Scheer v. Regents of the Univ. of Cal.

76 Cal.App.5th 904

291 Cal.Rptr.3d 822

Arnold SCHEER, Plaintiff and Appellant,

v.The REGENTS OF THE UNIVERSITY OF CALIFORNIA et al., Defendants and Respondents.

B303379

Court of Appeal, Second District, Division 3, California.

Filed March 28, 2022

Greene Broillet & Wheeler, Mark T. Quigley, Christian T.F. Nickerson, El Segundo; Esner, Chang & Boyer, Stuart B. Esner, Los Angeles, and Kevin K. Nguyen for Plaintiff and Appellant.

Horvitz & Levy, Bradley S. Pauley, Burbank, Scott P. Dixler, Eric S. Boorstin, Burbank; Munger, Tolles & Olson, Bryan H. Heckenlively, San Francisco, John B. Major and Samuel H. Allen, Los Angeles, for Defendants and Respondents The Regents of the University of California and Jonathan Braun.

Fisher & Phillips, Karl R. Lindegren and Lizbeth Ochoa, Irvine, for Defendant and Respondent Scott Binder.

LIPNER, J.^*

In this case alleging whistleblower retaliation, plaintiff and appellant Arnold Scheer, M.D., M.P.H., appeals a judgment entered pursuant to the grant of a motion for summary judgment in favor of defendants and respondents The Regents of the University of California (Regents), Jonathan Braun, M.D., Ph.D., and Scott Binder, M.D., (collectively, Defendants).

Scheer brought his whistleblower claims in three causes of action, alleging violations of three statutes: Labor Code section 1102.5, Government Code section 8547 et seq., and Health and Safety Code section 1278.5. In Lawson v. PPG Architectural Finishes, Inc . (2022) 12 Cal.5th 703, 289 Cal.Rptr.3d 572, 503 P.3d 659 ( Lawson ), the California Supreme Court clarified the legal framework that applies to claims under Labor Code Section 1102.5, such as Scheer's claim in this case. While Lawson did not discuss Government Code section 8547.10, that statute contains nearly identical language to the language analyzed by our Supreme Court. We therefore conclude that Lawson ’s legal framework applies to Scheer's Government Code claim as well. Because Defendants, in seeking summary adjudication of Scheer's Labor and Government Code claims, relied on a legal standard inconsistent with Lawson , we reverse and remand as to those claims.

Lawson did not change the legal framework for Scheer's third claim under Health and Safety Code section 1278.5. As to that claim, we conclude that a triable issue of material fact exists as to whether the stated reasons for termination were pretextual. Therefore, the judgment is reversed, and the matter is remanded for further proceedings consistent with this opinion.

FACTUAL AND PROCEDURAL BACKGROUND

A. Pleadings

On April 26, 2017, Scheer filed this action against his former employer, the Regents, and two of his former supervisors, Braun and Binder, alleging he was wrongfully terminated from his position as Chief Administrative Officer (CAO) of the UCLA Department of Pathology and Laboratory Medicine (Department) in retaliation for whistleblowing.

The operative first amended complaint pleaded the following causes of action: (1) violation of Health and Safety Code section 1278.5 (first cause of action), against the Regents; (2) violation of Labor Code section 1102.5 (second cause of action), against the Regents; and (3) violation of Government Code section 8547 et seq., the California Whistleblower Protection Act (third cause of action), against the Regents, Braun, and Binder.

Scheer alleges that "he identified and became aware of numerous issues, violations, and concerns related to patient safety, mismanagement, economic waste, fraudulent and/or illegal conduct, unsafe and/or substandard conditions, and incompetence at the facilities of the UC REGENTS, including, but not limited to, recurrent lost patient specimen issues, mislabeling and mix-up of patient samples resulting in misdiagnosis, lost specimens used in NIH funded research, and failure and/or refusal to follow required procedures to investigate, analyze, and formulate action plans to correct patient safety issues." Scheer pleaded that as a result of his attempts to properly report and correct the violative conduct, he was terminated on June 2, 2016 from his position in the Department, where he had worked since 2004 and had served as CAO since 2009.

B. The motions for summary judgment

The Regents and Braun jointly filed a motion for summary judgment or summary adjudication of issues. They argued that as to all three causes of action, Scheer was terminated for legitimate, nonretaliatory reasons, as set forth in their June 2, 2016 notice of intent to terminate (NOIT), and that Scheer could not meet his burden of demonstrating those reasons were pretextual, as required by McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 ( McDonnell Douglas ).

Under the three-part burden-shifting framework laid out in McDonnell Douglas , the employee must first establish a prima facie case of unlawful discrimination or retaliation ( McDonnell Douglas , supra , 411 U.S. at p. 802, 93 S.Ct. 1817 ); next, the employer bears the burden of articulating a legitimate reason for taking the challenged adverse employment action ( ibid . ); and finally, the burden shifts back to the employee to demonstrate that the employer's proffered legitimate reason is a pretext for discrimination or retaliation ( id . at p. 804, 93 S.Ct. 1817 ). In arguing that Scheer could not meet the third prong, the Regents and Braun asserted that Scheer was terminated not for whistleblowing, but "because he bullied and intimidated those with whom he worked and over time became ineffective in his role.... The letter from Department leadership informing Plaintiff of the intent to terminate him [i.e., the June 2, 2016 NOIT] made that clear, stating Plaintiff was being terminated because he (1) had an overly aggressive attitude concerning certain negotiations; (2) had a harsh and disruptive style at meetings; (3) had become increasingly ineffective as CAO; (4) lack[ed] ... enthusiasm for [his] position; and (5) was not an effective leader."

Binder filed a separate motion for summary judgment, directed solely at the third cause of action to which he was a party. Binder similarly contended that Scheer was terminated for legitimate, nonretaliatory reasons, and Scheer could not meet his burden under McDonnell Douglas to establish pretext.

C. Scheer's opposition to summary judgment

In opposition, Scheer contended there were triable issues of fact as to whether Defendants’ stated reasons for his termination were pretextual. Among other things, Scheer asserted the "reasons given for [his] termination in the NOIT are patently false and are expressly refuted by his having received outstanding performance on his FYl5 Performance Review, given by Defendant Dr. Braun in July 2015. Further, Dr. Scheer's FY16 goals were developed in consultation with Dr. Braun and submitted on or about September 11, 2015. The FY16 goals do not identify any behavioral or other performance issues.... Thus, a triable issue of fact exists whether defendants’ stated reasons for termination are true. For this threshold reason the motion should be denied."

D. Trial court's ruling

After hearing the matter and taking it under submission, the trial court issued an order granting Defendants’ motions for summary judgment. The trial court ruled that the McDonnell Douglas burden-shifting analysis governed the three whistleblowing causes of action, and it proceeded to apply that framework.

On the first step of the analysis, the trial court found that Scheer met his burden to prove a prima facie case of retaliation by a preponderance of the evidence. The trial court also noted that Defendants did not contest the sufficiency of Scheer's prima facie case of retaliation. Thus, "the burden shifts to Defendant to offer a legitimate, nondiscriminatory reason for the adverse employment action."

On the second step, the trial court found that "Defendants present sufficient evidence demonstrating that Plaintiff was terminated for his harsh and aggressive style of work and increasing ineffectiveness as CAO.... Defendants also present supporting testimony and documentary evidence that there were multiple complaints and concerns about Plaintiff regarding his aggressive behavior and that the Human Resources Department conducted an investigation accordingly.... The proffered reason for termination, whether good or not, is facially unrelated to the alleged retaliatory motive and, therefore, Defendants meet their burden of production.... [¶] The Court finds that Defendants properly show legitimate, non-retaliatory reasons to defeat the presumption of retaliation. The burden shifts back to Plaintiff to show the proffered reasons were untrue or pretextual."

On the third and final step, which is the crux of this appeal, the trial court ruled that Scheer had failed to raise a triable issue of material fact as to pretext. The trial court stated:

"Plaintiff argues that, while there is no direct evidence of discriminatory intent, Defendants’ stated reason for his termination is false because he received satisfactory performance reviews and even accolades for his outstanding performance until even after he made complaints about patient safety issues in 2015.... Plaintiff asserts that this is sufficient circumstantial evidence of pretext because his termination can only be explained by Defendants’ retaliatory motive for his protected activity.

"Upon review of the records, the Court finds that those evaluations do not speak to or controvert the proffered reason for Plaintiff's termination. His performance reviews take the form of checklists relating to completion of individual tasks, rather than subjective evaluations of the quality of his work or his style and manner in completing those tasks.... [S]ee Hicks [v. KNTV Television, Inc. (2008)] 160 Cal.App.4th [994,] at 1009-1010, 73 Cal.Rptr.3d 240 (While a news anchor had been complimented for various news casts and his reporting skills in general, that did not directly controvert evidence that his anchoring style was...