Ferrick v. Santa Clara University
231 Cal. App. 4th 1337
Cal. Ct. App.2014Background
- Linda Ferrick, a senior administrator in Santa Clara University (SCU)’s real estate department, was placed on leave and later terminated after an internal audit; her complaint alleged wrongful termination in violation of public policy (Tameny claim).
- Ferrick alleged she reported various misconduct by her supervisor, Nick Travis, including kickbacks (3% placement fees from landlord Steve Sundeen), improper payments to contractors, living rent-free in university housing funded/ furnished by SCU, and driving a golf cart with a suspended license.
- Ferrick reported some concerns internally to SCU officials (Florio, Fong, Roberts, and others) at different times; she claims at least one disclosure (August 3, 2011) reasonably raised suspicion of commercial bribery by Travis.
- The trial court sustained SCU’s demurrer without leave to amend, finding Ferrick’s allegations did not show violation of a fundamental public policy that inures to the public rather than merely SCU’s pecuniary interests.
- The Court of Appeal reversed in part, holding that, on a narrow basis, the complaint adequately pleaded a Tameny claim grounded in whistleblower public policy (Labor Code §1102.5(b)) based on Ferrick’s allegation of a kickback/placement-fee scheme.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ferrick pleaded termination for reporting activity protected by public policy (whistleblower law §1102.5) | Ferrick reported reasonably based suspicions of commercial bribery, embezzlement, tax evasion, unsafe conduct, and false claims; §1102.5 reflects public policy protecting such disclosures | SCU: disclosures concerned only SCU’s private pecuniary interests and thus fall outside Tameny/Foley public-policy protection | Held: On a narrow ground, Ferrick plausibly alleged a §1102.5-based public-policy violation only with respect to alleged kickbacks (placement fees from Sundeen) reported Aug. 3, 2011; other disclosures insufficiently pleaded reasonable suspicion of public-law violations |
| Whether Ferrick reasonably believed specific misconduct constituted commercial bribery (Pen. Code §641.3) | Ferrick alleges Travis billed placement fees (3%) through a private company for placing SCU tenants in Sundeen’s buildings, suggesting personal payments not in trust for SCU | SCU: allegations do not show Travis solicited/accepted value in exchange for using his position; conduct concerns only private interests | Held: Liberally construed, allegations about the 3% placement fees plausibly supported a reasonable belief of commercial bribery and thus protected disclosure |
| Whether other alleged disclosures (embezzlement, tax evasion, Vehicle Code violation, safety hazards, CFCA false claims) were protected | Ferrick contends these disclosures implicated public policies (embezzlement, tax reporting, vehicle safety/Cal‑OSHA, CFCA) | SCU: facts do not show reasonable basis to suspect these statutory violations; many allegations are internal/pecuniary only | Held: Court found allegations insufficient to show reasonable suspicion of embezzlement, tax evasion, Vehicle Code violation, CFCA false claims, or workplace safety hazards — those theories fail on the pleadings |
| Causation and timing (nexus between protected disclosures and termination) | Ferrick alleges termination occurred after audit and that stated reasons were pretextual; her Aug. 3, 2011 disclosure preceded termination in Oct. 2011 | SCU: no causal connection; prior complaints were temporally remote and reasons for termination appear on complaint face | Held: Pleading of causation was adequate at demurrer stage; temporal proximity and allegations of pretext were sufficient to survive demurrer on the narrow kickback-based claim |
Key Cases Cited
- Tameny v. Atlantic Richfield Co., 27 Cal.3d 167 (Cal. 1980) (recognizing wrongful discharge tort where termination violates fundamental public policy)
- Green v. Ralee Engineering Co., 19 Cal.4th 66 (Cal. 1998) (§1102.5 reflects broad public policy encouraging whistleblowers; employee need only have reasonably based suspicion)
- Foley v. Interactive Data Corp., 47 Cal.3d 654 (Cal. 1988) (employee reports serving only private employer interest do not implicate Tameny public-policy protection)
- Collier v. Superior Court, 228 Cal.App.3d 1117 (Cal. Ct. App. 1991) (adopts broader view that reporting ongoing workplace crimes can serve public interest and support Tameny claim)
- Gantt v. Sentry Insurance, 1 Cal.4th 1083 (Cal. 1992) (public policy exception requires a sufficiently clear, fundamental public policy)
- Rojo v. Kliger, 52 Cal.3d 65 (Cal. 1990) (recognizing fundamental public interest in workplace free from discrimination)
- Blank v. Kirwan, 39 Cal.3d 311 (Cal. 1985) (standards for reviewing demurrers)