Perjured Testimony Dooms Employee’s Retaliation Suit

California’s employers often express frustration that the civil justice system does not seem to have adequate protections to discourage employees from filing legal claims based on alleged “facts” that the employee knows to be absolutely false.

Rule 11 of the Federal Rules of Civil Procedure, and section 128.7 of the California Code of Civil Procedure, are both intended to prevent such abuses.

Both statutes require that attorneys, in essence, verify whenever they sign and file court papers that there is a reasonable and good faith basis for the factual allegations stated in their papers. That belief must be based on a reasonable pre-filing investigation that consists of more than simply accepting as true what the attorney’s client says. Under both Rule 11 and section 128.7, an attorney who is found not to have complied with their obligations may be subject to monetary sanctions by the trial court.

Unfortunately, in real-world practice, those gateway requirements, which are intended to protect the integrity and public trust in our civil justice system and its procedures, seem rarely invoked by trial judges to hold dishonest claimants and their attorneys to account. Many casual observers of our modern legal processes marvel at the apparent ease with which a claimant may bring false claims, including those under oath, with no apparent repercussion or effective deterrent. Some even question whether a justice system predicated on a party’s promise to tell the truth is not archaic, as one’s “word, “honor,” or “bind” often do not seem as important in today’s world as they once were.

That is precisely why the recent action of a federal District Court Judge in California’s Northern District is so refreshing.

In the case of Yu v. ByteDance Inc. (N.D. Cal. December 12, 2024, Case No. 3:23-cv-04910 December ), federal District Court Judge Susan Illston demonstrated emphatically the perils of dishonestly in court proceedings, and made it known that an employee’s perjury would not be tolerated in her courtroom.

In a engineer’s retaliation suit against his former employer, the parent company of social media platform TikTok, Judge Illston used the plaintiff’s dishonesty as the basis for issuing terminating sanctions–ordering as a punishment that legal proceeds be terminated.

In ByteDance Inc. plaintiff Yintao Yu alleged that he had been fired in retaliation for complaining about his employer’s discrimination against a co-worker who was on medical leave. During the course of the litigation, the employer claimed that Mr. Yu had fabricated a sworn declaration and had also perjured himself in a prior bankruptcy case. Mr. Yu invoked his Fifth Amendment right against self-incrimination during an evidentiary hearing before Judge Illston regarding the alleged fabrication and perjury.

In her ruling, Judge Illiston stated that “this court has the inherent power to investigate whether a party has abused the judicial process or otherwise committed a fraud upon the court.” “It would be a further abuse of the judicial process,” she added, “to allow a party who has committed egregious litigation misconduct to avoid sanctions by voluntarily dismissing his case or similar gamesmanship.”

Plaintiff derisively characterized the employer’s efforts for terminating sanctions as mere “sideshows” that involved collateral matters. Judge Illston, however, would have none of that. “Far from engaging in ‘sideshows,’ defendants’ sanctions motion and the evidentiary hearing have revealed that Yu has engaged in serious, bad faith conduct that has abused the judicial process,” she wrote.

The outcome of the Yu case may well be a product of the extraordinarily and outrageous conduct of the plaintiff. However, the court’s ruling provides a glimmer of hope that truth and the integrity of the civil justice system remain important and that dishonest litigants and their attorneys proceed at their own peril.