Jaekel v. Aytu BioScience, Inc.

Background

Aytu hired Robert David Jaekel as a Sales Manager in May 2016. He later became a Regional Area Sales Manager, with responsibility for hiring and training. Jaekel testified that he reported concerns about expired or short-dated ProstaScint and possible forgery by another employee in late 2017. His role changed from Regional Area Sales Manager to Sales Manager on January 1, 2018, without a change in base salary.

Jaekel also reported an incident in which one employee grabbed another employee’s crotch. He complained about unpaid commissions and other compensation issues, filed a Labor Commissioner complaint regarding unpaid mileage, commissions, and stock, and was terminated on October 28, 2019.

The complaint asserted eight causes of action: whistleblower retaliation under California Labor Code section 1102.5; retaliation under section 98.6; failure to take steps to prevent sexual harassment or retaliation under California Government Code section 12940(k); retaliation under section 12940(h); wrongful termination in violation of public policy; defamation; intentional infliction of emotional distress; and failure to pay all wages due to a discharged employee. The defendants moved for summary judgment on all claims. Summary judgment is a ruling without a trial when the evidence shows no genuine dispute over a fact that could affect the outcome and the moving party is entitled to judgment under the law.

Court’s Analysis

For the whistleblower-retaliation claim, the court found a genuine factual dispute about whether Jaekel’s reports concerning ProstaScint and forgery were protected activity and contributed to the January 2018 role change. The court also found that a reasonable jury could determine that his complaints about unpaid commissions were protected activity and that the timing supported a possible connection to his termination. The court explained that Jaekel did not need to prove that the employer’s stated reason was a pretext under the applicable California statute. The court denied summary judgment on the first cause of action.

For the section 98.6 retaliation claim, the court found evidence that Jaekel complained about unpaid commissions and was terminated within eight months of that complaint. The court denied summary judgment on the second cause of action.

For the claim involving failure to take steps to prevent sexual harassment or retaliation, the court rejected the defendants’ argument that Jaekel lacked viable underlying claims and denied summary judgment on the third cause of action.

For the California Fair Employment and Housing Act retaliation claim, the court found that Jaekel’s testimony about reporting the crotch-grabbing incident created a triable factual issue about protected activity. The court denied summary judgment on the fourth cause of action.

For wrongful termination in violation of public policy, the court found that the evidence supporting the retaliation claims also created a factual dispute and denied summary judgment on the fifth cause of action.

Jaekel did not oppose summary judgment on defamation. The court therefore granted summary judgment on the sixth cause of action.

For intentional infliction of emotional distress, the court found that a reasonable jury could find for Jaekel based on its findings concerning the retaliation claims. The court denied summary judgment on the seventh cause of action.

For the unpaid-wages claim, the court noted that the defendants provided no supporting briefing or case law and denied summary judgment on the eighth cause of action.

The court also found that the evidence could support an inference that the defendants acted for a retaliatory purpose. It therefore denied summary judgment on Jaekel’s request for punitive damages, leaving the issue for a jury.

Disposition

The court granted in part and denied in part the defendants’ motion for summary judgment. It granted the motion as to the defamation claim and denied the motion as to the punitive-damages request and the first, second, third, fourth, fifth, seventh, and eighth causes of action. The order did not resolve the remaining claims at trial.