Mokler v. County of Orange

Facts

The County hired Pamela Mokler in November 2000 as executive director of its Office on Aging (OoA), a federally and state-funded advocate for residents 60 and older. Her supervisor, Community Services Agency Director William Baker, “consistently rated Mokler’s performance as ‘exceptional’ from the time she was hired until Baker retired in March 2003.” (Mokler, supra, 157 Cal.App.4th at pp. 127–128.)

The LCF proposal. In December 2002 the federal government awarded the OoA $800,000 in “one-time” funds that had to be spent by June 30, 2003 or revert. Among four responses to a request for proposals was one from the Latino Coalition Foundation (LCF), a health-care nonprofit whose advisory board included David Padilla, “whom Mokler had recently dated.” (Mokler, supra, 157 Cal.App.4th at p. 128.) While an impartial evaluation committee reviewed the proposals, Mokler — reasoning that the spending deadline meant her team would have to work “[i]n warp speed” if the project were approved — directed staff to obtain copies of the LCF proposal for a publicist and an outside consultant. After staff resisted on confidentiality grounds, Mokler consulted section 4.2.4 of the contracts manual, which made pre-award proposals “accessible only to county personnel or other members of the proposal evaluation committee having a legitimate interest in them,” concluded her designees had a “legitimate interest,” and ordered the copies provided. (Id. at pp. 128–129.) After the committee scored LCF’s proposal below its competitors, LCF’s director met with Mokler and staff and submitted a revised, smaller proposal naming Padilla as local project manager; the proposal was ultimately funded not through the RFP process but through a state pilot project. (Id. at p. 129.)

The hospital van IFB. Baker approved a plan to fund Mission Hospital’s “diabetic outreach van” and gave Mokler “the green light” to “sole source” the contract; when a staff member suggested an invitation-for-bid process instead, Baker told her “ ‘just go along with it … .’ ” “ ‘The way to do it is to write a tight scope of work’ ” so that only Mission Hospital would receive the contract, adding, “ ‘This is a little game we play in the county.’ ” Mokler “nevertheless researched the existence of other organizations that could potentially compete” and found none. (Mokler, supra, 157 Cal.App.4th at p. 129.)

The reorganization and Mokler’s warnings. Baker retired March 27, 2003. On April 11, his interim successor told Mokler the County planned to transfer the OoA’s contracts department to the County Executive Office Purchasing Department. Mokler objected that the move would violate the County’s contract with the California Department of Aging (CDA) — which allowed the state to terminate funding if “[t]he contractor’s [OoA’s] organizational structure has materially changed” — and “expressed her belief that removal of the contracts department violated both federal and state law.” (Mokler, supra, 157 Cal.App.4th at pp. 129–130 & fn. 1.) On April 18 she complained again to her supervisors and county counsel, prepared a memorandum, and asked the assistant CEO to obtain a county counsel opinion. The County executed the transfer on April 21; two days later the OoA’s operations director was told he was “effective immediately … reporting 100 percent to me” — to the Purchasing Department. Mokler repeatedly told her supervisors she believed this was illegal. (Id. at p. 130.) Her supervisors instructed her, “both verbally and in writing, not to communicate with the CDA,” and — “[w]orried that Mokler might leak information regarding the change” — flew to Sacramento on May 2 to meet CDA official Ed Long “to short-circuit any allegation of illegal activity Mokler might report,” where, according to Mokler, they “misrepresented to Long the extent of the change.” (Ibid.)

Leave, discharge, and the Skelly hearing. “On May 5, 2003, Mokler’s supervisors learned she had telephoned Long. Later that same day, the County placed Mokler on administrative leave and had her escorted out of her office building.” (Mokler, supra, 157 Cal.App.4th at p. 130.) On or about July 3, 2003, she received a notice of intent to discharge, accusing her of procurement violations regarding the LCF proposal — including meeting LCF representatives “for the purpose of rewriting their proposal” — and, as to the van, of attempting “to have this contract established using the ‘sole source’ contracting procedure” and directing staff “to keep the Scope of Work so tight that only Mission Hospital could receive the award.” (Id. at pp. 130–131.) After a two-hour Skelly hearing before a County information officer designated as a neutral, the hearing officer concluded Mokler had directed a staff member to rewrite a proposal to benefit an organization with personal ties to her, had crafted a restrictive IFB, and had been insubordinate; he terminated her effective August 8, 2003, advising her of a right to appeal through the County’s internal grievance procedures. “Mokler, however, did not pursue this avenue.” (Id. at p. 131.)

The Norby incidents. Mokler’s duties required near-daily interaction with the Board of Supervisors. Three encounters with Supervisor Chris Norby grounded her harassment claim. On January 29, 2003, when she introduced herself and he learned she was unmarried, he replied: “ ‘So you’re the aging nun.’ ” (Mokler, supra, 157 Cal.App.4th at p. 131.) On February 5, 2003, at a hotel victory party, Norby took her arm, pulled her against his body, asked “ ‘Did you come here to lobby me?’ ” and — gesturing to two women beside him — “ ‘Why not? These women are lobbying me,’ ” then told her she had a nice suit and nice legs, looking her up and down; Baker’s advice was to be careful and “ ‘to win him over.’ ” (Id. at pp. 131–132.) On March 3, 2003, at Norby’s office, he put his arm around her, demanded her exact home address at a wall map, put his arm around her again — rubbing her breast with his arm as he did — and, when she tried to discuss OoA services, interrupted with a profane slur: “ ‘Why the “f[uck]” do you have to do something special for Mexicans?’ ” (Id. at p. 132.)

Procedural history

Mokler sued the County for breach of contract, wrongful termination, a gender-based hostile work environment under the FEHA, and unlawful retaliation under Labor Code section 1102.5, subdivision (b). On motions for judgment on the pleadings, the trial court dismissed the contract and wrongful-termination claims for failure to “exhaust her internal administrative procedural remedies,” and the case went to trial on retaliation against the County and harassment against Norby. (Mokler, supra, 157 Cal.App.4th at p. 132.) The jury found by special verdict that Mokler was “terminated from her employment with the County of Orange in retaliation for being a whistleblower,” awarding $14,089.60 in past economic damages and $1,681,823 in past and future noneconomic damages; it also found Norby created a hostile work environment but awarded no damages on that claim, and the trial court declared Norby the “prevailing party” for costs. (Ibid.)

The trial court denied defendants’ JNOV motion on both claims. On the new trial motion, “[a]fter ‘weighing the entire record,’ ” it found the noneconomic award excessive and ordered a new trial on damages against the County unless Mokler accepted a remittitur to $125,000; she refused, and a new trial on damages was ordered. (Mokler, supra, 157 Cal.App.4th at pp. 132–133.) Defendants appealed the JNOV denial — pressing, for the first time, an exhaustion defense to the retaliation claim, along with sufficiency challenges to both verdicts — and Mokler cross-appealed the new trial order. (Id. at pp. 127, 133.) The Court of Appeal reversed the JNOV denial as to the harassment claim only, otherwise affirmed, and affirmed the new trial order, each side bearing its own costs on appeal. (Id. at pp. 127, 148.)

Issue

Four questions. First, may a public-entity defendant raise an employee’s failure to exhaust internal administrative remedies for the first time on appeal, on the theory that exhaustion is “jurisdictional”? (Mokler, supra, 157 Cal.App.4th at p. 133.) Second, did substantial evidence support the section 1102.5 verdict — specifically, Mokler’s “reasonable cause to believe” the reorganization violated law, and the jury’s implicit finding that the County’s stated reasons for firing her were pretextual? (Id. at pp. 138–141.) Third, were Norby’s three incidents over five weeks “sufficiently severe or pervasive” to create a hostile work environment under the FEHA as then construed? (Id. at pp. 141–145.) Fourth, was the conditional new trial order on damages supported by the trial court’s specification of reasons? (Id. at pp. 146–147.)

Holding

Reasoning

Exhaustion: “jurisdictional” does not mean “raisable anytime.” The County conceded it never raised exhaustion against the retaliation claim below, but argued the defense was jurisdictional under Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280. (Mokler, supra, 157 Cal.App.4th at p. 133 & fn. 3.) The court dismantled the premise by parsing Abelleira’s taxonomy of “jurisdiction”: the exhaustion requirement is not “an entire absence of power to hear or determine the case” but rather “a fundamental rule of procedure laid down by courts of last resort, followed under the doctrine of stare decisis, and binding upon all courts.” (Id. at pp. 133–134, quoting Abelleira, at p. 293.) It then adopted the reasoning of Green v. City of Oceanside (1987) 194 Cal.App.3d 212: exhaustion is no “inflexible dogma” but a doctrine riddled with exceptions (unreasonable agency delay, agency incapacity, irreparable harm, futility) requiring case-by-case analysis — exactly the kind of issue governed by “the general rule of civil litigation that arguments and objections not raised and preserved in the trial court are waived on appeal.” (Id. at p. 134, quoting Green, at p. 222.) The equities sealed it: “it would be grossly unfair to allow a defendant to ignore this potential procedural defense at a time when facts and memories were fresh and put a plaintiff to the time and expense of a full trial, knowing it could assert the failure to exhaust administrative remedies if it received an adverse jury verdict.” (Id. at pp. 134–135, quoting Green, at pp. 222–223.)

Sorting the split and confining Campbell. The court canvassed the older cases treating exhaustion as raisable at any time and the “later cases [that] have generally followed Green,” and confronted Hood and Ohton, noting Ohton’s any-time statement rested solely on Hood — which had expressly declined to decide the question. (Mokler, supra, 157 Cal.App.4th at p. 135.) As for the County’s claim that Campbell v. Regents of University of California (2005) 35 Cal.4th 311 resolved the split, the court read Campbell’s footnote — “we may review it at any point in the proceedings” — in context: “the court did not say a party could raise the exhaustion doctrine at any point in the proceedings, but declared it could review at any point a trial court’s determination requiring a party to show exhaustion.” (Id. at pp. 135–136.) Because “ ‘[a]n opinion is not authority for propositions not considered,’ ” Campbell did not authorize sandbagging. (Id. at p. 136, quoting Kinsman v. Unocal Corp. (2005) 37 Cal.4th 659, 680.) Two independent grounds followed: “By waiting to raise exhaustion until after a full trial on the merits, the County unmistakably engaged in ‘unreasonable delay,’ ” and because the grievance procedures “expressly provide they are subject to waiver by mutual consent,” the County “implicitly consented to the trial court’s jurisdiction over Mokler’s retaliatory termination claim.” (Ibid.)

No preservation through the other claims. The County argued it had preserved the issue by winning exhaustion dismissals of the contract and wrongful-termination claims. The court disagreed for two reasons: those claims “essentially duplicated her retaliation claim,” so Mokler’s incentive to litigate futility on them was “substantially less”; and, more importantly, the trial court had cut off any factual showing — announcing, in a colloquy the opinion reproduces, that it would not treat futility as “a sufficient basis to excuse the step” regardless of the evidence. “Accordingly, Mokler never received a full opportunity to present evidence supporting her contention that exhaustion would have been futile.” (Mokler, supra, 157 Cal.App.4th at pp. 136–138 & fn. 4.)

Retaliation: the reasonable-belief element. Section 1102.5, subdivision (b) then provided that an employer “may not retaliate 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.” (Mokler, supra, 157 Cal.App.4th at p. 138.) Retaliation may be proved circumstantially through the familiar three-step framework (Patten v. Grant Joint Union High School Dist. (2005) 134 Cal.App.4th 1378, 1384) or by direct evidence (Morgan v. Regents of University of California (2000) 88 Cal.App.4th 52, 67–68), and protected activity includes disclosing “ ‘reasonably based suspicions’ of illegal activity.” (Id. at p. 138, quoting Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 86–87.) The County’s attack — that no one could reasonably believe an “internal and temporary reporting change” violated law — failed on four bodies of testimony: Mokler’s own (“the County could not effectuate any reorganization of the office on aging without getting prior approval from the state Department of Aging”); CDA official Long’s confirmation that “ ‘reorganization of the area agency on aging does have to be approved by the Department of Aging’ ”; former county CFO Branca’s concession that a reporting change could be material; and Baker’s testimony that the reassignment was, to his belief, “not appropriate or legal” under the Older Americans Act and Older Californians Act. (Id. at p. 139.) The jury could credit Baker’s opinion because he had been her supervisor — and “also could infer Mokler’s supervisors also believed the change was illegal because they instructed her not to inform state officials of the new reporting requirements.” (Id. at pp. 139–140.)

Retaliation: pretext with a paper trail. The County met its intermediate burden with three internal investigations finding procurement violations, shifting the burden back to Mokler to show the explanation “unworthy of credence.” (Mokler, supra, 157 Cal.App.4th at p. 140, quoting Morgan, supra, 88 Cal.App.4th at p. 68.) The pretext evidence was layered. She had never been reprimanded before her complaints; her reviews were “exceptional”; and a month before her suspension Baker’s recommendation letter praised her in terms the court italicized — she had “made strong in-roads in forging collaborative efforts, especially among the Asian and Latino community leadership.” (Ibid.) “Ironically,” the same LCF relationship “so highly valued by Baker” reappeared in the termination notice as “a cause for mistrust and suspicion” that “cast strong doubt on the impartiality” of the van IFB. (Id. at pp. 140–141.) “A jury could reasonably infer from the County’s sudden change of position that the County’s professed reasons for termination were pretextual” — citing Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1062, for the probative force of “material change in performance reviews after protected activity.” (Id. at p. 141.) Additional support: no one ever told Mokler she had done anything irregular with the van before the discharge process; she had in fact sought competitors rather than sole-sourcing; and LCF’s president corroborated that the OoA “never rewrote” LCF’s proposal but “simply recommended issues for LCF to address.” The jury could find the allegations “a trumped-up effort to justify their retaliatory termination of Mokler.” (Ibid.)

Harassment: the then-governing “severe or pervasive” bar. The court stated the familiar standards: hostile-environment harassment under Government Code section 12940, subdivisions (a) and (j)(1), must be “sufficiently severe or pervasive” to “ ‘alter the conditions of [the victim’s] employment and create an abusive working environment,’ ” judged by the totality of the circumstances. (Mokler, supra, 157 Cal.App.4th at pp. 141–142, quoting Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 609.) It recited Fisher’s factors (nature, frequency, duration, context), Fisher’s instruction that acts “cannot be occasional, isolated, sporadic, or trivial,” the inverse severity–frequency relationship, and the collections in Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1123–1124, contrasting “pattern of continuous, pervasive harassment” cases with isolated-incident cases. (Id. at pp. 142–143.) Sheffield v. Los Angeles County Dept. of Social Services (2003) 109 Cal.App.4th 153 supplied the boundary illustration: FEHA is “not a ‘civility code,’ ” but a week of escalating pursuit crossed the line there only because a fist-slamming gesture “added an aspect of violence.” (Id. at pp. 143–144.)

Application: three incidents, five weeks, no physical threats. “Here, we note Norby’s harassment of Mokler occurred on three occasions over a five-week period, and involved no physical threats.” (Mokler, supra, 157 Cal.App.4th at p. 144.) The court weighed each: Norby “did not supervise Mokler or work in the same building with her”; the “aging nun” remark was “an isolated but boorish comment”; the party incident “did not occur at work” and involved “a minor suggestive remark and nonsexual touching”; the office incident “involved touching when Norby placed his arm around Mokler and rubbed his arm against her breast in the process,” but “[t]he touching, however, was brief and did not constitute an extreme act of harassment. Norby’s request for Mokler’s home address was brazen, but this conduct falls short of what the law requires . . . . Norby’s derogatory statement regarding Mexicans was unmistakably foul and offensive, but not sexual.” (Id. at p. 145.) “Taken as a whole, the foregoing acts demonstrate rude, inappropriate, and offensive behavior” — but not a workplace “ ‘permeated with “discriminatory intimidation, ridicule and insult.” ’ ” (Ibid., quoting Beyda v. City of Los Angeles (1998) 65 Cal.App.4th 511, 517.) Analogizing to federal cases finding similar conduct insufficient, the court reversed the denial of JNOV on the harassment claim. (Id. at pp. 145–146.)

The new trial order: deference to the thirteenth juror. Under Code of Civil Procedure section 657, a new trial order for excessive damages requires the judge, “after weighing the evidence,” to be “convinced from the entire record” the jury “clearly should have reached a different verdict”; on appeal such an order “ ‘must be sustained . . . unless the opposing party demonstrates that no reasonable finder of fact could have found for the movant on [the trial court’s] theory.’ ” (Mokler, supra, 157 Cal.App.4th at p. 146, quoting Lane v. Hughes Aircraft Co. (2000) 22 Cal.4th 405, 412.) The trial court’s specification of reasons found no harassment damages, “no physical pain and suffering, requiring medical or professional attention,” no evidence of reputational loss, difficulty finding work, public scorn, or future damages — concluding the “$1.6 million” noneconomic award was punishment in substance. (Id. at p. 147.) Mokler could not show any of the six findings unsupported: she “did not require medical or professional attention,” and “that Mokler was unemployed for only two weeks suggests Mokler’s reputation remained unimpaired” and spared her the economic anxiety “which typically exacerbate[s] the emotional distress suffered by wrongfully terminated individuals.” (Ibid.) The order was affirmed. (Ibid.)

Significance

Mokler has three distinct legacies, and they have aged very differently.

The exhaustion-waiver holding remains a workhorse. Mokler is a leading citation for the rule that failure to exhaust administrative remedies — though labeled “jurisdictional” — is a procedural prerequisite subject to forfeiture, not a defect in subject matter jurisdiction that can be deployed after an adverse verdict. Its careful reading of Abelleira and its confinement of Campbell to appellate review (rather than party assertion) of exhaustion rulings gave trial courts a clean framework for policing sandbagging, and its alternative ground — implied mutual consent where the grievance procedure itself allows waiver — supplies an independent argument whenever a public employer litigates first and exhausts later. (Mokler, supra, 157 Cal.App.4th at pp. 133–136.)

The retaliation holding is a model of § 1102.5 proof. The opinion shows how a whistleblower establishes “reasonable cause to believe” illegality without proving actual illegality: contract text, a state official’s partial confirmation, and — critically — a trusted supervisor’s legal opinion together made her belief reasonable, and the employer’s gag instruction let the jury infer the employer shared it. (Mokler, supra, 157 Cal.App.4th at pp. 139–140.) Its pretext analysis — the praise-to-pretext arc in which the very relationship celebrated in a recommendation letter becomes “a cause for mistrust and suspicion” in the termination notice — is among the cleanest published applications of Yanowitz’s teaching that a sudden shift in the employer’s evaluations after protected activity is itself probative. (Id. at pp. 140–141.) Note that Mokler applied section 1102.5, subdivision (b), as it read before the Legislature’s later expansion of the statute: Senate Bill 496 (2013), effective January 1, 2014, broadened section 1102.5 to protect internal disclosures — reports to a person with authority over the employee or with authority to investigate — as well as disclosures of information the employer already knew. Mokler’s disclosure to a state agency official fell within even the pre-2014 provision’s core.

The harassment holding must be read against Government Code § 12923 — and cited, if at all, with great caution. Mokler held three incidents over five weeks — including physical touching of the plaintiff’s breast and a profane ethnic slur — insufficiently “severe or pervasive” as a matter of law. (Mokler, supra, 157 Cal.App.4th at pp. 144–145.) In 2018 the Legislature added Government Code section 12923 (Stats. 2018, ch. 955, § 1, eff. Jan. 1, 2019), a set of declarations about the standards governing FEHA harassment claims. Two of its provisions bear directly on Mokler-style reasoning: subdivision (b) declares that “[a] single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment if the harassing conduct has unreasonably interfered with the plaintiff’s work performance or created an intimidating, hostile, or offensive working environment,” and subdivision (e) affirms Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243 and “its observation that hostile working environment cases involve issues ‘not determinable on paper.’ ” (Gov. Code, § 12923, subds. (b), (e).) The Supreme Court discussed section 12923 in Bailey v. San Francisco District Attorney’s Office (2024) 16 Cal.5th 611 — which held a coworker’s single use of a racial slur could create a triable hostile-environment issue — while finding “no need to rely on section 12923 to resolve this case” and noting its holding “appears consistent with section 12923.” The Lexis print of Mokler carries a negative-treatment “Warning” signal. The precise doctrinal status of Mokler’s harassment discussion — legislative declaration versus judicial overruling — is therefore layered, but the practical point is not: the three-incidents-too-few arithmetic at the heart of the harassment holding does not survive contact with section 12923’s text, and this site’s analysis relies on Mokler only for its retaliation and exhaustion holdings.

Key quotes

“By waiting to raise exhaustion until after a full trial on the merits, the County unmistakably engaged in ‘unreasonable delay.’ ” (Mokler, supra, 157 Cal.App.4th at p. 136.)

“We conclude substantial evidence supports a finding that Mokler reasonably believed the change in the reporting requirements of OoA’s contracts department represented a material change requiring state approval.” (Mokler, supra, 157 Cal.App.4th at p. 139.)

“A jury could reasonably infer from the County’s sudden change of position that the County’s professed reasons for termination were pretextual.” (Mokler, supra, 157 Cal.App.4th at p. 141.)

“Thus, the jury reasonably could infer the County’s allegations constituted a trumped-up effort to justify their retaliatory termination of Mokler.” (Mokler, supra, 157 Cal.App.4th at p. 141.)

Read the full opinion (Justia) →

Practice pointer

Open questions

The court never decided whether exhaustion of the County’s internal grievance procedures would in fact have been futile — it held only that Mokler was denied the chance to prove futility and that the County waived the defense; whether a post-Skelly internal appeal is ever a prerequisite to a section 1102.5 suit on facts like these was left open. (Mokler, supra, 157 Cal.App.4th at pp. 136–138.) The opinion likewise does not resolve the published split it catalogued — Ohton’s any-time rule versus the Green waiver line — beyond rejecting Ohton’s reading of Hood; the Supreme Court’s definitive word on when exhaustion may be raised remains to be written. (Id. at p. 135.) On damages, the decision affirms the trial court’s six-factor specification without holding that any factor is required, leaving unsettled what quantum of noneconomic proof insulates a seven-figure award from the “thirteenth juror.” (Id. at p. 147.) And the harassment discussion poses the largest prospective question: how courts should treat pre-2019 severity-or-pervasiveness holdings like Mokler’s after Government Code § 12923 — a legislative declaration the Supreme Court in Bailey expressly found “no need to rely on,” reserving “threshold issues regarding its applicability.” Until those threshold issues are decided, Mokler’s harassment analysis occupies doctrinal limbo: never formally overruled, but contradicted on its face by the statute’s declared standards.