Vatalaro v. County of Sacramento

Facts

Two Labor Code provisions frame the case. Labor Code section 1102.5, subdivision (b), prohibits an employer from retaliating against an employee for disclosing information to, among others, “a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance … if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee’s job duties.” (§ 1102.5, subd. (b), quoted at Vatalaro, supra, 79 Cal.App.5th at p. 380.) Its companion, Labor Code section 1102.6, has since 2003 supplied the evidentiary architecture: once retaliation is shown to be “a contributing factor in the alleged prohibited action,” the employer bears “the burden of proof to demonstrate by clear and convincing evidence that the alleged action would have occurred for legitimate, independent reasons even if the employee had not engaged in activities protected by Section 1102.5.” (§ 1102.6, quoted at Vatalaro, supra, at p. 378.)

Cynthia Vatalaro worked for the County of Sacramento. In 2013, her then-supervisor, Michelle Callejas, discussed the possibility of her promoting from administrative analyst II to administrative services officer (ASO) III; Vatalaro worked with Callejas to develop the duties associated with the promotion and received it in 2015. (Vatalaro, supra, 79 Cal.App.5th at pp. 371–372.) Under County civil service rules, the new position was probationary for six months. (Id. at p. 372.)

Trouble preceded her first day. Vatalaro learned her supervisor would be Mindy Yamasaki, not Callejas, and that her listed duties differed from those she had developed. (Vatalaro, supra, 79 Cal.App.5th at p. 372.) A County human resources analyst found no problem with the reporting structure — “[t]here is nothing in the class specifications that would prohibit the reporting relationships you are proposing” — but, according to Vatalaro, told her by phone that her assigned duties “did not rise to the level of an ASO III” and “would cause [her] promotional issues because [she would not be] doing the duties that would prepare [her] for the next level of promotability,” adding that if the classification “came under a study, … it would be unsure if [Vatalaro] would be able to remain in that job classification since it did not rise to the level.” (Ibid.) Callejas voiced similar concerns, stating she “felt [Vatalaro’s assigned job duties] were … below the level of classification that [Vatalaro] was going to be in.” (Ibid.) At a pre-start meeting, Yamasaki told Vatalaro her staff “had reservations about working with [Vatalaro],” declined to give specifics, and deferred discussion of Vatalaro’s anticipated tasks. (Ibid.)

Once in the role, Vatalaro perceived a series of slights she attributed to her complaints about working below her classification. Days in, Yamasaki declined her request for higher-level tasks, saying, “[W]e all do staff work”; a month later, when Vatalaro asked Yamasaki to tell Callejas that “she doesn’t have assignments” at the appropriate level, Yamasaki said nothing and appeared angry. (Vatalaro, supra, 79 Cal.App.5th at p. 373.) Feeling excluded from a staff appreciation breakfast, Vatalaro wrote Yamasaki, “I wanted to thank you for including me in the PA appreciation breakfast, it shows how much I’m seen as part of the team” — drawing Yamasaki’s response that she had informed Vatalaro of the event but Vatalaro had “decided to take the entire day off”; Vatalaro rejected an offer to discuss it in person, preferring “email [in the future] so there is no misunderstanding.” (Ibid.) After Vatalaro complained to Callejas that Yamasaki “has not given me any concessions on tasks or projects that I’d like to work on,” Yamasaki e-mailed that she was “pleased to have [Vatalaro] as a member of” the management team, that staff in their field “get various assignments to complete that do not always align to a prescribed duty statement,” and assigned initial projects — an e-mail Vatalaro considered retaliatory. (Ibid.)

The friction escalated into claimed harassment. When Vatalaro reported that coworker Verronda Moore had told her not to talk in a meeting or Moore would “poke [her] in the leg,” Yamasaki investigated on the spot; after Moore denied it, the two allegedly yelled at Vatalaro for not “telling the truth.” (Vatalaro, supra, 79 Cal.App.5th at p. 374.) Vatalaro reported harassment to Callejas, who forwarded the complaint to the County’s department of personnel services. (Ibid.) Two weeks later Yamasaki and Moore presented Vatalaro an agenda cataloguing “[p]erceptions of what’s not working well” — including “[b]ody language and expressions,” “[n]on-engaging behavior,” and “[s]preading false rumors” — and, later the same day, convened a meeting at which a coworker aired complaints against her. (Id. at pp. 374–375.) Yamasaki reported Vatalaro’s harassment complaint to personnel services and, in a subsequent phone call, described “how difficult it’s been working with [Vatalaro] because she has felt that [Vatalaro] ha[s] been distant and unwilling to cooperate”; Vatalaro shot back that Callejas had told her Yamasaki “didn’t want [her] in the management position,” and Yamasaki noted she “still hasn’t decided what to do about [her] probation.” (Id. at p. 375.)

Shortly afterward, Yamasaki recommended releasing Vatalaro from probation on the ground that she “ha[d] been insubordinate, disrespectful, and dishonest in her actions,” supported by a memorandum to Callejas detailing instances: Vatalaro repeatedly called work meetings “a waste of her time,” declined a meeting as not a “valuable use of [her] time,” “roll[ed] her eyes, look[ed] away, and gestur[ed] with her hands” when asked to research software for staff, and said she planned to “promote up higher.” (Vatalaro, supra, 79 Cal.App.5th at p. 375.) Callejas signed the recommendation; the County terminated her ASO III employment and offered return to her prior analyst classification. (Id. at p. 376.) Vatalaro refused, writing that the experience had left her physically sick and anxious, and that she had “been advised not to return to such a hostile environment.” (Ibid.)

Procedural history

In 2017, Vatalaro sued the County on two causes of action: retaliation in violation of section 1102.5 for reporting that “she was working below her classification,” and constructive termination in violation of public policy. (Vatalaro, supra, 79 Cal.App.5th at p. 376.) The County moved for summary judgment on two retaliation grounds — first, that Vatalaro could not establish a prima facie case because her “complaints about her job assignments were not complaints of illegal activity, nor did [Vatalaro] have a belief that they even violated the Civil Service Rules”; and second, that the “County had a legitimate, non-retaliatory reason for releasing her from probation,” namely that she had been “‘insubordinate, disrespectful, and dishonest.’” (Ibid.) It attacked the common law claim on the settled rule that “a public employee cannot state a common law claim for wrongful termination in violation of public policy against a public entity employer.” (Ibid.)

The trial court granted the motion on both grounds. It found the County “met its burden to show that [Vatalaro] cannot allege[] a prima facie case of retaliation because she has not alleged or presented evidence of protected conduct under this statute,” reasoning that she complained only about “internal personnel matters”; alternatively, it found the County “presented evidence that it had a legitimate business reason for releasing her from probation” and that Vatalaro “fail[ed] to raise a triable issue of material fact to support that the reasons given for the release from probation were ‘pretext.’” (Vatalaro, supra, 79 Cal.App.5th at pp. 376–377.) It held the public-policy claim barred. (Id. at p. 377.) Vatalaro timely appealed, renewing both retaliation arguments. (Ibid.)

The posture then took its decisive turn. Because every participant — both parties and the trial court — had litigated the motion under a three-part burden-shifting framework that Lawson v. PPG Architectural Finishes, Inc. (2022) 12 Cal.5th 703 had since repudiated, the Court of Appeal requested supplemental briefing “to account for Lawson and section 1102.6.” (Vatalaro, supra, 79 Cal.App.5th at pp. 383–384.) It then affirmed, “though on a ground somewhat different than those raised at the trial level.” (Id. at p. 371.) Review of the summary judgment was de novo, with the evidence liberally construed in Vatalaro’s favor. (Id. at p. 377.)

Issue

Three questions structure the opinion. First, what framework governs an employer’s summary judgment showing on a section 1102.5 claim after Lawson — the familiar three-part, legitimate-reason-plus-pretext test, or section 1102.6’s two-step statutory scheme? (Vatalaro, supra, 79 Cal.App.5th at p. 378.) Second, could Vatalaro establish that she engaged in protected activity — a question that folded into a subsidiary interpretive puzzle: does section 1102.5(b), which by its terms protects an employee with “reasonable cause to believe” the disclosed information reveals unlawfulness, require an actual, subjective belief at all? (Id. at pp. 380–382.) Third, did the County’s evidence — offered under the wrong standard below — nonetheless “demonstrate, by clear and convincing evidence, that it would have taken the action in question for legitimate, independent reasons even had the plaintiff not engaged in protected activity”? (Id. at pp. 379–380, 384.)

Holding

Reasoning

Step one: the framework everyone used below is “deeply flawed.” Both parties and the trial court evaluated the claim under a three-part burden-shifting test drawn from pre-Lawson authority — prima facie case, legitimate nonretaliatory reason, pretext — citing decisions such as Patten v. Grant Joint Union High School Dist. (2005) 134 Cal.App.4th 1378, 1384, Mokler v. County of Orange (2007) 157 Cal.App.4th 121, and Hager v. County of Los Angeles (2014) 228 Cal.App.4th 1538, 1540. (Vatalaro, supra, 79 Cal.App.5th at p. 378.) The court held that framework “deeply flawed, as our Supreme Court recently explained in Lawson,” because it “fail[s] to acknowledge section 1102.6.” (Ibid.) The plain text of the statute undermines the three-part test in three respects, each of which the court spelled out. First, the burden of production: the three-part test lets an employer prevail on a mere preponderance showing of a legitimate reason, but “section 1102.6 explicitly imposes a higher burden of production, clear and convincing evidence.” (Id. at p. 379.) Second, the required showing: it is not enough that the employer had a legitimate reason — “[w]ere that the standard, then an employer could satisfy its burden simply by showing it had one legitimate reason for its action, even if several illegitimate reasons principally motivated its decision.” (Ibid.) The employer must instead show the action “would have occurred for legitimate, independent reasons even if the employee had not engaged in” protected activity. (Ibid.) Third, pretext: requiring the employee to prove pretext at a third step “makes no sense under the framework described in section 1102.6,” because, as Lawson explained, “[u]nder section 1102.6, a plaintiff does not need to show that the employer’s nonretaliatory reason was pretextual. Even if the employer had a genuine, nonretaliatory reason for its adverse action, the plaintiff still carries the burden assigned by statute if it is shown that the employer also had at least one retaliatory reason that was a contributing factor in the action.” (Ibid., quoting Lawson, supra, 12 Cal.5th at pp. 715–716.) The court therefore “decline[d] to apply the parties’ offered three-part framework” and restated the governing two-step scheme: the plaintiff must show by a preponderance that retaliation was a contributing factor; the burden then shifts to the employer to prove the same-decision defense by clear and convincing evidence. (Id. at pp. 379–380, citing Lawson, supra, 12 Cal.5th at p. 718.)

Step two: the prima facie case — a fatal concession under the parties’ reading, and a statutory puzzle the court left unsolved. The trial court had found no protected activity because Vatalaro showed no reasonable belief that any law was violated. Assuming “for a moment” the parties’ shared premise that section 1102.5 protects an employee who “reasonably believed” the disclosed information revealed a violation, the court agreed Vatalaro’s challenge “falls short” — because she had conceded the point in discovery. (Vatalaro, supra, 79 Cal.App.5th at pp. 380–381.) Asked at deposition whether it was her understanding that her job description “violated civil service rules,” she answered, after an evasive start, “I don’t know” — “which we understand to be a clear concession that she did not have an understanding that her job description ‘violated civil service rules.’” (Id. at p. 381.) Pressed further, she identified only two things her assignment violated, neither a law: “It violated the agreement [she] had with [Callejas] and … also violated some type of policy with HR.” (Ibid.) Her post-deposition declaration asserting a belief that her duties “did not comply with the Civil Service Requirements” could not resurrect the claim: even at summary judgment, courts “may give ‘great weight’ to admissions made in discovery and ‘disregard contradictory and self-serving affidavits of the party.’” (Ibid., quoting Whitmire v. Ingersoll-Rand Co. (2010) 184 Cal.App.4th 1078, 1087.)

But the court then unsettled the premise itself. Surveying the many decisions equating “reasonable cause to believe” with “reasonably believes” — including Nejadian v. County of Los Angeles (2019) 40 Cal.App.5th 703, 719, Ross v. County of Riverside (2019) 36 Cal.App.5th 580, 593, Siri v. Sutter Home Winery, Inc. (2019) 31 Cal.App.5th 598, 605, Mize-Kurzman v. Marin Community College Dist. (2012) 202 Cal.App.4th 832, 850, and Collier v. Superior Court (1991) 228 Cal.App.3d 1117, 1123 — the court observed that “these phrases are not equivalent”: a person may have reasonable cause to believe something is true “even if she does not in fact believe it to be true.” (Vatalaro, supra, 79 Cal.App.5th at pp. 381–382.) The Legislature itself distinguishes the concepts — Penal Code section 26’s duress defense requires that defendants “had reasonable cause to and did believe” their lives endangered — and federal courts have long read “reasonable cause” objectively. (Id. at p. 382, citing Pen. Code, § 26, Bernstein v. South Central Bell Telephone Co. (5th Cir. 1984) 730 F.2d 987, 991, and Yorke v. Thomas Iseri Produce Co. (7th Cir. 1969) 418 F.2d 811, 814.) “Considering the generally acknowledged distinction between a person who has cause to believe something is true and a person who actually believes something is true, we harbor serious doubts about the parties’ understanding of section 1102.5. But we stop short of rejecting their reading altogether.” (Ibid.) Some statutes’ phrasing has been construed to require both reasonable cause and actual belief — the court pointed to People v. Gonzales (2013) 56 Cal.4th 353, 380, footnote 12, construing Evidence Code section 1024 — and “[p]erhaps similar considerations could favor a similar reading of section 1102.5. But because … the trial court’s decision can be sustained on an alternative ground, we need not pursue this issue further.” (Id. at pp. 382–383.) The court also flagged, in a footnote, that the Supreme Court’s endorsement of “‘reasonably based suspicions’” in Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 87, never addressed “the outer reach of the statute’s ‘reasonable cause to believe’ language.” (Id. at p. 382, fn. 1.)

Step three: the dispositive ground — a clear-and-convincing same-decision showing on an undisputed record. Because everyone had briefed the wrong standard, the court ordered supplemental briefing on Lawson and section 1102.6, then agreed with the County that its evidence satisfied even “the more demanding standard.” (Vatalaro, supra, 79 Cal.App.5th at pp. 383–384.) The County’s three stated reasons — Vatalaro had been “‘insubordinate, disrespectful, and dishonest’” — were documented in Yamasaki’s release memorandum and, critically, went essentially unrebutted. (Id. at p. 384.) On dishonesty, Vatalaro had claimed she could not complete her work because she “could not talk directly to” a coworker in a meeting, then admitted she “did participate in the meeting by talking and asking questions”; the court found she “never meaningfully disputed” that episode, and her quibble about whether Moore had initially told her not to speak was “immaterial to Yamasaki’s reasoning.” (Id. at pp. 384–385.) On insubordination and disrespect, the e-mail record spoke for itself: she told her supervisor “[t]hese agenda items have already been given to you as far as updates go” and “I would like to make valuable use of my time”; she accused Yamasaki of wasting her time — “You know, you could have saved a whole lot of time if you just would have said that an hour ago”; and she sent Yamasaki an e-mail under the subject line “Dear Fran,” an apparent reference to a former County manager with a poor reputation. (Id. at p. 385.) Vatalaro herself, in her own notes of a call with Yamasaki, “appeared to at least acknowledge that she had been ‘difficult’ to work with, ‘distant,’ and ‘unwilling to cooperate.’” (Ibid.) On that record, the court concluded “that the County’s undisputed evidence would require a reasonable fact finder to find it ‘highly probable’ that the County’s decision to release Vatalaro from probation would have occurred for legitimate, independent reasons even if Vatalaro had not complained about working on low-level assignments” — importing the clear-and-convincing appellate lens of Conservatorship of O.B. (2020) 9 Cal.5th 989, 1011–1012, into the summary judgment calculus. (Id. at p. 386.)

Step four: none of Vatalaro’s counterarguments raised a triable issue. The court worked through each. Her characterization that the County released her merely because she “was not a ‘potted plant’” and “continued to try to right what she perceived was a wrong” was “not a fair characterization” given the specific documented incidents. (Vatalaro, supra, 79 Cal.App.5th at p. 386.) Her general competence was conceded but “not material to this case, which concerns the County’s adverse employment action based on her ‘insubordinate, disrespectful, and dishonest’ conduct, not the quality of her work.” (Ibid.) Her claim that she was never given leadership assignments lacked record support — Yamasaki had tried to put her in charge of data entry staff, which Vatalaro dismissed as “a dump job.” (Ibid.) Her assertion that she was “never coached or disciplined” showed only that she was never coached in writing; Yamasaki testified to an “oral warning” and coaching, and Callejas testified she counseled Vatalaro on working better with Yamasaki, including her use of sarcasm — none of it disputed. (Id. at pp. 386–387.) The complaint that the release rested on “unverified” third-party accusations misread the record: “Yamasaki made clear that she relied principally on her own personal interactions with Vatalaro.” (Id. at p. 387.) And her final points — that the release invoked a 2013 staffing incident and accused her of fabricating her harassment complaint — were “premised on a misunderstanding of the record,” since the release memorandum did neither. (Ibid.) The court closed by analogizing to federal practice under a similar framework, citing Gonzalez v. City of New York (S.D.N.Y. 2020) 442 F.Supp.3d 665, 697–698, affirmed (2d Cir. 2021) 845 Fed.Appx. 11, and held that summary judgment was properly granted. (Id. at pp. 387–388.)

Significance

Vatalaro is the essential post-Lawson counterweight. Lawson was justly celebrated on the employee side: it abolished the pretext requirement, lowered the plaintiff’s causation showing to “contributing factor,” and raised the employer’s rebuttal burden to clear and convincing evidence. Vatalaro demonstrates that the framework’s second step still has real teeth at summary judgment — an employer with a well-documented, undisputed disciplinary record can win outright even where, as here, its own motion papers had invoked the wrong standard. The decision’s mechanics deserve attention: the court did not remand for a do-over (contrast Scheer v. Regents of University of California (2022) 76 Cal.App.5th 904, which reversed where the moving papers rested on McDonnell Douglas); it solicited supplemental briefing and applied section 1102.6 to the existing record itself. The practical difference appears to lie in the state of the evidence — in Vatalaro the employer’s proof was effectively uncontroverted, so the higher standard changed nothing about the outcome.

Doctrinally, the opinion makes two lasting contributions. First, it translates the clear-and-convincing standard into summary judgment terms: the employer’s undisputed evidence must be such that a reasonable fact finder would be required to find the same-decision defense “highly probable,” borrowing Conservatorship of O.B.’s formulation of clear-and-convincing review. (Vatalaro, supra, 79 Cal.App.5th at p. 386.) That framing has become the working test for section 1102.6 summary judgment motions. Second, its extended dictum questioning whether “reasonable cause to believe” requires an actual belief is quietly radical. Nearly every prior decision — Nejadian, Ross, Siri, Mize-Kurzman, Collier — had assumed a subjective-belief requirement; Vatalaro marshals text, the Penal Code, and federal authority to suggest the standard may be objective. (Id. at pp. 381–383.) An objective reading would protect employees whose disclosures objectively evidence unlawfulness even if the employee cannot articulate a legal theory at deposition — precisely the trap that closed on Vatalaro herself. The court’s refusal to resolve the question leaves both readings available. Subsequent authority has confirmed Vatalaro’s core holding on the defense side of the ledger: Veverka v. Department of Veterans Affairs (2024) 102 Cal.App.5th 162, 174, cited Vatalaro as establishing that a plaintiff whose employer carries the section 1102.6 burden “is barred from all relief.”

Key quotes

“[U]nder section 1102.6, a plaintiff does not need to show that the employer’s nonretaliatory reason was pretextual. Even if the employer had a genuine, nonretaliatory reason for its adverse action, the plaintiff still carries the burden assigned by statute if it is shown that the employer also had at least one retaliatory reason that was a contributing factor in the action.” (Vatalaro, supra, 79 Cal.App.5th at p. 379, quoting Lawson, supra, 12 Cal.5th at pp. 715–716.)

“[W]e conclude that the County’s undisputed evidence would require a reasonable fact finder to find it ‘highly probable’ that the County’s decision to release Vatalaro from probation would have occurred for legitimate, independent reasons even if Vatalaro had not complained about working on low-level assignments.” (Vatalaro, supra, 79 Cal.App.5th at p. 386.)

“Considering the generally acknowledged distinction between a person who has cause to believe something is true and a person who actually believes something is true, we harbor serious doubts about the parties’ understanding of section 1102.5. But we stop short of rejecting their reading altogether.” (Vatalaro, supra, 79 Cal.App.5th at p. 382.)

Read the full opinion (Justia) →

Practice pointer

Open questions

The opinion is as notable for what it declined to decide as for what it held. First, the court expressly reserved whether section 1102.5(b)’s “reasonable cause to believe” standard requires an actual, subjective belief in unlawfulness, or is instead objective — it “harbor[ed] serious doubts” about the prevailing subjective reading but “stop[ped] short of rejecting” it, noting that “we need not pursue this issue further.” (Vatalaro, supra, 79 Cal.App.5th at pp. 382–383.) It likewise observed that Green v. Ralee Engineering Co. never decided “the outer reach of the statute’s ‘reasonable cause to believe’ language” — including “whether an employee who had reasonable cause to be suspicious, but was not in fact suspicious, could also invoke the statute.” (Id. at p. 382, fn. 1.) Second, because the court affirmed on the same-decision ground, it never decided whether Vatalaro’s out-of-class complaints were protected disclosures at all — the trial court’s “internal personnel matters” rationale was neither endorsed nor rejected on appeal. Third, the court did not decide whether Vatalaro satisfied step one of section 1102.6 (the contributing-factor showing); the analysis proceeded directly to the employer’s step-two burden, leaving open how courts should sequence the two steps at summary judgment when both are contested. Finally, the opinion gives no general guidance on how much genuinely disputed evidence will defeat a clear-and-convincing same-decision showing — here the record was one-sided, and the court’s fact-bound holding leaves the harder, mixed-record cases for another day. (Id. at pp. 386–388.)