PAGA, Individual Claims, Public Entities, and Section 1102.5 Whistleblower Claims

On September 8, 2019, the Court of Appeal for the Second Appellate District issued an important decision in the case of Hawkins v. City of Los Angeles (Case Nos. B279719, B282416).  That decision casts light on the following questions:  (1) Whether PAGA claims can be brought on behalf of an individual, as opposed to a group of aggrieved employees; (2) Whether PAGA claims can be brought against public entities; and (3) Whether attorneys’ fees are recoverable under Labor Code section 1102.5.

In Hawkins, the plaintiffs (Hawkins and Kim) were former employees of the City of Los Angeles.  They claimed that they were fired because they had complained about the City’s practice of pressuring city employees to change decisions regarding parking fines.  The plaintiffs were part-time hearing examiners who were not entitled to civil service protections.  In other words, like almost all employees in California, they were at-will employees who were not entitled to progressive discipline.

In Los Angeles, individuals who get parking tickets can request a review of the underlying violation.  If they are not happy with the results of the review, they must pay the fine but can ask for an administrative hearing before a hearing officer.  If the hearing officer agrees with the individual, then the City will issue a refund of the fine.

Hawkins complained that supervisors were screaming and yelling at hearing officers in order to get them to change their decisions from “not liable” to “liable”.  As a result, members of the public were not getting the refunds that they deserved.  Hawkins’ complaint was substantiated by many other hearing officers.  When his complaints were ignored, Hawkins went up the chain of command and also raised this issue with the City Ethics Commission and the City Council.   Kim raised similar complaints.

Shortly thereafter, the City fired Hawkins and Kim.  Hawkins sued and won, and the City appealed.  The Court of Appeal upheld the jury verdict in Hawkins’ favor.

The Court looked first at the issue of whether Hawkins had met his burden under Labor Code section 1102.5.  In particular, the Court considered whether Hawkins had shown that the reason given by the City for his termination was “pretextual.”  The Court found that Hawkins had met his burden on this issue for several reasons.

First, there was evidence to support the finding that the plaintiffs had not been fired for the reasons given by the City.  Second, there was strong evidence that the City had pressured hearing officers to change their decisions, thus giving the City a motive to terminate the plaintiffs.  Third, the City’s witnesses had plainly lied in some of their testimony at trial.

The Court then turned to the PAGA question.  The plaintiffs’ claims raised the following issues:  Can terminated employees bring PAGA claims based upon their termination?  And can public employees bring PAGA claims against a public entity?

The Court did not address either of these questions directly.  As to the first question, the Court focuses on whether the plaintiffs had properly exhausted their administrative remedies under PAGA.  The Court found that they had, because the plaintiffs had alleged that the City pressured hearing officers (in addition to the plaintiffs) to change their written decisions.  Thus, they complained about conduct that impacted them and fellow hearing officers.  This was sufficient under PAGA, even though the plaintiffs’ 1102.5 claims were ultimately brought only on behalf of themselves.

As to the second question, the Court permitted PAGA penalties against the City of Los Angeles, a public entity.  The Court did not explicitly address this issue, however.

Finally, the Court turned to the issue of attorneys’ fees.  The Court found that attorneys’ fees were appropriate for the violations of Labor Code section 1102.5 because the plaintiffs had properly brought a PAGA claim.  See Labor Code § 2699(g)(1).  This finding underscores the importance of bringing PAGA claims for violations of section 1102.5.

The Court also found that attorneys’ fees were also appropriate under Code of Civil Procedure section 1021.5 because the action resulted in the enforcement of an important right affecting the public interest.  Section 1021.5 is therefore another important avenue for wrongfully-terminated employees to recover their attorneys’ fees.

The lawyers at Hunter Pyle Law represent employees at all levels-from CEOs and Vice Presidents to the lowest paid hourly employees-who are brave enough to stand up for their rights in the workplace.  If you have questions about whether you are being retaliated against for being a whistleblower, please feel free to contact us for a free and confidential initial intake process.  We can be reached at inquire@hunterpylelaw.com or at (510) 444-4400.