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Monday, March 2, 2015

Court of Appeal Rules on Retroactivity of Whistleblower Statutes

A frequent issue over the last several years has been whether a plaintiff must exhaust administrative remedies under Labor Code section 98.7 by filing a claim with the Labor Commissioner before filing a statutory whistleblower action under Labor Code 1102.5. See, e.g., Campbell v. Regents of University of California (2005) 35 Cal.4th 311; MacDonald v. State of California (8/27/13) depublished 11/27/13.

In 2013, the Legislature addressed the issue by:

Adding section 244(a), which provides: “An individual is not required to exhaust administrative remedies or procedures in order to bring a civil action under any provision of this code, unless that section under which the action is brought expressly requires exhaustion of an administrative remedy. This subdivision shall not be construed to affect the requirements of Section 2699.3.”

Adding section 98.7(g), which states: “In the enforcement of this section, there is no requirement that an individual exhaust administrative remedies or procedures.”

In Satyadi v. West Contra Costa Healthcare District (12/31/14) --- Cal.App.4th ---, the plaintiff, Satyadi, sued the defendants under Labor Code section 1102.5, alleging that they fired her in retaliation for reporting and refusing to participate in allegedly illegal activities. On demurrer, the defendants argued that Satyadi had not exhausted her administrative remedies by filing a complaint with the Labor Commissioner under section 98.7 before bringing her action. The trial court agreed, but the Court of Appeal reversed, concluding that these amendments "merely clarified existing law" and should apply retroactively to Satyadi's case.