Mize-Kurzman v. Marin Community College Dist.

Facts

Two statutes were in play. Labor Code section 1102.5, in the version then in force, prohibited an employer from retaliating against an employee “for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation,” and provided in subdivision (e) that a report by a government employee to his or her own employer is such a disclosure. (Mize-Kurzman, supra, 202 Cal.App.4th at p. 844, fn. 2.) Education Code section 87160 et seq. extends whistleblower protection to community college employees, defining a “ ‘[p]rotected disclosure’ ” as “a good faith communication that discloses or demonstrates an intention to disclose information that may evidence” an “improper governmental activity” or a significant threat to health or safety, and defining “improper governmental activity” to include both activity that “violates a state or federal law or regulation” and activity that is “economically wasteful or involves gross misconduct, incompetency, or inefficiency.” (Id. at p. 844, fn. 3, quoting Ed. Code, § 87162, subds. (c), (e).) Because the appeal principally claimed instructional error, the court recited the facts “in the light most favorable to the claim of instructional error.” (Id. at p. 839, fn. 1.)

Pamela Mize-Kurzman had worked for the Marin Community College District since July 1, 1973, and served as an administrator from 1981; she was promoted to dean of enrollment services in 1994 — an “at will” position — pursuant to the settlement of a previous lawsuit against the district. (Mize-Kurzman, supra, 202 Cal.App.4th at pp. 839–840.) In July 2004 Frances White became superintendent and president; in January 2006 Anita Martinez was hired as vice-president of student learning and became plaintiff’s direct supervisor. (Id. at p. 840.)

Beginning in April 2006, plaintiff made four claimed disclosures of what she believed were violations of law. (Mize-Kurzman, supra, 202 Cal.App.4th at p. 840.) First, she reported to White her concern that the hiring process for a student-services director had been tampered with: a hiring committee had been pressured, through a human resources clerk relaying what turned out to be Martinez’s demands, to expand its candidate list, and plaintiff e-mailed White that the committee had “the strong opinion that the job was being set up for a specific candidate.” She believed Martinez’s interference violated the Education Code, though she never told White in terms that she thought it “illegal.” (Id. at p. 840; see id. at p. 865.) Second, she reported to Martinez and White her belief that the “La Academia” project in the district’s Educational Excellence Innovation Fund proposal unconstitutionally targeted scholarship money to Hispanic students; she confirmed with the district’s outside counsel that “the Latino student scholarship fund violates the California Constitution if it awards scholarships derived from public funds to students based solely upon their ethnicity or national origin,” and e-mailed that advice to White and Martinez. The grant was later rewritten; Martinez “verbally ordered plaintiff not to contact outside counsel without checking with her first.” (Id. at p. 841.) Third, in July and August 2006 plaintiff told Martinez she believed the district’s new policy of letting students register despite unpaid fees was illegal, and she obtained and forwarded a chancellor’s office legal opinion that the district should not allow indefinite deferral of fees. (Id. at pp. 841–842.) Fourth, after Martinez directed her to remove citizenship and residency questions from the credit application, plaintiff told Martinez she believed the policy was illegal and, in March 2007, that the information was a legally required element of state data collection. (Id. at p. 842.) At trial, the parties’ experts disagreed about the legal questions underlying the third and fourth reports. (Ibid.)

The claimed retaliation escalated in step. White directed plaintiff to “please stop the email discussion” about the scholarship issue; Martinez told her not to call outside counsel because legal expenses “were getting high.” (Mize-Kurzman, supra, 202 Cal.App.4th at p. 842.) In July 2006 plaintiff discovered from an organizational chart that her position had been reorganized and significant duties stripped — including her seat on the academic standards committee — which she considered a demotion. (Ibid.) After plaintiff e-mailed Martinez in October 2006 that Martinez had directed her to do “something illegal” in the fee matter, Martinez issued four written orders reprimanding her for seeking a chancellor’s office legal opinion and for attempting “to cast [herself] in the role of a whistleblower,” requiring pre-clearance before raising legality questions anywhere, and warning that noncompliance would “be seen as insubordination.” When plaintiff disputed the discipline, Martinez replied that “a further response from you will be deemed an act of insubordination.” (Id. at p. 843.) At the last board meeting before the March 15, 2007 statutory notice deadline, on White’s and Martinez’s recommendations, the board released plaintiff from her administrative assignment and placed her on immediate paid leave; because she had tenure rights, she was reassigned to a counselor position. (Ibid.)

Procedural history

Plaintiff sued in July 2007. Four causes of action were dismissed before trial, and the case was tried to a jury on three: violations of Labor Code section 1102.5, subdivisions (a) and (b), and violation of Education Code section 87160 et seq. (Mize-Kurzman, supra, 202 Cal.App.4th at pp. 843–844.) The trial court gave two special instructions defining “disclosure” with five limitations drawn from federal Whistleblower Protection Act (WPA) case law, and allowed the district to introduce evidence of plaintiff’s eligibility to retire and her projected pension as bearing on mitigation of damages, instructing the jury that “[t]he extent to which such a retirement pension could reduce” her damages was a question of fact. (Id. at pp. 844–845, 867.) The jury deliberated from September 9 through 11, 2009, and “found the district had violated Labor Code section 1102.5, subdivision (a), but that plaintiff was not harmed thereby. It found no violation of Labor Code section 1102.5, subdivision (b) or Education Code section 87160 et seq., and no damages from any violation of the statutes.” (Id. at pp. 844, 870.)

The Court of Appeal reversed and remanded for retrial of the whistleblower claims tied to the tampering and scholarship disclosures, and — because the issue would recur — held the retirement-benefit evidence inadmissible on mitigation. (Mize-Kurzman, supra, 202 Cal.App.4th at pp. 866–867, 870–879.) The district’s petition for review was denied on April 25, 2012 (S200217). (Id. at p. 879.)

Issue

Did the trial court correctly instruct the jury that, under Labor Code section 1102.5(b) and Education Code section 87160 et seq.: (1) “Plaintiff must prove that any disclosure of information was made in good faith and for the public good and not for personal reasons”; (2) “Debatable differences of opinion concerning policy matters are not disclosures of information”; (3) “Information passed along to a supervisor in the normal course of duties is not a disclosure of information”; (4) “Reporting publicly known facts is not a disclosure of information”; and (5) “Efforts to determine if a practice violates the law are not disclosures of information”? (Mize-Kurzman, supra, 202 Cal.App.4th at p. 845.) If any instruction was erroneous, was the error prejudicial under Soule v. General Motors Corp. (1994) 8 Cal.4th 548? And could the district introduce evidence of plaintiff’s unexercised eligibility for a retirement pension to reduce her damages? (Id. at pp. 845–846, 867–868.)

Holding

Reasoning

Federal WPA authority may guide — but only where it fits. The trial court had noted the absence of CACI instructions defining “disclosing information” (Lab. Code, § 1102.5) or “protected disclosure” (Ed. Code, § 87162) and crafted its own from federal case law. The Court of Appeal endorsed the method: “As a general proposition, we conclude the court could properly craft instructions in conformity with law developed in federal cases interpreting the federal whistleblower statute.” (Mize-Kurzman, supra, 202 Cal.App.4th at p. 847.) Legislative history showed the Education Code provisions extended the California Whistleblower Protection Act to community college employees, and that act in turn was “intended to align state ‘whistleblower’ statutes with those in existing federal law”; nothing suggested the Labor Code and Education Code terms “were intended to have significantly different meanings,” and “the language and purpose of the statutes are sufficiently close to permit the court to use federal authorities as a guide.” (Id. at pp. 847–849.) The question became whether each borrowed limitation accurately stated the law. It is worth pausing on the method itself: each limitation was tested against California statutory text and California precedent — which is why some survived and others did not.

Limitation 1 — motive: error. The instruction that a plaintiff “must prove that any disclosure was made in good faith and for the public good and not for personal reasons” “misstated the applicable law.” (Mize-Kurzman, supra, 202 Cal.App.4th at p. 850.) The district’s authorities collapsed on inspection: Garcetti v. Ceballos (2006) 547 U.S. 410 “does not contain the limitation” — indeed it pointed to statutes like section 1102.5 as the proper shield for whistleblowers — and Fiorillo v. U.S. Dept. of Justice, Bureau of Prisons (Fed.Cir. 1986) 795 F.2d 1544, which had imposed a “primary motivation” test, “has been expressly overruled by Congress, and criticized as misinterpreting the federal statute.” (Id. at pp. 850–851.) The court added its own institutional reason: a personal agenda “will be one of several considerations motivating the employee whistleblower” in many cases, and chasing motive “easily could lead the finder of fact to detour around the central question of the employee’s reasonable belief.” (Id. at p. 852.) The rule that emerged is among the opinion’s most quoted: “it is not the motive of the asserted whistleblower, but the nature of the communication that determines whether it is covered.” (Ibid.)

Limitation 2 — “debatable policy differences”: error as given. The limitation comes from White v. Department of the Air Force (Fed.Cir. 2004) 391 F.3d 1377, a “gross mismanagement” case in which no violation of law was claimed. (Mize-Kurzman, supra, 202 Cal.App.4th at p. 853.) White itself confined the rule: the “non-debatable requirement does not, of course, apply to alleged violations of statutes or regulations. In that circumstance, there may be a reasonable belief that a violation has occurred, even though the existence of an actual violation may be debatable.” (Ibid., quoting White, supra, 391 F.3d at p. 1382, fn. 2.) The trial court’s unqualified instruction “improperly conflated” two categories: disclosures claiming a policy is unwise or wasteful (to which the limitation applies, at least under Education Code section 87162(c)(2)), and disclosures resting on a reasonable belief that a policy is unlawful (to which it does not). (Id. at p. 854.) Applying the debatable-policy bar to reasonable-belief illegality claims “would eviscerate the reasonable belief standard in many, if not most, of such cases.” (Ibid.) Where a policy is challenged on both grounds, “it is error to give the debatable policy matters instruction without carefully explaining that the limitation does not apply” to the illegality theory. (Ibid.)

Limitation 3 — reports to a supervisor in the normal course of duties: error. The instruction traced to Huffman v. Office of Personnel Management (Fed.Cir. 2001) 263 F.3d 1341, which held that a federal employee assigned to investigate wrongdoing who reports through normal channels is unprotected. (Mize-Kurzman, supra, 202 Cal.App.4th at p. 856.) California law is otherwise. Labor Code section 1102.5, subdivision (e) — effective January 1, 2004 — “expressly provides that ‘[a] report made by an employee of a government agency to his or her employer is a disclosure of information to a government or law enforcement agency,’ ” and even the former statute had “been consistently interpreted to protect a public employee who reports legal violations to his or her own employer,” citing Colores v. Board of Trustees (2003) 105 Cal.App.4th 1293 and Gardenhire v. Housing Authority (2000) 85 Cal.App.4th 236. (Id. at pp. 856–857.) Colores had squarely rejected the “merely did her job” argument, and Patten v. Grant Joint Union High School Dist. (2005) 134 Cal.App.4th 1378 followed it. (Id. at pp. 857–858.) The holding carries one carefully drawn caveat that matters in practice: “In circumstances where the supervisor is not the alleged wrongdoer (i.e., the supervisor’s own conduct is not the asserted wrongdoing that is being disclosed to that supervisor), it cannot categorically be stated that a report to a supervisor in the normal course of duties is not a protected disclosure.” (Id. at p. 858.)

Limitation 4 — “publicly known facts”: approved then, rejected since. The court held this “was a proper limitation on what constitutes disclosure protected by California law,” agreeing with Huffman and other federal cases “that have held that the report of information that was already known did not constitute a protected disclosure,” and adopting the dictionary sense of the word: “[T]he term ‘disclosure’ means to reveal something that was hidden and not known.” (Mize-Kurzman, supra, 202 Cal.App.4th at p. 858.) The court tied this to a corollary drawn from the same federal line: reports to a supervisor about the supervisor’s own wrongdoing are not “disclosures,” “because the employer already knows about his or her wrongdoing.” (Id. at p. 859.) This is the portion of the opinion that did not survive. In Kolla’s, supra, 14 Cal.5th 719, the Supreme Court held that an employee’s report of unlawful activity is a protected “disclosure” under section 1102.5(b) even when the recipient already knows of the violation — there, a complaint about unpaid wages made directly to the owner responsible for them — rejecting the recipient-knowledge limitation this court had borrowed from Huffman. The analysis below therefore reflects the law as it stood from 2012 to 2023, not current doctrine.

Limitation 5 — “efforts to determine if a practice violates the law”: approved. Drawing on Reid v. Merit Systems Protection Bd. (Fed.Cir. 2007) 508 F.3d 674, the court held this instruction “appears to us to be a correct statement of the law”: discussion among employees and supervisors about possible courses of action “is healthy and normal in any organization” and “may in fact avoid a violation,” so a mere inquiry into legality — as opposed to a report of conduct — is not itself a disclosure. (Mize-Kurzman, supra, 202 Cal.App.4th at pp. 859–860.) The court applied the principle concretely in its prejudice analysis: plaintiff’s inquiry to outside counsel about the scholarship “was not a protected disclosure, as it was clearly an attempt by plaintiff to determine whether and/or to gain support for her view that the grant was unlawful,” and the same was true of her inquiries to the chancellor’s office counsel. (Id. at pp. 865–866.)

The Education Code instructions on intent and employer justification were sound. Education Code section 87164, subdivisions (b) and (h), “expressly require that the person engaging in retaliation do so ‘intentionally,’ ” so instructing the jury to find intentional retaliation did not raise plaintiff’s burden; and the instruction based on subdivision (i) — that an employer is not liable if it “reasonably believed” its action was justified “on the basis of evidence separate and apart from” the protected disclosure — was one permissible way for the district to carry its clear-and-convincing burden under subdivision (j), not an evasion of it. (Mize-Kurzman, supra, 202 Cal.App.4th at pp. 860–862.)

Prejudice: two of the four disclosures require retrial. Applying Soule, the court asked whether it was reasonably probable the errors affected the verdict, viewing the evidence favorably to the instructional-error claim. (Mize-Kurzman, supra, 202 Cal.App.4th at pp. 862–863.) On the hiring-tampering claim, the erroneous debatable-policy instruction “likely led the jury to determine that there was no protected disclosure, as the question was one of debatable policy, even if plaintiff reasonably thought the conduct was illegal” — and the jury’s mid-deliberation questions about whether plaintiff could “disclose” to White confirmed the risk of confusion. (Id. at pp. 864–865.) On the scholarship claim, all agreed the subject was outside plaintiff’s normal duties, White and Martinez were not the wrongdoers, and “[t]hat plaintiff may have been wrong in her understanding of the nature of the program or the grant does not necessarily render her belief in the unlawfulness of the scholarship unreasonable.” (Id. at p. 865.) By contrast, the fee-registration and citizenship claims failed on grounds untouched by the instructional errors: the policies were already well known — “Plaintiff was not disclosing any previously unknown or hidden conduct, practice or policy, but only her view that the known policy was not lawful” — and her consultations with counsel were inquiries, not disclosures. (Id. at p. 866.) Note that this harmlessness rationale rests in part on the publicly-known limitation later rejected in Kolla’s; the same record today might be analyzed differently.

Damages on retrial: unexercised retirement benefits are off the table. The trial court had admitted evidence that plaintiff could retire on an unmodified pension of $100,788 — more than her counselor salary — and told the jury it could decide “[t]he extent to which such a retirement pension could reduce” damages. (Mize-Kurzman, supra, 202 Cal.App.4th at pp. 867, 869.) The Court of Appeal held this was error. The avoidable-consequences doctrine requires only reasonable mitigation efforts, and under Parker v. Twentieth Century-Fox Film Corp. (1970) 3 Cal.3d 176, projected earnings from opportunities not pursued count only if the employer shows “comparable, or substantially similar” employment. (Id. at pp. 870–871.) Pension benefits, by contrast, are classic collateral-source payments — “secured by the plaintiff’s efforts as part of his employment contract” — that do not reduce a tortfeasor’s liability even when the defendant is the employer, because the contributions arise “from a contractual and statutory obligation completely outside the notions of tort liability.” (Id. at pp. 872–875, discussing McQuillan v. Southern Pacific Co. (1974) 40 Cal.App.3d 802.) “Had plaintiff actually retired and taken her retirement pension, we are convinced the trial court would have been required to exclude evidence of plaintiff’s retirement benefits as a collateral source,” and it “make[s] little sense” to admit benefits she never received when received benefits would be excluded. (Id. at p. 877.) Forcing an employee to choose between retiring early and pursuing a wrongful-treatment claim would replicate the “unacceptable election” condemned in Mayer v. Multistate Legal Studies, Inc. (1997) 52 Cal.App.4th 1428, and the court found persuasive the reasoning of the Pennsylvania court in Griesser that such evidence invites the jury to misuse retirement eligibility to slash liability. (Id. at pp. 876–878.) The district’s argument that a pension richer than the dean’s salary was “a fortiori comparable or better employment” drew open skepticism — “we consider it doubtful” — and failed in any event because the jury was never instructed to make a comparable-employment finding. (Id. at pp. 877–878.)

Significance

For over a decade, Mize-Kurzman was the closest thing California had to a definitional map of “disclosure” under section 1102.5 — CACI had no instruction, and trial courts reached for this opinion. Assessing it today requires sorting its holdings into what stands and what has fallen.

What did not survive. In Kolla’s, supra, 14 Cal.5th 719, the Supreme Court held that “disclosure” under section 1102.5(b) encompasses an employee’s report of unlawful conduct to a recipient who already knows about it — in that case, a wage complaint made directly to the owner who owed the wages. That holding is irreconcilable with Mize-Kurzman’s adoption of Huffman’s “reveal something that was hidden and not known” definition (Mize-Kurzman, supra, 202 Cal.App.4th at p. 858) and with its corollary that a report to the wrongdoing supervisor is not a disclosure “because the employer already knows about his or her wrongdoing” (id. at p. 859). Practitioners should treat the “publicly known facts” instruction approved here — and the portions of the prejudice analysis that rested on it (id. at p. 866) — as no longer reliable statements of California law. Whether any narrower version of the limitation retains force (for example, where the employee reports nothing but her opinion about facts genuinely notorious to the world at large) is a question Kolla’s did not need to answer, and this article does not claim it did; the safe course is to assume the recipient’s or the public’s prior knowledge no longer defeats “disclosure” without close analysis of current authority.

What survives — and thrives. Three employee-protective holdings remain foundational. The motive-irrelevance rule — protection turns on “the nature of the communication,” not the whistleblower’s purity of heart (Mize-Kurzman, supra, 202 Cal.App.4th at p. 852) — removed a defense argument that once dominated these trials, and nothing in Kolla’s disturbs it. The debatable-policy analysis protects employees who reasonably believe a policy is unlawful even where the legality question is contestable (id. at pp. 854–856), preserving the reasonable-belief standard drawn from Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66. And the normal-course-of-duties holding (id. at pp. 856–858) anticipated the Legislature: 2013 amendments, effective January 1, 2014, rewrote subdivision (b) to protect disclosures made to “a person with authority over the employee” and to protect them “regardless of whether disclosing the information is part of the employee’s job duties.” (Lab. Code, § 1102.5, subd. (b), as quoted in Ross v. County of Riverside (2019) 36 Cal.App.5th 580, 591.) The “efforts to determine if a practice violates the law” limitation (id. at pp. 859–860) has not been expressly repudiated, but counsel should note that it shares an intellectual root — the narrow reading of “disclosure” — with the limitation Kolla’s rejected, and should verify its current vitality before relying on it. Finally, the damages holding stands entirely apart from the Kolla’s debate: unexercised retirement eligibility is inadmissible to reduce a wrongfully demoted or discharged employee’s recovery (id. at pp. 872–878), a rule of continuing importance in every public-employee case where the plaintiff is pension-eligible. The decision’s larger legacy — courts refining section 1102.5 doctrine claim by claim, with the Supreme Court ultimately re-centering the statute on its protective purpose in Kolla’s and in Lawson v. PPG Architectural Finishes, Inc. (2022) 12 Cal.5th 703 — makes it essential reading even where it is no longer safe citation.

Key quotes

“Hence, it is not the motive of the asserted whistleblower, but the nature of the communication that determines whether it is covered.” (Mize-Kurzman, supra, 202 Cal.App.4th at p. 852.)

“Disclosures of a policy that the employee reasonably believes violates a statute or regulation are protected disclosures, whether or not the existence of an actual violation or the wisdom of the policy are debatable.” (Mize-Kurzman, supra, 202 Cal.App.4th at p. 854.)

“In circumstances where the supervisor is not the alleged wrongdoer (i.e., the supervisor’s own conduct is not the asserted wrongdoing that is being disclosed to that supervisor), it cannot categorically be stated that a report to a supervisor in the normal course of duties is not a protected disclosure.” (Mize-Kurzman, supra, 202 Cal.App.4th at p. 858.)

“It seems to us to make little sense to allow introduction into evidence of retirement benefits that plaintiff never received on the issue of mitigation where such evidence would have been precluded under the collateral source rule had she actually received the benefits.” (Mize-Kurzman, supra, 202 Cal.App.4th at p. 877.)

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Practice pointer

Open questions

The opinion left several matters unresolved on its own terms, and subsequent history has added more. The court expressly declined to address plaintiff’s claim that the trial judge improperly pressured the jury to conclude deliberations before a vacation, finding nothing improper on the record (Mize-Kurzman, supra, 202 Cal.App.4th at p. 867), and it did not reach the challenged special verdict questions on damages (id. at p. 868, fn. 14). Its mitigation holding also flagged, without resolving, a split of authority on the distinct question whether pension benefits an employee actually receives after discharge may reduce a backpay award. (Id. at p. 873, fn. 17.) The larger open questions are those created by Kolla’s: how much, if anything, remains of the “publicly known facts” limitation; whether the “efforts to determine if a practice violates the law” rule — never passed on by the Supreme Court — continues to mark the boundary between protected reporting and unprotected inquiry; and how the opinion’s harmlessness analysis for the fee-registration and citizenship claims would come out under current law, given that both turned in part on the now-rejected recipient-knowledge rationale. (Id. at p. 866.) Finally, because the decision predates Lawson v. PPG Architectural Finishes, Inc. (2022) 12 Cal.5th 703, nothing in it addresses the section 1102.6 burden-shifting framework that now governs how these claims are tried.