California Supreme Court to Revisit Whistleblower’s Retaliation and Defamation Lawsuit

Now, however, Hearn v. Pacific Gas & Electric is headed to the California Supreme Court for a closer look at the tangled relationship between public safety, whistleblower protections, workplace discrimination and harm to professional reputation. Among other things, this is also a story about the caution that workers need to exercise when facing a workplace investigation.

California lineman not still on the line

Todd Hearn worked for PG&E for 20 years first as a meter reader and thereafter, as a lineman. During the time in question, he worked at a Napa location, referred to as the “Napa yard.”

Beginning in 2017, he repeatedly expressed safety concerns to PG&E management about a device called a “Tripsaver” that PG&E began installing on its electrical lines in 2016. The Tripsaver automatically restored power to a line after a power interruption or “fault” occurred. This saved the time and expense of a trip by a lineman.

Hearn was concerned that Tripsavers were being installed in high fire-risk areas, where downed power lines might ignite dry grass or brush when re-energized. PG&E Superintendent Roy Surges allegedly responded negatively to Hearn and others who raised these concerns.

In early 2018, Superintendent Sturges noted excessive meal costs, suspicions of misconduct, a high number of rest periods, poor attendance, multiple retaliatory compliance and ethics complaints, poor morale and bad attitude among the senior crew and foreman in the Napa yard. Both an internal investigation and a later outside investigation focused on Hearn.

On January 18, 2019, PG&E terminated Hearn’s employment. The company accused him of misusing company time, misstating work activities and fraudulently submitting timecards for overtime compensation.

Hearn sued. He alleged violations of the California labor law for retaliation against a whistleblower, wrongful termination under the Fair Employment and Housing Act (FEHA) sections of the Labor Code, and common law defamation. After trial in Napa Valley Superior Court, a jury dismissed his termination claims, finding that PG&E had not fired him because of his safety complaints. The jury, however, awarded him $2.16 million for his defamation claims.

The Appeals Court later reversed the defamation award, finding that Hearn could not recover damages when the only harm he suffered was his termination. The defamation claim, the court reasoned, was simply a re-phrasing of his unfair termination claim, which the trial court had dismissed.

California Labor Law

The general rule throughout most of the United States is that an employer may fire an employee for good reason, bad reason or no reason at all. This is known as the “employment-at- will” doctrine. Some states have carved out exceptions to this employer-friendly rule. The most important of these in California law is contained in FEHA.

FEHA protects employees from retaliation when they disclose information about violations of laws, rules, or regulations. More generally, it prohibits employers from terminating staff based on protected characteristics like race, religion, sex, age, disability, or sexual orientation. 

Defamation

In California, to prove defamation a plaintiff must show four things:

• A false statement of fact: The statement must be presented as fact, not just opinion.  Truth is a complete defense against defamation.
• Communication to a third party, either written or spoken: The statement must be communicated to at least one person other than the person being defamed.
• Fault amounting to negligence or recklessness: The person who made the false statement must have acted with some level of fault, usually at least negligence, meaning they did not take reasonable care to check if the statement was true; and
• Actual damages or harm: The statement must cause real damage to the subject’s reputation, such as financial loss, damage to their career, or severe reputational harm.

Hearn’s defamation claim foundered, under the Appeals Court’s reasoning, because the trial jury dismissed the FEHA whistleblower claim. But is that the only foundation on which an employment defamation claim might be built?

There are many other damage to professional reputation defamation claims that do not appear to have been built on statutory claims. The test, let us remember is “real damage to the subject’s reputation.”

This is the question that the California Supreme Court will likely consider.

Takeaways

Let’s face it, if you have been terminated from a job, even for a bad or fabricated reason, or because you unaccountably rubbed someone the wrong way, or for no reason at all, you should act defensively. Your employment record is valuable. Losing your reputation can be hugely expensive.

If you have been investigated at work, fired under questionable circumstances, or feel that false statements are being used against you, here are three things to do:

• Keep detailed records of conversations, time records and company actions. Keep these records at home;
• Stay cool; avoid discussing your situation with co-workers, especially at work; and

Take this seriously and talk to an employment lawyer.