Elizabeth Willson v Fonte, Inc, Pietro Bernardi, Edward Mitchell. and Does

Case Number

24CV04342

Case Type

Hearing Date / Time

Wed, 02/05/2025 - 10:00

Nature of Proceedings

Demurrer

Tentative Ruling

Plaintiff Elizabeth Wilson: James Cordes; Angelica J Caro.

Defendants Fonte, Inc., a dissolved entity, and Pietro Bernardi: Shannon DeNatale, Melissa Fassett

Defendant Edward Mitchel: Allen Bifano.

RULING 

For the reasons set forth below, Defendant Bernardi’s demurrer to Plaintiff Willson’s complaint is sustained without leaved to amend. The trial date of 9/3/25 is confirmed.

Background

This action commenced on 8/25/24; as alleged in the complaint and relevant to the present demurrer Plaintiff filed an action against Fonte, Inc a corporation, Pietro Bernardi, an individual, Edward Mitchell an individual, and Does 1 through 10.

The allegations are that Plaintiff was employed by Fonte (a dissolved entity) at its restaurant Via Vai, which closed in April 2024. Plaintiff alleges that Mitchell, a Via Vai customer, made defamatory statements about her allegedly taking $2,000 from him under false pretenses. Plaintiff claims she was terminated for allegedly refusing to serve an inebriated Mitchell and allegedly asserting 1102.5 claims.

On 9/6/24 Edward Mitchell filed his answer.

On 11/25/24 Pietro Bernardi filed a demurrer and set it for hearing on 2/5/25 as to the sole cause of action alleged against Bernardi, that is, the third cause of action (Violation of Labor Code section 1102.5); contends the pleadings do not state a cause of action as to him and the sole cause of action asserted against Bernardi is based on Labor Code section 1102.5, the Whistleblower Statute.

A claim under the Whistleblower Statute, however, will only lie against an employer and not against an individual acting on behalf of the employer.

Here, Plaintiff admits that she was employed by Fonte, Inc., also a Defendant, and not by Bernardi.

Thus, there is no viable legal claim against Bernardi and asks that the demurrer be sustained without leave to amend.

More specifically Plaintiff alleges that in August 2023, she was working as a waitress at Via Vai, a restaurant located in Montecito; that Defendant Fonte, Inc. owned and operated Via Vai, that Defendant Bernardi was the President of Fonte, Inc., and that Defendant Edward Mitchell was a patron of Via Vai. Plaintiff alleges that Mitchell was “known to be a problematic figure due to his regular intoxication.”

Plaintiff further alleges that Bernardi was a supervisory employee and managing agent of Fonte, Inc.; that on or about August 6, 2023, Mitchell wrote on two Via Vai credit card receipts and provided a handwritten letter to Via Vai, claiming – among other things – that Plaintiff induced him to give her $2,000.00 via the GoFundMe website but that she “never spent any of that $2,000 for a lawyer to help your children, you spent it on clothes and things for yourself.” Mitchell claims that Plaintiff owed him the $2,000 because he was induced to provide the money under false pretenses, that she “ripped me off”, and that he would not tip any Via Vai staff member until the equivalent of $2,000 in tips had been withheld, noting that “she could solve the whole problem by giving me the money back, but she never will.”

Plaintiff alleges that on or about August 8, 2023, she received a handwritten letter from Bernardi in which he provided copies of the documents received from Mitchell, advised her that Mitchell had asserted she took $2,000 from him under false pretenses, and stated that she was removed from the work schedule until the matter had been investigated to conclusion. Plaintiff alleges that she was taken off the work schedule in retaliation for her complaints about Mitchell’s disruptive behavior.

However, there is no contention in the Complaint that Plaintiff had ever complained about Mitchell. Plaintiff alleges that on August 16, 2023 – after she had been placed on leave due to Mitchell’s allegations – her attorney wrote to Fonte, Inc. claiming, among other things, that Mitchell’s accusations were slanderous, and that Plaintiff had “already invoked whistleblower protections” because she had previously complained about Mitchell being inebriated. 

Plaintiff further alleges that on or about September 18, 2023, Defendants terminated her employment.

The remaining allegations relate to Mitchell and are not relevant to the Demurrer. 

Plaintiff asserts the following four causes of action: (1) libel and (2) slander against Mitchell; (3) violation of Labor Code § 1102.5 against Fonte, Inc. and Bernardi; and (4) wrongful termination in violation of public policy against Fonte, Inc.  Only the third cause of action is asserted against Bernardi and is the subject of this demurrer.

Pursuant to Code of Civil Procedure section 430.10(e), this demurrer must be sustained because the pleadings do not state facts sufficient to constitute a cause of action for violation of Labor Code section 1102.5 (“Section 1102.5”) against Bernardi, who is being sued in his capacity as an individual and not as an employer.

Section 1102.5(c) states that “an employer, or any person acting on behalf of the 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.” The language – “any person acting on behalf of the employer” – is at issue. Plaintiff contends that the statute allows for individual liability against an alleged supervisor like Bernardi. However, the case law and statutory language demonstrate otherwise and demonstrate that Plaintiff is incorrect, and no liability attaches to an individual employee.  

California appellate courts and the California Supreme Court have not addressed whether individual liability for a non-employer can be predicated on Section 1102.5’s language “or any person acting on behalf of an employer” since that language was added effective January 1, 2014. Federal courts however have explored this language in the Whistleblower Statute at extensive length, and do not support individual liability. Published and unpublished federal decisions are citable as persuasive authority.

First, the Whistleblower Statute itself demonstrates the legislature’s intent was to impose liability only on the employer and not on individual employees. For example, Labor Code Section 1104 states that an employer is responsible for the acts of its managers, officers, agents, and employees. This demonstrates the intent to hold the employer liable for the acts of its agents, as opposed to holding individuals liable. Section 1104 supports the conclusion that the pertinent language in Section 1102.5, referring to acts by persons acting on behalf of the employer, is not indicative of individual liability of an employee but rather that an employer’s liability can be predicated on actions an individual employee.

Further, Section 1105 similarly states: “Nothing in this chapter shall prevent the injured employee from recovering damages from his employer for injury suffered through a violation of this chapter.” Again, this language makes it clear that the sole entity which may be held liable under the Whistleblower Statute is the employer. Importantly, there is no mention in Section 1105 of individual liability for an individual acting on the employer’s behalf, which the legislature could easily have incorporated if it had intended to do so. 

Several federal courts have analyzed this statute and have rejected individual liability under the Whistleblower Statute. While noting that there is no controlling state court decision, in interpreting how the California Supreme Court would rule on this issue, federal courts have provided numerous persuasive explanations regarding why individuals are not proper Defendants under Section 1102.5. 

In sum, the federal decisions – both published and unpublished – that have considered whether Section 1102.5 allows for liability against an individual Defendant have all concluded that individuals are not proper Defendants under Section 1102.5. These cases analyze the legislative history, the overall structure and effect of Labor Code sections 1101 through 1106, and how the California Supreme Court would rule based on California Supreme Court precedent.

Bernardi requests that this Court join the Eastern, Central, Northern, and Southern federal District Courts in California in finding that individuals acting on behalf of employers are not proper Defendants Section 1102.5 and sustain this demurrer without leave to amend.

The Complaint reflects a complete lack of support for naming Bernardi. The sole claim asserted against him is under the Whistleblower Statute, and there is no individual liability under that statute. No amount of amendments will change the law, which is that an individual Defendant acting on behalf of an employer cannot be held liable for an alleged violation of Labor Code section 1102.5.  Therefore, leave to amend should be denied.        

Defendant Fonte, Inc’s 1AA to the Complaint

Filed 12/18/24; Defendant generally denies the Complaint and each and every allegation contained in the Complaint, and further denies that by reason of any matter therein alleged, either as therein alleged or otherwise, Plaintiff is entitled to any relief requested or any relief at all.

Plaintiff Willson’s Opposition to the Demurrer.

Filed 1/21/25; 9 pages; summarized; Bernardi’s demurrer should be overruled because the plain language of Labor Code §1102.5 explicitly includes individual liability, the legislative history confirms intent to expand liability beyond employers, the statutory framework of the Labor Code consistently provides for individual liability, Bernardi’s reliance on FEHA authorities is of very limited relevance, federal authority is split and not binding, and creating a limitation on liability would improperly render the 2013 amendment meaningless.

More specifically her Complaint for Damages against Bernardi is valid. Her Complaint is based on the plain language of Labor Code §1102.5, which expressly provides for individual liability, and because not a single California case supports Bernardi’s position. When a statute says one thing, and no California case says anything else, the result is clear: the Demurrer must be overruled.

In this case, Bernardi was the President of FONTE, INC., a supervisory employee, and a managing agent of Via Vai. On or about September 18, 2023, “Defendants” terminated Plaintiff’s employment, with Defendants” having previously been identified as each Defendant, “acting individually, jointly, and/or severally.” He is thus an “owner, director, officer, or managing agent” and was either “personally involved in the purported violation ... or had sufficient participation in the activities of the employer.”

While some federal courts have rejected individual liability, others have found section 1102.5 permits individual liability. Cordell v. PICC Lines Plus LLC, 2016 WL 4702654 (N.D.Cal. Sept. 8, 2016) found that “the plain language of the statute allows individuals acting on behalf of their employers to be held liable.” Jackson v. Dollar Tree Distribution, Inc., 2018 WL 2355983 (C.D. Cal. May 23, 2018) rejected arguments against individual liability. De La Torre v. Progress Rail Servs. Corp., 2015 WL 4607730 (C.D. Cal. July 31, 2015) noted no California Court has ruled on the issue.

While Bernardi cites federal court cases, California Rules of Court, Rule 8.1115 prohibit Plaintiff from citing to the “California state courts [which] are divided on whether section 1102.5 precludes individual liability,” other than this reference which provides that they do exist.

Bernardi points to the different contexts in which federal court made their rulings, but those decisions are not binding on this Court either way, meaning at most the weight of their persuasion varies. There still is no binding authority for this Court to consider.

Defendant Bernardi’s Reply

Despite Plaintiff’s representations, there is nothing in either the legislative history underlying the 2013 modifications nor in the statutory language which demonstrates an intent to impose liability on an employer’s agent as an individual under the Whistleblower Statute. Plaintiff relies solely on the underlined language in arguing that the statute reflects an intent to impose individual liability when Section 1102.5(c) states: “an employer, or any person acting on behalf of the 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.”

Nothing in that Section states that individuals may themselves be held liable; only that an employer may be held liable for acts of its agents. Plaintiff’s interpretation is contradicted by the plain language of the Statute. Similarly, nothing in the legislative history expresses an explicit intent to hold agents liable as individuals. 

Examining the entire statutory construction of Section 1101 et seq., it is apparent that only employers are liable under the Whistleblower statute.  Section 1102.6 discusses the bringing of a civil proceeding for a violation of the Whistleblower Statute, and references only an action against the employer, stating: “In a civil action or administrative proceeding brought pursuant to Section 1102.5, once it has been demonstrated by a preponderance of the evidence that an activity proscribed by Section 1102.5 was a contributing factor in the alleged prohibited action against the employee, the employer shall have the burden of proof by clear and convincing evidence that the alleged action would have occurred for legitimate, independent reasons even if the employee had not engaged in activities protected by Section 1102.5.”

Clearly, the intent was that the employer would be the entity held to answer under the Whistleblower Statute.  

Similarly, Section 1104 states that an employer is responsible for the acts of its managers, officers, agents, and employees. This is consistent with Section 1102.5(c) which describes circumstances when the employer may be held liable. It supports the conclusion that an employer’s liability can be based on conduct of individual employees, not that the individuals themselves may be liable.

Section 1105 states “Nothing in this chapter shall prevent the injured employee from recovering damages from his employer for injury suffered through a violation of this chapter.”  This further clarifies that the intent of the Statute is to impose liability only on the employer. There is no mention anywhere in the Statute of individual liability for an individual acting on the employer’s behalf.  

 As discussed in the Demurrer, numerous courts analyzing the legislative history of Section 1102.5 have consistently found that the language of the Whistleblower Statute, including the language at issue, extends the employer’s liability but does not create a new category of individual liability for agents. The legislative history was analyzed extensively in Bernardi’s Demurrer, which Plaintiff pointedly ignores rather than attempting to rebut.

The context of the Legislative history as a whole and the overall structure of Section 1101 et seq., make it clear that the cited language, added to Section 1102.5 in 2013, did nothing to create new individual agent liability but rather reaffirmed the extent of the employer’s liability.  Plaintiff attempts to rely on another, entirely different statute, Labor Code section 558.1, in arguing that individual liability should be found in the Whistleblower Statute. Yet the language is entirely different and given the differences in language as between Section 1102.5 and Section 558.1, the juxtaposition weighs against finding individual agent liability under the Whistleblower Statute.

Section 558(a) reads “Any employer or other person acting on behalf of an employer who violates, or causes to be violated, a section of this chapter or any provision regulating hours and days of work in any order of the Industrial Welfare Commission shall be subject to a civil penalty…”

Section 558.1(a) states: “Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work…. may be held liable as the employer for such violation.”

The language shows a clear intent in these sections of the statute to hold an individual agent responsible for a violation of specific wage and hour laws. In contrast, the Whistleblower Statute contains no such language.

The Legislature knew how to impose individual liability if it wished to do so.   

The Legislature could have but chose not to use comparable language in the Whistleblower Statute (Section 1102.5, found at Section 1101 et seq).

The Court must apply the Whistleblower Statute as it was drafted, and not as Plaintiff wishes it were drafted.

Plaintiff also cites Labor Code Section 1019(a) as another example in which individual liability was imposed by the Legislature. That section states “It is unlawful for an employer or any other person or entity to engage in, or to direct another person or entity to engage in, unfair immigration-related practices…” Here, again, the Legislature chose to expressly use language which imposed individual liability. The “any other person” phrase in Section 1019(a) does not reference a person acting on behalf of an employer to impose employer liability and instead, Section 1019.1(b)(1) explicitly makes such person subject to penalty and liability for equitable relief.

This is distinguishable from Section 1102.5, which contains no such liability provision.

Likewise, Labor Code Section 1197.1(a) also reflects an express intent to impose individual liability, stating: “Any employer or other person acting either individually or as an officer, agent, or employee of another person, who pays or causes to be paid to any employee a wage less than the minimum fixed by an applicable state or local law, or by an order of the commission, shall be subject to a civil penalty, restitution of wages, liquidated damages payable to the employee, and any applicable penalties imposed pursuant to Section 203…” Here again, the language differs from Section 1102.5.

The Legislature made a conscious decision to call out individual liability and state that an individual would be subject to a civil penalty, restitution, liquidated damages, and penalties. Section 1102.5 contains no similar language imposing liability on an employer’s agent.

In sum, those Labor Code provisions creating individual liability for employer agents contains specific language imposing liability for said individuals. The Legislature chose not to include such language with respect to Section 1102.5. Because the Legislature did not impose liability for employer’s agent under Section 1102.5, no such liability can be found.

In her attempt to rebut the overwhelming weight of persuasive federal authority interpreting Section 1102.5 against individual agent liability, Plaintiff mischaracterizes the case law for several reasons.  

1. Plaintiff inaccurately characterizes the cited federal authority as relying solely on a comparison to FEHA precedent (arising under Government Code section 12940 et seq). Plaintiff ignores the fact that the federal decisions rejecting individual liability are not solely premised on analogizing Section 1102.5 to FEHA. To the contrary, they track the legislative history and the Whistleblower Statute itself in rejecting individual liability under Section 1102.5. Furthermore, they note that Sections 1103 and 1104 support employer liability only, not individual liability, under Section 1102.5. See also Conner v. Aviation Services of Chevron U.S.A. (N.D. Cal., Nov. 5, 2014, No. 14-CV- 02102-JD) 2014 WL 5768727, at *5, and Demurrer, p. 5:1. 

2. Plaintiff misinterprets the FEHA analogy. The relevant federal cases did not find per se that the language used in Section 1102.5 mirrored the language used in the FEHA statutes. Rather, they found when analyzing arguments alleging individual liability in FEHA cases, the federal courts looked at California Supreme Court precedent and noted that those cases pointed out the exact issue being raised here: the Legislature knows how to create individual liability, and yet it chose not to do so. This is the same argument raised in the Reply. 

3. The federal cases cited by Plaintiff for the position that individual liability can be imposed under Section 1102.5 are not persuasive. The three cases Plaintiff string-cited were not discussed in any substance. In Cordell v. PICC Lines Plus LLC, 2016 WL 4702654 (N.D. Cal. Sept. 8, 2016), the court failed to analyze the language of Section 1102.5 at all – e.g., analyzing legislative history, analyzing the overall structure of Section 1101 et seq., comparing the structure to other Labor Code provisions, etc. – and instead concluded, in a single paragraph, that individuals acting on behalf of an employer can be held liable. Such an elementary analysis lacks persuasive value. Plaintiff’s citations to Jackson v. Dollar Tree Distribution, Inc., 2018 WL 2355983 (C.D. Cal. May 23, 2018) and De La Torre v. Progress Rail Servs. Corp., 2015 WL 4607730 (C.D. Cal. July 31, 2015) are also unpersuasive because they concerned motions to remand a case to state court, which would then determine if individual liability might exist. As explained in Bernardi’s Demurrer, motions to remand involve a different legal standard than a demurrer.

In contrast, the federal authorities referenced by Bernardi in his Demurrer contain a detailed, thorough analysis of the Whistleblower Statute, the legislative history, the applicable California case law, and a well-reasoned prediction on how the California Supreme Court would rule on this issue.

Those decisions concluded that based on the plain language of the Statute and the legislative history, the Legislature had failed to create a basis for individual liability. This Court should reach the same conclusion.     

Analysis

“When any ground for objection to a complaint, cross-complaint, or answer appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading.” (Code Civ. Proc., § 430.30, subd. (a).) “Our consideration of the facts alleged includes ‘those evidentiary facts found in recitals of exhibits attached to [the] complaint.’ [Citation.]” (Alexander v. Exxon Mobil (2013) 219 Cal.App.4th 1236, 1250.)

“The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds:

“(a) The court has no jurisdiction of the subject of the cause of action alleged in the pleading.

“(b) The person who filed the pleading does not have the legal capacity to sue.

“(c) There is another action pending between the same parties on the same cause of action.

“(d) There is a defect or misjoinder of parties.

“(e) The pleading does not state facts sufficient to constitute a cause of action.

“(f) The pleading is uncertain. As used in this subdivision, “uncertain” includes ambiguous and unintelligible.

“(g) In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.

“(h) No certificate was filed as required by Section 411.35.” (Code Civ. Proc., § 430.10.)

In her Opposition to Bernardi’s Demurrer to the Complaint, Plaintiff attempts to create individual liability for an employer’s agent under the whistleblower statute even though there is no persuasive legal authority supporting her argument. The Legislative history does not support a finding of individual liability under Section 1102.5. The plain language of the Whistleblower Statute,

Section 1101 et seq., reflects the Legislative intent that only the employer may be held liable for conduct under that statute.

Plaintiff relies on completely different statutes allowing individual agent liability, arguing that because individual agent liability may exist under a different statute, it should also exist under the Whistleblower Statute.

That argument is untrue, and all the statutes cited by Plaintiff are entirely different.

The Legislature knew how to craft language imposing liability on an employer’s agents in an individual capacity when it wished to do so.

The Legislature chose not to do so in the Whistleblower Statute.

While there is no direct California case law addressing individual liability under the Whistleblower Statute, there is substantial, persuasive federal authority conclusively rejecting such individual liability.

Bernardi’s demurrer should be sustained without leave to amend.