By Anne Lowe

WHISTLEBLOWERS – The California Court of Appeal affirmed Tuesday that a fired City of San Diego employee is not protected under a state law that shields whistleblowers from employer retaliation—because the conduct by a fellow employee that he reported had not violated any law.

Rickie Reynolds, the San Diego’s former assistant chief operating officer, filed suit after being asked to resign following two complaints he lodged against another employee.

The court’s unpublished decision notes that Reynolds believed fellow employee Fred Sainz was attempting to “politically discredit” the city attorney’s office after intercepting an e-mail in which Sainz “exhibited animosity” for the office. Reynolds initially alerted Chief Operating Officer Jay Goldstone of the incident because he was concerned Sainz’s use of the city’s e-mail system potentially violated city ethics regulations.

Later that month, Reynolds was told that Sainz requested a list of IP addresses assigned to the city attorney’s office. Reynolds, believing Sainz was going to supply the IP addresses to third parties for monitoring purposes, alerted Goldstone and expressed concerns about Sainz’s intentions.

Goldstone told Reynolds to deliver the IP addresses to Sainz nonetheless, and Reynolds then decided to write a memorandum addressing his concerns, which he delivered along with the IP addresses to Sainz, Goldstone and a deputy chief operating officer. After being told to destroy the memo, Reynolds was asked to resign because he “did not fit into the mold of the mayor’s leadership team for the next administration.”

Reynolds contended that his actions were protected under California Labor Code 1102.5 because he was alerting city officials of potentially illegal activities by city employees.

But the trial court and Fourth District Court of Appeal decided otherwise:

We conclude Reynolds's complaint failed to state facts sufficient to constitute a cause of action under section 1102.5. Circulating the memorandum to Goldstone, Sainz and Michell was not protected conduct because the memorandum disclosed no illegal activity by the City or its employees. (§ 1102.5, subd. (b).) Reynolds cites no statute or ordinance that shows release of the IP addresses to Sainz was illegal. Indeed, Reynolds does not contend here nor did he contend in the memorandum that such disclosure was illegal. Although the memorandum and Reynolds's conversation with Goldstone showed concern that disclosure to or misuse of the addresses by the public could be illegal, it did not amount to the disclosure of past or ongoing illegal activity of his employer that section 1102.5 protects.

Reynolds argues section 1102.5 protects disclosures of what an employee reasonably believes to be the employer's intended illegal activity. He asserts Sainz's e-mail in early September gave rise to a suspicion that Sainz had unethical and illegal motives in requesting the IP addresses. Reynolds cites a number of statutes which indicate that, had Sainz disclosed the IP addresses to outside parties, he or they might have violated the law in the disclosure or subsequent misuse of the addresses. He claims his memorandum prevented the intended illegal activity, and suggests such prevention is part of the public policy section 1102.5 seeks to promote.

We do not agree section 1102.5 protects disclosures of intended illegal activity, especially as here where that activity never occurred. Such an interpretation would provide the opportunity for disgruntled employees to ascribe various illegal intentions to the innocuous behavior of their employers and then seek the protection of the courts after they were terminated for disclosing those alleged intentions. Further, to elevate such disclosures to whistleblower status would "thrust the judiciary into micromanaging employment practices[,]" requiring it to determine motive and intent by parsing various routine communications and workings of the job site. . . Moreover, we do not think the Legislature intended section 1102.5 to create so broad an exception to the at-will-employment relationship, under which employers can discharge employees for even arbitrary reasons. . . Exceptions to the at-will relationship must be "tethered" to a statutory or constitutional policy to ensure employers have adequate notice of the conduct that will subject them to liability.