Court Rejects Whistleblower Claims of Terminated Captain

The California Court of Appeals has ruled that a whistleblower-qualifying complaint raised for the first time during a disciplinary proceeding, can serve as a basis for whistleblower protection, but that it was not the reason why fire captain Sean Olguin was terminated from the Hollister Fire Department. As a result, the captain’s appeal was denied.

Captain Olguin was a 25-year veteran with the City of Hollister Fire Department. He was terminated in 2019 following an altercation with his brother, also a city firefighter. The altercation resulted in injuries that put his brother out of work.

At a Skelly Hearing (which is California’s version of a Loudermill hearing), Captain Olguin raised a number of defenses, including:

• that he was not the original aggressor…
• that his brother had been physically violent to him in the past; and
• that despite claimed injuries attributed to the October 2018 incident, his brother was physically active and earned money working side jobs while on paid medical leave.

The city’s management services director served as the presiding officer, and concluded Captain Olguin should be terminated. Captain Olguin filed an administrative appeal and was given a full due process hearing before the city manager. While that matter was pending, his attorney filed a tort claim against the city alleging his termination was retaliation for having informed the city about his brother’s fraudulent activity. The city denied the claim. Following the due process hearing, the city manager concluded that Captain Olguin should be terminated.

Several months later, Captain Olguin filed suit alleging unlawful retaliation in violation of California Labor Code Section 1102.5, which is the whistleblower protection act. Captain Olguin claimed that prior to his Skelly hearing, the fire chief assured him he would not be terminated, and that termination only became a concern after he reported insurance fraud as part of his defense. The trial court ruled in favor of the city prompting Captain Olguin to appeal.

The Court of Appeals upheld the trial court decision, concluding:

• The city argues that plaintiff’s presentation of evidence at the Skelly conference does not constitute protected activity under section 1102.5 because the disclosures do not encompass a statutory violation or noncompliance by the city.
• But it is settled law that whistleblower protection extends under section 1102.5 to reports of illegal activity by a plaintiff’s employer or by fellow employees.
• The allegations in plaintiff’s complaint are based on his disclosure of unlawful conduct (in the form of insurance fraud) by plaintiff’s brother, a city firefighter.
• Plaintiff’s complaint nonetheless fails as a matter of law because it draws no causal link between plaintiff’s disclosure and his termination.
• Plaintiff was issued a notice of intended termination in October 2019, following an extensive internal affairs investigation into the October 2018 altercation.
• Plaintiff’s Skelly hearing-at which he challenged the misconduct charges in part through disclosure about his brother’s alleged fraud-occurred after the investigation and notice of intended termination.
• Plaintiff’s disclosure therefore does not support a prima facie case of retaliation.
• “Employers need not suspend previously planned [adverse action] upon [a plaintiff engaging in protected activity], and their proceeding along lines previously contemplated, though not yet definitively determined, is no evidence whatever of causality.”
• If the rules were otherwise, a plaintiff could orchestrate a retaliation claim by purporting to reveal an unlawful act of a coworker at any time during a disciplinary process.
• Plaintiff argues that the adverse action did not arise until after the Skelly hearing because the fire chief told others after issuing the notice of intent that he did not actually intend to terminate plaintiff.
• The chief’s statements are not relevant, however, because the final decision to terminate plaintiff did not rest with the fire chief but with the city’s management services director.

Here is a copy of the decision: