Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County. Paul Gutman, Judge. Los Angeles County Super. Ct. No. BC348903
Mancini & Associates, Marcus M. Mancini and Adam Jason Reisner; Benedon & Serlin, Douglas G. Benedon and Kelly R. Horwitz for Plaintiff and Appellant.
Law Offices of Tharpe & Howell, Christopher S. Maile and David S. Binder for Defendant and Respondent Farmers Insurance Exchange.
ZELON, J.
Appellant Beau Yeakel (“Yeakel”) appeals from the trial court’s grant of summary judgment in favor of his former employer, respondent Farmers Insurance Exchange (“Farmers”). Following his termination of employment, Yeakel filed suit against Farmers for violation of Labor Code section 1102.5, subdivisions (a) and (c), and wrongful termination in violation of public policy. In his complaint, Yeakel alleged that Farmers enforced policies that precluded employees from reporting unlawful conduct to anyone outside the company and terminated Yeakel’s employment because of his opposition to Farmers’ business practices regarding automobile repair estimates. We conclude that the trial court properly granted summary judgment because Yeakel could not identify any policy of Farmers that prohibited disclosures of perceived unlawful activity to government agencies, nor could Yeakel demonstrate that he had a reasonable belief that Farmers’ business practices were unlawful. Accordingly, we affirm.
Unless otherwise stated, all further statutory references are to the Labor Code.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
I. Yeakel’s Employment with Farmers
On December 5, 1997, Farmers hired Yeakel as an auto physical damage claims representative. His job duties included estimating the cost and scope of automobile repairs for Farmers’ insureds in an assigned geographic area and working with the repair shops to ensure that the repairs were properly completed. In 2000, Yeakel transferred to Farmers’ Ventura, California branch claims office where his assigned territory included Ventura and Santa Barbara counties. Yeakel’s direct supervisor was Gabe Snyder (“Snyder”), a branch claims supervisor. The branch manager for the Ventura office and Snyder’s direct supervisor was Barbara Mann (“Mann”).
At various times in his employment, Yeakel was provided with copies of Farmers’ written personnel policies, including its employee handbook, Code of Business Ethics Handbook, and Electronic Communications Policy. On an annual basis between 2003 and 2005, Yeakel signed an “Employee Information Acknowledgment Form” in which he acknowledged receipt of these and other policies and agreed to comply with their contents. Each Acknowledgment Form signed by Yeakel also included a provision on “Confidential Information,” which stated that employees would “not, at any time, except in the performance of [their] obligations to the Company as required by applicable law or with the prior written consent of the Company, directly or indirectly disclose any secret or confidential information... or use any such information to the detriment of the Company.” Farmers’ Code of Business Ethics Handbook and Electronic Communications Policy contained similar confidentiality provisions which prohibited the disclosure of any confidential, proprietary or trade secret information without prior company approval.
The term “confidential information” was defined in the Acknowledgment Forms as “information about the Company and its respective suppliers, clients and customers that is not disclosed by the Company for financial reporting purposes and... specifically includes, without limitation, proprietary information, knowledge, trade secrets, market research, data, formulae, supplier, client and customer lists.”
II. Yeakel’s Complaints about Farmers’ Estimating Practices
While employed in the Ventura office, Yeakel often raised concerns to both Snyder and Mann about Farmers’ business practices in estimating the cost of automobile repairs. According to Yeakel, Farmers’ practice in preparing repair estimates was to use alternative or after-market parts in the repairs where possible, to include a discounted price for the use of original equipment manufacturer parts, and to include a discounted labor rate that was less than the prevailing rate charged by the local repair shops. At various times between 2003 and 2005, Yeakel complained to Snyder and Mann that none of the shops in his assigned territory would agree to the parts and labor discounts sought by Farmers. Yeakel believed that the inclusion of such discounts in his estimates eroded his credibility with the repair shops and created additional work for him when he had to re-write the estimates to eliminate the discounts.
In his complaints to his supervisors, Yeakel also expressed frustration that Farmers’ discount practices were adversely affecting his performance evaluations. As described by Yeakel, the discounts were considered in Farmers’ “key performance indicators,” which was a compilation of the criteria against which a claims representative’s performance was measured and upon which performance reviews and pay raises were based. Yeakel had several heated discussions with Snyder about his performance reviews because Yeakel felt that he was being unfairly rated based on discounts that no repair shop would accept. Yeakel also voiced his opinion that after-market parts did not fit properly in the repaired vehicles and that Farmers’ parts discount was “unethical.” In response to Yeakel’s complaints, Snyder advised him that these were the company’s orders and that Yeakel was required to comply with them. In late 2004 or early 2005, Yeakel also complained to Rosanna Ortiz (“Ortiz”), Farmers’ Human Resources Operations Specialist, about the parts and labor discounts as they related to his performance ratings. Among other issues, Yeakel indicated that the parts discount was making his workload insurmountable. In response, Ortiz told Yeakel that Farmers reserved the right to do business in any way it decided.
Yeakel raised additional concerns about Farmers’ business practices when he was counseled by his supervisors for various performance and behavioral issues. For instance, on July 13, 2004, Snyder issued a written warning to Yeakel for his poor performance in failing to timely process claims and his inappropriate behavior during a discussion with Snyder about performance concerns. Upon receiving the written warning, Yeakel remarked to Snyder that Farmers had “lost its integrity and ethics in claims handling and treatment of employees.” On January 19, 2005, Mann held a unit meeting in the Ventura office during which she asked employees in attendance to provide referrals for an open position at Farmers. Yeakel replied that he would not refer anyone to the company because he had too much integrity and did not feel the workload was manageable. Mann later met privately with Yeakel and counseled him that his comment at the meeting was not appropriate. Yeakel in turn voiced his frustration with Farmers, telling Mann that “when you start affecting people’s performance reviews because they can’t get parts discounts in an area where they can’t get discounts offered, how can you improve on that?”
In addition to his internal complaints to management, Yeakel also contacted the Department of Insurance about Farmers’ business practices. Specifically, in 2001, Yeakel called the Department of Insurance to inquire about the process involved in investigating Farmers’ parts and labor discounts. During that call, Yeakel communicated his belief that Farmers was using an improper parts discount and a labor rate that was less than the prevailing rate. However, Yeakel decided not to file a formal complaint with the agency because an agency representative advised him that his complaint could not be kept anonymous. Yeakel never told anyone at Farmers that he had contacted the Department of Insurance, and he has no knowledge that anyone at Farmers was aware of his call.
III. Yeakel’s Inappropriate Voice mail Message
On February 22, 2005, Yeakel repeatedly attempted to reach Snyder at his work telephone number to obtain Snyder’s approval on some urgent business matters. Because Snyder was unavailable, the calls were forwarded to his voice mail system, which Yeakel found increasingly frustrating. On his third attempt, Yeakel believed he had disconnected the call upon hearing Snyder’s voice mail greeting. But, unbeknownst to Yeakel, the call was still connected. Yeakel then spoke the following words which were recorded on Snyder’s voice mail system: “This is Gabe Snyder, stud muffin here, Barbara’s number one man. Maybe you can come visit us in our closet and we can have a circle jerk.”
The term “circle jerk” is defined in the Random House Dictionary as “mutual masturbation among three or more persons.”
When Snyder retrieved his messages, he heard Yeakel’s recorded statement. Snyder then shared the recording with Mann who was offended by Yeakel’s words and believed them to have a sexual meaning. A few days later, Mann met privately with Yeakel and played the voice mail message for him. Yeakel was shocked to discover that his statement had been recorded. He admitted to Mann that he inadvertently had left the message on Snyder’s voice mail system and apologized for doing so. He also offered to resign rather than have the matter written up in his file. Mann, however, told Yeakel that resignation was not necessary. She indicated that she would have to report the matter to Farmers, but said to Yeakel, “‘give me some time, and I’ll see what we can do about it.’” Yeakel later apologized to Snyder for his actions in leaving the message. Snyder assured Yeakel that he was not offended.
Due to the nature of the voice mail message, Mann referred the matter to Farmers’ human resources department. Mann also directed Snyder to prepare a memo documenting Yeakel’s various performance and behavioral problems since 2004. The memo from Snyder, dated March 4, 2005, included a reference to the written warning that Snyder issued to Yeakel on July 13, 2004, and to Yeakel’s oral statement in response to that warning that the company had “lost its integrity and ethics in claims handling and treatment of employees.” After reviewing a draft of Snyder’s March 4, 2005 memo, Mann approved it for distribution to the human resources department.
The matter was referred to John Gonzales (“Gonzales”), Farmers’ Human Resources Operations Manager. After listening to Yeakel’s voice mail message, Gonzales understood the message to have a sexual meaning and to be in violation of the company’s harassment policy and code of business ethics. On March 8, 2005, Gonzales sent an email to Rob Howard (“Howard”), Farmers’ California Field Claims Manager, requesting approval to terminate Yeakel’s employment. In his email to Howard, Gonzales explained that Ventura management was proposing termination because of Yeakel’s prior disruptive behavior and recent voice mail message. Gonzales also attached electronic copies of the July 13, 2004 written warning and Snyder’s March 4, 2005 memo about Yeakel’s prior performance and behavioral issues. At the time he recommended terminating Yeakel’s employment, Gonzales was not aware of any of Yeakel’s complaints about Farmers’ estimating practices.
Howard reviewed Gonzales’ email and related attachments. He also listened to a recording of Yeakel’s voice mail message, and understood the message to have a sexual meaning in violation of Farmers’ harassment policy and professional standard of ethics. In a March 8, 2005 email to Gonzales, Howard agreed that Yeakel’s employment should be terminated “in light of the totality of [his] performance, previous behavioral issues and the [voice mail] in question.” Howard sent a copy of his email to Edward Reis (“Reis”), Farmers’ Assistant Vice President of California Auto Claims, seeking Reis’ approval for the termination. Reis agreed that Yeakel’s voice mail message violated Farmers’ harassment policy and professional standards of ethics and warranted termination. Neither Howard nor Reis was aware of any of Yeakel’s complaints about Farmers when they approved the discharge decision.
On March 9, 2005, after securing the approval of Howard and Reis, Gonzales sent an email to Wendy Bevel (“Bevel”), Farmers’ Human Resources Services Manager, proposing that Yeakel’s employment be terminated. Bevel agreed that Yeakel’s voice mail message and prior behavioral and performance problems warranted termination. In particular, Bevel believed the voice mail message constituted sexual harassment within the meaning of Farmers’ harassment policy and violated several other personnel policies, including the code of business ethics. At the time she approved the termination request, Bevel was not aware of any of Yeakel’s complaints about Farmers’ estimating practices.
On March 15, 2005, Mann and Ortiz notified Yeakel of Farmers’ decision to terminate his employment. Ortiz explained to Yeakel that he was being discharged for violating the company’s professional standard of ethics by leaving the voice mail message. At the conclusion of the meeting, Mann walked Yeakel out of the office and provided him with a book on professional conduct. As they were walking, Mann told Yeakel that he “should never have challenged her in [their] unit meeting;... that [he] undermined her, and should never have done that.” Mann also stated, “You don’t be confrontational. You don’t buck managers... [W]hen people are trying to refrain from giving their opinions in unit meetings, you don’t speak up.”
IV. Yeakel’s Civil Action against Farmers
On March 14, 2006, Yeakel filed a civil action against Farmers for violation of section 1102.5, subdivisions (a) and (c), and wrongful termination in violation of public policy. In his second amended complaint, Yeakel alleged that Farmers had policies that prohibited him from disclosing perceived unlawful conduct by the company to government agencies. Yeakel also alleged that Farmers wrongfully terminated his employment in retaliation for his refusal to participate in Farmers’ estimating practices because he reasonably believed that such practices violated state law.
On June 15, 2007, Farmers filed a motion for summary judgment, or in the alternative, summary adjudication. Following a hearing on Farmers’ motion, the trial court granted summary judgment in favor of Farmers and entered judgment against Yeakel. On November 27, 2007, Yeakel filed a timely notice of appeal.
DISCUSSION
I. Standard of Review
“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, fn. omitted.) “Once the [movant] has met that burden, the burden shifts to the [other party] to show that a triable issue of one or more material facts exists as to that cause of action....” (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar v. Atlantic Richfield Co., supra, at p. 850.) The party opposing summary judgment “may not rely upon the mere allegations or denials of its pleadings,” but rather “shall set forth the specific facts showing that a triable issue of material fact exists....” (Code Civ. Proc., § 437c, subd. (p)(2).) A triable issue of material fact exists where “the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar v. Atlantic Richfield Co., supra, at p. 850.)
Where summary judgment has been granted, we review the trial court’s ruling de novo. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 860.) We consider all evidence presented by the parties in connection with the motion (except that which was properly excluded) and all uncontradicted inferences that the evidence reasonably supports. (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.) We affirm summary judgment where it is shown that no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).).
II. Violation of Section 1102.5, Subdivision (a)
In his first cause of action for violation of section 1102.5, Yeakel contended that Farmers violated subdivision (a) of the statute by enforcing both written and unwritten personnel policies that precluded employees from reporting alleged unlawful activity by the company to government agencies. Section 1102.5, subdivision (a) states that “[a]n employer may not make, adopt, or enforce any rule, regulation, or policy preventing an employee from 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 noncompliance with a state or federal rule or regulation.” We conclude that the trial court properly granted summary judgment on Yeakel’s section 1102.5, subdivision (a) claim because he failed to identify any policy of Farmers that would violate the statute.
In opposing summary judgment, Yeakel asserted that Farmers enforced several written policies that violated section 1102.5, subdivision (a) by barring the disclosure of confidential company information without prior approval without creating an exception for disclosures of unlawful conduct to outside agencies. As evidence, Yeakel pointed to the “Confidential Information” provision in the annual “Employee Information Acknowledgment Form,” which required employees to agree that they would “not, at any time, except in the performance of [their] obligations to the Company as required by applicable law or with the prior written consent of the Company, directly or indirectly disclose any secret or confidential information... or use any such information to the detriment of the Company.” Notably, however, at his deposition, Yeakel testified that he understood the provision simply as prohibiting him from disseminating company secrets and proprietary information, and not as prohibiting him from disclosing unlawful conduct to persons outside the company. Indeed, Yeakel admitted that interpreting the provision as precluding reports of Farmers’ parts and labor discount practices to regulatory agencies “seemed like a real stretch.”
Yeakel provided similar testimony with respect to the other personnel policies that he relied on to support his claim. Yeakel identified Farmers’ Employee Handbook and Electronic Communications Policy as additional policies that violated section 1102.5 by restricting the disclosure of confidential and proprietary information without making an exception for reports of unlawful activity to government agencies. Yet Yeakel admitted at his deposition that he did not understand these policies to prohibit him from disclosing unlawful conduct by Farmers to persons outside the company. There is also nothing in the actual language of the policies that can reasonably be read as precluding reports of unlawful activity to appropriate government agencies. On their face, the policies merely require employees to maintain the confidentiality of Farmers’ proprietary and trade secret information. These confidentiality provisions in Farmers’ written personnel policies cannot support a claim under section 1102.5, subdivision (a).
In his opposition separate statement, Yeakel also identified the Code of Business Ethics Handbook as a written policy that supported his claim. On its face, the handbook does not bar employees from disclosing alleged unlawful conduct by Farmers to outside agencies, and Yeakel failed to offer any evidence to establish that he had a contrary understanding.
Yeakel likewise failed to identify any unwritten policy of Farmers that violated section 1102.5. In opposing summary judgment, Yeakel argued that Farmers had an unstated policy which prevented employees from reporting unlawful conduct to persons outside the company because there was a general office culture that discouraged such disclosures. As support for his claim, Yeakel testified that “common sense tells you that they don’t want you speaking ill of the company.” He also testified that Mann told employees at various times that she did not want them talking to the repair shops about the negative aspects of Farmers’ new estimating practices. However, Yeakel admitted that Mann’s comments were directed solely at the employees’ communications with the repair shops and that she never said anything that led Yeakel to believe that he could not report unlawful conduct to regulatory agencies. Yeakel further admitted that no one else at Farmers engaged in conduct that led him to believe he was prohibited from disclosing perceived unlawful activity to persons outside the company.
Given Yeakel’s testimony, he failed to raise a triable issue as to whether Farmers had any written or unwritten policy that prohibited him from reporting unlawful conduct by the company to government agencies. Summary judgment was therefore proper on Yeakel’s claim for violation of section 1102.5, subdivision (a).
III. Violation of Section 1102.5, Subdivision (c)
In his first cause of action for violation of section 1102.5, Yeakel also claimed that Farmers violated subdivision (c) of the statute by terminating his employment in retaliation for his refusal to participate in Farmers’ business practices regarding repair estimates. Section 1102.5, subdivision (c) provides that “[a]n employer may not retaliate against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation.” We conclude that the trial court properly granted summary judgment on Yeakel’s section 1102.5, subdivision (c) claim because he cannot establish that he had a reasonable belief that Farmers’ estimating practices were unlawful.
To state a prima facie case of retaliation under section 1102.5, a plaintiff must show that (1) he or she engaged in a protected activity, (2) the employer subjected the plaintiff to an adverse employment action, and (3) a causal link existed between the protected activity and the adverse action. (Mokler v. County of Orange (2007) 157 Cal.App.4th 121, 138; Akers v. County of San Diego (2002) 95 Cal.App.4th 1441, 1453.) An employer can satisfy its burden on summary judgment by showing that the plaintiff cannot establish a prima facie case of retaliation or that the employer had a legitimate, non-retaliatory reason for the adverse decision. (Mokler v. County of Orange, supra, at p. 138; Akers v. County of San Diego, supra, at p. 1453; see also Sada v. Robert F. Kennedy Medical Center (1997) 56 Cal.App.4th 138, 150 [employer must present “admissible evidence either that one or more of plaintiff’s prima facie elements is lacking, or that the adverse employment action was based on legitimate, nondiscriminatory factors”].) If the employer sets forth a non-retaliatory reason for its decision, the plaintiff must produce specific and substantial evidence of pretext. (Mokler v. County of Orange, supra, at p. 138; Akers v. County of San Diego, supra, at p. 1453; see also Morgan v. Regents of University of California (2000) 88 Cal.App.4th 52, 68 [“‘[T]he plaintiff may establish pretext “either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer’s proffered explanation is unworthy of credence.”’”].) “[A]n employer is entitled to summary judgment if, considering the employer’s innocent explanation for its actions, the evidence as a whole is insufficient to permit a rational inference that the employer’s actual motive was [retaliatory].” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 361.)
Among other arguments raised at summary judgment, Famers asserted that Yeakel could not make a prima facie showing of retaliation under section 1102.5, subdivision (c) because the business practices at issue did not violate any state or federal law. In his opposition, Yeakel did not attempt to show that there was an actual violation of law, but rather argued that it was sufficient if he reasonably believed such practices were unlawful. It is true, as Yeakel contends, that an employee alleging retaliatory termination under section 1102.5 “need not prove an actual violation of law; it suffices if the employer fired him for reporting his ‘reasonably based suspicions’ of illegal activity.” (Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 87; see also Mokler v. County of Orange, supra, 157 Cal.App.4th at p. 138 [“An employee engages in protected activity [under section 1102.5] when she discloses to a governmental agency ‘“reasonably based suspicions” of illegal activity.’”].) Nevertheless, to constitute protected activity, the employee must have an actual belief that the employer’s actions were unlawful and the employee’s belief, even if mistaken, must be reasonable. (Carter v. Escondido Union High School Dist. (2007) 148 Cal.App.4th 922, 933-934 (Carter); Patten v. Grant Joint Union High School Dist. (2005) 134 Cal.App.4th 1378, 1384-1385 (Patten).)
In Patten, for instance, the Court of Appeal rejected, in substantial part, a school principals claim for retaliatory discharge under section 1102.5 on the grounds that her disclosures about teacher and safety issues did not constitute protected activity. (Patten, supra, 134 Cal.App.4th at pp. 1384-1385.) The principal alleged she was discharged, in part, because she had reported to her supervisors student complaints about inappropriate behavior by two male teachers and had requested additional staff to assist with campus safety. (Id. at p. 1382.) The court concluded that the principals disclosures were made in “the context of an internal personnel matter... rather than in the context of a legal violation,” and “do not show any belief on [the principals] part that she was disclosing a violation of state or federal law in any sort of whistle blowing context.” (Id. at p. 1385.) As the court explained, “[t]o exalt these exclusively internal personnel disclosures with whistle blower status would create all sorts of mischief. Most damagingly, it would thrust the judiciary into micromanaging employment practices and create a legion of undeserving protected ‘whistle blowers’ arising from the routine workings and communications of the job site. [Citation.]” (Ibid.)
Similarly, in Carter, the Court of Appeal held that a teacher’s report to the high school athletic director that the football coach had recommended a student take a weight-gaining nutritional supplement was not protected activity under section 1102.5. (Carter, supra, 148 Cal.App.4th at pp. 933-934.) The court concluded that the teacher’s disclosure “was not motivated by his belief that a law had been broken,” and that “even if [the teacher] subjectively believed that [the football coach] had violated a statute or regulation..., the record is devoid of anything that would support a conclusion that his belief was ‘reasonable.’” (Id. at p. 933.) The court also reasoned that, as in Patten, the teacher’s report was akin to “a routine ‘internal personnel disclosure’ that was, at its core, a disagreement... about the proper advice to give to student athletes.” (Id. at p. 934.) Because the disclosure “was not whistle blowing under section 1102.5,” it could not support a retaliatory termination claim as a matter of law. (Ibid.)
In this case, Yeakel claims that his refusal to participate in Farmers’ estimating practices was protected activity because he reasonably believed such practices violated state law prohibitions on unfair business practices. The specific practices at issue were Farmers’ use of alternative and after-market parts in automobile repairs, its inclusion of a discounted price for original equipment manufacturer parts, and its inclusion of a discounted labor rate that was less than the prevailing rate charged by the repair shops. While not arguing that the practices actually violated any law, Yeakel asserts that his view that they were unlawful is grounded in Insurance Code section 790.03, which prohibits insurers from engaging in unfair or deceptive business acts, and in California Code of Regulations, title 10, section 2698.91, which requires an insurer to report the results of any survey conducted to determine a prevailing labor rate to the Department of Insurance. However, notwithstanding his reliance on these statutes, Yeakel’s deposition testimony demonstrates that he did not have an actual and reasonable belief that the challenged practices constituted unlawful activity.
With respect to the use of alternative or after-market parts, Yeakel testified that he never refused to include such parts in his repair estimates. In fact, he stated that he was “the best in the office” for two consecutive years in preparing estimates with alternative parts. Yeakel also was asked whether he believed that the use of either alternative or after-market parts in Farmers’ estimates was in any way unlawful. He responded, “No.”
With respect to the use of a discounted price for original equipment manufacturer parts, Yeakel stated that he refused to include the discount in 98 percent of his estimates because the repair shops would not agree to them. He explained that it was an “integrity issue” because he had to be able to negotiate with the shops in good faith and it offended the shops when he wrote an estimate with a parts discount that he knew they would not accept. However, when asked specifically whether he believed Farmer’s parts discount was unlawful, Yeakel responded, “No, if the shop agreed to it.” Yeakel further testified that there were a few repair shops in the Oxnard and Ventura areas that were willing to accept Farmers’ discounted price for original parts, and that he included the parts discount in his estimates when he understood that the shop would agree to it.
With respect to the use of a discounted labor rate, Yeakel testified that he believed the discount was unlawful because Department of Insurance regulations required Farmers to pay the prevailing rate. At his deposition, Yeakel was unable to identify any specific insurance regulation that prohibited Farmers’ labor rate practice, but stated that he believed there were regulations that required a survey to be done to determine the prevailing rate if the local repair shops were complaining about the issue. Yet, as with the parts discount, Yeakel testified that he believed Farmers’ labor discount was not unlawful if the repair shops were willing to accept the discounted rate. Indeed, Yeakel agreed that if Farmers proposed a particular labor rate and the shop accepted it, then that rate would not be unlawful no matter what it was.
In addition to this testimony, Yeakel admitted that he was not aware of any vehicle that could not be repaired because of Farmers’ estimating practices. For instance, even when a repair shop did not agree to Farmers’ discounted labor rate, the vehicle still would be repaired either by the original shop at a re-negotiated rate or by another shop that would accept the discount. Yeakel also admitted that he was not aware of any law that prohibited Farmers from negotiating with the shops over the cost of the repairs.
Yeakel’s internal complaints about Farmers’ estimating practices likewise fail to show the existence of a reasonable belief that the company was committing any legal violation. It is undisputed that Yeakel often complained to management about Farmers’ parts and labor discounts and was vocal in his opinion that such practices were unethical. However, there is no evidence that Yeakel ever said anything to his supervisors that would indicate that he believed the practices were unlawful. Instead, Yeakel’s internal complaints were focused on how Farmers’ estimating practices were increasing his workload and adversely impacting his performance because he was being evaluated on his ability to obtain discounts that the repair shops would not accept. Accordingly, as in Patten and Carter, Yeakel’s complaints to Farmers were made the context of an internal personnel matter, rather than in the context of a perceived legal violation. (Patten, supra, 134 Cal.App.4th at p. 1385; Carter, supra, 148 Cal.App.4th at p. 934.)
Yeakel argues that his inquiry to the Department of Insurance alone is sufficient to demonstrate that he reasonably believed Farmers’ business practices involved a violation of state law. As described by Yeakel, he called the Department of Insurance in 2001 to inquire about the process for investigating Farmers’ parts and labor discount practices, but opted not to pursue the issue further because he could not do so anonymously. An employee report of his or her concerns about an employer’s business activities to an outside agency does not, however, in and of itself, mean that the employee has reasonable cause to believe that such activities are unlawful. Here, Yeakel’s communication with the Department of Insurance is not sufficient to create a triable issue given his testimony that he personally believed that Farmers’ parts and labor discounts were not unlawful as long as the repair shops were willing to accept them.
Because there is no evidence that Yeakel reasonably believed Farmers’ estimating practices violated any state or federal law, he cannot show that he engaged in protected activity under section 1102.5 by refusing to participate in such practices. Farmers was entitled to summary judgment on Yeakel’s claim for violation of section 1102.5, subdivision (c).
In light of our conclusion that Yeakel’s refusal to participate in Farmers’ business practices did not constitute protected activity under section 1102.5, subdivision (c), we need not address the parties’ other arguments regarding the merits of this claim.
IV. Wrongful Termination in Violation of Public Policy
In his second cause of action for wrongful termination in violation of public policy, Yeakel alleged that Farmers terminated his employment in violation of the public policy embodied in section 1102.5. On appeal, Yeakel concedes that his public policy claim is based on the same factual allegations and legal theory supporting his statutory claims, and therefore, rises or falls with his first cause of action for violation of section 1102.5. Because we conclude that Yeakel did not engage in protected activity under section 1102.5, he likewise could not establish a prima facie case of wrongful termination in violation of public policy as a matter of law. (See Carter, supra, 148 Cal.App.4th at pp. 934-935 [rejecting action for wrongful termination in violation of public policy based on section 1102.5 where employee’s conduct did not constitute protected activity under the statute].) The trial court accordingly did not err in granting summary judgment on Yeakel’s second cause of action for wrongful termination in violation of public policy.
DISPOSITION
The judgment is affirmed. Farmers shall recover its costs on appeal.
We concur: PERLUSS, P. J. JACKSON, J.