In Ferrick v. Santa Clara University, ___ Cal.App.4th ___ (December 1, 2014), the California Court of Appeal (Sixth Appellate District) reversed the order of the Santa Clara County Superior Court (Judge Overton) sustaining defendant’s demurrer to plaintiff’s claim for wrongful termination in violation of the public policy found in Labor Code Section 1102.5, which protects whistleblowers.
Plaintiff was a senior administrator in defendant university’s real estate department. During her employment, she claimed, her direct supervisor engaged in “extensive wrongdoing and inappropriate behavior,” including embezzling funds, engaging in kickback schemes, evading taxes, misdirecting public monies, making false representations in real estate deals, violating state code controlling licensed realtors, and threatening public health and safety. The trial court sustained defendant’s demurrer to the complaint without leave to amend because, it concluded, the complaint failed to state facts sufficient to show that the university terminated plaintiff in violation of a fundamental public policy. Specifically, it found the alleged illegal conduct by plaintiff’s supervisor — at least that which she reported to her superiors — involved an injury only to the pecuniary interests of defendant, a private institution, and not the public at large. Plaintiff appealed.
The appellate court disagreed, concluding that the complaint did state a cause of action for wrongful termination in violation of public policy “on a very narrow basis.” Specifically, the court found that the complaint’s allegations indicated that plaintiff “reasonably suspected” that her supervisor engaged in commercial bribery and she reported the information to defendant’s Budget Director. “This alleged misconduct did not affect only [defendant]’s private interest; it also implicated the public policy embodied in section 1102.5.”