McGrory v. Applied Signal Tech. Inc., No. H036597 (January 24, 2013): A California Court of Appeal recently upheld the dismissal of a lawsuit where the employee refused to cooperate with a company investigation and claimed his conduct was “protected activity” under California’s Fair Employment and Housing Act (FEHA).

John McGrory, a former department manager at Allied Signal Technology Inc., placed one of his subordinates, Dana Thomas, on a performance improvement plan (PIP). Instead of signing the plan, Thomas filed a complaint against McGrory for discrimination based on sex and sexual orientation. She alleged that McGrory often told “off-color” and insensitive jokes in the office.

Allied Signal hired an employment attorney to investigate the charges. The investigator did not find that McGrory discriminated against Thomas (because there were legitimate concerns about her performance), but did find that McGrory violated the company’s sexual harassment policy by regularly making racial and sexual comments and jokes. During the investigation, McGrory “admitted that he and other men in his department went into an office during and after office hours to tell jokes” but indicated that “he thought this complied with [company] policies as females were not present.” The investigator also believed that McGrory was “uncooperative and appeared to have intentionally misrepresented some facts during the course of the investigation.”

McGrory was fired and sued Allied Signal for wrongful termination under FEHA (among other claims). FEHA prohibits employers from retaliating against a person who has filed a complaint, testified, or assisted in any proceeding under the Act. The trial judge granted summary judgment in favor of Allied Signal. In affirming this decision, the Court of Appeal determined that (1) a company investigation does not meet the definition of a “proceeding,” which is protected by FEHA, and (2) public policy does not “protect deceptive activity during an internal investigation.” According to the court, McGrory’s lack of cooperation and misrepresentation in an investigation is not protected activity under FEHA. With regard to his other claims, the court held that McGrory did not provide sufficient evidence to support them.

According to Stuart Tochner, a shareholder in the Los Angeles office of Ogletree Deakins: “This decision is good for California businesses. It reaffirms an employer’s right, and obligation, to take appropriate action following an employee’s intentionally deceptive conduct. The plaintiff here had sought to expand California’s protection offered to complaining or testifying employees beyond the scope that the legislature intended. The court wisely rejected that attempt.”


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