Filed 12/1/14 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT
LINDA FERRICK, Plaintiff and Appellant,

v. SANTA CLARA UNIVERSITY, Defendant and Respondent. H040252 (Santa Clara County Super. Ct. No. CV233484)

Linda Ferrick, a former employee of Santa Clara University (SCU), a private
institution , appeals from a judgment of dismissal after an order sustaining a demurrer to Ferrick ’ s second amended complaint (complaint) without le ave to amend. The complaint’s sole cause of action i s for wrongful termination in violation of public policy , otherwise known as a Tameny claim ( see Tameny v

. Atlantic Richfield Co

. (1980) 27
Cal.3d 167 )

. The court found that the complaint failed to alle ge that her discharge violated any fundamental public policy

. Although th e complaint charges Nick Travis (Travis) , alleged ly SCU’s “ Director
of Real Estate ” and Ferrick’s immediate supervisor , with extensive wrongdoing and inappropriate behavior , only som e of that conduct wa s allegedly reported by Ferrick to
SCU ’s management

. Based upon her limited disclosures to SCU as alleged , Ferrick

a rgue s that the complaint state s a cause of action

. We conclude that t he complaint does
state a cause of action for wro ngful termination in violation of public policy on a very narrow basis . Accordingly, we will reverse the judgment.2 I Standard of Review Appellate review of an order sustaining a demurrer is de novo. ( McCall v

. PacifiCare of Cal ., Inc

. (2001) 25 Cal.4th 412, 415.) “ In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long

- settled rules. ‘ We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions
or conclusions of fact or la w. [Citation.] We also consider matters which may be judicially noticed. ’ [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we deter mine whether the complaint states facts sufficient to
constitute a cause of action. [Citation.] ” ( Blank v

. Kirwan (1985) 39 Cal.3d 311, 318.) “It is not the ordinary function of a demurrer to test the truth of the plaintiff ’ s allegations or the accuracy with which he describes the defendant ’ s conduct. A demurrer tests only the legal sufficiency of the pleading. [Citation.] ” ( Committee On Children ’ s Television , Inc

. v
. General Foods Corp. (1983) 35 Cal.3d 197, 214.) In reviewing the ruling on a demurr er, “the question of plaintiff ’ s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court [citations]

. . . .” (

Alcorn v

. Anbro Engineering , Inc

. (1970) 2 Cal.3d 493, 496.) “To
survive a dem urrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff ’ s proof need not be alleged. [Citation.]” ( C

. A

. v
. William S

. Hart Union High School Dist

. (2012) 53 Cal.4th 861, 872.) A complaint’s allegations are construed liberally in favor of the pleader. ( Skopp v

. Weaver (1976) 16 Cal.3d 432, 438; see Code Civ. Proc., § 452.)

“ [W]hen [the demurrer] is sustained without leave to amend, we decide whether
there i s a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of3

discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff. [Citation.] ” ( Blank v

. Kirwan , supra , 39 Cal.3d at p. 318.) The plaintiff “must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading. [Citation.]” ( Cooper v

. Leslie
Salt Co

. (1969) 70 Cal.2d 627, 63 6 .) In this case, Ferrick has not shown that her complaint may be amended in any factual respect.
II Background
A. Second Amended Complaint
The complaint alleges that Ferrick worked for SCU as a senior administrator in its
real estate d epartment and Travis was the department ’ s director. It contains allegations indicating that Travis has a bad character and behave d unprofessional ly , for example , it
states that Travis has a “ ‘playboy ethic,’ ” he sent “ ‘ inappropriate emails,’ ” he arrived
late to the office, he took long lunches, he sometimes failed to come into work, and he “frequently drank alcohol at work and l eft empty beer cans in his office

. . . . ” The complaint generally alleges: “ Ferrick witne ssed and reported numerous instances of her immediate supervisor, Nick Travis

. . . embezzl [ing] funds, engag [ing] in kickback schemes, evad [ing] taxes, misdirect [ing] public monies, mak [ing] false representations in real estate deals, violat [ing] sta te code controlling licensed realtors,
and threaten [ing] public health and safety. All of these substantial policy concerns harm

me mbers of the public beyond SCU.” It also states: “ Travis ’ activities violated statutes and significant public policy conc erns by harming SCU students, parents, customers, taxpayers, regulators, bond issuers, local business, and community members and is
theref ore a matter of public policy.” According to t he complaint , Travis asked Ferrick ’ s son

- in

- law, David Rego, a
construc tion supervisor at SCU, t o procure a truck for SCU’s r eal e state department

.4

Rego procured a truck for $6,000. When processing an invoice for $21,000 from Rego in August 2011, Ferrick allegedly “ changed the total from $21,000 to $27,000 believing,
incorr ectly, that the bill did not refl ect the $6,000 for the truck.” “ Rego subsequently returned a check for $6,000 that was overpaid ” and “ Ferrick immediately deposited it in
an SCU account, correcting the error.”
On September 9, 2011, SCU informed Ferrick t hat there would be a full audit of
its r eal e state d epartment. SCU placed Ferrick and her son

- in

- law on paid administrative
leave. On October 12, 2011, Travis terminated Ferrick “ for ‘ questionable finance practices ’ that he characterized, at worst, ‘ as f raud and embezzlement from the University. ’ ” The allegations of the complaint indicate that at various times Ferrick made disclosures about Travis to Harry Fong, SCU ’ s director of finance , or Sam Florio, SCU ’ s risk manager

. It also alleges that she prov ided a list of SCU tenants of Steve Sundeen, a property owner who paid Travis a fee of 3 percent on new leases, to SCU’s budget
director , Dennis Roberts, a little more than a month before SCU announced an internal
audit of the r eal e state d epartment.
B. R uling on Demurrer
The court sustain ed SCU ’ s demurrer to the complaint without leave to amend
because it fail ed to state facts sufficient to show that the university terminat ed Ferrick in
violat ion of a fundamental publ ic policy. It found that “ the allege d illegal conduct by [Ferrick ’ s] supervisor that she reported to her superiors involved an injury only to the pecuniary interests of SCU, a private institution, and not the public at large.” It indicated
that Ferrick ’ s “ conclusory allegations that her sup ervisor ’ s alleged conduct generally
result in harm to students and others are insufficient to demonstrate that he violated laws
which inure ben efits to the public at large.” The trial court determined that Ferrick had
not shown that she could add factua l allegations to state a claim.5 II I
Discussion
A. Law Governing Ta meny Claim

“ An action in tort seeking damages for discharge from employment in contravention of public policy is an exception to the general rule, now codified in Labor Code section 2922, th at unless otherwise agreed by the parties, an employment is
terminable at will. That exception was recognized in Tameny v

. Atlantic Richfield Co

. (1980) 27 Cal.3d 167

. . . . ” ( Jennings v

. Marralle (1994) 8 Cal.4th 121, 129, fn. omitted.) Tameny stated: “ [W] hen an employer ’ s discharge of an employee violates fundamental principles of public policy, the discharged employee may maintain a tort action and recover damages traditionally available in such actions. ” ( Tameny , supra , at p. 170.) To prevail on a claim for wrongful termination in violation of public policy, a plaintiff must show that (1) the plaintiff was employed by the defendant , (2) the defendant discharged the plaintiff, (3) a viol ation of public policy was a motivating
reason for the dischar ge, and (4) the discharge harm ed the plaintiff

. (See Haney v

. Aramark Uniform Services , Inc

. (2004) 121 Cal.App.4th 623, 641 ; CACI No. 2430.)
B

. Public Policy
1. Nature of Public Policy Supporting Wrongful Termination Claim The public policy supporting a claim of wrongful termination must meet the following four criteria : “First, the policy must be supported by either constitutional or statutory provisions. Second, the policy must be ‘public’ in the sense that it ‘inures to the benefit of the public’ rather than serving merely the interests of the individual. Third, the policy must have been articulated at the time of the discharge. Fourth, the policy must be ‘fundamental’ and ‘substantial.’ ” ( Stevenson v

. Superior Court (1997) 16 Cal.4th 880,
889

- 890, fn. omitted.) A dministrative regulations implementing a statute may also be a6

source of fundamental public policy. ( See Green v

. Ralee Engineering Co

. (1998) 19 Cal.4th 66, 79

- 80, 82 ( Green ).) The determination whether the public policy exception

a pplies “depends in large part on whether the public policy alleged is sufficiently clear to provide the basis for such a potent remedy.” ( Gantt v

. Sentry Insurance (1992) 1 Cal.4th 1083, 1090 ( Gantt ) , disapproved on another ground in Green , supra , at p. 8 0, fn. 6.)
2

. Whistleblower Protection for Reports of Unlawful Activity

a

. Public Policy Embodied in Labor Code Section 1102

. 5 , Subdivision ( b )
Ferrick asserts that she was wrongful ly discharge d in violation of the public policy
reflected in Labor Code section 1102.5, subdivision (b) , 1 which prohibits an employer from retaliating against an employee for reporting criminal or unlawful activity

. Ferrick
asserts that she complained about activities that she reasonably believed violated Penal
Code section 6 41.3 (commercial bribery), California Code of Regulations, title 22,
section 926

- 3 (taxable v alue of lodging), or other law.
As amended in 2003 and at the time of Ferrick ’s termination in 2011 , former section 1102.5, subdivision (b), provided: “ An employ er may not retaliate against an employee for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation or nonc ompliance with a state or federal rule or regulation. ” 2 (Stats. 2003, ch. 484, § 2, p. 3518 .)

1 All further references are to the Labor Code unless otherwise specified.
2 As originally enacted, section 1102.5 did not apply to rules. ( Stats. 1984, c h

. 1083, § 1 , p. 3698.) The section was again amended in 2013 (Stats. 2013, ch. 781, § 4.1, p p

. 5525

- 5526 ). Subdivision (b) of the section now provides in full: “ An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information , or because the employer believes that the employee disclosed or may disclose information, to a government or law enforcement agency, to a person with authority over the employee or another employee who has the authority to investig ate, discover, or correct the violation or noncompliance , or for providing information to, or (continued)7

I n Green , supra , 19 Cal.4th 66 , the California Supreme Court observed that former section 1102.5, subdivision (b) , “ reflects the broad public policy interest in encouraging workplace whistle

- blowers to report unlawful acts without fearing retaliation. ” ( Green , supra , at p. 77.) It stated: “ Section 1102.5, subdivision (b), concerns employees who report to public agencies. It does not protect plaintiff, who rep orted his suspicions directly to his employer. Nonetheless, it does show the Legislature ’ s interest in encouraging employees to report workplace activity that may violate important public policies that the Legislature has stated.” ( I bi d. ) “[A]n employee need not prove an actual violation of law; it suffices if the employer fired him for reporting his ‘reasonably based suspicions’ of illegal activity. [Citation.]” ( Id . at p. 87.)
b

. Purported Commercial Bribery
Ferrick now asserts that she reasonably believed that some of Travis’s activities
violated Penal Code section 641.3 and she re ported them to Florio or Fong. Penal Code section 641.3, subdivision (a), provides: “Any employee who solicits, accepts, or agrees to accept money or any thing of value from a person other than his or her employer, other than in trust for the employer, corruptly and without the knowledge or consent of the employer, in return for using or agreeing to use his or her position for the benefit of that other person, and any pe rson who offers or gives an employee money or any thing of value under those circumstances, is guilty of commercial bribery.” For purposes of this statute, “ ‘[c]orruptly’ means that the person specifically intends to injure or defraud (A) his or her empl oyer, (B) the employer of the person to whom he or she offers, gives, or agrees to give the money or a thing of value, (C) the employer of the person from
testifying before, any public body conducting an investigation, hearing, or inquiry, if the employee has reasonable cause to believe that the information disclose s a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee ’ s job duties. ” (Italics added.)8

whom he or she requests, receives, or agrees to receive the money or a thing of value, or (D) a compe titor of any such employer.” (Pen. Code, § 641.3, subd. (d)(3 ) .)
Ferrick claims that th ree of Travis’s alleged a ct i vities provided a reasonable basis
for her to belie ve that Travis violated Penal Code section 641.3. F irst , Ferrick allegedly reported to Florio “the situation” that Travis instructed her to expedite the payment of a $4,365 bill submitted by the contractor hired “to install a second electric meter at a[n] SCU address” even though he had not yet completed the work. The complaint does not

con tain allegations stating or showing that Ferrick had a reasonable basis to suspect that Travis solicited, accepted, or agreed to accept money or anything of value from the

contractor not in trust for SCU . (See Ibid

. ; Green , supra , 19 Cal.4th at p. 87.) F errick’s
disclosure to Florio regarding the payment of the contractor was not protected by a public policy encouraging employees to report illegal activities

. The second activity involved an alleged “below

- market lease agreement” between
SCU and City Ligh ts Limousines that was arranged by Travis , who allegedly ran an unpaid tab for the company’s limousine services. The complaint alleged that “ City Lights Limousines continually complained to Ms. Ferrick a bout the non

- payment

. . . .”
A t some undisclosed t ime (impliedly between early 2011 and July 2011 if allegations are in chronological order ), Ferrick allegedly disclosed to Fong that Travis was allowing City Lights Limousines to a pay a reduced rent in exchange for Travis’s personal use of its
limousine s ervice s

. The complaint alleged that “Travis’ rent

- for

- rides arrangement”
vio lated Penal Code section 641.3. Again , there is no allegation that Travis solicited, accept ed, or agreed to accept
free limousine rides from City Lights Limousines in exchange fo r providing some benefit to the company

. (See Pen. Code, § 641.3.) Rather, the complaint’s allegations indicate
that Travis simply did not pay the outstanding bill for the company’s services and the company “continu ally complained” about it to Ferrick

. The allegations do not state or9

show that Ferrick had a reasonable basis to suspect that Travis was committing commercial bribery. ( See Green , supra , 19 Cal.4th at p. 87.) Her disclosure to Fong regarding City Lights Limousines w as not protected by a pub lic policy encouraging employees to report illegal activities

. The third activity that Ferrick claims provided a reasonabl e basis to believe that Travis was violating Penal Code section 641.3 involved alleged “kick

- backs from Steve Sundeen, who owned a co mmercial property near SCU’s c a mpus.” The c omplaint allege s that, “[f]or every tenant th at Mr. Travis placed in Mr. Su n deen’s property, Mr. Travis received a three percent fee, which he billed through his father’s c ompany, Alto View Properties.” It state s that Travis placed SCU departments in Sundeen’s buildings to

“ earn his additional payments ” even though SCU had “significant vacant commercial and
of fice space of its own

. . . .” The complaint further allege s that , on August 3, 2011, “Ferrick compiled a list [for] SCU Budget Director Dennis Roberts listing ten SCU departments or groups that were paying approximately $7 5,000 in monthly lease payments the [ sic ] Mr. Sundeen, the property owner who paid Mr. Travis three percent on new leases.” It states th at Ferrick reported a “ kickback ” scheme when she disclosed Travis’s “receipt of a three percent fee for every tenant he placed in Mr. Sundeen’s building. ”
Those allegations , liberally construed, indicate that Travis accepted something of value (a 3 percen t payment) , not in trust for SCU, in return for using his position as an SCU employee to p lace SCU tenants with a private landlord . Accordingly, the complaint adequately plead s that Ferrick ha d a reasonable basis to suspect commercial bribery and
disclose d her “ reasonably based suspicions ” to Roberts on August 3, 2011. (See Green , supra , 19 Cal.4th at p. 87.) On this very narrow basis, the complaint states a tort cause of action for wrongful termination in violation of public policy embodied in section 1 102.5, subdivision (b)

.10

c

. Purported Embezzlement Ferrick additionally argues that she had a reasonable belief that “ Travis violated
the law ” when she “ told Florio that Travis lived in SCU property rent

- free and instructed her to pay for $11,000 in furni shing and décor

. . . .” The complaint alleges th e following. I n January 2010, Travis moved into a furnished SCU apar tment but he did not pay rent. In July 2010, Travis moved into a university

- owned loft, he had it furnished at SCU’s expense, and he did n ot pay rent. “Residential accommodations were not part of [Travis’s] agree d upon compensation from SCU.” Ferrick told Florio that Travis lived
“rent

- free” in the loft and Travis “had instructed her to pay $11,000 in furnishing and
décor

. . . with an S CU credit card.” “Ferrick disclosed Travis’ embezzlement” when she told “Florio that Mr. Travis decorated and lived in an SCU

- financed home that was n ot a term of his compensation.” “Embezzlement is the fraudulent appropriation of property by a person to whom it has been intrusted.” (Pen. Code, § 503; see id

. , § 507 [a person entrusted with property as a tenant may be guilty of embezzlement].) “Embezzlement requires conversion of trusted funds [or property] coupled with the intent to defraud. [Citation s.] An intent to deprive the rightful owner of possession even temporarily is sufficient .

. . . [Citations.]” ( In re Basinger (1988) 45 Cal.3d 1348, 1363

- 1364.) The mental state required for embezzlement “may be found to exist whenever a person, for a ny length of time, uses property entrusted to him or her in a way that significantly interferes with the owner ’ s enjoyment or use of the property.” ( People v

. Casas (2010) 184 Cal.App.4th 1242, 1247.) It is not embezzlement where a person honestly and in good faith “believes that he is authorized to appropriate and use property which he is accused of embezzling

. . . . [Citations.]” ( People v

. Stewart (1976) 16 Cal.3d 133, 139.) The complaint alleges that SCU’s real estate department “manages roughly 1 00
units of h ousing for faculty and staff.” It does not allege that the loft unit was entrusted11

to Travis to be rented on behalf of SCU. The complaint does not allege that Travis lacked authority to use SCU’s credit card for the purpose of buying furnish ings and decor
for the SCU

- owned loft or that the expenditure of $11,000 exceeded his authority. It does not allege that Travis significantly interfered with SCU ’ s possession, use , or enjoyment of its property. The complaint’s allegations do not state or show that Ferrick had a reasonable basis to suspect that Travis had committed embezzlement . The complaint fails to state a cause of action for wrongful termination based upon the protected disclosure of “ ‘ reasonably based suspicions ’ ” of embezzlement. ( Green , supra , 19 Cal.4th at p. 87.)
d

. Purported Violation of a n Administrative Regulation Ferrick now asserts that she “reasonably believed that Travis’ refusal to pay rent or report the free lodging as additional compensation for tax purposes was ill egal” and “[h]er disclosure amounted to a report that Travis violated California Code o f Regulations title 22, § 926

- 3.” As indicated, the complaint alleges Ferrick told Florio that “Travis lived in the loft
rent free

. . . .” The complaint further state s that , “[i]n disclosing to Mr. Florio that
Mr. Travis lived in the SCU

- owned loft rent free, Ms. Ferrick put him on notice that
Mr. Travis was evading taxes by not declaring to the IRS that the accommodation was a part of his compensation .” (Italics adde d.) It avers that “Ferrick reported tax evasion
when she

. . . told Mr. Florio that Mr. Travis was living rent free in SCU

- financed housing that was not a term of his compensation, nor declared through payroll, ha rming all California citizens.” The compl aint alleges that “[b]oard, lodging, or any other payment in kind, received by an employee in addition to, or in lieu of cash wages, is taxable on the ba s is of a reasonably estimated cash value to the employee. Cal. Code Regs. tit. 22, § 926

- 3.” It
furth er states that the State of California “collects taxes on lodging received by an12

employee in addition to cash wages,” citing California Code of Regulations, title 22 , section 926

- 3

. California Code of Regulations, title 22, section 926

- 3 is not an income tax reporting law

. Rather , th at provision is part of the administrative regulation s implement ing Unemployment Insurance Code section 926 , which defines “ wages , ” the
basis of contributions required by the Unemployment Insurance Code . (See Unemp. Ins.
Code , § § 131 , 926, 927, 930, 976 , 984, 985 .) Although a significant public policy
underlies the Unemployment Insurance Code (see § 100), 3 Ferrick is not relying up on that policy

. I nsofar as Ferrick is attempting to invoke a public policy exception based upon her allegedly protected disclosure of a violation of income tax reporting laws, t he complaint
fails to identify any specific laws

. ( See Gantt v

. Sentry Insurance , supra , 1 Cal.4th at
p. 1095 .) In addition, the complaint does not state or show that Ferri ck had a reasonable
basis to believe that , because Travis was living in the loft without paying rent , he was not fully reporting the value of any rent

- free SCU housing as income on his income tax

returns

. The complaint fails to state a cause of action for wrongful termination based upon the protected disclosure of “ ‘ reasonably based suspicions ’ ” of income tax evasion. ( Green , supra , 19 Cal.4th at p. 87.)

e

. Purported Violation of Vehicle Code S ection 14601

. 1 Ferrick’s complaint alleges that Travis had hi s driver’s license suspended for driving under the influence and he subsequently purchased, with SCU funds, “a special

3 The Legislature d eclared in Unemployment Insurance Code section 100: “[T]he public good and the general welfare of the citizens of the State require the enactment of this measure under the police power of the State, for the compulsory setting aside of funds to be used for a system of unemployment insurance providing benefits for persons unemployed through no fault of their own, and to reduce involuntary unemployment and the suffering caused thereby to a minimum.”13

go lf cart to get around campus.” It states that “[e]very year, SCU records the driver’s license numbers of employees who drive SCU

- ow ned vehicles.” The complaint further alleges that, in early 2010, Ferrick told SCU’s risk manager, Florio, that Travis was driving the golf ca rt without a driver’s license. It also states that a golf cart is considered
a motor vehicle under Vehicle Code section 345 and driving without a license violates
Vehicle Code section 14601.1. Although a golf cart may be a motor vehicle (Veh. Code, § § 345 , 415 ) and driving with a suspended or revoked license may be a crime ( i d ., § 14601.1, subds. (a), (b) ),
Vehicle Code section 14601.1 , subdivision, (c) does not prohibit “ a person from driving a motor vehicle, which is owned or utilized by the person ’ s employer, during the course of employment on private property which is owned or utilized by the employer , except an offstreet parking facility” open for use to the public. ( S ee Id

. , § 12500, subd. (c).) Although Ferrick is asserting that she reasonably believed tha t Travis was violating the law, t he complaint does not state or show that Ferrick had a reasonable basis to suspect that Travis was violating Vehicle Code section 14601.1 by driving the golf cart without a
license. (See Green , supra , 19 Cal.4th at p. 87.) The complaint allege s that Travis purchased the golf cart to “get around campus” ; it contains no alleg ation that Travis drove the golf cart on public property or in any offstreet parking facility open for use to the public

. Ferrick has not identified a significant and fundamental public policy delineated by Vehicle Code section 14601.1 and implicated here by Travis driving a golf cart
without a valid license as alleged

. ( See Gantt v

. Sentry Insurance , supra , 1 Cal.4th at
p. 1095.) Mere violation of some university policy governing the operation of vehicles used for university business is not sufficient t o bring Ferrick’s disclosure within a public policy exception to at

- will employment.14

3

. Whistleblower Protection Concerning Workplace Health and Safety Hazards Ferrick argues that her complaint state s a wrongful discharge claim in violation of the public policy protecting employees from retaliation for reporting workplace health and safety violations to their employers , citing section 6310 and section 6400 et seq., which are part of California ’s Occupational Safety and Health Act (Cal

- OSHA)

. 4
S ection 631 0, independently and together with other provisions of Cal

- OSHA, reflect s a significant public policy interest in encouraging employees to report health and safety
hazards existing in the workplace without fear of discrimination or reprisal

. (See Freund

v
. Nycomed Amersham (2003) 347 F.3d 752, 758

- 759; Hentzel v

. Singer Co. (1982) 138 Cal.App.3d 290, 299

- 300.)

4 S ection 6310, subdivision (a), provides in part: “No per son shall discharge or in any manner discriminate against any employee because the employee has done any of the following: [¶] (1) Made any oral or written complaint to the [Division of Occupational Safety and Health], other governmental agencies having s tatutory responsibility for or assisting the division with reference to employee safety or health, his or her employer, or his or her representative.” S ection 6310, subdivision (b), provides: “Any employee who is discharged, threatened with discharge, de moted, suspended, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because the employee has made a bona fide oral or written complaint to the division, other governmental agencies having statutor y responsibility for or assisting the division with reference to employee safety or health, his or her employer, or his or her representative, of unsafe working conditions, or work practices, in his or her employment or place of employment, or has particip ated in an employer

- employee occupational health and safety committee, shall be entitled to reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer.

. . .” Section 6400, subdivision (a), states: “Every employer shall furnish employment and a place of employment that is safe and healthful for the employees therein.” S ection 6401.7 , subdivision (a)(5) generally mandates every employer to establish a written injury prevention program that includes specified elemen ts, including “[t]he employer ’ s system for communicating with employees on occupational health and safety matters, including provisions designed to encourage employees to inform the employer of hazards at the worksite without fear of reprisal.”15

Ferrick claims that she was entitled to a safe workplace free of unlicensed drivers. The complaint does not allege , however, that Travis was drivi ng the golf cart in a
hazardous manner or that Ferrick reported to Florio that Travis was driving the golf cart
while under the influence or unsafely

. To be protected by a public policy, an employee

“ must convey the information in a form which would reaso nably alert his or her employer of the nature of the problem and the need to take corrective action. ” ( Holmes v

. General Dynamics Corp

. (1993) 17 Cal.App.4th 1418, 1434 .) Although Ferrick now asserts that she “reasonably believed that Travis violated a v ehicle safety statute by driving a golf cart without a license,” Ferrick’s alleged disclosure to Florio that Travis was driving the golf cart without a license d id not convey a workplace safety hazard

. Ferrick further claims that she is entitled to a work plac e without “dangerous
tenants.” The complaint states that she “approached” Fong in April 2008 because a commercial tenant had fallen behind in rent and the tenant was “in the ne ws in a
murder

- for

- hire case.” It allege s that Travis had told her “not to worry about it” because the tenant and he “were friends” and , when Travis failed to “take action regarding Mr. Garcia’s delinquent rent,” “Ferrick brought her concerns to Mr. Fong.” Although the complaint alleges that Ferrick was “concerned about the leg al, ethical, and safety implications, for the workplace and community, of subsidizing a man under indictment for murder,” there was no allegation that this tenant posed a danger in the workplace. Ferrick’s alleged disclosure to Fong did not convey a workp lace safety hazard

. The complaint’s allegations do not state a cause of action for wrongful termination
in violation of the public policy of encouraging employee s to report workplace health or safety hazards to their employers

. 4

. California False Claims Act Ferrick asserts that her wrongful discharge claim can also be based upon the
California False Claims Act (CFCA) (Gov. Code, § 12650 et seq.). She “offers [the16

CFCA] as another species of public policy to support the argument that SCU’s decision

to t erminate her employment violated public policy

. . . .” She points to the complaint’s allegations that, on a number of dates, SCU received financing from the California Educational Facilities Authority and her alleged belief that Tr avis was diverting thos e funds. Citing Phillippe v

. Shapell Industries (1987) 43 Cal.3d 1247 , SCU incorrectly
insists that Ferrick is precluded from rais ing this theory for the first time on appeal. That case stated the general rule that “a party may not for the first time on appeal change his theory of recovery. [Citation.]” ( Id . at p. 1256

. ) Th is general rule does not apply at the demurrer stage. ( Smith v

. Commonwealth Land Title Ins

. Co

. (1986) 177 Cal.App.3d 625, 630 .) Courts “ may affirm the sustaining of a demurrer on ly if the complaint fails to state a cause of action under any possible legal theory. [Citation.] ” ( Sheehan v

. San
Francisco 49ers , Ltd

. (2009) 45 Cal.4th 992, 998.)
Ferrick contends that C FCA reflects a public policy protecting employees from
retaliati on for reporting fraud against the government. Under the CFCA , as it read at the
time of Ferrick ’ s termination, an employer was prohibited from adopting or enforcing a policy that would prevent an employee from disclosing information to a government or
la w enforcement agency and from discharging or otherwise discriminating against an employee for taking such action. ( See Stats. 1987, ch. 1420, § 1, pp. 5245

- 5246 [former Gov. Code, § 12653, subds. (a) & (b)].) An employee disclosing information was requir ed to have reasonably based suspicions of a false claim

. ( See McVeigh v

. Recology
San Francisco (2013) 213 Cal.App.4th 443, 456 .) Th is statutory whistleblower provision
did not , however, protect an employee who reported suspicions of a false claim direct ly to his or her employer. 5 (See Stats. 1987, ch. 1420, § 1, pp. 5245

- 5246.) It nevertheless

5 Governme nt Code section 12653, sub d ivis i on (a), now provides in pertinent part: “Any employee

. . . shall be entitled to all relief necessary to make that employee

. . . (continued)17

reflect ed a significant public interest in encouraging employees to disclose information potentially leading to false claim actions and protecting those that did

. Ferrick’s complaint includes allegations that, “[s]ince 2002, SCU ha [ d ] received $575,628,877.25 from the U.S. Department of Education in the form of student loan payment s and other grants” and SCU had “received financing from seventeen separate
bond is suances through the California Educational Facilities Authority, the most recent for $50,125,000 beginning September 1, 2010 in part to ‘finance the construction, renovation, remodeling, furnishing and equipping of certain facilities of the University

. . . .’ ” As indicated, t he complaint allege s that Ferrick told Florio that Travis “had instructed her to pay for $11,000 in furnishing and décor

. . . with a SCU credit
card ” for the university

- owned loft in which Travis lived. The complaint s tates that “[ i]t is likely the additional furnishing [of the loft] constituted a misdirection of government funds obtained through a s tate

- financed municipal bond.” It avers that “Ferrick disclosed the misdirection of public funds” by reporting “to Mr. Florio that Mr. Travis had
remodeled the SCU

- owned unit he was living in with SCU

- funds likely from the recent
construction bond loan

. . . .” “[S]pecific allegations in a complaint control over an inconsistent general allegation. [Citations.] Under this principle, it is possible that specific allegations will render a complaint defective when the general allegations, standing alone, might have been sufficient. [Citations.] ” ( Perez v

. Golden Empire Transit Dist

. (2012) 209 Cal.App.4th 1228, 1236.) T he complaint indi cates that Travis directed Ferrick to pay for

whole, if that employee

. . . is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of his or her employment because of lawful acts done by the employee

. . . in furtherance of an action under this section or other efforts to stop one or more violations of this article.”18

$11,000 in furnishings and décor for a loft owned by SCU with an SCU credit card , not public funds

. The complaint does not state or show that Ferrick had a reasonable basis to believe
that Travis may have viol ated the CFCA and that her report to Florio that Travis instructed her to expend $11,000 on the SCU’s credit card disclosed information relevant

to such violation. (See Stats. 2009, c h . 277, § § 1 , 2, pp. 1381

- 1382 [former Gov. Code, § 12650] , pp. 1382

- 138 3 [former Gov. Code, § 12651] .) The complaint fails to state a cause of action for wrongful termination based upon the protected disclosure of

“ ‘ reasonably based suspicions ’ ” of a violation of the CFCA. ( Green , supra , 19 Cal.4th at p. 87.)
5

. 1988 Fol ey Decision Citing Foley v

. Interactive Data Corp

. (1988) 47 Cal.3d 654 ( Foley ) , SCU
maintains that all the alleged misconduct reported by Ferrick affected only its private interest and did not implicate a policy protecting the public and, therefore, the complaint
does not state a cause of action

. We consider SCU’s arguments with respect to the only alleged disclosure that supports a cause of action for wrongful termination in violation of public policy, namely Ferrick’s alleged disclosure that Travis rec ei ved placement fees in exchange for p utting SCU tenants in commercial property belonging to Sundeen.
Plaintiff Foley learned that his immediate supervisor was “currently under investigation by the Federal Bureau of Investigation for embezzlement from his former employer” and he reported this information to the company’s vice president. ( Foley , supra , 47 Cal.3d at p. 664.) On appeal, Foley maintained that as an agent of his employer, he had a duty to disclose th at information about his coworker. ( Id . at p. 669.) The Supreme Court concluded there was no substantial public policy prohibiting an employer from discharging an employee for reporting information that was relevant to his employer ’ s business interest s. ( Id . at pp. 669

- 671.) It stated: “When t he duty of an19

employee to disclose information to his employer serves only the private interest of the employer, the rationale underlying the Tameny cause of action is not implicated.” ( Id . at pp. 670

- 671, fn. omitted.) SCU places great weight on a footn ote in Foley , in which the California Supreme Court indicated that a policy would be a true public policy if the policy would void an agreement between an employer and an employee that contradicted that policy. ( Foley , supra , 47 Cal.3d at p. 671, fn. 12.) In Foley , the Supreme Court found nothing in California’s public policy that would render void an agreement between an employer and employee requiring the employee to not “inform the employer of any adverse information” about a coworker’s background. ( I bi d .) Subsequent to Foley , a split in the case law developed regarding whether an employee’s disclosure that a coworker engaged in suspected unlawful conduct while employed by their mutual e mployer is protected by a fundamental public policy. In this

cas e, SCU relies upon American Computer Corp

. v
. Superior Court (1989) 213 Cal.App.3d 664 (

American Computer ) , which held that an employee’s communications with the officers of the company about suspected embezzlement from the company do not “serve any intere st other than the company ’ s” ( i d . at p. 665) and “under Foley his reports will not support a wrongful termination claim.” ( Id . at pp. 665

- 666.) Ferrick relies upon Collier v

. Superior Court (1991) 228 Cal.App.3d 1117 ( Collier ) , which disagreed with Ameri can Computer

. In American Computer , the appellate court reasoned : “ The most that can connect [the discharged employee ’ s] conduct with the public interest is the argument that by reporting his suspicions to his superiors he took action which might eventua lly prevent or uncover commission of a felony and thereby served the laudable goal of preventing crime. However, the potential for such a public benefit is not a public interest which is weighty enough to give rise to a claim for wrongful discharge. Our conclusion in this20

regard is based on the fact Justice Mosk, in his dissent in Foley , unsuccessfully advanced much the same argument. ” ( American Computer , supra , 213 Cal.App.3d at p. 668.)
In his dissent in Foley , Justice Mosk had stated: “ My colleagues insist that reporting the presence of an embezzler to an employer is solely to the benefit of the employer. While undoubtedly it is to the employer ’ s benefit, it is not exclusively so. It is my opinion that such action

— i.e., advising a state

- created cor poration of the employ in a supervisorial position of a person chargeable with a potential felony

— is in the best interests of society as a whole, and therefore covered by the public policy rule. [¶]

. . . It seems incongruous to permit retaliation and di scharge when the employee chooses to go directly to his employer with the information, rather than to circumvent the employer, go behind his back and directly to a public agency. In either event, it seems clear to me that the law and public policy are imp licated. ” ( Foley , supra , 47 Cal.3d at p. 724 (dis. opn. of Mosk, J.).) The appellate court in American Computer concluded : “ Although the majority in Foley might have responded to Justice Mosk ’ s dissent by pointing out that the public
interest in that ca se was diminished because the plaintiff there was only reporting past activities of a colleague rather than, as is alleged here, ongoing criminal conduct, no such distinction appears in the majority opinion. We interpret this to mean the majority
consider ed the entire merits of Justice Mosk ’ s arguments and rejected them. ” ( American Computer , supra , 213 Cal.App.3d at pp. 668

- 669.)
In Collier , a case involv ing writ review of an order sustaining a demurrer without leave to amend, the operative complaint a ll eged that George Collier, a regional manager of a record company, reported to higher management his suspicions of criminal conduct involving internal orders to ship large quantities of free promotional re cords that “were

not marked with any notation limiti ng them to nonsale or promotional purposes only.” ( Collier , supra , 228 Cal.App.3d at p. 1120.) The complaint alleged that Collier was21

subsequently “ fired, purportedly for failing to perform his job adequately ” but that reason

was a pretext and his discha rge was retaliatory. ( Id . at pp. 1120

- 1121.) Relying upon former section 1102.5, subdivision (b), the appellate court in Collier
found a “ fundamental public interest in a workplace free from illegal practices. ” ( Collier , supra , 228 Cal.App.3d at p. 1124 .) The court stated: “ Labor Code section 1102.5, subdivision (b), which prohibits employer retaliation against an employee who reports a reasonably suspected violation of the law to a government or law enforcement agency, reflects the broad public policy interest in encouraging workplace ‘ whistleblowers, ’ who may without fear of retaliation report concerns regarding an employer ’ s illegal conduct. This public policy is the modern day equivalent of the long

- established duty of the citizenry to bring to pub lic attention the doings of a lawbreaker. [Citation.] Even though the statute addresses employee reports to public agencies rather than to the employer and thus does not provide direct protection to petitioner in this case, it does evince a strong public interest in encouraging employee reports of illegal activity in the workplace. [Citation.] ” ( Id . at p. 1123.)
The Collier court distinguished Foley : “ The case before us involves public policy implications not presented in Foley . The plaintiff in Fole y merely reported that another employee was being investigated for possible past criminal conduct at a previous job. His action served only the interest of his employer. The petitioner in this case reported his suspicion that other employees were current ly engaged in illegal conduct at the job, specifically conduct which may have violated laws against bribery and kickbacks (Pen. Code, § 641.3); embezzlement (Pen. Code, § 504); tax evasion (Rev. & Tax Code, § 7152; 26 U.S.C. §§ 7201, 7202)

. . . . ” ( Colli e r , supra , 228 Cal.App.3d at
pp. 1122

- 1123.) It stated that “[a]n agreement prohibiting an employee from informing anyone in the employer ’ s organization about reasonably based suspicions of ongoing criminal conduct by coworkers would be a disservice not o nly to the employer ’ s interests,22

but also to the interests of the public and would therefore present serious public policy concerns not present in Foley .” ( Id . at p. 1125, fn. omitted.)
The Collier court concluded that, in addition to serving his employe r’s interest, the employee’s report served “the public interest in deterring crime and

. . . the interests of innocent persons who stood to suffer specific harm from the suspected illegal conduct. ” ( Collie r , supra , 228 Cal.App.3d at p. 1123.) The “circle of harm” from the alleged wrongdoing encompassed re cording artists , who allegedly “ were deprived of royalty payments for the improperly distributed products, ” state and federal tax authorities , who allegedly “ were deprived of appropriate tax revenues ,” an d retailers , who “ allegedly suffered a competitive disadvantage in pricing these

. . . products. ” ( I bi d .)
Collier indicated that American Computer ’ s analysis had been undermined by Rojo v

. Kliger (1990) 52 Cal.3d 65 ( Rojo ). ( Collier , supra , 228 Cal.App. 3d at
pp. 1126

- 1127.) In Rojo , the California Supreme Court recognized a “ fundamental public interest in a workplace free from the pernicious influence of sexism ” ( Rojo , supra , 52 Cal.3d at p. 90) . Collier determined : “ The fundamental public interest in a workplace free from crime is no less compelling. The public policy of this state against crime in the workplace is reflected in the Penal Code sections declaring unlawful the acts of embezzlement (Pen. Code, § 504) and commercial bribery (Pen.Code, § 6 41.3), and in the federal antitrust laws. (See Tameny v

. Atlantic Richfield Co

. , supra , 27 Cal.3d at
p. 173

. . . .) Retaliation by an employer when an employee seeks to further this well

established public policy by responsibly reporting suspicions of i llegal conduct to the employer seriously impairs the public interest

. . . . ” ( Collier , supra , at p. 1127.)
We conclude that Collier is better reasoned. As observed in that case , Foley
concerned a n employee’s disclosure that the FBI was investigating a coworker’s suspected embezzlement from a former employer. ( Foley , supra , 47 Cal.3d at p. 664.)

“ ‘ “It is axiomatic that language in a judicial opinion is to be understood in accordance23

with the facts and issues before the court. An opinion is not autho rity for propositions not considered.” ’ [Citations.]” ( People v

. Knoller (2007) 41 Cal.4th 139, 154

- 155.)
We observe that Foley predates the 1998 decision in Green , supra , 19 Cal.4th 66.
In Green , the Supreme Court described its Foley holding as follo ws : “ In rejecting a tort claim based on an employee ’ s discharge after he reported to management his supervisor ’ s history of embezzlement , we held that alleged violations of internal practices that affect only the employer ’ s or employee ’ s interest, and not the general public ’ s interest, will not give rise to tort damages. ( Foley , supra , 47 Cal.3d at pp. 669

- 671.) ” ( Id . at p. 75 , italics
added .)
Collier is consistent with Green ’s recognition that section 1102.5 expresses “the broad public policy interest in encouraging workplace whistle

- blowers to report unlawful acts without fearing retaliation.” The Legislature’s recent amendment of section 1102.5

to protect disclosures to employers buttresses Collier ’s analysis

. (See f n. 2 , ante .) SCU and an employee could not validly enter an agreement contravening that statute. Here, the complaint’s allegations , liberally construed, indicat e that Ferrick reasonably suspected that Travis was committing commercial bribery (Pen. Code, § 641.3) by taking a 3 percent pl acement fee for himself in return for placing SCU tenants in property owned by Sundeen and she reported the information to SCU’s Budget
Director on August 3, 2011

. This alleged misconduct did not affect only SCU’s private
interest ; it also implicate d the public policy embodied in section 1102.5.
C

. Causation or Nexus
SCU maintains that “there is no causal connection or temporal nexus between Ms. Ferrick’s complaint s to SCU and her termination.” The university suggests this court affirm the judgment of d ismissal on the grounds that the real and valid reason for terminating Ferrick appears on the face of her complaint and the complaint does not24

allege facts showing a nexus between her discharge in October 2011 and her internal compl aints months and years e arlier. To establish a claim for wrongful termination in violation of public policy, an employee must prove causation. (See CACI No. 2430 [us ing phrase “substantial motivating reason” to express causation].) Claims of whistleblower harassment and
retali atory termination may not succeed where a plaintiff “cannot demonstrate the required nexus between his reporting of alleged statutory violations and his allegedly adverse treatment by [the employer].” ( Turner v

. Anheuser

- Busch , Inc

. (1994) 7 Cal.4th 1238, 1258

. ) The complaint states that Travis ostensibly terminated Ferrick “for “ ‘questionable finance practices’ that he characterized, at worst, as ‘fraud and embezzlement from the University’ ” but it also alleges that SCU’s reasons for terminating Ferric k were “clear pretext.” The complaint further a vers that “Ferrick’s disclosures were protected conduct” and “[t]he University terminated [her] becau se of her protected activity.” The phrase “because of” sufficiently expresses a causal link. Ferrick’s al leged disclosure on August 3, 2011 and her termination in October 2011 following an internal audit we re not so temporally remote as to preclude , as a matter of law, a finding of causation by a trier
of fact

. SCU also asserts that this court, in assessing the sufficiency of the complaint, should consider Ferrick’s allegation that “[t]he University’s stated reason for terminati ng Ms. Ferrick is mere pretext” “in the context of her factual allegations showing that she was fired months after her last complaint of purportedly illegal activity, but shortly after issuance of the results of an audit” r evealing a $6,000 discrepancy. This is a factual question that cannot be resolved on demurrer. “As a general rule in testing a pleading against a demurrer the facts alleged in the pleading are deemed to be true, however25

improbable they may be. [Citation.]” ( Del E

. Webb Corp

. v
. Structural Materials Co

. (1981) 123 Cal.App.3d 593, 604.)
DISPOSITION The judgment is reversed.________________________________ _ ELIA, J.

WE CONCUR:

_______________________________ RUSHING, P. J.

_______________________________ PREMO, J.

Ferrick v

. Santa Clara University
H040252Trial Court: Santa Clara County Superior Court S.Ct. No. CV233484

Trial Judge: Hon. Carol W. Overton Hon. Neal Anthony Cabrinha Hon. Patricia M. Lucas

Couns el for Plaintiff and The Employment Law Group Appellant: David L. Scher

Counsel for Defendant and Ropers, Majeski, Kohn & Bentley R espondent: Michael J. Ioannou Terry Anastassiou Susan H. Handelman

Ferrick v

. Santa Clara University
H040252