NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS JUL 2 2024

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

WALLEN LAWSON, No. 22-56114

Plaintiff-Appellant, D.C. No. 8:18-cv-00705-JVS-JPR v.

PPG ARCHITECTURAL FINISHES, INC., MEMORANDUM*

Defendant-Appellee.

Appeal from the United States District Court for the Central District of California James V. Selna, District Judge, Presiding

Argued and Submitted December 8, 2023 San Francisco, California

Before: COLLINS, FORREST, and SUNG, Circuit Judges. Concurrence by Judge FORREST.

Plaintiff-Appellant Wallen Lawson appeals the district court’s grant of

summary judgment in favor of Defendant-Appellee PPG Architectural Finishes,

Inc. (“PPG”) on his claims for whistleblower retaliation under California Labor

Code § 1102.5 and common law wrongful termination. We have jurisdiction under

28 U.S.C. § 1291, and we review the district court’s decision de novo, Ochoa v.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. City of Mesa, 26 F.4th 1050, 1055 (9th Cir. 2022). To affirm a district court’s grant

of summary judgment, an appellate court must find, viewing the evidence in the

light most favorable to the nonmoving party, that there are no genuine issues of

material fact and that the district court correctly applied the relevant standard of

law. Id. “A factual issue is genuine ‘if the evidence is such that a reasonable jury

could return a verdict for the nonmoving party.’” Id. (quoting Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986)). Applying these standards, we reverse the

district court’s decision on the statutory claim, vacate its decision on the common

law claim, and remand.

Lawson’s manager at PPG, Clarence Moore, directed his subordinates to

secretly tint poor-selling paint product the wrong color, which forced PPG’s client,

Lowe’s, to sell the product at a deep discount, and allowed PPG to avoid buying

back unsold inventory. This fraudulent scheme also made PPG employees’ sales

numbers “appear to be better than they actually [were].” Lawson anonymously

reported the scheme through PPG’s ethics reporting system and, a few days later,

openly confronted Moore about it as well.

Moore was involved in every decision or action that led to PPG’s

termination of Lawson’s employment: Moore (1) evaluated Lawson’s performance

on market walks; (2) put Lawson on a Performance Improvement Plan (“PIP”);

and (3) asked PPG to terminate Lawson’s employment. PPG asserts that it

2 terminated Lawson for two reasons: “falsified” entries in a training roster and

failure to meet the goals of his PIP, including improved market walk performance

scores and sales targets. Both purported bases for the termination were identified

by Moore.

Whistleblower Retaliation Claim

Lawson claims that PPG terminated him in violation of California’s

whistleblower protection law, California Labor Code § 1102.5. The California

Supreme Court, on certification from a prior appeal in this case, held that

California Labor Code § 1102.6 provides a two-step framework for § 1102.5

whistleblower retaliation claims. Lawson v. PPG Architectural Finishes, Inc., 503

P.3d 659, 667–68 (Cal. 2022). At step one, the plaintiff must “establish, by a

preponderance of the evidence, that retaliation for an employee’s protected

activities was a contributing factor in a contested employment action.” Id. at 667.

At step two, “the burden shifts to the employer to demonstrate, by clear and

convincing evidence, that it would have taken the action in question for legitimate,

independent reasons even had the plaintiff not engaged in protected activity.” Id. at

667–68. To satisfy the “clear and convincing” burden of proof under California

law, the evidence must be “so clear as to leave no substantial doubt,” and

“sufficiently strong to command the unhesitating assent of every reasonable mind.”

In re Angelia P., 623 P.2d 198, 204 (Cal. 1981) (cleaned up). The § 1102.6

3 framework “closely resembles” the Mt. Healthy framework for First Amendment

retaliation claims, but the employer’s burden under § 1102.6 is higher (clear and

convincing) than it is under Mt. Healthy (preponderance of the evidence). Lawson,

503 P.3d at 665 (citing Mt. Healthy City Bd. of Educ. v. Doyle, 429 U.S. 274, 287

(1977)).

On remand, the district court concluded that a reasonable jury could find that

Lawson met his burden at step one of the § 1102.6 test, i.e., that he demonstrated

by a preponderance of the evidence that retaliation was a “contributing factor” in

his termination. But the district court held that PPG carried its burden at step two,

i.e., that it demonstrated that no reasonable jury could find that PPG had failed to

show, by clear and convincing evidence, that Lawson would have been terminated

for “legitimate, independent reasons” irrespective of his whistleblowing activity.

On appeal, PPG asks us to affirm the grant of summary judgment either on the

same ground, or on the ground that Lawson cannot meet his burden at step one.

For the reasons explained below, we agree with the district court that there is

a genuine factual dispute regarding whether Lawson met his burden at step one.

Ochoa, 26 F.4th at 1055; Ellins v. City of Sierra Madre, 710 F.3d 1049, 1064 (9th

Cir. 2013) (“[W]hen ‘questions of motive predominate in the inquiry about how

big a role the protected behavior played in the decision, summary judgment will

usually not be appropriate.’” (quoting Mabey v. Reagan, 537 F.2d 1036, 1045 (9th

4 Cir. 1976))). However, unlike the district court, we conclude that there is also a

genuine factual dispute regarding whether PPG met its burden at step two. Viewing

the record in the light most favorable to Lawson, a reasonable jury could find by a

preponderance of the evidence that Lawson’s protected activity was a contributing

factor in his termination. Further, a reasonable jury could find that PPG failed to

prove, by clear and convincing evidence, that it would have terminated Lawson,

even if Lawson had not engaged in protected activity.

1. As a threshold matter, the district court erred by relying on Moore’s

testimony to resolve several disputed issues of material fact, even though the

record contains multiple bases for impeaching Moore’s credibility.1 SEC v.

Koracorp Indus., Inc., 575 F.2d 692, 699 (9th Cir. 1978) (“The courts have long

recognized that summary judgment is singularly inappropriate where credibility is

at issue.”); see also Settlegoode v. Portland Pub. Schs., 371 F.3d 503, 511 (9th Cir.

2004) (employer not entitled to judgment as a matter of law where evidence of

employee’s poor work performance “hinged entirely” on word of supervisor with

retaliatory motive, “which the jury was certainly entitled to disregard”).

1 For example, even though PPG’s internal investigation found that Moore directed the fraudulent mis-tinting scheme, Moore denied knowing about the practice of mis-tinting at his deposition. For another example, Moore testified in his deposition that he did not request Lawson’s termination, but the record contains an email dated August 21, 2017, in which Moore explicitly requested Lawson’s termination.

5 2. The district court also erred by repeatedly faulting Lawson for failing to

present evidence proving that PPG’s proffered legitimate reasons for terminating

him were pretextual. The California Supreme Court held in Lawson that, “[u]nder

section 1102.6, a plaintiff does not need to show that the employer’s nonretaliatory

reason was pretextual.” 503 P.3d at 666. Instead, “plaintiffs may satisfy their

burden of proving unlawful retaliation even when other, legitimate factors also

contributed to the adverse action.” Id. at 664. And, the employer does not satisfy

its burden just by demonstrating that it had a legitimate reason to take the

challenged employment action. See id. at 664–65; see also Gillette v. Delmore, 886

F.2d 1194, 1198 (9th Cir. 1989).2

Thus, in this case, even assuming PPG demonstrated that it could have

terminated Lawson for the legitimate reasons it identified, PPG would still not be

entitled to summary judgment unless it also demonstrated, “by clear and

convincing evidence, that it would have” terminated Lawson for those reasons,

even if he had “not engaged in protected activity.” Lawson, 503 P.3d at 667–68

(emphasis added); see also Gillette, 886 F.2d at 1198 (“The district court found

that two other charges were serious enough to warrant termination, given

2 We cite First Amendment retaliation cases because the California Supreme Court explained that the Mt. Healthy and § 1102.6 frameworks are substantially the same. See Lawson, 503 P.3d at 665 (“the [Mt. Healthy] burden-shifting framework . . . closely resembles the section 1102.6 framework” (citing Mt. Healthy, 429 U.S. at 287)).

6 [plaintiff’s] prior disciplinary history. This, however, is not enough. [Defendant]

must show that it would have terminated him, not that it could have.” (emphasis in

original)).

3. There are genuine disputes of material fact regarding Moore’s decision to

place Lawson on a PIP and his management of that PIP. Viewing the record in the

light most favorable to Lawson, a reasonable jury could find that Moore placed

Lawson on a 60-day PIP just a few days after Lawson openly refused to participate

in the mis-tinting scheme and that Moore’s retaliatory motive contributed to that

decision. See, e.g., Soranno’s Gasco, Inc. v. Morgan, 874 F.2d 1310, 1316 (9th Cir.

1989) (holding timing can properly be considered as circumstantial evidence of

retaliatory intent).

Contrary to what PPG claimed at oral argument, the record shows a material

factual dispute as to when Lawson was informed of the PIP. Although Lawson

initially answered “[y]es” when asked during his deposition whether Moore had

informed him of the PIP on April 21, the transcript also shows that Lawson

immediately corrected himself and stated that Moore only discussed “issues”

regarding Lawson’s performance at that time. Nothing in the record clearly

demonstrates that Moore had decided to place Lawson on a PIP prior to Moore’s

April 26 email to Andrew Mayhew, a member of PPG’s HR department. Although

PPG claims that Mayhew’s responsive email shows that the two of them had

7 discussed placing Lawson on a PIP weeks earlier, that response can reasonably be

read as stating only that Moore and Mayhew had previously discussed Lawson’s

performance issues. The point is significant, because a reasonable jury could find

that Lawson confronted Moore about the mis-tinting scheme as late as April 25 and

that Moore then requested the PIP—which he had not previously raised with

Lawson—a day later. That finding would permit a reasonable inference that the

PIP, which set Lawson on the path to termination, was a retaliatory response to the

protected activity of refusing to engage in illegal conduct, see Cal. Lab. Code

§ 1102.5(c). Lawson therefore carried his burden to create a triable issue under the

first prong of § 1102.6.

Additionally, it is undisputed that PPG policy required Moore to provide

support to Lawson during the PIP, such as weekly coaching meetings, and that

Moore failed to do so. Lawson complained to Human Resources about the lack of

support, and as a “corrective action,” HR extended Lawson’s PIP by 30 days. But

Moore still failed to attend the required coaching meetings during this extension. A

reasonable jury could find that Moore’s retaliatory motive contributed to his

deficient management of Lawson’s PIP, and that the deficient management

contributed to Lawson’s failure to successfully complete it. Although Moore

testified that he had placed three other employees on PIPs, PPG provided no

evidence that Lawson’s performance issues were comparable to (or worse than)

8 those of the other employees, or that Moore managed the other employees’ PIPs in

a similarly deficient manner.3 In the absence of such evidence, a reasonable jury

also could find that PPG failed to meet its burden to show that Moore would have

treated Lawson the same, even in the absence of his protected activity.

4. There is a genuine dispute of material fact regarding whether Moore’s

retaliatory motive tainted his scoring of Lawson’s market walks after Lawson

objected to Moore’s fraudulent scheme. PPG asserts that Lawson does not dispute

the accuracy of the market walk scores that Moore gave him, but that is not correct.

For example, Lawson testified at his deposition that Moore gave him no credit for

certain displays, even though Lawson completed more of the displays than

required. For another example, the market walk evaluation records show that

Moore generally refused to give partial credit for various tasks that Lawson

partially completed.4 These factual disputes are material because it is undisputed

that Lawson missed the score he needed to pass the PIP by only four points. A

reasonable jury could find that Moore scored Lawson harshly at least in part

3 Likewise, PPG provided no evidence that the requirements for successfully completing the PIP that Moore set for Lawson were comparable to those Moore set for other employees. 4 Although PPG claimed at oral argument that Moore consistently gave either full or no credit across his market walk scoring of Lawson, this assertion is contradicted by the record, which shows Moore sometimes gave partial credit. Further, PPG provided no comparators showing that Moore consistently refused to give other employees partial credit.

9 because of his retaliatory motive. PPG failed to provide sufficient comparator

evidence to require a reasonable jury to find that PPG proved by clear and

convincing evidence that Moore treated Lawson like other employees.

PPG argues that Lawson’s unsuccessful performance on market walks both

before and after the protected activity is sufficient to demonstrate an independent

basis for terminating him. But the scores for Lawson before and after his protected

activity alone do not prove that the post-protected activity scores are accurate.

Indeed, Lawson argues that but for Moore’s allegedly arbitrary decision to score

Lawson’s performance at zero in places where he should have received partial

credit, Lawson would have successfully completed his PIP. PPG also disregards

the possibility that Lawson improved and Moore refused to acknowledge that

improvement because of his retaliatory motive.

PPG points to one instance—Lawson’s final market walk in August 2017

before his termination—in which Moore’s supervisor, Sean Kacsir, approved of

Moore’s scoring. But that does not resolve the factual dispute because Kacsir’s

credibility is also genuinely disputed. There is record evidence that Kacsir was

close to Moore; Kacsir insisted that Moore did nothing wrong, even after PPG’s

internal investigation concluded that Moore directed a fraudulent scheme; and

Kacsir managed at least two other supervisors who, like Moore, directed their team

members to engage in the same fraudulent scheme. Accordingly, a reasonable jury

10 could discount Kacsir’s credibility.

Further, PPG provided no evidence that it normally terminates an employee

for low market walk scores. Notably, the record shows that a different manager

gave Lawson the highest year-to-date score in the nation less than a year before his

termination. Even though the market walk scoring grids give managers wide

discretion on how many points to award and whether to award partial credit, PPG

concedes that it gives managers “no guidance” about how to score market walks

other than the scoring grid itself. This lack of guidance and the wide variability of

market walk scoring between different managers supports a reasonable inference

that PPG does not consider one manager’s market walk scores to be a dispositive

measure of an employee’s performance.

Although Lawson’s failure to meet sales targets reflects a more objective

metric, there are factual disputes concerning this issue that would permit a

reasonable jury to find that PPG’s proof was not clear and convincing. In

particular, as the district court noted, Moore had realigned Lawson’s store

assignments to include “three underperforming stores, one of which later shut

down completely.” Although that realignment occurred before Lawson’s protected

activity, as did some of Lawson’s earlier failures to meet sales targets, a reasonable

jury could find that PPG’s claimed reliance on these missed sales targets was not

clear and convincing. As the district court acknowledged, Lawson “only missed his

11 sales goals by a small margin,” suggesting that the weakness of the stores may

have made a difference. Moreover, the district court improperly faulted Lawson for

the lack of record evidence as to other Territory Managers’ “sales metrics” and

potential store realignments. Given the lack of such evidence, a reasonable jury

could find that PPG did not clearly and convincingly show that Lawson’s sales

metrics reflected an objective level of inferior performance that would have led to

termination without regard to his protected activity.

Because PPG failed to provide sufficient evidence to require any reasonable

jury to find by clear and convincing evidence that Lawson would have been

terminated absent Moore’s retaliatory motive, PPG is not entitled to summary

judgment. Lawson, 503 P.3d at 667–68; see also Settlegoode, 371 F.3d at 510–11

(concluding employer not entitled to judgment as a matter of law on retaliation

claim where it terminated employee based on evaluations completed by supervisor

with retaliatory motive).

5. There is a genuine dispute of material fact regarding whether retaliatory

motive contributed to Moore’s decision to characterize Lawson’s training roster as

“falsified.” Lawson testified that the training roster issue was caused by technical

problems with his company-issued equipment, and that Moore was aware of those

problems and had previously emailed IT about them on Lawson’s behalf. The

record also includes emails in which Moore described the training roster errors as

12 “inaccuracies,” without ascribing intent to falsify. Moore and Mayhew first

accused Lawson of “falsifying” his training roster during Lawson’s termination

meeting. Mayhew testified at his deposition that there was no actual evidence that

Lawson intentionally falsified the entries on his training roster. On this record, a

reasonable jury could find that Moore’s retaliatory motive led him to wrongly

accuse Lawson of more egregious misconduct, and that PPG failed to show that it

would have characterized Lawson’s conduct in the same way, even if he had not

engaged in protected activity.

6. Even assuming that Lawson’s performance was deficient in the ways

Moore identified, viewing the record in the light most favorable to Lawson, a

reasonable jury could infer from the circumstances that retaliatory motive

contributed to Moore’s decision to ask PPG to terminate Lawson and to PPG’s

decision to grant that request. And we cannot conclude based solely on the

undisputed facts in this record that every reasonable jury would find by clear and

convincing evidence that PPG met its step two burden to show that it would have

terminated Lawson, even in the absence of retaliatory motive. See, e.g.,

Settlegoode, 371 F.3d at 510–12 (employer did not carry its step two burden

where, although the employer said it terminated the plaintiff for inadequate

individualized education programs (IEPs), it “offered no evidence that other

teachers had been fired for drafting inadequate IEPs in the past or that it was

13 unusual for new teachers to struggle with IEP writing”).

Wrongful Termination Claim

The district court also granted summary judgment in favor of PPG on

Lawson’s claim of wrongful termination in violation of public policy. The district

court granted summary judgment on this claim solely because it is “predicated on

the same alleged retaliation that was the basis of [Lawson’s] first claim.” Because

we conclude that genuine disputes of material fact preclude summary judgment on

Lawson’s retaliation claim, we vacate the district court’s decision as to the

wrongful termination claim and remand for further consideration consistent with

this decision.

REVERSED AND REMANDED.

14

FILED

JUL 2 2024

Wallen Lawson v. PPG Architectural Finishes, Inc., No. 22-56114

MOLLY C. DWYER, CLERK

Forrest, J., concurring. U.S. COURT OF APPEALS

Because I agree that there are genuine issues of disputed material fact

regarding whether Defendant-Appellee PPG Architectural Finishes, Inc. can prove

by clear and convincing evidence that it would have terminated Plaintiff-Appellant

Wallen Lawson “for legitimate, independent reasons even if [Lawson] had not

engaged in activities protected by [California Labor Code] Section 1102.5,” Cal.

Lab. Code § 1102.6, particularly where the record does not definitively establish that

Lawson was informed that he would be placed on a performance improvement plan

to correct his work deficiencies before he engaged in protected activity, I concur in

the court’s judgment.