Retaliation and Whistleblower Protections in California

Retaliation and Whistleblower Law in California

Whistleblowers have an important role in revealing and rectifying governmental waste, environmental dangers, public safety violations, conspiracies, fraud, and deceit. The “right thing to do” in some instances may mean reporting the employer to the authorities—or “blowing the whistle.” However, the employee risks losing his job or position within the company.

Because of this, such an employee may find himself between a legal or ethical rock and a hard place, that is having to weigh a duty to the public versus a sense of loyalty to his employer. Whistleblower statutes are intended to relieve individuals from this predicament. As the California Supreme Court has explained:

There is great public interest in the truthful revelation of wrongdoing . . . .1

Whistleblower statutes typically prohibit dismissal or other retaliatory action against the employee and may also provide for enhanced monetary awards.2 The issue of whistleblowing can arise in numerous situations. Examples include:

  • An employee finding out that his government contractor employer is bilking the government with fraudulent invoices,3
  • A public or private employer is found to be violating safety regulations under state or federal occupational health and safety acts,4
  • Employer discrimination or harassment,5
  • Abuse at a health care facility,6 or
  • Medical malpractice.7

In any of these situations, the employee who blows the whistle on unsafe, illegal, or unethical practices to the authorities may be the subject of punitive or retaliatory action, like Diana Duenas-Brown at Wells Fargo: dismissal, transfer, demotion, and unfair treatment.

Federal Law Protections for Whistleblowers

Numerous federal acts have whistleblower protections included in their provisions. Some examples include:

  • The Clean Air Act;8
  • Comprehensive Environmental Response, Compensation and Liability Act (CERCLA);9
  • The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act);10
  • Sarbanes-Oxley Act of 2002 (SOX);11 and
  • The Fair Labor Standards Act of 1938 (FLSA).12

These and many other acts of federal legislation include protections for employees who complain about safety or health hazards—in the workplace or to the environment—that were caused by an employer.13

To be protected under these acts, an employee must have a good-faith belief that the employer is violating the law and must complain either to the employer or to a federal agency about the apparent violation. The employee is then protected even if the employer is ultimately found to be in compliance.

An employee who feels that he or she has been retaliated against for making a complaint, must bring a complaint to OSHA within 30 days of the retaliatory action.

State Law Protections for Whistleblowers

Most states have laws to protect employees from discrimination or retaliation against whistleblowers. Similar to federal law, to be eligible for protection, most states require an employee to have a good-faith belief that the employer or its employees are violating the law.

In addition, the employee must also either complain about that violation to the employer or to a government agency, refuse to participate in the violation, or assist in an official investigation of the violation.14

Discussion – California’s Whistleblower Law

California Labor Code § 1102.5 affords protections for employee disclosures of suspected violations or non-compliance with federal or state law. A worker who discloses information concerning a violation of or non-compliance with a state or federal statute or who refuses to participate in an activity that would violate a state or federal statute may be protected from retaliation.15

This whistleblower statute is designed to “encourag[e] workplace whistle-blowers to report unlawful acts without fearing retaliation.”16

Filing a Complaint

Anyone who is eligible for protection under California’s whistleblower laws may also file a claim for any damages sustained by the retaliation. This is usually consists of the repayment of lost wages, reinstatement to employment, or damages due to a damaged reputation.

To establish a prima facie case of retaliation, a plaintiff must show that she engaged in protected activity, that thereafter she was subjected to adverse employment action by her employer, and there was a causal link between the two.17

Protected activity, the statute holds, is the disclosure of or opposition to a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation.18 Thus, Labor Code § 1102.5 requires that to be applicable, the activity disclosed by an employee must violate a federal or state law, rule, or regulation.19

A prerequisite to asserting a violation of Labor Code § 1102.5 is the existence of an employer-employee relationship at the time the allegedly retaliatory action occurred.20 Causation is critical, and a claim of whistleblower harassment and retaliatory termination may fail if the a plaintiff can’t demonstrate the required connection between her reporting of alleged statutory violations and her allegedly negative treatment by her employer.21

In addition, courts have stated that a § 1102.5 cause of action “stands alone and does not require a separate showing that the employee’s subjective motivation and/or the particular crime he or she reported concerned a fundamental public policy.”22

In a civil action or administrative proceeding brought under § 1102.5, after it has been demonstrated by a preponderance of the evidence that an activity proscribed by that section was a contributing factor in the alleged prohibited action against the employee, the burden shifts to the employer to show by clear and convincing evidence that the alleged action would have occurred for legitimate, independent reasons, even if the employee had not engaged in activities protected by § 1102.5.23

To prevail, the plaintiff has to show that the explanation is a pretext for the retaliation.24 If the plaintiff is successful in proving a violation of § 1102.5(b), compensatory damages are recoverable.25

In addition to other penalties, an employer that is a corporation or limited liability company is liable for a civil penalty no more than $10,000 for each violation of Labor Code § 1102.5.26

An employer or any other person or entity that violates Chapter 5 or the Labor Code is guilty of a misdemeanor punishable, in the case of an individual, by imprisonment in the county jail not to exceed one year or a fine not to exceed $1,000 or both that fine and imprisonment, or, in the case of a corporation, by a fine not to exceed $5,000.27

Who is protected?

Pursuant to California Labor Code § 1102.5, employees are the protected class of individuals.28

An “employee” under that statute is “any person employed by an employer, private or public, including, but not limited to, individuals employed by the state or any subdivision thereof, any county, city, city and county, including any charter city or county, and any school district, community college district, municipal or public corporation, political subdivision, or the University of California.”29

A whistleblower is also protected if it is an employee who refuses to participate in an activity that would mean the violation of a state or federal statute, or a violation of or noncompliance with a local, state or federal rule or regulation.30

Further, Labor Code § 1102.5(b) does not limit whistleblower protection only to an employee who discloses unlawful conduct that had not been previously disclosed by another employee.31

Courts have recognized that a personal agenda or animus towards a supervisor or other employees a factor motivating the employee whistleblower to make a disclosure regarding conduct that the employee also reasonably believes violates a statute or rule or constitutes misconduct.32 However, that motivation is irrelevant to the purposes of the disclosure statutes.33

General Protections for Whistleblowers

Labor Code § 1102.5(b) stipulates that an employer, or any person acting on behalf of the employer, cannot retaliate against an employee for whistleblowing or because the employer believes that the employee disclosed or may disclose information to a government or law enforcement agency or other authority.34

In addition, an employer, or any person acting on behalf of the employer, is prohibited from retaliating against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation.35

The purpose of Labor Code § 1102.5, the whistleblower statute, is to “encourag[e] workplace whistle-blowers to report unlawful acts without fearing retaliation.”36 Section 1102.5(b) applies to employees who report issues to public agencies; it does not protect plaintiff who reports his suspicions directly to his employer.37

California Labor Code § 1102.5 stipulates that if an employer retaliates against a whistleblower, the employer may be required to reinstate the employee’s position and work benefits, pay any lost wages, and take other actions in order to comply with the law.38

State Employees

California’s Whistleblower Protection Act found in Government Code § 8547 protects California state employees from retaliation for disclosing waste, fraud, abuse of authority, violations of law, or threats to public health without “fear of retribution.”39

Employees who experience retaliation from their employers for whistleblowing may be awarded damages, punitive damages, and attorney’s fees for any intentional “acts of reprisal, retaliation, threats, coercion, or similar acts against a state employee or applicant for state employment.”40

However, any action for damages will not be available to the injured party unless he or she first has filed a complaint with the university officer41—and the university has failed to reach a decision on the complaint within the specified time limits.42

It is important to note this exhaustion requirement of filing an administrative complaint with the State Personnel Board within 12 months of an incident of retaliation before filing an action in court for general and punitive damages.43 The statute directs the board to adhere to the procedures prescribed in Government Code § 1968344 for hearings or investigations of a written complaint for retaliation as prohibited by § 8547.3.

The Board may award reinstatement, back pay, restoration of lost service credit, and compensatory damages if appropriate in enforcing the Act’s protections.45

The Whistleblower Act also allows a whistleblower to bring a civil suit for damages. The statute provides that state employees who retaliate against whistleblowers are subject to fines, imprisonment, disciplinary proceedings, and civil liability, including compensatory damages, punitive damages, and attorney fees.46

In adopting this legislation, the California Legislature expressly found “that public servants best serve the citizenry when they can be candid and honest without reservation in conducting the people’s business.”47

2014 Amendments

In 2014, California’s whistleblower law was bolstered with the enactment of three amendments to the California Whistleblower Protection Act.48 The prior version of § 1102.5 stated that employers may not engage in certain conduct, such as retaliating against employees who disclose information to a government or law enforcement agency or who refuse to participate in activity that would result in violation of federal or state laws.

The amendment replaced the word may with shall. Also, the 2014 amendment added protection for whistleblowers who disclose information to a person with authority over the employee or to a person who has authority to investigate, discover, or correct the alleged violation or noncompliance.49

Further, to be protected as a whistleblower, the employee only must possess “reasonable cause to believe”50 that employer’s conduct is unlawful, providing a wider scope of liability for employers.

The statute also has been amended to protect whistleblowers who provide information to or testify before any public body which is investigating, hearing, or inquiring into an employer’s violation of or noncompliance with local, state, or federal rules or regulations.51

In addition, the prior language of § 1102.5 required the employee to actually disclose information. The 2014 amendment prohibits employers from retaliating against an employee “because the employer believes that the employee disclosed or may disclose information.”52

Other Whistleblower Statutes

The state legislature has enacted several others statutes to give whistleblowers protection.

California’s Whistleblower Protection Act found in Government Code § 9149 protects those who disclose improper government activities, including but not limited to violations of state or federal laws or regulations, economic wage, or gross misconduct.53 The California False Claims Act protects whistleblowers who report fraud against government.54

Employees may be protected from retaliation if they engage in efforts to stop state false claims act violations or act in furtherance of a claim.

Finally, the California Fair Employment and Housing Act (FEHA) protects employees from being retaliated against for complaining of harassment or discrimination on the basis of age, disability (mental or physical), gender, sex, national origin, race, religion, color, medical condition, marital status, and sexual orientation.55

Conclusion

The public policy of the State of California is to encourage employees to notify an appropriate agency or person with authority over the employee when they have reason to believe their employer is violating a state or federal statute, or violating or not complying with a local, state or federal rule or regulation.56

If you want to pursue a claim, follow your employer’s company policies and procedures for making a claim, and be certain that you thoroughly document the whole process.

Footnotes

  1. Mitchell v. Superior Court, 37 Cal. 3d 268 (Cal. 1984)
  2. Details on State Whistleblower Laws, FINDLAW.
  3. Jason Devaney, Whistleblower: VA Contractor Cheated Vets out of Agent Orange Benefits, NEWSMAX (February 17, 2017).
  4. Jim Shay, OSHA: Amtrak whistleblower gets job back, $892K settlement, CONNECTICUT POST (January 20, 2017).
  5. Brad Bowman, KSU settles discrimination, retaliation lawsuit with former police chief, LEXINGTON HERALD-LEADER (February 14, 2017).
  6. Kristen Schorsch, Ex-Mead Johnson director files whistleblower suit over ‘defective’ baby formula, CRAIN’S CHICAGO BUSINESS (February 9, 2017).
  7. Judge Awards $1.9M to Medical Clinic Whistleblower in Pacific Northwest, INSURANCE JOURNAL (November 15, 2016).
  8. 42 U.S.C. §7401 et seq.
  9. 42 U.S.C. § 9610(a).
  10. P.L. 111-203, § 748, 124 Stat. 1376, 1739 (2010).
  11. 18 U.S.C. § 1514A(a).
  12. 29 U.S.C. § 215(a)(3).
  13. US Department of Labor, Occupational Safety and Health Administration, Information About Filing a Whistleblower or Retaliation Complaint With OSHA, OMB # 1218-0236.
  14. Whistleblower Protections, FINDLAW.
  15. Cal. Labor Code § 1102.5.
  16. Green v. Ralee Engineering Co., 19 Cal.4th 66, 77 (1998).
  17. Morgan v. Regents of University of California, 88 Cal.App.4th 52, 69 (2000).
  18. Cal. Labor Code § 1102.5(b) and (c).
  19. Mueller v. County of Los Angeles, 176 Cal.App.4th 809, 821–822 (2009). Local ordinances were added in 2014. See discussion below.
  20. Soukup v. Law Offices of Herbert Hafif, 39 Cal.4th 260, 287-288 (2006). In this case, Soukup was not an employee at the time she complained to the Department of Labor about the company’s pension plan distribution or when the underlying action was filed. Accordingly, she failed to demonstrate how defendants’ filing and maintenance of the underlying action, even if it was in some broad sense retaliatory, violated the specific provisions of Labor Code § 1102.5, much less that the statute rendered defendants’ conduct illegal as a matter of law. See Hansen v. Department of Corrections & Rehabilitation, 171 Cal.App.4th 1537, 1546 (2008) (a prerequisite to asserting a Labor Code section 1102.5 violation is the existence of an employer-employee relationship at the time the allegedly retaliatory action occurred).
  21. Ferrick v. Santa Clara University, 231 Cal.App.4th 1337 (2014); Turner v. Anheuser-Busch, Inc., 7 Cal.4th 1238, 1258 (1994) (“To establish a claim for wrongful termination in violation of public policy, an employee must prove causation.”).
  22. Cardenas v. M. Fanaian, D.D.S., Inc., 240 Cal.App.4th 1167, 1172 (2015). See, e.g., Carter v. Escondido Union High School Dist., 148 Cal.App.4th 922, 933 (2007) (identifying the provision as “California’s general whistleblower statute”); Garcia v. Rockwell Int’l Corp., 187 Cal.App.3d 1556, 1561 (1986) (explaining “the Labor Code section merely enunciated already existing public policy,” which “forbids retaliatory action taken by an employer against an employee who discloses information regarding an employer’s violation of law to a government agency”); Collier v. Superior Court of County of Los Angeles, 228 Cal.App.3d 1117, 1123 (1991) (finding Section 1102.5(b) “reflects the broad public policy interest in encouraging workplace ‘whistleblowers,’ who may without fear of retaliation report concerns regarding an employer’s illegal conduct”).
  23. Cal. Labor Code § 1102.6.
  24. Patten v. Grant Joint Union High School Dist., 134 Cal.App.4th 1378, 1384, (2005); Hager v. County of Los Angeles, 228 Cal.App.4th 1538, 1540.
  25. See Gardenhire v. Housing Authority, 85 Cal.App.4th 236, 240–241 (2000) (economic and emotional distress damages awarded for violation of § 1102.5).
  26. Cal. Labor Code § 1102.5(f).
  27. Cal. Labor Code § 1103.
  28. See Hager v. County of Los Angeles, 228 Cal.App.4th 1538 (2014) (plain language of Lab. Code, § 1102.5(b) does not limit whistleblower protection only to an employee who discloses unlawful conduct that had not been previously disclosed by another employee).
  29. Cal. Labor Code § 1106.
  30. See Tameny v. Atlantic Richfield Co., 27 Cal.3d 167 (1980); Turner v. Anheuser-Busch, Inc., 7 Cal.4th 1238, 1258 (1994).
  31. Hager v. County of Los Angeles, 228 Cal.App.4th 1538, 1549 (2014).
  32. Mize-Kurzman v. Marin Community College Dist., 202 Cal.App.4th 832, 850 (2012) (“[N]othing in the enumeration above of the prima facie elements for recovery indicates that, where a statutory violation under section 1102.5 is proven, the trial court must also scrutinize the plaintiff’s motives or the particular crimes reported to make sure they are “public” enough.”).
  33. Mize-Kurzman v. Marin Community College Dist., 202 Cal.App.4th 832, 852 (2012) (“It easily could lead the finder of fact to detour around the central question of the employee’s reasonable belief and down a circuitous byway in an attempt to discern the employee’s motives by delving into the employee’s relationships with coworkers, supervisors and the employer.”).
  34. Cal. Labor Code § 1102.5(b).
  35. Cal. Labor Code § 1102.5(c). In addition, “[a]n employer, or any person acting on behalf of the employer, shall not retaliate against an employee for having exercised his or her rights under subdivision (a), (b), or (c) in any former employment.” Cal. Labor Code § 1102.5(d).
  36. Green v. Ralee Engineering Co., 19 Cal.4th 66, 77, (1998). See Morgan v. Regents of University of California, 88 Cal.App.4th 52, 69 (2000). See Soukup v. Law Offices of Herbert Hafif, 39 Cal.4th 260, 287-288 (2006).
  37. Ferrick v. Santa Clara University, 231 Cal.App.4th 1337 (2014); Foley v. Interactive Data Corp., 47 Cal.3d 654, 724 (1988); Green v. Ralee Engineering Co., 19 Cal.4th 66, 77 (1998).
  38. Cal. Labor Code § 1102.5.
  39. Cal. Gov. Code § 8547.1.
  40. Cal. Gov. Code § 8547.8(c). Employee is defined as: “(a) “Employee” means an individual appointed by the Governor, or employed or holding office in a state agency as defined by § 11000, including, for purposes of §§ 8547.3 to 8547.7, inclusive, an employee of the California State University, or an individual appointed by the Legislature to a state board or commission and who is not a Member or employee of the Legislature. In addition, “employee” means a person employed by the Supreme Court, a court of appeal, a superior court, or the Administrative Office of the Courts for the purposes of §§ 8547.3 to 8547.7, inclusive, and § 8547.13, except for those provisions of § 8547.4 concerning notice of adverse action and the State Personnel Board. “Employee” includes a former employee who met the criteria of this subdivision during his or her employment.” Cal. Gov. Code § 8547.2(a). Section § 8547.12(c) permits alleged California State University whistleblowers to bring actions for damages.
  41. See Cal. Gov. Code § 8547.12(a).
  42. Cal. Labor Code § 8547.12(c). See Runyon v. Board of Trustees of California State University, 48 Cal.4th 760 (2010) (“Nothing in this section is intended to prohibit the injured party from seeking a remedy if the university has not satisfactorily addressed the complaint within 18 months.”).
  43. CAL. GOV. CODE, § 8547.8(c). See State Bd. of Chiropractic Examiners v. Superior Court, 45 Cal.4th 963, 978 (2009) (“So long as the board has issued findings (or the deadline for issuing findings has passed), the employee may proceed with a damages action in superior court regardless of whether the board’s findings are favorable or unfavorable to the employee. Moreover, once the board has issued findings, the employee need not pursue additional administrative remedies and need not challenge the findings by way of a petition for a writ of administrative mandate.”).
  44. CAL.GOV. CODE § 18500 et seq.
  45. CAL. GOV. CODE, § 8547.1. See Cornejo v. Lightbourne, 220 Cal.App.4th 932 (2013). See Miklosy v. Regents of University of California, 44 Cal.4th 876, 885 (2008); State Bd. of Chiropractic Examiners v. Superior Court, 45 Cal.4th 963, 968 (2009).
  46. CAL.GOV. CODE § 8547.8(b) and (c).
  47. Id. See State Bd. of Chiropractic Examiners v. Superior Court, 45 Cal.4th 963, 967-968 (2009).
  48. Cal. Labor Code § 1101, et seq.
  49. California Senate Bill 496, Legislative Counsel’s Digest (February 21, 2013).
  50. Cal. Labor Code § 1102.5(b).
  51. Cal. Labor Code § 1102.5(a).
  52. Cal. Labor Code § 1102.5(b).
  53. Cal. Gov. Code § 9149.
  54. Cal. Gov. Code § 12653.
  55. CAL. GOVT CODE § 12950(b)(7).
  56. CA Division of Labor Standards Enforcement, Whistleblowers Are Protected.

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