Plamer v. Regents of University of Cal.

• Decision Date: 08 April 2003
• Docket Number: No. B154868.,B154868.
• Citation: 132 Cal.Rptr.2d 567,107 Cal.App.4th 899
• Court: California Court of Appeals Court of Appeals
• Parties: Patricia M. PALMER, Plaintiff and Appellant, v. Regents of the UNIVERSITY OF CALIFORNIA, Defendant and Respondent.

132 Cal.Rptr.2d 567

107 Cal.App.4th 899

Patricia M. PALMER, Plaintiff and Appellant, v. Regents of the UNIVERSITY OF CALIFORNIA, Defendant and Respondent.

No. B154868.

Court of Appeal, Second District, Division 7.

April 8, 2003.

Review Denied July 9, 2003.^*

Herbert Abrams and Lauren Mayo-Abrams for Plaintiff and Appellant.

Atkinson, Andelson, Loya, Ruud & Romo, James C. Romo and Sukhi K. Sandhu, Cerritos, for Defendant and Respondent.

PERLUSS, P.J.

Plaintiff Patricia M. Palmer sued the Regents of the University of California (the Regents) in a common law action for wrongful termination in violation of public policy without first pursuing University of California grievance procedures expressly created to protect employees like Palmer who claim to be victims of retaliation for reporting improper activities. The trial court granted the Regents' motion for summary judgment based on Palmer's failure to exhaust the internal remedies available to her. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

1. Palmer's Termination and her Complaint for Wrongful Discharge

Palmer was employed for 21 years as a clinical laboratory technologist at the UCLA Medical Center's Department of Pathology and Laboratory Medicine. In January 1997 the department announced a major restructuring. Palmer and a number of her coworkers were advised they would be laid off effective March 31, 1997, but would be permitted to apply for new positions within the restructured department prior to the layoff date. Palmer was also told "as a regular status employee with more than ten years of seniority, you shall have preference for re-employment for three years from the date of layoff."

A committee established to select employees to whom permanent positions would be offered after the restructuring interviewed Palmer but did not offer her a job because, according to the chair of the committee, "there were other, better qualified applicants for the positions available." However, Palmer was hired as a temporary clinical laboratory technologist in a position that terminated in December 1997. Palmer was told her "knowledge and ability qualify you [for] this position."

Palmer brought this action against the Regents alleging wrongful discharge in violation of the public policy against retaliation for reporting unlawful activity. In paragraphs 19 and 20 of her complaint she asserts she "repeatedly reported laboratory abuses to defendants [including] failure ... to comply with state regulations regarding reviewing lab results and failure to comply in signing off those results [and] that data from the lab was being falsified." She alleges she "was wrongfully terminated and not rehired because of her whistleblowing activities as set forth in paragraphs 19 and 20 of this complaint."

2. The Regents' First Motion for Summary Judgment

The trial court granted the Regents's initial motion for summary judgment, construing Palmer's complaint as limited to a cause of action for discharge in violation of Labor Code section 1102.5, subdivision (b), which prohibits an employer from retaliating against an employee who reports the violation of a federal or state statute or regulation to "a government or law enforcement agency." The trial court concluded that reports of violations to the employer itself are not protected under Labor Code section 1102.5 and that, in any event, the Regents had presented evidence of a proper basis for Palmer's termination. We reversed in an unpublished opinion (Palmer v. Regents of the University of California (Mar. 5, 2001, B138553) [nonpub. opn.]), holding that Palmer had stated a "classic" common law cause of action for discharge in violation of public policy under Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167,164 Cal.Rptr. 839, 610 P.2d 1330, and that triable issues of fact existed as to the reasons for Palmer's discharge.

3. The Second Summary Judgment Motion: Failure to Exhaust Internal Grievance Procedures

On remand the Regents again moved for summary judgment, asserting that Palmer was required to exhaust available internal grievance procedures before bringing her wrongful discharge action. The Regents explained Palmer had available both the general employee grievance procedure described in the complaint resolution section of the pamphlet entitled Personnel Policies for Staff Members (PPSM) and the more specific internal grievance process involving retaliation for reporting improper activities, outlined in the document UCLA Procedures for Reporting Whistle Blowing Complaints. Although Palmer did file a grievance under the PPSM alleging discrimination based on age, race and sex, as well as retaliation for her participation in union organizational activities, she abandoned that grievance before it was finally resolved. No internal complaint or grievance was ever filed claiming she was the victim of retaliation for reporting unlawful activity at UCLA.

Palmer responded to the motion by arguing exhaustion of administrative remedies is not a valid affirmative defense to a common law cause of action for wrongful discharge in violation of public policy. She did not contend the Regents' internal grievance procedures are inadequate for adjudication of her claim of wrongful termination.

The trial court once again granted the Regents' motion for summary judgment, agreeing with the Regents that Palmer was required to pursue internal grievance procedures before filing her lawsuit. Palmer filed a timely notice of appeal.

DISCUSSION

1. Palmer's Failure To Exhaust Internal Grievance Procedures Precludes Her Civil Action for Wrongful Termination

In Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, 131 Cal Rptr. 90, 551 P.2d 410 (Westlake), the Supreme Court held a physician's failure to pursue a hospital's internal grievance process barred his civil suit for damages based on the hospital's purportedly improper denial of staff privileges. "[A] doctor who has been denied hospital staff privileges must exhaust all available internal remedies before instituting any judicial action, including an action seeking only damages...." (Id. at p. 485, 131 Cal.Rptr. 90, 551 P.2d 410.) In Rojo v. Kliger (1990) 52 Cal.3d 65, 276 Cal.Rptr. 130, 801 P.2d 373 (Rojo), the Supreme Court distinguished Westlake (id. at p. 86, 131 Cal. Rptr. 90, 551 P.2d 410) and held that, while an employee must exhaust the administrative remedy made available by the Fair Employment and Housing Act (Gov.Code, § 12900 et seq.)¹ (FEHA) before bringing a cause of action under FEHA, exhaustion is not required before filing a civil action for damages alleging nonstatutory causes of action. (Rojo, at p. 88, 276 Cal. Rptr. 130, 801 P.2d 373 [tort of wrongful discharge in violation of public policy against sex discrimination and sexual harassment in employment]; accord, Stevenson v. Superior Court (1997) 16 Cal.4th 880, 905, 66 Cal.Rptr.2d 888, 941 P.2d 1157 (Stevenson) [applying exhaustion analysis of Rojo to claim of wrongful discharge in violation of public policy against age discrimination].)

The difference between Westlake, where exhaustion was required, and Rojo and Stevenson, where it was not, is that Westlake involved the use of internal grievance procedures, made available to an employee or member by the organization itself. (See, e.g., Rojo, supra, 52 Cal.3d at p. 87, 276 Cal.Rptr. 130, 801 P.2d 373 [courts "with little, or no, analysis" have extended Westlake, which "concerned the exhaustion of private internal remedies," "to require exhaustion of `external' administrative remedies in a variety of public contexts"].) When a statute such as FEHA provides an administrative process for resolution of grievances, exhaustion of those administrative remedies is a precondition to bringing a civil suit on a statutory cause of action, but not for seeking judicial relief on a common law tort claim for wrongful termination in violation of public policy. (Stevenson, supra, 16 Cal.4th at p. 905, 66 Cal.Rptr.2d 888, 941 P.2d 1157 ["An employee's post-termination failure to exhaust administrative remedies has no bearing on whether the termination violated the public policy expressed through the statutory prohibition against age discrimination, and thus the employee's post-termination administrative default does not preclude assertion of a nonstatutory tort claim for wrongful termination in violation of public policy."].) When a private association or public entity establishes an internal grievance mechanism, as the Regents has done, failure to exhaust those internal remedies precludes any subsequent private civil action. (Rojo, at p. 86, 276 Cal.Rptr. 130, 801 P.2d 373; Westlake, supra, 17 Cal.3d at p. 485, 131 Cal.Rptr. 90, 551 P.2d 410.)

Although Westlake involved exhaustion of internal grievance procedures maintained by a voluntary private association (Westlake, supra, 17 Cal.3d at p. 474, 131 Cal.Rptr. 90, 551 P.2d 410), in Rojo the Supreme Court confirmed that the Westlake exhaustion doctrine was not confined to private associations and voluntary organizations. In the course of explaining why Westlake did not mandate exhaustion of FEHA administrative procedures before proceeding with a judicial action for the common law tort of wrongful discharge in violation of public policy, the Rojo Court defined the "context" in which exhaustion of internal remedies was a precondition to a civil suit: "We agree the exhaustion doctrine when applicable, serves important policy considerations.... As we stated in Westlake, `From the earliest decisions reviewing actions of voluntary private associations, ... our courts have recognized the applicability of the exhaustion of remedies doctrine in this context.' [Citations.] [¶] The `context' to which Westlake properly applies is where the party or entity whose `quasi-judicial' determination is challenged—be it hospital, voluntary private or professional association, or public entity—has provided an internal remedy. [Citations,...