In Lawson v. PPG Architectural Finishes, Inc., an opinion issued on January 27, 2022, the California Supreme Court resolved a split in the lower courts regarding the proper evidentiary standard necessary to prove a whistleblower retaliation claim.

Lawson v. PPG Architectural Finishes, Inc., arose from the discharge of Plaintiff Wallen Lawson by his employer PPG Architectural Finishes for alleged poor performance. In response to his discharge Lawson brought a whistleblower claim against PPG in which he asserted he had uncovered and reported a supervisor’s scheme to “mis-tint” unpopular paint colors in order to avoid buyback requirements. The federal district court applied the three-step framework the United States Supreme Court had established in McDonnell Douglas v. Green and concluded Lawson did not meet his burden of demonstrating that PPG’s legitimate, non-retaliatory reason for discharging him was pretextual. Lawson appealed to the Ninth Circuit, which certified to the California Supreme Court the question of what evidentiary standard applies to whistleblower claims under California law.

California appellate courts have not uniformly applied the same evidentiary standard to whistleblower retaliation claims. Some courts applied the three-part burden-shifting framework established by the U.S. Supreme Court in McDonnell Douglas v. Green, where (1) the employee first must establish a prima facie case of retaliation; (2) the employer then has the burden to show a legitimate reason for the adverse employment action; and (3) the burden then shifts back to the employee to show the reason given by the employer is pretextual.

However, other California courts have applied the “contributing-factor standard” under which: (1) an employee must demonstrate by a preponderance of the evidence that the whistleblowing activity was a contributing factor to the adverse action taken by the employer against them; and then (2) the employer has the burden to show by the higher clear and convincing evidence standard that it would have taken that action in any event for legitimate, independent reasons, regardless of the employee’s alleged protected activity.

The California Supreme Court considered the legislature’s intent behind and the legislative history of California Labor Code section 1102.6, the plain text of the statute, and how other courts have addressed and interpreted similar statutes at the federal level. The California Supreme Court rejected the McDonnell Douglas burden-shifting standard in favor of the far-more employee-friendly “contributing-factor” standard.

The “contributing-factor” standard enables whistleblowers to meet their burden by showing their whistleblowing activity was just one factor that contributed to the adverse action, even when there are other, legitimate factors for the employer’s decision.

Additionally, the heightened burden of proof on the employer will likely make it even more difficult for employers to prevail in whistleblower cases both at the summary judgment and trial phases of a case.

Should a whistleblower suit be brought by a terminated employee it is imperative to immediate contact your legal counsel and employer liability insurer as these cases tend to become complicated.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.