Hon. Edward A. Infante (Ret)

JAMS

Two Embarcadero Center, Suite 1500'
San Francisco, CA 94111

Telephone: (415) 982-5267

Fax: (415) 982-5287

Arbitrator

JAMS ARBITRATION

JAMS Ref: 1100083130

DUNN, JOSEPH, L.,
FINAL AWARD

Claimant,

V.

STATE BAR OF CALIFORNIA, CRAIG
HOLDEN, AND BETH JAY,

Respondents.

 

 

I. Facts

A. Procedural Background

On November 18, 2014, Claimant Joseph Dunn (?Claimant?) ?led a lawsuit in the
Superior Court for the State of California, Los Angeles County, Case No. BC563715, against the
California State Bar (?State Bar?), State Bar President Craig Holden (?Holden?), and the State
Bar Board of Trustees (?Board?) for claims arising out of the termination of his employment

with the State Bar. Claimant ?led his First Amended Complaint on April 29, 2015, adding

Respondent Beth Jay On June 12, 2015, the Superior Court granted the State Bar?s
Motion to Compel Arbitration.

On February 12, 2015, Claimant ?led his Notice of Claims in this arbitration
proceeding. The Arbitrator sustained a demurrer to all claims alleged against the Board, with
leave to amend. On May 2, 2016, Claimant ?led an Amended Notice of Claims In
January of 201 7, the Arbitrator granted summary judgment in favor of Respondents Craig
Holden and Beth Jay on all claims asserted against them. Therefore, only two claims asserted
against the State Bar remained: a claim for ?Whistleblower? protection under Labor Code
?1102.5 and a claim for Breach of the Implied Covenant of Good Faith and Fair Dealing. The
Arbitrator conducted hearings on February 1 through February 7, 2017 to resolve the remaining
claims.

B. Case Facts

1. Claimant Hired by the State Bar

The State Bar hired Claimant in November of 201 to serve as its Executive Director.
State Bar Trial Exhibit 543-6 (?Employment Agreement?). According to the
Employment Agreement executed between Claimant and the State Bar, ?essential duties? of the
Executive Director included: . .to keep the Board and its President fully informed on matters
of signi?cance,? ?to attend meetings of the Board and report to the Board at each Board Meeting
on matters of signi?cance;? ?to appropriately safeguard and administer all funds, physical assets,
and other State Bar property;? and ?to establish and maintain positive relationships with. . . the
Supreme Court. . .and other State Bar constituents.? Id. The Employment Agreement also
stated that while employed as Executive Director, Claimant was ?entitled to reimbursement for

transportation, business and travel expenses incurred in the performance of his duties as

Executive Director and in accordance with the State Bar?s travel expense and business expense
policies . . Id. 

The State Bar had the right to terminate Claimant ?with or without cause prior to the
expiration? of his term, effective upon 30 days prior written notice. Id. If the State
Bar initiated termination, the State Bar was obligated to pay Claimant severance, unless, ?in the
sole discretion of the board, [Claimant] had committed an act involving moral turpitude,
dishonesty, corruption or similar act of gross misconduct . . Id.

Between 2010 and 2014, Claimant received excellent performance evaluations. Hearing
Transcript at 783; Claimant?s Exhibits (?Cl?s Ex?) 8/9. In 2011 and 2012, Claimant
received merit bonuses, and in 2013, Claimant received a bonus that exceeded the amount
speci?ed for merit bonuses under his contract. Id. at 784. Claimant?s original three-year
contract was extended in January 2014 for another three years. SB Ex. Rx 546.

2. Claimant Criticizes Chief Trial Counsel Jayne Kim

In 2011, Dunn hired Jayne Kim to manage the daily operations of the State Bar?s Of?ce
of Chief Trial Counsel Tr. at 909:24-910zl3, 912:7-913:20. One of the tasks
performed by Ms. Kim?s department was the creation of reports detailing the number of
pending investigations into attorney misconduct (referred to as the ?backlog? reports). Tr. 918,
920. Data to populate the reports was generated by the State Bar?s Of?ce of Budget and
Performance. Id. at 920. The reports were compiled into an annual report that detailed
the State Bar?s efforts to investigate complaints against California attorneys, entitled the Annual
Discipline Report Id. 919:11?920z25. Claimant reviewed the reports, signed them,
and submitted the ADR reports to the California Legislature. Id. The reports assisted the

legislature in evaluating the State Bar?s performance. Id.; 425:10-21; SB Rx 655.

Claimant testi?ed that in September of 2013, he expressed concern to Ms. Kim that the
number of backlogged investigations pending in her department was too high. Tr. 807:6-16.
One month later, Claimant noticed a decrease in the number of backlogged cases in Ms. Kim?s
report. Tr. 806221-24. Upon inspection, Claimant found that investigations initiated by
the State Bar, referred to as investigations, were not included in Ms. Kim?s report. Id.
Claimant believed that it was State Bar?s policy and practice to include SBIs in all backlog
reports, and concluded that Ms. Kim had intentionally deleted these cases ?'om her report. Id. In
late 2013, Claimant confronted Ms. Kim regarding the report. Id. at 921-922. Ms. Kim
informed Claimant that she believed that it was State Bar policy to exclude SBIs from the
backlog reports. Id. Claimant asked Ms. Kim to con?rm State Bar policy on reporting SBI
cases, and Ms. Kim contacted John Chiappetta, the Director of Budget Perfomiance and
Analysis. Id. at 922; SB BX 652. Mr. Chiappetta informed both Ms. Kim and Claimant that
while he had included SBIs in prior ADRs, he had also informed Ms. Kim that SBIs were not
included in the reports. Id.; SB BX 652. Mr. Chiappetta acknowledged that the
confusion regarding whether SBIs should be included in the backlog reporting was due
to his error. Id.; Tr. 923:4-924:12.

Claimant, however, continued to believe that Ms. Kim intentionally deleted SBIs from
her reports in order to boost the appearance of productivity in her department. Tr. 807.
Claimant testi?ed that he thought Ms. Kim?s professed confusion as to State Bar policy on the
matter was ?patently false.? Id. 808. According to Claimant, Mr. Chiappetta was a ?numbers
cruncher,? not a lawyer or policymaker, and thus Ms. Kim should not have relied upon Mr.
Chiappetta to determine whether SBIs should be included in the report. Id. 811-812.

Although Ms. Kim was a member of Claimant?s Executive Management Team, Ms. Kim

reported to the Regulations, Admissions and Discipline Committee, a State Bar
4

Committee composed of a subset of Trustees of the Board (?Trustees?). Tr. 911 :13-22. Heather
Rosing acted as the RAD Committee Chair and Michael Colantuono acted as Vice Chair. Id.
418:20-25. In early 2014, Claimant met with Mr. Colantuono and Ms. Rosing to inform them
that Ms. Kim had failed to include SBIs in her backlog reports. Id. 816; 418:6?4l9z7. Claimant
stated that he believed Ms. Kim intentionally eliminated SBIs from the backlog report to give the
false impression that her department was ef?ciently reducing the number of backlogged
investigations, and asserted that Ms. Kim?s actions were a ??reable offense.? Id. Mr.
Colantuono and Ms. Rosing asked Claimant to refrain from further action and informed Claimant
that they would conduct a ?thorough? investigation of the incident. Id. 419:23-420: 1 6.

As the Chair of the RAD Committee, Ms. Rosing outlined a plan of action to investigate
Claimant?s allegations against Ms. Kim. Id. 420:18-21. Mr. Colantuono and Ms. Rosing
interviewed Ms. Kim, Mr. Chiappetta, and the State Bar?s General Counsel. Id. 422:3-18; 424:9-
10; 427: 1 8-27; 429:20-24. Mr. Colantuono and Ms. Rosing concluded that there was a history of
confusion at the State Bar regarding the de?nition of ?backlogged? investigations, and that Mr.
Chiapetta?s and Ms. Kim?s reporting errors were the result of this historic, internal confusion at
the State Bar. Id. 428:429:17. Additionally, Mr. Colantuono and Ms. Rosing concluded that the
number of SBI investigations was suf?ciently small relative to the total number of outstanding
investigations such that it was unlikely that Ms. Kim, or anyone else, would manipulate SBI
numbers in an attempt to bolster the State Bar?s perceived performance. Id. Mr. Colantuono and
Ms. Rosing reported their conclusions to Claimant, and recommended that Claimant standardize
the State Bar?s policy regarding reporting backlogged investigations and lobby the legislature for
clari?cation as to how the State Bar should de?ne its metrics. Tr. 429:1-17. The RAD
Committee?s investigation concluded that the errors in reporting SBI investigations were due to

?a big misunderstanding that just required clari?cation.? 1d,; Tr. 430:17-23. In February of
5

2014, the General Counsel?s Of?ce prepared an agenda item for a Board proposal to ?clarify?
and ?expand? the guidelines on reporting backlogged investigations to RAD. Rx 655. The
Board approved the resolution in March of 2014. Tr. 93023-8.
3. MS. Kim Files a Complaint Against Claimant

On July 31, 2014, Ms. Kim ?led a formal complaint against Claimant with State Bar
Human Resources Director, Robert Hawley. Rx 549. Ms. Kim reported several concerns
regarding Claimant?s performance as Executive Director, but two issues are of primary
importance in this case. First, Ms. Kim expressed concerns regarding Claimant?s use of funds to
travel to Mongolia in January 2014. SB Rx 549?1. Ms. Kim noted that while Claimant had
informed the Board that State Bar funds would not be used to pay for Claimant?s trip, Claimant
had, in fact, submitted an expense report to obtain reimbursement for his travel costs, and his
airfare had been purchased through the State Bar travel agent. Id.549-2. Second, Ms. Kim
reported an event that occurred in May of 2014 at a quarterly meeting between representatives of
the Supreme Court and key executives of the State Bar. Tr. 933:25-934:19. Both Ms. Kim and
Claimant were in attendance. Id. During the meeting, Supreme Court representatives instructed
the State Bar representatives to ?stand down? on Assembly Bill 852, a bill pending before the
legislature in the spring of 2014. Tr. 933:25-934:7. Shortly thereafter, Ms. Kim attended a State
Bar Board Meeting at which Claimant and Mr. Miller advocated that the State Bar should
support AB 852. Id. 934:8-13. In fact, Claimant submitted a memorandum prior to the Board
meeting stating that there was ?no known opposition? to AB 852. Id. 93522-4. Ms. Kim
believed that Claimant?s statements to the Board directly contradicted the instructions Claimant
had received from the Supreme Court?s representatives, and that Claimant had failed to inform

the Board regarding the opinion of a signi?cant State Bar stakeholder.

4. Board Hires Manger, olles, Olson to Investigate

Mr. Hawley submitted Ms. Kim?s report to State Bar Audit Committee. Tr at 337:1-18;
528:23-529z8. The Audit Committee noti?ed then State Bar President Luis Rodriguez. Tr. at
531111-5321]; 691 :17-24. Mr. Rodriguez recused himself ?om participating in the
investigation and asked then Vice President and President-elect, Craig Holden, to work with the
Audit Committee to determine the State Bar?s response. Id.

The Audit Committee and Mr. Holden considered Ms. Kim? report to be a
?Whistleblower Complaint? and concluded that the Board was obligated to obtain outside
counsel to investigate her allegations. Tr. 529:24-530:8; 533:20-534:10; 593:14-19. After
interviewing several law ?rms, the Audit Committee elected to hire Munger, Tolles Olson
(MTO) because bid to conduct a Phase I investigation was the lowest bid received. Id.
534113-19. On September 14, 2014, the Board held a closed session meeting, at which the Audit
Committee informed the full Board of Ms. Kim?s report and of the Committee?s
recommendation to retain MTO to investigate the allegations. Rx 561-1. The Board voted to
ratify the contract with MTO and authorized MTO to provide a written report, including
recommendations, to the Board upon completion of their investigation. Id.

5. The 0 Report

MTO interviewed ?ve witnesses during Phase I of its investigation and presented its
preliminaryanalysis to the Board at the September 14, 2014 Board meeting. Tr. 1067:2-22.
Phase II of investigation involved interviewing 19 additional witnesses and reviewing
relevant documents. Id. at 1067:23-1068211. MTO investigators interviewed Claimant twice,
once during Phase I of the investigation and again during Phase II. Id. 1070:13-19. During
Phase of the investigation, MTO created and presented a report of its ?ndings to the Board.

Id. 1068:10-11.

The MTO report concluded that Claimant had engaged in serious misconduct that
justi?ed termination by ?repeatedly provid[ing] inadequate or inaccurate information to the
[B]oard in a way that undermined its ability to exercise its decision-making authority.? RX. 552-
29. Speci?cally, the MTO report concluded that although the Supreme Court instructed
Claimant to stop all State Bar action on AB 852, Claimant ignored those instructions, failed to
disclose the Supreme Court?s position on AB 852 to the Board, and af?rmatively advocated to
the Board that it should sponsor AB 852. Rx 552-10-12. The MTO Report noted that on April
10, 2014, Supreme Court Staff Attorney Beth Jay wrote to Claimant that the State Bar?s position
on AB 852 should be, at most "neutral for now." Rx. 608-1. On April 17, 2014, Claimant was
further instructed that the Supreme Court wanted AB 852 to be "delayed pending input. RX.
610-]. On April 25, 2014, the Supreme Court informed Claimant that it wanted the bill "stopped
until it has time to gather additional information." Rx. 614-1. Nonetheless, on May 6, 2014,
Claimant wrote a memorandum to the Board in which he stated that the ?Board should adopt the
recommendation to sponsor AB 852,? and that there was ?no known opposition? to AB 852. Rx.
617-2. At the May 8, 2014 Board Operations Committee Meeting, Claimant placed AB 852 on
the ?consent calendar? for the next day?s Board meeting. 1 Rx. 568-1. As a result, the Board
voted to sponsor AB 852.

The MTO report also indicated that at the September 2014 Board Meeting, Claimant
represented to the Board that the Chief Justice of the Califomia Supreme Court af?rmatively
supported a proposal to move State Bar?s headquarters from San Francisco to Sacramento. Rx.

552-12-13. MTO attorneys interviewed the Chief Justice, however, who stated that she had not

 

1 Items placed on the ?Consent Calendar? are "non?controversial" items that do not require discussion. Tr. 349:24-
350:9. The Consent Agenda does not require a motion or a second and is routinely adopted in the absence of any
objection. Id.

8

spoken with Claimant, had not taken a position regarding the move, and had, in fact, expressed
concerns about the impact of the move to Mr. Rodriguez. Rx 520 at 164:1-16; Rx 450 at 62:22-
63 :2 1 .

The MTO Report further concluded that Claimant misrepresented to the Board that State
Bar funds would not be used to fund Claimant?s travel to Mongolia in January of 2014. Rx 552-
5. Claimant had stated at a board meeting that no State Bar funds would be used to pay for his
travel, and yet Claimant booked his airfare through the State Bar travel department, and Claimant
submitted for State Bar reimbursement of other travel costs. Rx 552-5, 594, 595, 596, 597, 520;
Tr. at 51 :23?52:1; 166:1-10; 489:12-14; 760:6-16. The report noted that Claimant also failed to
correct an April 23, 2014 newspaper article that reported that no State Bar funds had been used
to fund Claimant?s trip. Tr. At 1082:3?5; Rx. 552-6.

6. The Board ?5 Response to the 0 Report

MTO attomeys presented the results of its report to the Board at an October 17, 2014
Special Board Meeting. RX 562-1. A motion was made to formally reprimand Claimant in
response to the MTO Report?s ?ndings, but the Board tabled the motion for consideration at a
later date. Id. 562-2. On October 30, 2014, the Board conducted a Closed Executive Session
Meeting at which it voted to accept the ?ndings of the MTO Report, but not the
recommendations in the report regarding how the Board should respond. Rx. 563. The Board
also appointed Trustees Joanna Mendoza and David Pasternak to draft and propose a formal
letter of ?reprimand/counseling? for the Board?s review and consideration at a follow-up, closed
board session scheduled for November 7, 2014. Id. 563-2.

Prior to the November 7, 2014 board meeting, the Board received two letters from the
Geragos Geragos Law Firm. On November 3, 2014, Mr. Geragos sent a letter to the Board

stating that his ?rm had been ?retained by a whistleblower? who was ?a member of the State Bar
9

of California,? but that ?due to concerns about retaliation and reprisal,? his client would not be
identi?ed. Rx. 554.1 Mr. Geragos asserted that the process under which MTO was retained
violated State Bar protocol and he demanded that the State Bar place a ?litigation hold? on all
related documents. Id. Mr. Geragos further stated that Trustee Miriam Krinsky failed to disclose
a longstanding relationship with one of the MTO attorneys who conducted the investigation, and
thus the engagement of MTO by the State Bar was con?icted. Id. Rx 554-2.

On November 5, 2014, Mr. Geragos sent a second letter to the Board. Rx. 556. In his
second letter, Mr. Geragos objected that personnel in the of?ce of the Executive Director had
shredded documents related to the case, and he reiterated his demand that the State Bar place a
?litigation hold? on all staff and personnel at the State Bar. Id. 556-1-2. Mr. Geragos further
stated that he had been ?retained by additional whistleblowers? who alleged that Ms. Kim had
engaged in misconduct by submitting false and misleading reports designed to deceive the
Board, the RAD Committee, members of the California State Bar, the State Legislature, the
California Supreme Court, and the California Governor. Id. 556-2. Mr. Geragos noted that in
the fall of 201 3, Ms. Kim?s job performance ?came under scrutiny? due to the backlog of State
Bar investigations, and that Ms. Kim removed SBI cases from the backlog inventory to give a
false and misleading impression that the backlog at the State Bar had been reduced. Id. 556-3.

On November 7, 2014, the Board conducted a closed meeting to further deliberate on
how to respond to the ?ndings reported in the MTO Report. RX. 564-1. At that meeting, a new
attorney, Carol Stevens of Burke, Williams Sorensen, attended and advised the Board on how
to respond to the MTO Report. RX. 564-1. The Board deliberated and, by an 11-4 vote, resolved
to notify Claimant that it was exercising its right to terminate Claimant?s employment under
Section of the Employment Agreement. Id. 564-2. The Board ?irther resolved to

offer Claimant the opportunity to resign in exchange for the severance payment provided for by
0

his contract. Id. The Board authorized Mr. Holden to consult with Ms. Stevens and negotiate
with Claimant regarding his resignation or termination. Id. 564-3. Lastly, the Board authorized
Mr. Holden to solicit proposals for insurance coverage counsel and litigation defense counsel to
investigate and resolve the two letters ?regarding unidenti?ed ?whistleblowers? received from the
Geragos Geragos? law ?rm. Id.

On November 7, 2014, Mr. Holden noti?ed Claimant of the Board?s resolution to
terminate his employment. Rx 577. During the following week, Mr. Holden and Claimant
negotiated the terms of a resignation in lieu of termination, but ultimately, Mr. Holden
terminated Claimant and the State Bar did not pay Claimant severance. Cl. Ex. 176. On
November 18, 2014, the Geragos Geragos Law Firm ?led a lawsuit on behalf of Claimant in
the Superior Court.

II. Analysis

Claimant has the burden to produce suf?cient evidence to support a ?nding in his favor
on each and every element of his claims by a preponderance of the evidence. See, Beck Dev. Co.
v. S. Pac. Transport Co., 44 Cal.App.4th 1160, 1205 (1996); Cal. Evid. Code ??115, 500.

A. Violation of Labor Code ?1102.5

Claimant alleges that he made ?Whistleblower? complaints to the State Bar during his
employment and that the State Bar wrongfully terminated him in retaliation for these complaints.
ANOC 11 11 69-78. California Labor Code SectiOn 1102.5(b) states that an ?employer may not
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 a violation or noncompliance with a state or federal rule or

regulation.?

11

Claimant may prove his claim for wrongful retaliation by either direct or circumstantial
evidence. ?Where a plaintiff offers direct evidence of discrimination that is believed by the trier
of fact, the defendant can avoid liability only by proving the plaintiff would have been subjected
to the same employment decision without reference to the unlaw?il factor.? Maker 12. Orange
County, 157 Cal.App.4th 121, 137 (2007). Claimant offered no direct evidence of retaliation.
Instead, Claimant relied upon circumstantial evidence to support his claim that the State Bar
?red him in violation of Labor Code ?1102.5.

To prove a retaliation claim by circumstantial evidence, a plaintiff must ??rst establish a
primafacie case of retaliation.? Id. Plaintiff must show that he engaged in a protected activity,
his employer subjected him to an adverse employment action, and that there is a causal link
between the two. Patton v. Grant Junior High School Dist, 134 Cal.App.4th 1378, 1384 (2005).
?Once established, the defendant must counter with evidence of a legitimate, non-retaliatory
explanation for its acts. If [the] defendant meets this requirement, the plaintiff must then show
the explanation is merely a pretext for retaliation.? Maker, 157 Cal.App.4th at 137.

An employee engages in a ?protected activity? if he or she discloses information to an
employer that the employee reasonably believes is a ?violation of state or federal statute, or
violation or noncompliance with a state or federal rule or regulation.? Cal. Labor Code ?1102.5
The statute does not require that an employee prove that a violation actually occurred; the
statute requires only that the employee had a ?reasonable belief that a violation occurred. Id.
The employee must reasonably believe that the conduct reported may violate a speci?c statute,
rule, or regulation, however. Love v. Motion Indus, Inc, 309 F.Supp.2d 1128, 1135 (ND. Cal.
2004). A reasonable belief that the ?activity violated some unnamed statute, rule, or regulation?

is insuf?cient. Id.

12

Claimant must also prove that the Board ?red him because of his protected,
?Whistleblower? activity. ?Retaliatory motive is proved by showing the plaintiff engaged in
protective activities, that his employer was aware of the protected activities, and that the adverse
action followed within a relatively short time thereafter.? Morgan v. Regents of University of
Cal, 88 Cal.App.4th 52, 69 (2000). ?Essential to a causal link is evidence that the employer was
aware that the plaintiff had engaged in protected activity.? Id. at 70 (citing Cohen v. Fred
Meyer, Inc., 686 F.2d 793, 796 (9th Cir. 1982)).

Claimant asserts that he engaged in two forms of protected ?Whistleblower? activity.
First, Claimant alleges that he was one of the unidenti?ed, anonymous ?Whistleblowers?
referred to in the letters Mr. Geragos sent to the State Bar in November of 2014. Tr. 50: 1 1?1 5.
Second, Claimant alleges that his complaints to the RAD Committee regarding Ms. Kim?s failure
to include SBIs in the backlog reports constitute a protected ?Whistleblower? activity. Tr. 50:9-
11.

I. Mr. Geragos? November 2014 Letters to the Board

Mr. Geragos? ?rst letter informed the State Bar that the retention of MTO violated State
Bar protocol and that Ms. Krinsky failed to disclose a potential con?ict. Rx 554. Mr. Geragos?
second letter informed the Board that Ms. Kim had unlawfully manipulated data regarding the
backlog of investigations and that Mr. Jim Fox might have had con?icted interests with regard to
the MTO investigation. RX, 556-2-4.

Although Mr. Geragos? letters stated that they related to a ?Whistleblower Complaint,?
the letters did not specify any statute, rule or regulation that Mr. Geragos? clients believed may
have been violated as a result of the reported actions. Furthermore, Claimant failed to testify at
the hearing that he believed a particular statute, rule, regulation or law was violated by the

behavior described in the letters. Even if Claimant was one of Mr. Geragos? unnamed clients,
1 3

and even if he had testi?ed that he believed the actions described in the letters violated a speci?c
law, Claimant?s claim would still fail because Claimant produced no evidence that Mr. Geragos?
letters caused the Board to terminate him.

Mr. Geragos? letters did not identify his clients and Claimant failed to produce evidence
indicating that the Trustees knew that Claimant was one of the unnamed ?Whistleblowers.? Rx
554-1; Rx 556-2. Evidence submitted by the State Bar indicates that the Trustees did not know
that Mr. Geragos represented Claimant or that Claimant was one of the unnamed
?Whistleblowers:?

0 Mr. Dean: Did Mr. Geragos identify his client or clients in those letters? A. No. Q.
Did you believe the anonymous clients included Joe Dunn? A. No. . . .Q. Prior to your
voting in favor of terminating Mr. Dunn, did you believe for any reason that he was a
whistleblower? A. No. Q. Did any trustee say anything to you or in your presence that
suggested they thought he was a whistleblower? A. No.? Tr. at 1164:10?23.

- Mr. Fox: At the time of the board?s vote on November 7th to terminate Mr. Dunn,
what did you know about the identity of the whistleblowers that Mr. Geragos purported
to represent? A. Nothing . . . Q. Did you at any time vote to terminate Mr. Dunn because
you believed he was blowing the whistle? A. No.? Tr. at 191 192:4?6.

0 Ms. Mendoza: didn?t even know who the letters were from. Just anonymous
people . . . In fact, I even question whether or not those people even existed . . Rx. 688
(Mendoza Depo. Tr.) at 19921?2005.

0 Ms. Moore: ?At no time prior to Mr. Dunn?s termination, did I know or suspect that the
letters were written on Mr. Dunn?s behalf. I did not know Mr. Geragos was Mr. Dunn?s
attorney. At no time during the Board?s discussions during the September 14, October
17, October 30, or November 7 Board meetings, or at any other time, did any Trustee
state or indicate in any way that they believed Mr. Dunn was a whistleblower (in sum or
substance). At no time during our discussions did any Trustee state or indicate in any
way that any adverse action should be taken against any purported whistleblower.? Rx.
647 -3, 1111 6?9.

0 Mr. Vera: did not know Mr. Dunn was represented by Mr. Geragos. I did not ?nd out
that Mr. Geragos was Mr. Dunn?s attorney until Mr. Dunn ?led a civil complaint on
November 13, 2014 in Los Angeles County Superior Court against the State Bar.? Rx.
646-3, 1] 6.

l4

Ms. Meyers: Did you have a belief as to whether or not Mr. Dunn was the source
behind those letters? A. I have no idea who the source was.? Tr. at 727:19?728:16.

Mr. Pasternak: Now, when you voted to terminate Mr. Dunn, did you do so because
you believed he was a whistleblower? A. Absolutely notyour
discussions with the trustees, Mr. Pasternak, did any trustee express that they were
voting to terminate Mr. Dunn because they believed he was a whistleblower? A.
Absolutely not. Q. Did any trustee even express that they believed Mr. Dunn was a
whistleblower? A. No. Nobody knew. That is, nobody knew who Mr. Geragos?s
unnamed whistleblower clients were.? Tr. at 1195 1 0?1 196:7.

Ms. Rosing: . . . at the time the Board voted to terminate Mr. Dunn on November
7th, did you believe Mr. Dunn was himself a whistleblower? A. No. Q. At any time prior
to his termination, did any Board member say anything to you suggesting that they
believed Mr. Dunn was a whistleblower? A. No. . . .Q. Did you believe that those letters
were sent on behalf of Mr. Dunn? A. No.? Tr. at 591:12?592z6.

Ms. Brewer: Before you voted to terminate Mr. Dunn, did you consider him to be a
whistleblowerDid you vote to terminate Mr. Dunn in retaliation for
blowing the whistle? A. Since I didn?t know he blew the whistle, I don?t know how I
could have acted in retaliation.? Tr. at 1133:7?15.

Ms. Krinsky: Now, at any time during your discussions about reprimanding
or terminating Mr. Dunn, did you ever believe him to be a whistleblower? A. Joe?
Q. Yeahdid you vote to terminate Mr. Dunn to retaliate against
him for whistleblowing? A. No. Q. Did any trustee on the Board say to you, Mr.
Dunn was a whistleblower? A. Absolutely not. . . . Q. Did those letters reveal to
you that Mr. Dunn was the source of those letters774124?
776: 1 5.

Mr. Colantuono: Did the [Board?s] consensus [to terminate Claimant] have anything
at all, in your observation or in your mind, to do with Mr. Dunn?s alleged status as a
whistleblowerDid you believe that Mr. Dunn was a whistleblower? A.
No.? Tr. at 330:8?19.

At least one board member assumed that Ms. Kim?s own staff must have lodged the complaints:

Mr. Mangers: You knew the whistleblowers in my letters was Joe; didn?t

you? A. I certainly did not.? Did you vote to terminate Mr. Dunn because

you believed he was a whistleblower? A. No. Q. Did you believe Mr. Dunn was

the source of Mr. Geragos?s letters? A. No. I, quite frankly, thought they were from Ms.
Kim?s subordinates.? Tr. at 46221?3, 500:12?24.

Given that Mr. Geragos did not name the identities of the ?Whistleblowers? he

represented, it is not surprising that the Board did not know that Claimant was one of them.

15

Furthermore, Mr. Geragos? November 5, 2014 letter objected that the Of?ce of the Executive
Director had shredded potentially relevant documents, and thus suggested that the letter was
written, in part, to report unlawful activity committed by Claimant. Rx 556-2. In response to
this allegation, Claimant wrote an email to Mr. Holden in which he disavowed that his of?ce had
shredded documents and implied that he was not involved with the Geragos letters. RX. 682-1
(?if someone has made an allegation that a ?secret? shredding program was launched in the Exec
Of?ce over the last few months, presumably in response to the overall situation we are dealing
with, nothing could be further from the truth?) (emphasis added.)

Several Trustees testi?ed that they never considered Claimant to be one of the
?Whistleblowers? referenced in the Geragos letters because it was highly unlikely that Claimant
would ?blow the whistle? on himself:

0 Ms. Rosing: ?[C]learly the executive director isn?t going to accuse himself of
shredding documents.? Tr. at 592:7?16.

- Mr. Pasternak: ?[T]he second letter talked about shredding going on in the executive
of?ce, Joe?s of?ce, which led me to believe he was writing on behalf of somebody
else, because I couldn?t understand why Joe would be complaining about shredding
going on in his of?ce.? Tr. at 1195:13?23.

0 Ms. Krinsky: second letter complained about improprieties, including in the
executive director?s of?ce that ?les were being shredded and other improper things
were being done. So, you know, that caused me to believe that somebody in the staff
was worried about what our executive director was doing, as we were moving
forward.? Tr. at 775:25?776:15.

0 Mr. Colantuono: ?So if he?s a whistleblower, why is he throwing stones at himself?).
Tr. at 331 :7?15, 335:25?336: 16.

0 Mr. Fox: ?Normally people don?t blow the whistle on themselves.? Tr. at 191 :14?17.
Claimant argued that the Board must have terminated Claimant in reaction to the Geragos
letters because ?nothing else happened? between the October 30, 2014 Board Meeting at which a

motion to terminate Claimant failed and the November 7, 2014 Board Meeting at which a motion

16

to terminate Claimant prevailed. Tr. 27:7-10. The State Bar produced evidence that signi?cant
events did occur, however, between those two board meetings, and that those events caused the
Board to resolve to terminate Claimant.

The State Bar noted that even before the Board received the Geragos letters, the Board
had voted to accept the factual ?ndings of the MTO Report, and four Trustees had resolved to
terminate Claimant. Rx. 563-1; 98213-24, 767:21?768z7, 1188:13-20. The remaining Trustees
were still deliberating on how to respond to the MTO Report. Tr. at 185: 12-21. Trustee Janet
Brewer testi?ed that she felt she needed more time to deliberate because ?it was a serious matter
to consider terminating the executive director,? and because she was a new Trustee, she was not
?prepared to take that drastic action as of that date.? Tr. at 1130:13-113121. Trustee Dennis
Mangers testi?ed that the Board was still in the process of ?trying to work out something that
would develop a consensus,? and Trustee David Pasternak testi?ed that ?[t]he Board was still
wrestling with determining what action to take.? Tr. at 496:16-497rl, 1190:4-12. Nonetheless, it
was clear that the Board intended to take action against Claimant. The evidence indicates that in
an attempt to reach consensus, the Board agreed that two Trustees would draft a letter of
reprimand that would be reviewed by legal counsel, ?to see if the Board could coalesce behind a
reprimand.? Id. at 119024?12.

The Board also authorized the retention of a new lawyer who was unaf?liated with MTO
to provide a second opinion. Rx. 563-2; 564-1. As Claimant points out, some of the Trustees
believed that the MTO law ?rm was predisposed to concluding that Claimant should be
terminated. Cl. Ex. 162-002 (?the attorneys have an obvious agenda?); 162-048 (?this is a witch
hunt?) The decision to retain legal counsel for a second opinion appears to be an attempt by the
Board to resolve the concerns of certain Trustees who were willing to accept the ?ndings of the

MTO Report, but not necessarily the recommendations.
17

At the November 7, 2014 meeting, Carol Stevens gave a presentation and provided legal
advice to the Board. Rx. 564-1. The details of Ms. Stevens? presentation were not admitted into
evidence because the State Bar asserted its right to withhold the information under the attorney-
client privilege. Testimony from Trustees who had rejected the vote to terminate at the October
30, 2014 Board Meeting indicate, however, that these Trustees changed their minds regarding
terminating Claimant after they engaged in further deliberation. Mr. Mangers testi?ed that he
?went back and reread the report . . . thought carefully?nally came to the
conclusion that Mr. Dunn simply could not continue to lead the organization.? Tr. 49822-499125.
Ms. Brewer testi?ed that by November 7, she ?had had an opportunity to mull . . . over [the
MTO Report]? and ?decided that . . . if any other member of the State Bar had engaged in
dishonest acts . . . such as Mr. Dunn had engaged in, they would have been disciplined.? Tr.
1130:2-24. After Ms. Stevens gave her presentation to the Board, the Board voted 11-4 to
exercise its right under the Employment Agreement to terminate Claimant. Rx. 564-2.

Claimant?s attempt to infer a circumstantial case of retaliatory termination based upon the
Geragos letters is not supported by the evidence. The letters did not assert that Claimant
reasonably believed that a speci?c statute, regulation, rule or law had been violated, and
Claimant failed to testify to such a belief at the hearing. Thus, the letters do not support a
?nding that Claimant engaged in a ?protected activity.? Claimant?s attempt to infer causation on
the basis that his termination occurred within a relatively short time after Mr. Geragos sent the
letters fails because none of the Trustees knew that Claimant was represented by the Geragos law
?rm and none of the Trustees knew that Claimant was one of the ?Whistleblowers? described in
the letters. Furthermore, the Board was considering termination before Mr. Geragos sent the

letters, and the deliberations at the November 7, 2014 Board Meeting indicate that a second

18

opinion provided by a new lawyer as well as further deliberations caused a majority of the
Trustees to agree that termination was the appropriate response.
2. Claimant?s Complaints to the RAD Committee Regarding Ms. Kim

Claimant also asserts that he engaged in protected ?Whistleblower? activity in early 2014
when he reported to the RAD Committee that Ms. Kim failed to report SBI cases in her backlog
reports. Tr. 1208:21-1210z9.

In the ANOC, Claimant alleged that he reasonably believed that Ms. Kim?s actions
violated California Business Professions Code ??6106, 6068(a), and 6128 California
Penal Code ?424, and California Government Code ??83 14, 815.6, and 1090. ANOC, 1173.
Claimant introduced no evidence, however, to support these allegations. Claimant failed to
testify that he reasonably believed, at the time that he discovered the reporting discrepancy, that
Ms. Kim?s actions violated a speci?c state or federal statute, or a state or federal rule or
regulation. Nor is there any evidence that Claimant reported Ms. Kim?s actions to the RAD
Committee based on a reasonable belief that Ms. Kim had violated a particular law or statute.
Claimant?s comment to the RAD Committee that the deletion of SBI data from the backlog
report was a ??rable offense? might indicate that Claimant was concerned about the
trustworthiness of a member of the executive staff, but it does not demonstrate that Claimant
believed Ms. Kim had violated any law. As the State Bar pointed out in closing arguments, it
was Claimant, not Ms. Kim, who signed and issued the State Bar?s report on pending
investigations, and therefore, Claimant could not reasonably believe that Ms. Kim was guilty of
issuing false reports to the California Legislature. Tr. 1238: 1 7-24.

Additionally, Claimant offered no evidence to support a conclusion that his comments to
the RAD Committee regarding Ms. Kim in the Spring of 2014 caused the Board to terminate him

in November of 2014. After Claimant expressed his concerns to the RAD Committee, the
9

Committee investigated and found that there was ?internal confusion? at the State Bar regarding
reporting metrics. Tr. 423:9-425:1, 475:16-24, 428:15-24. Thus, the RAD Committee
concluded that Claimant? assertion that Ms. Kim intentionally falsi?ed reports was not
supported by their investigation and was unlikely given the small number of SBIs that had been
deleted from the report. Tr. 429:1-430:15, 480:3-21, 92821-9305, Rx. 655. By March of 2014,
the issue had been investigated and resolved, and Claimant never again raised a concern
regarding Ms. Kim?s reports to the RAD Committee. Tr. 481 :19-25.

Claimant also suggests that Ms. Kim retaliated against him for reporting her to the RAD
Committee by ?ling her ?Whistleblower? complaint. Ms. Kim had no authority to terminate
Claimant, however. The Board of Trustees terminated Claimant and Claimant provided no
evidence of any connection between the Board?s decision to terminate and Claimant?s
communications with the RAD Committee. The two events are not temporally connected
because the issue regarding Ms. Kim?s backlog reporting was resolved and put to rest eight
months before the Board terminated Claimant. Additionally, the evidence indicates that the
Board terminated Claimant based on the ?ndings of the MTO Report and the Board?s
determination that Claimant had failed to perform his duties adequately. In other words, the
Board terminated Claimant for legitimate and non-retaliatory reasons.

Eight of the eleven Trustees who voted to terminate Claimant at the November 7, 2014
Board Meeting testi?ed at the hearing that they voted to terminate because the MTO Report
revealed that Claimant failed to keep the Board adequately informed of signi?cant issues, and, in
some instances had actively deceived the Board:

0 Mr. Mangers: ?nally came to the conclusion that Mr. Dunn could not continue to lead

this organization. . . there was just no escaping the fact that he had been dishonest with
the Board and not forthcoming on some major issues.? Tr. at 498:2?499:25.

20

0 Mr. Pasternak: believed that the ?ndings in the Munger report that we had adopted,
established dishonesty, misconduct, lack of candor by Joe. That left us no alternative, as
a State Bar, who?s responsible for the ethics of our profession, to do anything other than
to terminate our executive director.? Tr. at 1188: 13?20.

0 Ms. Meyers: ?the reason I felt Mr. Dunn should be terminated, and to this day, I still
maintain that, is because of the breach of his ?duciary duty to the Board, as well as the
breach of his contractual obligations to the Board. He had an obligation, both under his
contract and his ?duciary duty, to disclose all information pertinent to anything the
Board decides.? Tr. at 722: 1 8?723:24.

0 Ms. Krinsky: felt that his failure to have been honest with us, that act of dishonesty,
and his failure of candor with the Board, provided a basis for his termination.? Tr. at
77023?77121].

0 Mr. Flanigan: felt that Mr. Dunn had violated his ?duciary relationship with the Board
. . . to keep the Board and its president fully informed on matters of signi?cance. I
believed that Mr. Dunn had not done that on several occasions.? Tr. at 982:3?24,
983:25?984:1 1.

0 Mr. Fox: Why did you vote to terminate Mr. Dunn on November 7th? A. I believed
that he had engaged in improper, unethical, dishonest behavior that involved moral
turpitude.? Tr. at 188:14?18.

0 Mr. Dean: what, if any, effect on your decision to vote to terminate, did that belief
that Mr. Dunn had engaged in dishonesty and moral turpitude have on your vote? A.
Well, . . . that was everything. That?s why I voted to terminate him. . . Tr. at 1166:18?
1 167: 15.

0 Ms. Brewer: decided that basically if any other member of the State Bar had engaged
in dishonest acts and acts of moral turpitude, such as Mr. Dunn had engaged in, they
would have been disciplined. They would have probably been disbarred. And that it was
appropriate to - basically the level of his dishonest acts that he should be terminated.?
Tr. at 1130:13?1131:1, 1130:2-24.

The State Bar admitted into evidence the declarations of the remaining three Trustees who voted
to terminate Claimant. These declarations also con?rm that Claimant was terminated because he
made misrepresentations to the Board and misused State Bar funds:

0 Mr. Torres: supported Mr. Dunn?s termination because MTO is a reputable law ?rm

that conducted an independent investigation and ultimately concluded that Mr. Dunn
misused State Bar funds and made misrepresentations to the Board.? RX. 644 11 3.

21

0 Mr. Vera: thought MTO did a thorough, impartial, and high-quality job, and I did not
have any reason to doubt the investigation?s ?ndings that Mr. Dunn had misused State

Bar funds and misled the Board. . . it was my strong belief that it was in the best interests

of the State Bar and consistent with my ?duciary duties as a Trustee to support Mr.

Dunn?s termination. Rx. 646 11 3.

0 Ms. Moore: ?After discussions with other Board members, it was my view that . . .he had

intentionally manipulated the Board on numerous occasions.? Rx. 647 113.

In fact, three of the four Trustees who voted against termination testi?ed that they nonetheless
supported the Board?s decision to terminate: ?even though I voted against that motion, I spoke
in favor of oe?s termination. There was nobody left defending Joe at that point.? Tr. 387:2?8;
see also, Tr. 589:19-591 and Rx 687 at 58:9-15.

Although Claimant introduced evidence that some Trustees disagreed with aspects of the
MTO Report, or believed that the MTO attorneys were prediSposed to concluding that Claimant
should be terminated, the Board nonetheless adopted the ?ndings of the MTO Report. Rx. 563?
1. Even if MTO was biased in favor of termination, as Claimant suggests, the Trustees had
personal knowledge of Claimant?s representations to the Board. Therefore, once the Board
learned that the Supreme Court did not support AB 852 or the proposal to move the headquarters
to Sacramento, and once the Board discovered that Claimant used State Bar funds to pay for the
Mongolia trip, the Board did not need to rely upon the MTO Report to conclude that Claimant
had mislead them.

Claimant failed to demonstrate that he engaged in protected ?Whistleblower? activity
when he reported Ms. Kim to the RAD Committee. Claimant also failed to demonstrate that his
comments to the RAD Committee had any causal connection to the Board?s decision to terminate
his employment. Furthermore, the State Bar?s evidence demonstrates that the Board had a

legitimate, non-retaliatory explanation for its decision to terminate Claimant?s employment.

Claimant provided no evidence demonstrating that the Board?s justi?cations for terminating
22

Claimant were merely ?pretextual,? and thus, Claimant failed to prove a violation of Labor Code
?1 102.5.
B. Breach of the Covenant of Good Faith and Fair Dealing

Claimant argued that the State Bar breached the covenant of good faith and fair dealing
by terminating Claimant in bad faith in order to deprive him of severance pay under the terms of
the Employment Contract. See, Cl?s Ex. 4, Section of the Employment
Contract states that Claimant was entitled to severance pay upon termination unless, ?in the sole
discretion of the Board,? Claimant had committed an ?act involving moral turpitude, dishonesty,
corruption or similar act of gross misconduct . . Cl?s Ex. 4, p. 6.

?Every contract contains an implied covenant of good faith and fair dealing providing
that no party to the contract will do anything that would deprive another party of the bene?ts of
the contract.? Digerati Holdings, LLC v. Young Money Entertainment, LLC, 194 Cal.App.4th
873, 885 (2011). ?The implied covenant protects the reasonable expectations of the contracting
parties based on their mutual promises. . . Id. The covenant does not expand upon the tenns
of the contract, however. ?The scope of conduct prohibited by the implied covenant depends on
the purposes and express temis of the contract.? Id.

The State Bar argued that the express terms of the Employment Contract allowed the
Board to terminate Claimant without paying severance, and thus Claimant is attempting to
impose a duty upon the State Bar via the implied covenant that is greater than the duty imposed
under the contract. The State Bar points to both the ?ndings of the MTO Report, which indicate
that Claimant engaged in acts of dishonesty, and to the individual testimony of several Trustees,
who stated that they personally believed that Claimant had behaved dishonestly. Rx. 552, 563-1;
Tr. 1132:23-11326, 985118-9822, 1194:12-17. According to the State Bar, this evidence

indicates that the Board terminated Claimant because, in the ?sole discretion of the Board,?
23

Claimant had committed an ?act involving moral turpitude, dishonesty, corruption or similar act
of gross misconduct . . Thus, the State Bar argues Claimant has no right to severance under
the contract and cannot utilize the implied covenant to otherwise obtain the bene?t.

Claimant asserted that the Board did not exercise its right to terminate him ?for cause,?
and that the Board did not ?nd that Claimant acted with ?moral turpitude, dishonesty, corruption
or similar act of gross misconduct.? The ?nal version of the November 7, 2014 Meeting Minutes
supports Claimant?s assertion: the Board resolved to ?unilaterally terminate? Claimant, but did
not indicate whether the termination was ?for cause? or ?without cause.? The Board also made
no ?nding that Claimant had acted with ?moral turpitude, dishonesty, corruption or similar act
of gross misconduct.? Claimant introduced evidence of early drafts of the minutes from the
November 7, 2014 Board Meeting that support this conclusion. The draft minutes indicate that
the Board authorized Mr. Holden to: (1) offer Claimant the Opportunity to resign in exchange for
the payment of severance provided by his contract; and (2) terminate Claimant pursuant to the
?termination without cause provision of his contract? if Claimant did not agree to resign. Cl.?s
Ex. 45 (emphasis added.) Furthermore, the termination letter sent to Claimant by Mr. Holden
states that the Board voted to ?unilaterally terminate? his employment; the letter does not state
that Claimant was terminated ?with cause.? Cl.?s Ex. 66.

The MTO Report and the individual testimony of Trustees are not acts of the Board.
The Arbitrator cannot presume that the Board would have resolved that Claimant had acted with
?moral turpitude, dishonesty, corruption or similar act of gross misconduct? had the Board
chosen to deliberate on the matter. The facts indicate that the Board either terminated Claimant
?without cause? or the Board simply failed to make a determination on the matter. Thus, the

Board did not exercise its right under the Employment Contract to terminate Claimant without

24

paying severance, and Claimant may assert his claim for breach of the covenant of good faith
and fair dealing.

The elements of a claim for breach of implied covenant of good faith and fair dealing are:
(1) the parties entered into a contract; (2) plaintiff ?did all, or substantially all of the signi?cant
things that the contract required,? or was excused from having to perform; (3) all conditions
required for defendant?s performance occurred or were excused; (4) defendant unfairly interfered
with plaintiff? 3 right to receive the bene?ts of the contract; and (5) plaintiff was harmed by
defendant?s conduct. Judicial Counsel of California Civil Jury Instruction 325.

The State Bar argued that Claimant?s breach of the implied covenant claim must fail
because plaintiff cannot prove an essential element of the claim: that he either performed or
?substantially performed? under the Employment Contract. ?The covenant . . . requires each
party to do everything the contract presupposes the party will do to accomplish the agreement?s
purposes.? Thrifty Payless, Inc. v. Americana at Brand, LLC, 218 CalAppnilth 1230, 1245
(2013); see also, Durell v. Sharp Healthcare, 183 Cal.App.4th 1350, 1367 (2010) (a plaintiff
?cannot state a cause of action for breach of the implied covenant without adequately pleading an
excuse for his nonperforrnance.?) Thus, the evidence must show that Claimant either performed
or ?substantially performed,? under the contract. ?What constitutes substantial performance is a
question of fact, but it is essential that there be no willful departure from the terms of the
contract,? and any defect in performance must ?be easily remedied or compensated,? so that each
party ?may get practically what the contract calls for.? Posner v. Grunwald-Marx, Inc, 56
Cal.2d 169, 186 (1961); see also, Connell v. Higgins, 170 Cal. 541, 556-57 (1915) . .
. defects or omissions are substantial, or merely unimportant mistakes that have been or may be

corrected, is generally a question of fact?)

25

The Employment Contract obligated Claimant to ?keep the Board . . . fully informed on
matters of signi?cance? and to ?appropriately safeguard and administer all funds . . . and other
State Bar assets,? among other duties. Claimant?s performance reviews also indicate that
Claimant was expected to maintain a good relationship with the Supreme Court, and early
reviews indicate that the Board believed Claimant had ful?lled his obligations. Cl.?s Ex. 8/9,
?2010-2011 Performance Evaluation,? SB00000227 (?Joe has . . . done an excellent job of
managing and improving relations with the Supreme Court, which is a very important
constituent?); SB00000229 (Joe has maintained and enhanced ?constituent relations? by
attending lunches with Beth Jay, principal attorney to the Chief Justice? and
?attendance at meetings . . with the Chief Justice?); SB00000232 . he has been able to assist
the Bar with improving its relationship with . . . the Supreme Court?) Id. at SB00000111 (Joe
?informs the Board about signi?cant matters affecting the State Bar? and ?communicates his
knowledge to the Board?); have little insight into relationships with the Supreme Court . . .
but I have no reason to think there are problems?) Thus, it is clear that the Trustees were
satis?ed with Claimant?s performance from 2010 through 2013, and as a result, the Board
renewed Claimant?s contract in January of 2014.

However, it is also clear that the Trustees were not satis?ed with Claimant?s performance
in 2014. The evidence indicates that Claimant breached his duties to keep the Board ?fully
informed? and to maintain good relations with the Supreme Court when he failed to inform the
Board about the Supreme Court?s opposition to AB 852 and when he encouraged the Board to
af?mratively support a bill that the Supreme Court opposed. Claimant also breached these duties
when he misinformed the Trustees that the proposal to move State Bar Headquarters to
Sacramento had been ?socialized with the Court? and implied that the Court supported the

proposal. In truth, it was not clear that the Supreme Court supported the move, and the Chief
26

Justice stated that she had never spoken with Claimant about the proposal and expressed

concerns about the proposal to Luis Rodriguez. RX. 552-12-13. Additionally, Claimant

breached his duty to keep the Board ?fully informed? and to ?safeguard and administer all [State

Bar] funds? when he informed the Board that State Bar funds would not pay for the Mongolia

trip and then charged some of the costs of his trip to the State Bar.

The State Bar?s evidence indicates that as a result of these breaches of duty, the Board

did not ?get practically what the [employment] contract call[ed] for:?

Ms. Brewer: [D]id Mr. Dunn perform his contractual obligations as executive
director of the State Bar? A. No, he did not. Q. Why not? A. . . . He did not truthfully
inform the members of the Board or the president about the Supreme Court?s position
on two signi?cant matters, and misused the State Bar ?lnds in addition to that0?22.

Mr. Fox: . . . In your opinion, Mr. Fox, did Mr. Dunn perform his obligations
under the contract? A. No. Q. Why not? A. . . . Not only did he not keep [t]he Board
fully informed, he misinformed [t]he Board.? Tr. at 193:9?14.

Mr. Flanigan: [D]o you believe that Mr. Dunn performed his contractual
obligations as executive director of the State Bar? A. I do not believe that he did. Q.
And why not? A. . . . Just starting out with number one here, to keep the Board and its
president fully informed on matters of signi?cance. I believe that Mr. Dunn had not
done that on several occasions.? Tr. at 983 :25?984z8.

Ms. Meyers: ?And the reason I felt Mr. Dunn should be terminated, and to this day, I
still maintain that, is because of the breach of his ?duciary duty to the Board, as well
as the breach of his contractual obligations to the Board. He had an obligation, both
under his contract and his ?duciary duty, to disclose all information pertinent to
anything the Board decides, to the Board.? Tr. at 723 :4?1 1.

Mr. Pasternak: [D]id you believe that Mr. Dunn complied with his obligations
under his employment contract? A. He did not. Q. Why not? A. Well, among other
things, the contract required that Joe fully inform the Board about material matters or
subjects that it should consider. The Munger report demonstrated that he did not
comply with that.? Tr. at l92:21?1193:9.

Claimant?s actions caused the Board to question Claimant?s motivations and damaged

Claimant?s relationships with both internal staff and key stakeholders. The State Bar introduced

27

evidence indicating that Trustees considered each of Claimant?s breaches to be signi?cant and
substantial:

Regarding Claimant?s failure to inform the Board that the Supreme Court opposed AB
852:

0 Mr. Colantuono: If he had told you that, would it have affected your view on
whether or not the Bar should be sponsoring that bill? A. Yes.? Tr. at 348:4?349z3.

0 Mr. Dean: ?If the Supreme Court had an objection, we would take it seriously times
ten. So it would stand out and . . . if we had been told that the Supreme Court had an
issue with something, there would have been big discussion about that.? Tr. 1148:3?
16

0 Ms. Krinsky: ?If the Court had had concerns, . . . that would have mattered greatly to
me.? Tr. 759:1?13.

0 Ms. Rosing: ?[T]hat was troubling to me, because I voted on that. And I voted in a
way where I would have liked to have had what Munger, Tolles Olson say was
available information. I didn?t have that information at the time I voted.? Tr. 606219?
607:3.

Regarding Claimant?s failure to adequately and accurately inform the Board regarding
the proposal to move State Bar Headquarters:

0 Ms. Krinsky: ?The question of whether our staff should be uprooted and relocated
from San Francisco to Sacramento was another example of where there appeared to
be a set of objectives by our executive director and different views by others,
including leadership of the Court. And the Board simply wasn?t getting the complete
picture. We weren?t being told by our executive director what we needed to know to
make critical decisions.? Tr. 761:18-762:12.

0 Mr. Pasternak: was] concerned that Joe had his own agenda, and his . . . agenda
was to move the State Bar headquarters to Sacramento, when others, such as
apparently the chief justice, had signi?cant concerns about that. And things like that
were not being disclosed to the Board.? Tr. 1 18821-1 189:8.

0 Mr. Colantuono: . . . cAnd made misstatements to a board committee regarding
the Supreme Court?s views on the Bar's possible move to Sacramento.? Do you
believe that last statement describes an act of dishonesty? A. Yes?; Tr. at 356213?21

0 Mr. Mangers: Did you come to later learn whether or not Mr. Dunn?s statement
to you, that the move to Sacramento had already been socialized with the Court, was

28

true? . . . A. I did. Q. Was that another example of dishonesty by Mr. Dunn? A. It
seemed to me that it was.? Tr. 494: 12?20.

Regarding Claimant?s misrepresentations regarding the source of the ?mding for his trip
to Mongolia:

0 Ms. Krinsky: ?Whether it was $5,000 or $5 million, the issue in my mind was
veracity and honesty with the Board. . . . And our ability to do that is hamstrung if we
can?t trust our leadership to give us critical information.? Tr. 760:17?7 61:17.

0 Mr. Mangers: ?The amounts of money were not that signi?cant, but he had stipulated
that no Bar funds would be used, and then submitted expense reports asking for
reimbursement. That seemed incongruous with what he indicated.? Tr. 489:19?
490:2.

0 Mr. Meyers: . . .What were you troubled about with Mongolia, the expenditures
with respect to Mongolia? A. [O]bviously the Board knew that the State Bar was not
paying for that trip for either Mr. Dunn, Mr. Layton or . . .[Howard] Miller, to go on
the trip. And, . . . they did pay for it. And the fact that it was later repaid, clearly

substantiated the fact in my mind that it should not have been paid for with State Bar
dues.? Tr. 719:4~16.

Claimant?s evidence is insuf?cient to rebut the State Bar?s showing that Claimant failed
to keep the board fully informed on matters of signi?cance.2 Claimant failed to ?substantially
perform? under the contract, and thus Claimant failed to prove an essential element of his claim
for breach of the implied covenant of good faith and fair dealing.

CONCLUSION

Claimant failed to demonstrate by a preponderance of the evidence that the State Bar

 

2 When asked to explain why he failed to inform the Board that the Supreme Court opposed AB 852, Claimant
testi?ed that he did not want to communicate the Supreme Court?s opposition to the bill in a public forum, and
claimed that at the May 8, 2014 board meeting, he suggested that a ?stakeholder? had ?concerns? regarding AB 852.
Tr. 794:20-795z6. There is no evidence of these comments in the meeting minutes, and Claimant?s assertion that he
made these comments con?icts with evidence that Claimant informed the Board that there was ?no known
opposition? to AB 852 and that he placed sponsorship of AB 852 on the Board?s Consent Agenda. Claimant also
pointed to the testimony of Trustee oanna Mendoza, who stated that she ?seemed to recall? that the Supreme Court
may have had con?icting opinions regarding AB 852. Tr. 853: 1?18; Rx 688 at 207:4-14. Even if Ms. Mendoza?s
recollections are accurate, none of the other Trustees testi?ed that they knew of the Supreme Court?s position. Thus,
the weight of the evidence indicates that Claimant failed to perform his duty to keep the Board fully informed.

29

violated Labor Code 1102.5. Claimant also failed to prove each element of his claim for
Breach of the Implied Covenant of Good Faith and Fair Dealing. Therefore, the Arbitrator ?nds
in favor of the State Bar on all claims.

On January 18 and 19, 2017, the Arbitrator issued orders granting Summary Judgment in
favor of Respondents Beth Jay and Craig Holden disposing of all claims against them.
Wherefore, judgment is made in favor of all Respondents and Claimant?s request for an

Arbitration Award is denied.

  

Dated: 129/ 1249/7



Ward A. Infant?, Arbitra

  

30