In the case of Aaron MacDonald v. State of California et al., the Court of Appeals held that an employee must exhaust the administrative remedy set forth in Labor Code section 98.7 prior to filing suit in Superior Court for retaliatory discharge under Labor Code Sections 1102.5 and 6310.
California Labor Code section 98.7(a) provides, in pertinent part, anyone who believes that he or she has been discharged or otherwise discriminated against in violation of California Labor laws may file a complaint with the California Labor Commissioner within six months of the occurrence. The Labor Commissioner will investigate the alleged violations and may hold a hearing to determine if the allegations are true. If the commissioner determines a violation has occurred, the employee is notified and the commissioner may take any action on behalf of the employee necessary to remedy the violation, including but not limited to reinstatement, reimbursement for lost wages, and payment of attorney’s fees. If the commissioner finds no violation has occurred, the complaint will be dismissed and the employee may subsequently bring a civil action in Superior Court to pursue his or her claim for damages.
In MacDonald, an employee of the State of California complained to upper management that a fellow co-worker was smoking in his office in violation of Labor Code section 6404.5 and Government Code section 7597. Although management advised MacDonald they would address the situation, he was fired two weeks later. MacDonald brought suit for retaliatory and discriminatory discharge under Labor Code sections 1102.5 and 6310, which protect employees who report unlawful acts (such as smoking in the workplace), and prohibit retaliation and discrimination regarding those disclosures to a government agency.
In response to the complaint, the Defendants filed a motion challenging the court’s jurisdiction over the causes of action because Plaintiff failed to follow the administrative procedure provided under California Labor Code section 98.7 before filing suit in Superior Court. Defendants were successful in their argument and the case was dismissed without leave to amend.
On appeal, the dismissal by the trial court was affirmed finding that under Campbell “the rule is that where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act.” Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 321. The Appellate Court further found that pursuant to Campbell, exhaustion of administrative remedies also exists where the requirement is couched in permissive language such as “may” as expressed in section 98.7. Although Defendants argued that the administrative procedure was merely an additional remedy an employee could choose to pursue, the court emphasized it was an absolute prerequisite to filing suit in Superior Court for violation of Labor Code sections 1102.5 and 6310.
Therefore, because MacDonald was required to exhaust his administrative remedies before bringing suit in Superior Court, and he failed to do so, the appellate court upheld the trial court’s ruling dismissing his causes of action.
While Defendants did cite the case of Lloyd v. County of Los Angeles to uphold their position that exhaustion of administrative remedies is not necessary prior to filing suit, the court quickly discounted that case for not distinguishing Campbell, and for failing to follow years of case law contrary to that ruling. The court further noted that to date, no published California decision has cited Lloyd for the proposition that an employee need not follow an administrative procedure prior to filing statutory causes of action.
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Aaron MacDonald v. State of California et al.