Lawson v. PPG Architectural Finishes, Inc., 12 Cal. 5th 703 (2022)

Plaintiff Wallen Lawson, who was discharged by his employer PPG Architectural Finishes for allegedly poor performance, brought a whistleblower claim against PPG; Lawson claimed he was terminated because he had uncovered and reported a supervisor’s scheme to “mis-tint” unpopular paint colors in order to avoid buyback requirements. A federal district court, applying the familiar three-step framework of McDonnell Douglas v. Green, concluded Lawson did not meet his burden of proving 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.

After considering the legislature’s intent behind and the legislative history of Cal. Labor Code § 1102.6, the plain text of the statute, as well as 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, which is expressly set forth in Section 1102.6, enables whistleblowers to meet their burden by showing their whistleblowing activity was just one factor that contributed to the adverse action, even when there is evidence of other, legitimate factors for the employer’s decision. Moreover, the heightened burden of proof on the employer (“clear and convincing evidence”) 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. The Supreme Court concluded, “To the extent PPG is concerned that the existing framework sets the plaintiff’s bar too low by requiring only a showing that retaliation was a contributing factor in an adverse decision, PPG’s remedy lies with the Legislature that selected this standard, not with this court.”