Satyadi v. W. Contra Costa Healthcare Dist.
| Decision Date | 31 December 2014 |
| Docket Number | A138948 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Carolyn SATYADI, Plaintiff and Appellant, v. WEST CONTRA COSTA HEALTHCARE DISTRICT et al., Defendants and Respondents. |
Che Hashim, San Francisco, & Alex Coolman, Oakland, for Plaintiff and Appellant.
The Narayan Law Firm, S.D. Narayan, Gregory M. Franchi, San Mateo, and Mukesh Advani for Defendant and Respondent West Coast Contra Costa Healthcare District.
After respondent Doctor's Medical Center (DMC) terminated Carolyn Satyadi's employment, Satyadi sued DMC, its owner, the West Contra Costa Healthcare District (the District), and various DMC officials. Satyadi claimed she had been fired in retaliation for reporting and refusing to participate in her employer's allegedly illegal activities. Her complaint alleged causes of action under Labor Code section 1102.5 .1
Respondents filed a demurrer, arguing Satyadi had not filed a complaint with the Labor Commissioner under section 98.7 before bringing her action, and thus her suit was barred by her failure to exhaust administrative remedies. The trial court agreed with respondents, ruling that Campbell v. Regents of University of California (2005) 35 Cal.4th 311 [25 Cal.Rptr.3d 320, 106 P.3d 976] ( Campbell ) required Satyadi first to seek relief from the Labor Commissioner before filing suit in court. It therefore entered a judgment dismissing Satyadi's action, and Satyadi appealed to this court.
While her appeal was pending, the Legislature amended the Labor Code to specify that employees such as Satyadi need not exhaust administrative remedies prior to filing suit for violations of the Labor Code, unless the provision under which suit is brought expressly requires exhaustion. We asked the parties to brief whether these amendments apply to this appeal. We conclude they do, and we therefore reverse the judgment and remand the matter for further proceedings on Satyadi's complaint.
Because this appeal follows a successful demurrer, we draw our statement of facts from Satyadi's first amended complaint, which is the operative pleading. ( E–Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1313, fn. 1 .) ( Kempton v. City of Los Angeles (2008) 165 Cal.App.4th 1344, 1347, fn. 1 .)
Satyadi is an American citizen of Indonesian origin. She holds six national board certifications in the area of clinical laboratory science. In November 2010, she interviewed for, and later accepted, the position of clinical laboratory director for DMC.
During the interview process, Satyadi was told the laboratory she would be managing had no material deficiencies in staff and equipment performance and accreditation. Despite those assurances, within two days of reporting to her new position, Satyadi was handed a list of performance deficiencies in the laboratory. She was directed to reduce overtime and to "clean up problem personnel." Her initial performance was praised, and her reviews indicated she met DMC's standards in every area of her job.
Beginning in December 2010 and continuing through March 2012, Satyadi informed DMC and its executive staff about numerous operational practices she believed were violations of state and federal laws relating to the laboratory's operations.2 While employed at DMC, Satyadi refused to engage in these and other activities she believed to be violations of the law.
In approximately January 2012, during negotiations with the union representing laboratory employees, a DMC executive made derogatory comments and gestures about Satyadi in the presence of her subordinates. The executive had previously asked Satyadi what country she was from. She complained in writing about what she viewed as harassment and was assured the matter would be reviewed by DMC's interim chief executive officer, but the latter never contacted Satyadi about her complaint. In March 2012, DMC's medical director told Satyadi, "It's not working."
In March 2012, Satyadi was placed on administrative leave pending an investigation into allegations against her by other DMC employees. An attorney who had been hired to investigate the allegations against Satyadi interviewed her, but DMC, the District, and a DMC executive intentionally withheld information from the investigator to create a pretext for Satyadi's retaliatory termination.
On June 12, 2012, Satyadi's counsel attended a DMC hearing "convened ... in order to provide [her] with a minimum level of due process required prior to removal of a permanent civil service employee under California law." Satyadi "responded in writing to the allegations made at the hearing, the manner of the receipt of evidence, as well as offering objections to the severity of discipline imposed."
Satyadi was terminated by letter dated June 26, 2012. She was informed through counsel that no further administrative appeals process existed by which she could challenge the decision to terminate her employment.
In August 2012, Satyadi filed a complaint against DMC, the District, Enfield, and Hardy. After various challenges to the pleadings, Satyadi was granted leave to amend, and she filed her first amended complaint (FAC) against the same defendants in January 2013. As relevant here, the FAC alleged causes of action claiming DMC and the District had retaliated against Satyadi for disclosing violations of state and federal law to government agencies and for refusing to participate in activities that would violate the law. Satyadi alleged the retaliation violated section 1102.5, subdivisions (b) and (c) .3
Respondents demurred to the FAC, arguing Satyadi's failure to exhaust her administrative remedies deprived the court of jurisdiction to adjudicate her complaint. Specifically, they contended Satyadi had failed to exhaust the remedy set forth in section 98.7, subdivision (a), which provides that "[a]ny person who believes that he or she has been discharged or otherwise discriminated against in violation of any law under the jurisdiction of the Labor Commissioner may file a complaint with the division within six months after the occurrence of the violation." Respondents contended the California Supreme Court's opinion in Campbell, supra, 35 Cal.4th 311, 25 Cal.Rptr.3d 320, 106 P.3d 976 required Satyadi first to seek administrative relief from the Labor Commissioner before resorting to court. (See id. at pp. 329–331, 25 Cal.Rptr.3d 320, 106 P.3d 976 [].) Satyadi disagreed, and relying on the Second District's opinion in Lloyd v. County of Los Angeles (2009) 172 Cal.App.4th 320 ( Lloyd ), she opposed the demurrer, arguing there was no requirement that she pursue the remedy provided by section 98.7 before filing her lawsuit. ( Id . at pp. 323, 331–332, 90 Cal.Rptr.3d 872 [].)
The trial court sustained the demurrer without leave to amend. It explained it had permitted Satyadi to file an amended complaint adding facts necessary to state causes of action for violations of section 1102.5, subdivisions (b) and (c) . The trial court found the FAC did not "address the reason why the court sustained the demurrer to those causes of action in the first place." While it acknowledged some appellate courts had held there is no requirement to exhaust administrative remedies before bringing a whistleblower claim under section 1102.5 , it interpreted Campbell as holding to the contrary, and it believed it was bound by that decision. Because Satyadi did not, and in the trial court's view could not, plead she had exhausted her administrative remedies, it found it did not have jurisdiction over her labor claims.
The trial court entered a judgment of dismissal on April 18, 2013, and Satyadi filed a timely notice of appeal.
After judgment was entered and Satyadi filed her notice of appeal, the Legislature enacted two amendments to the Labor Code that are relevant here. First, it added section 244, subdivision (a) (section 244(a)), which provides: (Stats. 2013, ch. 577, § 4.) Second, the Legislature amended section 98.7 to add subdivision (g) (section 98.7(g)), which states: "In the enforcement of this section, there is no requirement that an individual exhaust administrative remedies or procedures." (Stats. 2013, ch. 732, § 3.) In accordance with Government Code section 68081 , we asked the parties to brief whether these amendments apply retroactively to this case, and if so, what effect they have on the proper disposition of this appeal. Both parties submitted supplemental briefs on these questions.
The parties agree that if the amendments to the Labor Code apply to this case, then the judgment must be reversed. Therefore, the sole question is whether the amendments govern the case before us. We conclude that because the amendments merely clarified existing law, they may be applied to this case without transgressing the general rule against the retroactive application of statutes.
A demurrer tests only the legal sufficiency of the complaint. ( Milligan v. Golden Gate Bridge Highway & Transportation Dist. (2004...
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