forth “competent evidence suggesting that his injuries have narrowed the range of economic opportunities available to him.”

He wrote:

“The evidence does not support the award of damages for loss of future earning capacity. The economist’s calculations, which Hager relies on, were based upon what he would have earned as a deputy sheriff, a job he can longer perform.”

The case is Hager v. County of Los Angeles, B238277.

Richard A. Love and Beth A. Shenfeld of the West Los Angeles law firm of Love & Erskine represented Hager. Thomas C. Hurrell and Melinda Cantrall of the downtown Los Angeles law firm of Hurrell Cantrall acted for the county.