In February 2016, Leonel Alvarez was hired as a police officer by the City of Delano, California. Within the first week of his employment, Alvarez joined the Delano Police Officers Association. Months later, he attended the December 2016 Association meeting. Among the topics on the agenda was a loan the Association had made to Corporal Jose Madrigal, the Association president.
At the meeting, the Association treasurer initiated a discussion of the loan to Madrigal and confirmed that the loan had been made, stated it had been repaid, and that it was allowed by the bylaws. Alvarez spoke near the end of the discussion. He stated the loan was illegal under the Internal Revenue Code, that the Association was not in the business of being a bank or loaning money, and that the Association’s money should be used for the benefit of its members and not for one individual who was not in a needy position. About 20 members spoke about the loan at the December 2016 meeting; half or more of those expressed an opinion the loan was improper or illegal.
At the end of the meeting, Alvarez felt there were financial transactions that needed an audit to determine whether they were legal or not. The members agreed the Association would talk to an attorney and determine whether the loan portion of the bylaws needed to be removed.
The City terminated Alvarez’s probationary employment on January 9, 2017. Alvarez subsequently sued the City, claiming that he was a whistleblower under a California statute that protects employees who report conduct believed to be unlawful. Alvarez alleged that his employment was terminated in retaliation for “speaking out about illegal conduct on the part of the Association” that involved the president, and that the president influenced the City’s decision to terminate Alvarez’s employment.
For several reasons, the California Court of Appeals dismissed Alvarez’s lawsuit. The Court found that the whistleblower law only protected disclosures of a violation of law “to a government or law enforcement agency, to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance.”
The Court ruled that “Alvarez’s claimed disclosure was not made to a government or law enforcement agency, including the government agency by which Alvarez was employed. It was made to the Association. The Association was not Alvarez’s employer, or a government or law enforcement agency. Those attending the meeting were present as members and board members of the Association, not as representatives or employees of the City, and not as persons with authority over Alvarez as an employee.
“Even assuming for the sake of argument that a disclosure of information to the Association concerning an alleged violation of law by the Association or its board could constitute a protected disclosure within the statute, Alvarez’s statements at the Association meeting were not ‘disclosures’ within the protection of the statute. Alvarez had no personal knowledge of the loan transaction. The uncontradicted evidence demonstrated the loan was made in 2015, before Alvarez was employed by the City or became a member of the Association. Alvarez testified that he learned of the Association’s loan to Madrigal from ‘a lot of people’ and from the Association itself, when it sent a notice of the December 2016 meeting and a list of the topics to be covered at the meeting.
“Alvarez presented no evidence showing that he disclosed or reported any facts pertaining to the loan transaction at the meeting. Rather, he claims his protected disclosure was his opinion that the loan transaction was illegal because it did not comply with IRS regulations.
“Alvarez did not disclose information he believed was not yet known to the Association about a transaction he believed violated the law. Rather, he engaged in a discussion with other members of the Association about a transaction, the facts of which the Association had already disclosed to its members, including Alvarez. The discussion and Alvarez’s participation in it did not constitute a disclosure within the statutory protection.”
Alvarez v. City of Delano, 2021 WL 1257935 (Cal. Ct. App. 2021).
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