Judge issues ruling in Vallejo “Whistleblowers” case

The judge in the so-called Vallejo “Whistleblowers” case made a tentative ruling in favor of the plaintiffs on Friday, overruling a demurrer and motion to strike filed by the City.

Former City employees Slater Matzke, Will Morat, and Joanna Altman filed a civil suit earlier this year alleging wrongful termination, harassment, defamation, and retaliation. All three employees worked closely with then-City Manager Greg Nyhoff, whom they are accusing of firing them after they reported issues they had with him, such as alleged corruption and graft. The plaintiffs allege that they were asked to be as honest as possible about Mr. Nyhoff to an outside investigator hired to evaluate his performance, but then when they were, they were promptly fired in April of last year.

In Friday’s tentative ruling, made final on Monday, October 18, the court said that “Plaintiffs have adequately alleged that they were terminated in retaliation for disclosing a reasonable belief that Defendants violated or failed to comply with various provisions of the Fair Employment and Housing Act.” In short, the court ruled that the plaintiffs have legal standing to continue with their whistleblowing and retaliation suit.

The court also found that the plaintiffs “adequately alleged” that former City of Vallejo Human Resources Director Heather Ruiz “published false and defamatory per se statements that Plaintiffs committed ’embezzlement and illegal activity’ to former colleagues.”

The Ruiz allegations were not part of the original claim filed in the suit, but the court ruled that the plaintiffs have legal standing to continue their claim that they were falsely accused of embezzlement and illegal activity.

The City of Vallejo will not comment on pending litigation, but told the Times-Herald that “at-will employees may be separated from service by any public or private employer at any time, with or without cause.”

However, should the “whistleblowers” prevail and prove that they were let go for speaking up, “at-will” firing is trumped and they can stand to get their attorneys fees paid by the City, as per a new law that went into effect last January. The trio stands to receive $3.8 million, according to the pre-trial complaint filed by their attorneys. With attorneys fees, that could tack on an added $750,000 to $1.52 million to their total.

At issue is Nyhoff’s dealings with Mare Island developers. Gary Gwilliam, counsel for the plaintiffs, released a statement earlier this year:

“Our clients rightfully exposed public corruption after learning that Vallejo City Manager Nyhoff had been working secretly with the Nimitz Group to undermine the city’s negotiations for development on public land.”

The plaintiffs argue that Nyhoff changed the terms of negotiation between the City and Nimitz in favor of the developers. I covered this recently and you can read it here. Open Vallejo also covered it and you can read that here.

The court tossed the plaintiffs harassment claims, however, saying that the plaintiffs “have not alleged facts establishing that they were subjected to unwelcome harassment based on some protected characteristic.” The plaintiffs had alleged that they were “subject to adverse employment actions” after the spoke up for an African-American woman who worked for the City and was allegedly harassed. The court ruled that personnel management actions cannot form the basis of a harassment claim.

Assistant City Attorney Katelyn Knight appeared in court on Monday for the City and requested 150 days to deal with what she said was “quite a lot of discovery” submitted by the trio.

Lawyers for the plaintiffs told me, “We will be proceeding with discovery, including taking depositions of Greg Nyhoff, key City Councilmembers, and other city officials under penalty of perjury.”

The next court date will be March 17, 2022, at which point either a trial date will be set or both sides could mutually agree to mediation.

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