Whistleblowers—Take Heart

Progress In California Workplace Retaliation Protection


By Xinying Valerian


California is well-known for having strong protections for employees who have suffered retaliation at work. Most notably, California’s Labor Code section 1102.5 has the following protections:

  1. Protects employees who report suspected unlawful conduct.

  2. Protects employees who oppose or refuse to engage in unlawful conduct.

  3. Protects employees against anticipatory retaliation, where their employer believes the employer might be a whistleblower.

  4. Protects employees who internally report illegal conduct.

  5. Protects employees for whom internal whistleblowing is a required part of their job.

Section 1102.5 also applies where the employer is mistaken in believing that the employee reported or may report unlawful conduct. Protection even extends to an employee’s family members.

Regardless of the type of illegality—be it federal, state, or local law, or some other kind of illegality—an employee need not even use any magic words of the law to call out illegal conduct, in order to trigger the anti-retaliation protections. There are numerous employee activities that are covered, many of which have been discussed at length on this blog, including:

  • Consumer protection laws.

  • Privacy laws.

  • Wage protection laws.

  • Discrimination laws.

  • Securities regulations for public companies.

  • Family, medical and sick leave laws.

It's easy to see just how expansive the anti-retaliation sweep of Labor Code 1102.5 really is.


In real-life terms, what kinds of less-obvious situations of employees taking a stand would trigger retaliation protection under California’s Labor Code 1102.5?

  • An employee refused to follow a manager directive that he reasonably believed was illegal because it would violate health and safety requirements. This situation was similar to a healthcare whistleblower case that Valerian Law filed. This employee should be covered by 1102.5.

  • A manager refused his boss’s demand that he demote an employee who had an excellent performance record but had just filed a sexual harassment report against the boss.

  • An employee called an ethics hotline to report illegal business conduct or fraud, as in the Wells Fargo fake accounts scandal where scores of employees suffered retaliation (allegedly) after calling an internal ethics line.

  • An anonymous ethics hotline report about one company intentionally defrauding another company, as in this case involving a paint manufacturer accused of a scheme that cheated a major retailer.

  • An employee internally telling their bosses that they felt their firm’s parental leave policy was discriminatory, as in this case where a law firm employee was fired days after complaining internally.

In most cases, where the complainant is not a lawyer, does retaliation protection in California hinge on establishing that there was in fact an underlying legal violation? The answer is no.


In California, Labor Code 1102.5 makes it clear that employees must have a “reasonable cause” to believe that there was illegal conduct. Under Section 1102.5, it doesn’t matter whether an employee actually proves that there was an underlying illegality. It only matters that the complaint is made in good faith. In the last example involving an allegedly illegal parental leave policy, the internal whistleblower was himself a well-credentialed lawyer in a better position than most to know what might be illegal and the defendant was vigorously asserting that its policy was not illegal. So in that case, it’s not surprising that the defendant was questioning the plaintiff’s “good faith” at the time he was complaining to his bosses.


Finally, as can be expected in all retaliation cases, defendants will point to lawful reasons for the adverse employment action, be it termination, demotion or some other major adverse action. On this front, some good news for California employees came recently from the California Supreme Court. On January 7, 2022, the Court handed down a decision in Lawson v. PPG Architectural Finishes, Inc., holding that:

  1. Whistleblowers may prove their claims by a “preponderance of the evidence” that the whistleblowing activity was a contributing factor in a contested employment action.

  2. Employers can defeat such claims only by showing “by clear and convincing evidence” that they would have taken the same adverse action even if the employee had not engaged in protected activity.

So, an employee need only show that the employee’s “whistleblowing activity was a ‘contributing factor’” in the employee’s termination. Employees are not required to show that the employer’s proffered reason for termination was pretextual when it comes to California Labor Code § 1102.5 claims. This sets California’s Labor Code retaliation law apart from many other retaliation laws, such as the retaliation laws embedded in anti-discrimination statutes. This victory for employees makes an even more useful tool for employees seeking justice for workplace retaliation.


 




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