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Monday, April 22, 2013

McVeigh v. Recology: Court of Appeal Reverses Summary Judgment on Whistleblower Claims

A quick note on a case from earlier this year.  

In McVeigh v. Recology San Francisco (1/31/13) --- Cal.App.4th ---, plaintiff Brian McVeigh worked for Recology, which provides waste collection services in San Francisco. Mr. McVeigh alleged that Recology terminated him in retaliation for reporting possible fraud in connection with payments for recycled materials. The trial court granted summary judgment for Recology, and McVeigh appealed. The Court of Appeal reversed, holding:
  • A plaintiff in an action for violation of the California False Claims Act (CFCA) need not prove the merits of a potential qui tam action. Instead, he "need only show a genuine and reasonable concern that the government was possibly being defrauded in order to establish that he or she engaged in protected conduct." However, a CFCA claim fails where the plaintiff admits that the alleged fraud resulted in no economic harm to the government. Slip op. at 10-23. 
  • To state a whistle-blower cause of action under the CFCA, an employee who is "charged with discovering fraud in the normal course of [his or her] job duties" must meet a "heightened notice standard" by giving notice to his employer that legal action may follow from the malfeasance being reported. Slip op. at 23-25. 
  • An employee's report of allegedly illegal activity can constitute protected conduct under Labor Code section 1102.5, subdivision (b) even if she "was simply doing her job" in making the report. Further, section 1102.5, subdivision (b) protects employee reports of unlawful activity by third parties such as contractors and employees, as well unlawful activity by an employer.  Slip op. at 27-31.  
The opinion is available here.  

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