After complaining about a supervisor smoking in the office, an employee of the State Assembly was fired. Believing the firing was motivated by his complaint, the employee filed a lawsuit against the Assembly, claiming illegal retaliatory and discriminatory discharge. The Assembly challenged the lawsuit, stating that the employee was required to exhaust administrative remedies by bringing a complaint to the Labor Commissioner before suing in court. The trial court agreed and dismissed the suit. On appeal, the Third District Court of Appeal upheld the trial court decision. (MacDonald v. State of California (--- Cal.Rptr.3d ----, Cal.App. 3 Dist., August 27, 2013).
Aaron MacDonald (“MacDonald”) was hired by the State of California (“State”) to work for the California State Assembly (“Assembly”) at an office in San Joaquin County. Several months into his new job, MacDonald complained to several of his supervisors that one of them was illegally smoking in the office, violating two state laws. One of the supervisors assured MacDonald that the problem was serious and would be dealt with, but two weeks later, MacDonald was fired. MacDonald filed suit against the Assembly and the State for retaliatory discharge and discriminatory discharge.
The State and Assembly filed demurrers challenging MacDonald’s claims. The Assembly argued that the trial court could not take the case because MacDonald failed to exhaust available administrative remedies by not bringing his complaint to the Labor Commissioner before going to court. The trial court agreed, granting the demurrers and finding that MacDonald failed to state facts constituting a cause of action because he did not exhaust administrative remedies. MacDonald appealed.
The Third District Court of Appeal upheld the trial court decision, agreeing that MacDonald was required to exhaust administrative remedies by taking his complaint to the Labor Commissioner before suing in court. Because MacDonald failed to do so, his suit was barred from court.
The appellate court rejected MacDonald’s argument that he was not required to exhaust administrative remedies according to the court of appeal case Lloyd v. County of Los Angeles (2009) 172 Cal.App.4th 320. Lloyd held that the administrative complaint procedure in the Labor Code did not have to be completed before suing in court. Lloyd stated that this was because the Labor Code provision containing the administrative remedy states that a party “may file a complaint” with the Labor Commissioner, rather than using a mandatory word such as “must” or “shall.” The court of appeal criticized Lloyd, stating that the case incorrectly interpreted the law. The appellate court noted that the settled rule in California is that when an administrative remedy is provided in a statute, that remedy must be pursued before suing in court, even if the statute uses non-mandatory language such as the word “may.”
After criticizing the reasoning in Lloyd, the appellate court held that another case, Campbell v. Regents of University of California (2005) 35 Cal.4th 311, more properly interpreted the law on exhaustion of administrative remedies in the Labor Code. Campbell involved a lawsuit by an employee of the Regents of the University of California and stated that the employee was required to exhaust the university’s internal administrative remedies before suing in court.
The court of appeal rebuffed MacDonald’s contention that Campbell only applied to internal department administrative remedies, not remedies contained in the Labor Code. The appellate court pointed out that Campbell treated the university’s internal rule as it if were a statute and held that the Labor Code requires exhaustion of administrative remedies before filing a lawsuit.