BAYLEY v. REGENTS OF THE UNIVERSITY OF CALIFORNIA (1997)

Court of Appeal, Second District, Division 3, California.

Timothy BAYLEY, Plaintiff and Appellant, v. REGENTS OF THE UNIVERSITY OF CALIFORNIA, Defendant and Respondent.

No. B106294.

Decided: September 25, 1997

Greenspan & Glasser and David M. Glasser, Culver City, for Plaintiff and Appellant. Hagenbaugh & Murphy, Alan R. Zuckerman and Julie M. DeRose, Glendale, for Defendant and Respondent.

Timothy Bayley (plaintiff) appeals from the order dismissing without leave to amend his first amended complaint (hereinafter the complaint) against the Regents of the University of California (the Regents) and Associated Students of UCLA (ASUCLA) (collectively, the Regents) for wrongful termination in violation of public policy and negligence.   The Regents' demurrer to plaintiff's complaint was sustained without leave to amend on the grounds that (1) plaintiff failed to allege that he had exhausted his administrative remedies ¹ and (2) plaintiff failed to allege sufficient facts to state a cause of action for wrongful termination in violation of public policy.   We hold that (1) the grievance procedure established by the Regents constituted nothing more than an internal remedy, plaintiff's exhaustion of which plaintiff adequately has alleged was waived or excused by the Regents' actions;  (2) “The Reporting of Improper Governmental Activities Act” (Gov.Code, § 8547, et seq.) provides a sufficient statutory basis for a public policy proscribing retaliatory actions against whistleblower employees;  and (3) plaintiff's reliance on that statute does not depend on a prior formal complaint to his supervisors nor does it only protect reports made to the State Auditor.   We therefore conclude that plaintiff has alleged (or can allege) sufficient facts to state a claim for wrongful discharge in violation of public policy, as well as a cause of action for negligence.   It was thus error to sustain the Regents' demurrer without leave to amend and we reverse the order of dismissal.

FACTUAL AND PROCEDURAL BACKGROUND 2

 Plaintiff began working for the Regents in 1972.   In 1975, he was promoted to Store Services Director, and was responsible for establishing and managing all of the University of California at Los Angeles' (UCLA's) domestic and international trademark licensing programs and for overseeing ASUCLA's retail businesses.   As Store Services Director, plaintiff managed departments and divisions which generated approximately eighty percent of ASUCLA's $84 million in annual sales.

In January 1994, plaintiff's supervisor, Jason Reed, the Executive Director of ASUCLA (Reed), ordered plaintiff and his managers to develop a 10 year financial forecast to test the feasibility of ASUCLA undertaking a major construction project.   The financial forecast indicated that the construction project, if undertaken, would result in a loss to ASUCLA of several million dollars over a three-year period.   Based on the forecast, plaintiff warned Reed that undertaking the project at that time could bankrupt ASUCLA.

Reed then removed plaintiff from the majority of plaintiff's normal responsibilities, and assigned plaintiff the temporary task of developing a strategic plan which would solve the financial difficulties being experienced by ASUCLA, as well as avert the financial losses forecast to occur that fiscal year and the two following years.   Plaintiff had no experience in developing such an organization-wide strategic plan, and repeatedly requested a return to his usual duties, which requests were denied by Reed.

Plaintiff believed that Reed had represented to the Board of ASUCLA (the Board) that (1) ASUCLA could undertake the construction project without financial difficulties, and (2) the strategic plan being developed by plaintiff would ensure ASUCLA's profitability.   Based on (1) these beliefs, (2) his assignment to create a strategic plan despite his lack of experience with such matters, and (3) Reed's refusal to honor his repeated requests to be returned to his regular job duties, plaintiff felt personally pressured to “solve” ASUCLA's financial difficulties.   On June 2, 1994, plaintiff went on medical disability leave as a result of the stress he was experiencing over this matter.

On October 20, 1994, plaintiff was released to return to his normal duties on a full-time basis.   However, Reed refused for more than six weeks to allow plaintiff to return to work.   Then, when plaintiff was allowed to return, he was told he had to take a position which had never before existed, and for which there was no job description, no staff, and no budget.   When plaintiff spoke to a Board member about this situation, he was placed on administrative leave with a written letter of reprimand.   When plaintiff asked for a copy of the Regents' grievance procedure, he was informed that his position was not covered under the ASUCLA grievance procedure.

Thereafter, plaintiff was notified in writing that he was the only ASUCLA executive who had a classification falling within UCLA's Executive Program guidelines.   Plaintiff was further advised that there was no grievance procedure available to Executive Program members, and that Executive Program Policy 22 (which apparently provided for a review procedure rather than a grievance procedure) should, for his purposes, be modified to replace any references to “Chancellor,” “Regents” or “President” with “Executive Director.”   In other words, any review to which plaintiff was entitled under UCLA's Executive Program guidelines would be conducted by Reed, even though the written Executive Program Policy provided that such review would be conducted by the Chancellor.

In January 1995, plaintiff was allowed to return to work researching and developing proposals for new business opportunities.   A month later, he advised two Board members that he believed Reed intentionally was concealing from the Board a fiscal crisis which could bankrupt ASUCLA.   This advice was in conformance with ASUCLA's Mission Statement and Goals & Objective Statements previously promulgated by the Board.   Reed promptly notified plaintiff in writing that plaintiff was to have no business-related contact with any member of the Board or any ASUCLA employee save for Reed and Valerie McCormick.

Plaintiff, through his attorney, wrote UCLA's Chancellor, outlining the above-noted events, as well as plaintiff's earlier requests for a grievance and Reed's responses thereto.   The letter concluded:  “Obviously, since the grievance revolves primarily around the relationship with [plaintiff] and [Reed], it is not possible to have [Reed] investigate or make findings relative to this grievance.  [¶] We, therefore, request that you immediately investigate the grievance of [plaintiff] with respect to his position with ASUCLA, and arrange for a hearing by the ASUCLA Board or other appropriate Hearing Officer.”   Less than two weeks later, on February 21, 1995, Reed terminated plaintiff's employment.³

On February 5, 1996, plaintiff filed a complaint against the Regents and ASUCLA.   The complaint contained four causes of action:  (1) breach of a written contract, (2) breach of the covenant of good faith and fair dealing, (3) wrongful termination in violation of public policy, and (4) negligence.   The Regents moved to strike from the complaint all references to ASUCLA as a defendant on the ground that ASUCLA was not a distinct entity separate from the Regents ⁴ , and concurrently demurred to the first and second causes of action on the sole ground that plaintiff, as a public employee of the Regents, had no contractual right to continued employment.   Plaintiff responded to the demurrer by filing the complaint, which specifically alleged that the Regents and ASUCLA were distinct and separate entities.

The Regents then demurred to all four causes of action of the complaint.   The grounds for the demurrer were that (1) plaintiff had failed to allege exhaustion of his internal remedies, (2) as a public employee, plaintiff was not employed pursuant to a contract, and (3) plaintiff had failed to allege the constitutional or statutory basis of the public policy which his termination violated, and also failed to allege that such policy inured to the benefit of the public at large.

Plaintiff opposed the demurrer on the merits and advanced a procedural argument, to wit, that by failing to demurrer to the third and fourth causes of action in their first demurrer, the Regents had waived their right to do so in a subsequent demurrer.⁵  The Regents' reply did not respond to the procedural argument.   It did, however, specifically urge that plaintiff had not exhausted his internal remedies because, even if plaintiff had been given the “run around” as to how and to whom to grieve, he should have filed a petition for a writ of mandate directing the Regents to follow their grievance procedures and to accommodate his grievance.

The trial court sustained the Regents' demurrer to the complaint without leave to amend as to all four causes of action on the grounds of failure to state a claim and failure to exhaust internal remedies, and an order of dismissal was entered on July 26, 1996.⁶  On September 19, 1996, plaintiff filed timely notice of appeal from the July 26, 1996, order of dismissal, but only as such order related to the third and fourth causes of action (i.e., the counts charging a wrongful termination in violation of public policy and negligence).

CONTENTIONS ON APPEAL

Plaintiff contends that:  (1) his complaint alleged sufficient facts to establish that the Regents' conduct denied him an opportunity to exhaust his internal remedies;  (2) his complaint alleged sufficient facts to establish that his termination was in violation of public policy;  (3) even if his complaint does not allege sufficient facts to establish that he was denied an opportunity to exhaust his internal remedies or that he was terminated in violation of public policy, the trial court erred by sustaining the demurrer without leave to amend, and he must be given an opportunity to amend his complaint.

 The Regents dispute each of these contentions.   They also point to the fact that (1) on September 20, 1996, one day after plaintiff filed his notice of appeal from the order of dismissal, plaintiff filed a petition for, alternatively, a writ of administrative mandamus (Code Civ. Proc. § 1094.5) or a traditional writ of mandate (Code Civ. Proc. § 1085) ⁷ , and (2) on March 12, 1997, the trial court in the writ proceeding ruled that plaintiff was not entitled to a grievance hearing, but that he was entitled to a review by the Chancellor, not to a review by Reed.⁸ According to the Regents, this proves that plaintiff had an internal remedy which he failed to exhaust before filing his complaint.⁹

DISCUSSION

1. Standard of Review

 This case comes to us on an appeal from the sustaining of a demurrer without leave to amend.  “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 law.  [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 determine whether the complaint states facts sufficient to constitute a cause of action.  [Citation.]”  (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.)   Irrespective of the labels attached by the pleader to any alleged cause of action, we examine the factual allegations of the complaint, to determine whether they state a cause of action on any available legal theory.  (Ellenberger v. Espinosa (1994) 30 Cal.App.4th 943, 947, 36 Cal.Rptr.2d 360;  Saunders v. Cariss (1990) 224 Cal.App.3d 905, 908, 274 Cal.Rptr. 186.)   If they do, then the trial court's order of dismissal must be reversed.  (Platt v. Coldwell Banker Residential Real Estate Services (1990) 217 Cal.App.3d 1439, 1444, 266 Cal.Rptr. 601.)

 Even if the complaint does not state a cause of action, the court determines whether plaintiff should have been granted leave to amend, and applies an abuse of discretion standard to such determination.  (Hendy v. Losse (1991) 54 Cal.3d 723, 742, 1 Cal.Rptr.2d 543, 819 P.2d 1.)   If there is a reasonable possibility that the defect in a complaint can be cured by amendment, it is an abuse of discretion to sustain a demurrer without leave to amend.  (Ibid.) The burden is on the plaintiff, however, to demonstrate the manner in which the complaint could be amended to state a viable cause of action.  (Ibid.) Such a demonstration may be made to the appellate court in the first instance.  (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1386, 272 Cal.Rptr. 387.) ¹⁰

2. Plaintiff Must Be Given an Opportunity to Amend His First Amended Complaint to Allege Additional Facts Related to the Exhaustion of Internal Remedies

 On appeal, plaintiff sets out the additional allegations with which he would amend the complaint if allowed to do so.   These proposed allegations, in combination with those already contained in the complaint, clearly establish a basis upon which a trier of fact could conclude that the Regents either are estopped from asserting that plaintiff failed to exhaust his internal remedies, or have waived their right to insist that plaintiff must first resort to such internal remedies.

 Under the doctrine of equitable estoppel, a party may not contradict facts as to which, by conduct and representations, it has misled another to the latter's prejudice.  (Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 320, 24 Cal.Rptr.2d 597, 862 P.2d 158.)   Plaintiff's proposed allegations indicate that he was misled, to his prejudice, as to his rights to grieve or seek some form of review, either by (1) falsely being told that he was no longer covered under a grievance procedure when, in fact, he was still covered (which prejudiced him by depriving him of the applicable grievance procedures, including a hearing), or (2) being told that he was covered under a review procedure, but falsely being told that Reed, rather than the Chancellor, was the final arbiter under the review process (which prejudiced him by depriving him of a hearing before the proper and presumably neutral decision maker).

 As to the doctrine of waiver, “waiver” has a number of meanings in statute and case law.  (Platt Pacific, Inc. v. Andelson, supra, 6 Cal.4th 307, 314, 24 Cal.Rptr.2d 597, 862 P.2d 158.)   It generally refers to the voluntary relinquishment of a known right.   But it can also mean the loss of an opportunity or a right as a result of a party's failure to perform an act it is required to perform, regardless of the party's intent to relinquish that right.  (Id. at p. 315, 24 Cal.Rptr.2d 597, 862 P.2d 158.)   In the recent case of Engalla v. Permanente Medical Group (1997) 15 Cal.4th 951, 64 Cal.Rptr.2d 843, 938 P.2d 903, the California Supreme Court, in discussing waiver of the right to compel arbitration, noted that (1) “the ‘bad faith’ or ‘wilful misconduct’ of a party may constitute a waiver and thus justify a refusal to compel arbitration,” (2) “no single test delineates the nature of the conduct of a party that will constitute such a waiver,” and (3) “ ‘[w]hether there has been a waiver of a right to arbitrate is ordinarily a question of fact, ․’ ” (Id. at p. 983, 64 Cal.Rptr.2d 843, 938 P.2d 903.)

There is no reason to suppose that the right to insist that an employee follow internal grievance procedures cannot be waived in the same manner as a right to compel arbitration.   Here, plaintiff's proposed allegations, if true, would support a finding that the Regents waived their right to demand that plaintiff exhaust his internal remedies before resorting to the judicial system, either by misleading him as to what he was required to do in order to follow and receive the benefit of such procedures, or by ignoring his requests to engage in such procedures.   Furthermore, while plaintiff's proposed allegations of facts showing equitable estoppel or waiver are enough to circumvent the supposed bar of failure to exhaust internal remedies, plaintiff's proposed allegations also indicate that he did, in fact, exhaust his internal remedies.

 Specifically, plaintiff's proposed amendments include allegations that after Reed gave him a five working day notice of the intent to terminate his employment, plaintiff wrote to the Chancellor and asked for a personal review or a hearing regarding his termination, and that the Chancellor did not respond to this request.   Under the Regents' internal procedures allegedly applicable to plaintiff (i.e., the review process as opposed to the grievance process), seeking review by the Chancellor was the last internal remedy available to plaintiff.   Contrary to the Regents' argument, filing a petition for a traditional writ of mandate under Code of Civil Procedure section 1085 to force an employer to hold a hearing to which the employee is entitled under internal grievance procedures is not part of the chain of internal remedies which must be exhausted.   The cases on which the Regents rely are all cases in which a party was required to file a petition for a writ of administrative mandamus under Code of Civil Procedure section 1094.5 to have the employer's or agency's decision reviewed.  (See, e.g., Westlake Community Hosp. v. Superior Court (Kaiman) (1976) 17 Cal.3d 465, 469, 131 Cal.Rptr. 90, 551 P.2d 410;  City of Fresno v. Superior Court (Santos) (1987) 188 Cal.App.3d 1484, 1488-1489, 234 Cal.Rptr. 136.)   The Regents have cited no cases indicating that resort to a traditional writ of mandate is part of the internal remedies which an employee must exhaust, nor has our own independent research discovered any such cases.   This makes sense, given that an employee whose request for an internal remedy is refused or ignored could choose to treat such a response as the employer's waiver of its right to require the employee to exhaust the internal remedy process, and to then bring a legal action for wrongful termination.   Alternatively, the employee could treat such conduct as a repudiation of the internal remedy portion of the employment contract, and proceed directly to court.  (See, e.g., Local 659, I.A.T.S.E. v. Color Corp. of Amer. (1956) 47 Cal.2d 189, 195-198, 302 P.2d 294.)

3. Plaintiff Must Be Given an Opportunity to Amend His First Amended Complaint to State a Cause of Action for Wrongful Termination in Violation of Public Policy

 To state a claim for termination from employment in violation of public policy, a plaintiff must allege, as to the public policy, a policy which (1) is delineated in a statutory or constitutional provision (Gantt v. Sentry Ins. (1992) 1 Cal.4th 1083, 1095, 4 Cal.Rptr.2d 874, 824 P.2d 680), (2) involves a matter which affects society at large, rather than the purely personal or proprietary interests of the plaintiff or his or her employer (id. at p. 1090, 4 Cal.Rptr.2d 874, 824 P.2d 680), and (3) is fundamental, substantial and well-established at the time of termination.   (Ibid.)

 As plaintiff points out, albeit in his reply brief, there is a statutory basis for his particular cause of action.  “The Reporting of Improper Governmental Activities Act” (the Act) encourages the disclosure, by state employees and other persons, of improper governmental activities.  (Gov.Code, § 8547 et seq.)  “Improper governmental activities” include any activity by a state employee or a state agency which is economically wasteful, or which involves gross misconduct, incompetency or inefficiency.  (Gov.Code, § 8547.2(b).)   This policy applies to improper governmental activities by the University of California, its employees, officers and faculty members.  (Gov.Code, § 8547.2(b).)

 This statute-based public policy meets the three Gantt requirements because:  (1) it is directly related to plaintiff's claim of wrongful termination, because it prohibits and punishes retaliation against, or intimidation of, one who discloses or might disclose such improper activities (Gov.Code, §§ 8547.3, 8547.8, 8547.10, 8547.11, 8547.12), and such forbidden acts of retaliation and intimidation include taking, directing others to take, or recommending, any personnel action (Gov.Code, § 8547.3(b)), (2) it clearly involves a matter which affects the general public, rather than the purely personal or proprietary interests of plaintiff or the Regents, because it is the public that ultimately foots the bill for wasteful, inefficient, incompetent and improper government activities, and (3) it embodies a public policy which was statutorily well-established in February 1995, when plaintiff was terminated.¹¹

The Regents urged at oral argument that the Act only protects disclosure of improper governmental activities when such disclosure is made to the State Auditor, and that it therefore does not apply to plaintiff's disclosure, which was made to two ASUCLA board members.¹²  The Regents have missed the point, which is not whether the Act applies to plaintiff's particular circumstances, but whether the Act serves as the requisite statutory delineation of an applicable public policy upon which plaintiff's common law cause of action for wrongful termination in violation of public policy must be based.  (Gantt v. Sentry Ins., supra, 1 Cal.4th at p. 1095, 4 Cal.Rptr.2d 874, 824 P.2d 680.)

At oral argument, the Regents also asserted that plaintiff may not “invoke” the Act until he has filed with his supervisor or manager or the Regents' designee the written complaint referred to in Government Code section 8547.10.¹³  In other words, according to the Regents, the Act is simply one more internal remedy which a public employee plaintiff ¹⁴ must exhaust before bringing a common law action for wrongful termination in violation of public policy.   We disagree.   For the reasons discussed below, we conclude that the filing of the written complaint referred to in Government Code section 8547.10 (and in Government Code section 8547.8) is not a prerequisite to a common law action for wrongful termination against the Regents.   Instead, it is a prerequisite to the statutorily-based action for damages against the particular employee or entity who intentionally engaged in the prohibited acts of retaliation.  (See Gov.Code, § 8547.10, subd. (c), quoted below.)

 In interpreting a statute, we must first “ascertain the intent of the Legislature in order to ensure that we effectuate the purpose of the law.  [Citation.]   Every statute should be construed and applied ‘with reference to the whole system of law of which it is a part so that all may be harmonized and have effect.’  [Citations.]   In doing so, we should seek to avoid absurd or anomalous results.  [Citation.]   Most relevant to the issues before us, we must remember that the meaning of the words used in a statute can only be determined with reference to the context in which the words are used;  that is, with reference to such [legislative] purpose as may be discerned from examining the entire enactment of which the words are part․   Thus, in analyzing the legislative usage of certain words, ‘ “the objective sought to be achieved by a statute as well as the evil to be prevented is of prime consideration․” ’  [Citations.]”  [Citation.]   (Looney v. Superior Court (Medical Center of North Hollywood) (1993) 16 Cal.App.4th 521, 531-532, 20 Cal.Rptr.2d 182.)

Government Code section 8547.1 states that the legislative intent behind the Act was that state employees and other persons should disclose, to the extent not expressly prohibited by law, improper governmental activities.

Government Code section 8547.10 provides, in relevant part:  “(a) A University of California employee, including an officer or faculty member, or applicant for employment[,] may file a written complaint with his or her supervisor or manager, or with any other university officer designated for that purpose by the regents, alleging actual or attempted acts of reprisal, retaliation, threats, coercion, or similar improper acts for having disclosed improper governmental activities, together with a sworn statement that the contents of the written complaint are true, or are believed by the affiant to be true, under penalty of perjury.   The complaint shall be filed within 12 months of the most recent act of reprisal complained about.

“(b) Any person who intentionally engages in acts of reprisal, retaliation, threats, coercion, or similar acts against a University of California employee, including an officer or faculty member, or applicant for employment[,] for having disclosed improper governmental activities, is subject to a fine not to exceed ten thousand dollars ($10,000) and imprisonment in the county jail for up to a period of one year.   Any university employee, including an officer or faculty member, who intentionally engages in that conduct shall also be subject to discipline by the university.

“(c) In addition to all other penalties provided by law, any person who intentionally engages in acts of reprisal, retaliation, threats, coercion, or similar acts against a university employee, including an officer or faculty member, or applicant for employment[,] for having disclosed improper governmental activities shall be liable in an action for damages brought against him or her by the injured party.   Punitive damages may be awarded by the court where the acts of the offending party are proven to be malicious.   Where liability has been established, the injured party shall also be entitled to reasonable attorney's fees as provided by law.   However, any action for damages shall not be available to the injured party unless the injured party has first filed a complaint with the university officer identified pursuant to subdivision (a), and the university has failed to reach a decision regarding that complaint within the time limits established for that purpose by the regents.”  (Italics added.)

Government Code section 8547.3, subdivision (c) provides that “Any employee who violates subdivision (a) [which prohibits acts of intimidation and reprisal against whistleblowers] may be liable in an action for civil damages brought against the employee by the offended party.”  (Italics added.)

Government Code section 8547.2, subdivision (a) defines “employee” as “any individual appointed by the Governor or employed or holding office in a state agency as defined by Government Code section 11000.”   Subdivision (c) defines “person” as “any individual, corporation, trust, association, any state or local government, or any agency or instrumentality of any of the foregoing.”   Subdivision (d) defines “state agency” as including the University of California for purposes of sections 8547.5 to 8547.7, inclusive.

 Reading these sections as a whole, we conclude that the Legislature did not intend to abrogate the common law remedy of an action for wrongful termination in violation of public policy by enacting the Act, but that instead it intended to encourage employees and others, before they have been terminated as employees, to disclose improper activity by providing yet another remedy, in the form of a statutorily-based action for damages, which would cover not only wrongful termination but all other forms of intimidation and reprisal, and which, unlike the common law cause of action for wrongful termination, would provide additional incentive for disclosure, and punishment for harassment and intimidation, by requiring the party who engaged in such wrongful conduct to pay the injured party's reasonable attorney's fees if liability were established.   While the Act thus provides a statutory remedy for injured whistleblowers, it also clearly provides that public policy favors the disclosure of improper governmental activity.   Thus, regardless of whether a whistleblower complies with the written complaint requirement so as to be able to take advantage of the statutory remedy, the existence of the Act supplies the Gantt statutory public policy element necessary for the common law action for wrongful termination in violation of public policy.¹⁵

Thus, plaintiff's allegations that his job assignment was changed and that his employment ultimately was terminated in reprisal for disclosing Reed's efforts to keep ASUCLA's financial problems from the Board despite the Board's need to know the truth about the fiscal situation in order to make an informed decision about the proposed building project, are sufficient to state a common law claim for wrongful termination in violation of California's public policy.

4. Plaintiff's First Amended Complaint States Facts Sufficient to Constitute a Cause of Action for Negligence

The Regents demurred to plaintiff's fourth cause of action, for negligence, on the sole ground that plaintiff had failed to exhaust his internal remedies.   As discussed above, plaintiff has demonstrated that he can allege facts which will allow him to avoid this bar.   The Regents urge, however, that the order sustaining the demurrer to the negligence cause of action should be affirmed on the ground that, as a matter of law, the Regents owed no duty to plaintiff to apprise him of his rights as an employee, citing Gray v. Superior Court (Cipher Data Products, Inc.) (1986) 181 Cal.App.3d 813, 226 Cal.Rptr. 570, disapproved on another ground, Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 688-689, 700 n. 42, 254 Cal.Rptr. 211, 765 P.2d 373 (Gray ).  Gray does not stand for this proposition, and, in fact, its holding supports plaintiff's position that he can bring a cause of action for negligence against the Regents.

In Gray, the plaintiff was summarily fired without any prior warnings or counselings provided for by his employer's internal disciplinary procedures.   He sued his employer for, among other things, wrongful termination in violation of public policy, breach of contract, breach of the implied covenant of good faith and fair dealing, and negligent infliction of emotional distress.   His employer's demurrer to these causes of action was sustained without leave to amend, and plaintiff sought a writ of mandate to force the trial court to vacate its order sustaining the demurrer.   The reviewing court held that the employer's violation of its own internal procedures and definitions of cause for termination did not violate any public policy, and therefore the plaintiff's allegations that he was wrongfully terminated in violation of public policy were not supported by allegations of such conduct.  (181 Cal.App.3d at p. 819, 226 Cal.Rptr. 570.)   However, the reviewing court also held that plaintiff's cause of action for negligent infliction of emotional distress, while “inartful” and lacking any allegation of a specific duty of care owed by the employer other than an allegation that the employer had breached a duty to exercise due care when dealing with him, was sufficient to state a cause of action, and that the trial court therefore had erred by sustaining the demurrer to that cause of action.   (Id. at pp. 822-823, 226 Cal.Rptr. 570.)

 Here, plaintiff's complaint alleged that the Regents had a duty to apprise plaintiff of his rights as an employee, and to conform to the appropriate grievance procedure, which duty they breached.   The general rule is that one is responsible for any injuries caused by one's intentional or negligent acts, i.e., one must exercise due care in all of one's dealings with others, unless there is a statutory exception or strong public policy reasons which would justify exemption from liability for negligent conduct.  (Civ.Code, § 1714;  Li v. Yellow Cab Co. (1975) 13 Cal.3d 804, 822-823, 119 Cal.Rptr. 858, 532 P.2d 1226;  Rowland v. Christian (1968) 69 Cal.2d 108, 111-113, 70 Cal.Rptr. 97, 443 P.2d 561.)   The Regents have failed to point to any authority which creates an applicable exception to this general rule.

 The Regents also urge, however, that plaintiff's own allegations demonstrate that they did not breach any duty to him because he admitted in the complaint that he had been provided with a copy of the Executive Program Policy on February 16, 1995, five days before he was terminated on February 21, 1995.   This argument assumes that plaintiff only had need of information about his internal remedies in time to protest his termination.   Not so.   Plaintiff's complaint alleges that he sought to pursue internal remedies for earlier alleged mistreatment:  Reed's refusal, for six weeks, to allow him to return to his job even though he had been released from medical disability leave, and Reed's assigning him to a new position for which he had no experience and for which there was no job description, no staff, and no budget.   The argument also ignores the fact that plaintiff alleges that the Regents were negligent not only because they failed to apprise him of his rights, but because they failed to follow the appropriate internal procedures.   Plaintiff's allegations are sufficient to state a cause of action for negligence.

CONCLUSION

Because plaintiff has demonstrated that his complaint can be amended to avoid the bar for failure to exhaust internal remedies and to state a viable cause of action for wrongful termination in violation of public policy, and because plaintiff's complaint alleged facts sufficient to constitute a cause of action for negligence, the trial court abused its discretion by sustaining the demurrer without leave to amend.   Therefore, the order of dismissal must be reversed.  (Hendy v. Losse, supra, 54 Cal.3d at p. 742, 1 Cal.Rptr.2d 543, 819 P.2d 1.)

DISPOSITION

The order of dismissal filed July 26, 1996 is reversed except as to the first and second causes of action for breach of contract and breach of the covenant of good faith and fair dealing.   As to those causes of action, the order is affirmed.   The matter is remanded with directions to grant plaintiff leave to amend his complaint and to conduct further proceedings consistent with the views expressed herein.   Plaintiff shall recover his costs on appeal.

FOOTNOTES

1.   Although both parties refer to the issue as one of exhaustion of administrative remedies, it is more accurately a question of whether plaintiff exhausted his internal remedies.  (See, e.g., Johnson v. Hydraulic Research & Mfg. Co. (1977) 70 Cal.App.3d 675, 679, 139 Cal.Rptr. 136.)   Accordingly, we shall refer to plaintiff's internal remedies.

2.   These facts are taken from the complaint.   Because this appeal arises from the sustaining of a demurrer without leave to amend, the court treats as true the material facts alleged in the complaint (Hernandez v. City of Pomona (1996) 49 Cal.App.4th 1492, 1497, 57 Cal.Rptr.2d 406), as well as any facts which may be implied or inferred from those expressly alleged (County of Los Angeles v. Farmers Ins. Exchange (1982) 132 Cal.App.3d 77, 83, 182 Cal.Rptr. 879), and then considers de novo whether such facts state a cause of action.  (Hernandez v. City of Pomona, supra, 49 Cal.App.4th at p. 1497, 57 Cal.Rptr.2d 406.)

3.   It can be inferred from these facts that the Chancellor took no action on plaintiff's request for some kind of internal remedy before plaintiff's termination, and, in any event, plaintiff's proposed amendments to the complaint specifically allege that the Chancellor took no action.

4.   ASUCLA also apparently moved to quash service of summons on the ground that it was not an entity separate from the Regents.

5.   Plaintiff relied on Los Angeles County Superior Court Rules, Rule 9.18(d), which provides:  “All grounds that the demurring party intends to assert shall be set forth in the demurrer to the original complaint, and grounds existing from the outset shall not be asserted piecemeal as the complaint is amended.”

6.   The trial court also granted ASUCLA's motion to quash, concluding that it was not a separate entity.   Plaintiff does not appeal from this order.

7.   The petition was filed in Bayley v. Regents of University of California (Super.Ct. of L.A. County 1996, No. BS041426) and that proceeding will be referred to hereafter as “the writ proceeding.”

8.   The March 12, 1997 ruling stated that plaintiff's petition for a writ of mandate was granted “in part, pursuant to [Code of Civil Procedure section] 1094.5,” because “[a]dministrative mandamus may be invoked to compel the agency to provide a review as required by law.   Professional Engineers [in Cal. Government] v. [ ] State Personnel [Bd.] (1980) 114 Cal.App.3d 101, 111 n. 6, 170 Cal.Rptr. 547;  Fascination, Inc. v. Hoover (1952) 39 Cal.2d 260, 268, 246 P.2d 656.”   However, we conclude that the trial court properly could have granted plaintiff's petition only pursuant to Code of Civil Procedure section 1085, rather than pursuant to Code of Civil Procedure section 1094.5.Code of Civil Procedure section 1094.5 is the method for reviewing final administrative decisions made as a result of a proceeding in which by law a hearing is required to be given.  (Code Civ.Proc., § 1094.5(a).)  Code of Civil Procedure section 1085, in contrast, is the method by which to compel a “corporation, board or person” to perform a ministerial duty, e.g., to hold a hearing or to follow the steps required by the agency's internal procedures, i.e., in this case, to provide plaintiff with the review contemplated in the Executive Program guidelines.  (Code Civ.Proc., § 1085;  Wilson v. Hidden Valley Mun. Water Dist. (1967) 256 Cal.App.2d 271, 286, 63 Cal.Rptr. 889.)   Because the Chancellor never acted on plaintiff's request for a review, there was no “final administrative decision made as a result of a proceeding in which by law a hearing is required to be given” to be reviewed by the trial court.   Instead of reviewing a decision, the trial court determined that plaintiff “was entitled to have a review which was never provided.”  (See Case No. BS041426, March 12, 1997 ruling at p. 3.)   Thus, regardless of its stated reliance, at least in part, on Code of Civil Procedure section 1094.5, the trial court actually had to have acted pursuant to Code of Civil Procedure section 1085, not Code of Civil Procedure section 1094.5, in directing the Regents to provide plaintiff with a review of Reed's decision to terminate him.While it is true that the court in Professional Engineers in Cal. Government v. State Personnel Bd., supra, 114 Cal.App.3d at p. 111 n. 6, 170 Cal.Rptr. 547, noted that “administrative mandamus may lie for the mere refusal to hold a hearing required by law,” citing Jean v. Civil Service Commission (1977) 71 Cal.App.3d 101, 109, 139 Cal.Rptr. 303, this was mere dicta, not a holding, and, in any event it was not a correct statement of the law.  Jean v. Civil Service Commission, supra, did not so hold.   Instead, it held that Jean, who had appealed the trial court's denial of his petition for a writ of administrative mandamus to review his discharge from municipal employment, had received from the Civil Service Commission a hearing to which he was entitled by law, and therefore he was entitled to have that decision reviewed by way of administrative mandamus.   Thus, in Jean v. Civil Service Commission, supra, unlike this case, there was no refusal to hold a hearing and there was a final administrative decision which the trial court could review.   Nor does Fascination, Inc. v. Hoover, supra, 39 Cal.2d at p. 268, 246 P.2d 656, support the trial court's conclusion that administrative mandamus was the proper remedy for the Chancellor's refusal to provide plaintiff with the review required by the Executive Program guidelines.   In Fascination, Inc. v. Hoover, supra, the opinion is entirely silent as to whether the writ before it was one pursuant to Code of Civil Procedure section 1085 or section 1094.5.The petition for rehearing is denied.   There is no change in the judgment.

9.   The Regents included the petition and March 12, 1997 ruling in the writ proceeding as part of their Respondent's Appendix.   These documents, which were not before the trial court, are not properly part of the record on appeal.  (See Cal.Rules of Court, Rules 4.5, 5(d), 5.1(b).)  The Regents asked this court to take judicial notice of the documents in their opening brief, and plaintiff did not object.   We have granted the request for judicial notice.

10.   As noted above, the Regents did not demurrer to the third and fourth causes of action in their first demurrer, in violation of the local rules of court.   However, Code of Civil Procedure section 430.80 provides that the failure to object to a pleading does not operate as a waiver of the pleading's failure to state facts sufficient to constitute a cause of action.   Therefore, the real import of the Regents' violation of the local rules of court was simply that when the Regents' demurrer to the complaint was sustained without leave to amend, plaintiff had had no prior opportunity to amend his third and fourth causes of action.   As noted above, if plaintiff could have amended his complaint to state causes of action, he should have been allowed to do so.

11.   The Act, which became effective on May 7, 1993 (Stats.1993, ch. 12, § 8), was derived from earlier code sections.   Former Gov.Code, §§ 10540, 10541, 10542, 10543, 10544, 10545, 10546, 10547 (Stats.1981, ch. 1168, § 7, pp. 4694-4696);  former Gov.Code, § 10549 (Stats.1984, ch. 1212, § 6, p. 4160);  former Gov.Code, § 10548 (Stats.1986, ch. 353, § 4, pp. 1511-1512);  former Gov.Code, §§ 10550, 10551.  (Stats.1988, ch. 1385, § 3, pp. 4668-4669.)

12.   It is true that the Act expressly protects a whistleblower in the disclosure of improper governmental activities to the State Auditor.  (Gov.Code, § 8547.3(a)) [“An employee may not [engage in intimidating or retaliatory behavior] for the purpose of interfering with the right of [a whistleblower] to disclose to the State Auditor matters within the scope of this article.”]   However, for the reasons noted above, we need not reach the issue of whether employees who disclose improper governmental activity to someone other than the State Auditor are also covered by the Act.

13.   The Regents further asserted at oral argument that such written complaint must be filed within the one-year period of limitation set forth in that same section, and that because plaintiff did not file a written complaint with the appropriate person within one year, this action for wrongful termination is barred.

14.   While Government Code section 8547.10 requires only University of California employees to file a written complaint with a supervisor or manager as a prerequisite to bringing an action for damages against the person who engaged in the retaliatory conduct, other state employees are similarly required to file a written complaint with the State Personnel Board as a prerequisite to an action for damages against the person who engaged in the retaliatory conduct.  (Gov.Code, § 8547.8.)

15.   This public policy that employees should be able to disclose wrongful conduct without suffering work-related reprisal is also expressed in other statutory provisions, e.g., Labor Code section 1102.5, subdivision (b) (“No employer shall 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 violation or noncompliance with a state or federal regulation”) and Government Code section 53296 et seq. (prohibiting retaliatory action by local agencies against employees who disclose written evidence of gross mismanagement, or a significant waste of public funds, an abuse of authority, or a substantial and specific danger to public health or safety).

CROSKEY, Acting Presiding Justice.

KITCHING and ARANDA *, JJ., concur.