In Miklosy v. Regents of the University of California, (— Cal.Rptr.3d —, 2008 WL 2923434, Cal., July 31, 2008), the California Supreme Court considered whether employees of a university could file a cause of action for damages in state court for alleged violations of the California Whistleblower Protection Act. The Supreme Court concluded the employees could not file a cause of action for damages because the university had timely decided the retaliation complaint.
Leo Miklosy and Luciana Messina are computer scientists who, in February 2003, were employed by the Regents of the University of California (“University of California” or “University”) at the Lawrence Livermore National Laboratory (“Laboratory”). Specifically, Miklosy and Messina worked in the National Ignition Facility on a project designed to assess the safety and reliability of the nation’s nuclear weapons stockpile.
While working on the project, Miklosy and Messina “identified problems with the . . . project.” These problems included “collisions by large million dollar robotic positioners . . . the delivery of unusable and untested software, a lack of defined engineering and operational processes . . . , and inadequate . . . control operator training . . ..” Miklosy and Messina repeatedly expressed their concerns to management.
On February 28, 2003, Kim Minuzzo, Larry Lagin, and Jerry Krammen, who were supervisory employees of the Laboratory, fired Miklosy. When leaving the premises, Miklosy heard Minuzzo tell Krammen that Messina would be fired next. Before Messina was fired, she submitted a letter of resignation. Lagin and Minuzzo asked Messina to reconsider her resignation over the weekend and she agreed.
On March 3, 2003, Messina inquired about transferring to another position. Minuzzo called Messina the next day to tell her to return to the National Ignition Facility; but before the call was disconnected, Messina overheard Minuzzo say to another employee that he intended to fire Messina. Messina resigned March 7, 2003.
Miklosy and Messina filed complaints with the University under the Whistleblower Act. The Laboratory assigned a “Retaliation Complaint Officer” (RCO), John Hunt, to investigate the claim pursuant to Laboratory procedure. The RCO must prepare findings within 90 days. Hunt investigated the claims and found Laboratory management had not acted adversely to Miklosy and Messina’s reports of problems. Hunt also found no support to the assertion that management had retaliated against Miklosy and Messina. Upon submission of Hunt’s findings to the director of the Laboratory, a decision must be reached on the findings within 15 days. The director of the Laboratory adopted Hunt’s findings within the prescribed 15 days.
In February, 2004, Miklosy and Messina filed a damages action in superior court against the University of California for: (1) unlawful retaliation in violation of the Whistleblower Act; (2) wrongful termination in violation of public policy; (3) wrongful constructive termination in violation of public policy; and (4) intentional infliction of emotional distress. Following a successful demurrer by the University in superior court, Miklosy and Messina appealed, but the Court of Appeal affirmed. The Supreme Court of California granted Miklosy and Messina’s petition for review.
The Supreme Court began by discussing the relevant statutory language of the Whistleblower Act. The purpose of the act was to encourage the disclosure of “improper governmental activities,” which are activities that are “unlawful, economically wasteful, or involve gross misconduct or incompetence.” The Whistleblower Act was codified as sections 8547 through 8457.11. (Stats. 1993, ch. 12, § 8, pp. 96-101). Section 8457.10, subdivision (c), imposes liability for retaliation against employees or officers of the University; “However, any action for damages shall not be available . . . unless the injured party has first filed a complaint with the designated university officer . . . , and the university has failed to reach a decision regarding that complaint within the time limits established for that purpose by the regents.” (Emphasis in the original.)
The Supreme Court also discussed two other sections of the Whistleblower Act. Those sections applied to state employees and California State University employees respectively. The Supreme Court noted that state employees may bring a damages action alleging whistleblower retaliation after first seeking relief from the State Personnel Board (§ 8547.8 subd. (c)). California State University employees may seek “a remedy” if the state university’s administrative remedy fails to proceed to a timely decision or does not “satisfactorily address” employees’ complaints within 18 months. (§ 8547.12, subd. (c)).
Next, the Supreme Court considered the plain language of the Whistleblower Act. The court found the language unambiguous and clear. University employees may not have an action for damages unless after a complaint has been filed with the designated university officer, a decision is not reached within prescribed time limits. Essentially, the alternative action for damages is only available when the University’s “internal mechanism fails to operate.” Just seeking relief from the University does not entitle University employees to a damages action, nor may University employees seek an alternative remedy if the administrative remedy does not “satisfactorily address” the employees’ complaints.
The Court further supported its interpretation and position by pointing out the “unique constitutional status of the University of California.” The Court explained that there is a “grant of constitutional power to the University [which] includes the grant of quasi-judicial powers.” In other words, “the University functions in some ways like an independent sovereign, retaining a degree of control over the terms and scope of its own liability.”
Next, the Supreme Court rejected the argument by Miklosy and Messina that legislative history of the Whistleblower Act suggests that an action for damages should be made available once relief has been sought, like for state employees. The court found that the legislative history actually supported its position that different procedural provisions were intended for the University of California. The court cited specific language that indicated that the legislature was cognizant of the different standards it was applying and therefore did not author different language by mistake.
The Supreme Court addressed the argument by Miklosy and Messina that “statutory interpretation . . . should not be given a literal meaning if doing so would result in absurd consequences which the Legislature did not intend.” The court concluded that the distinction drawn by a literal statutory reading is not absurd because of the great deference afforded to the University of California and its “unique constitutional status.”
Lastly, the Supreme Court discussed the common law claims of wrongful termination in violation of public policy, wrongful constructive termination in violation of public policy, and intentional infliction of emotional distress. The court concluded that the common law claims were precluded by the Government Claims Act which established the limits of common law liability for public entities. In addition, in connection with the emotional distress claim, the court concluded that workers’ compensation was Miklosy and Messina’s exclusive available remedy because the alleged wrongful conduct occurred at the worksite.