Whistleblower Protection

Whistleblower Protection

Labor Code Section 1102.5 is known as California’s whistleblower protection law. It is one of the most comprehensive statutes of its kind in the United States, designed to protect employees who blow the whistle on illegal acts or violations of state or federal regulations within their workplace. The law makes it illegal for employers to retaliate against employees for disclosing information about violations of, or noncompliance with, laws or regulations to a government or law enforcement agency, a person with authority over the employee, or to another employee with the authority to investigate, discover, or correct the violation or noncompliance. The key provisions of Labor Code 1102.5  include:

• Protection for Disclosures: Employees are protected when they disclose information that they reasonably believe violates state or federal law, or noncompliance with local, state, or federal rules or regulations.
• Internal and External Reports: The law covers disclosures made not only to external entities like government or law enforcement agencies but also to people within the organization who have the power to investigate and address the misconduct.
• Retaliation Prohibited: Employers are prohibited from retaliating against employees for making these disclosures. Retaliation can include firing, demoting, suspending, or any other adverse employment action.
• Broad Coverage: The protection applies regardless of whether disclosing the information is part of the employee’s job duties. Employees are protected even if the employer merely perceives them as whistleblowers.
• Reasonable Belief: Employees need not prove an actual violation of law to be protected; it suffices if the disclosure is based on a reasonable belief that a violation has occurred.
• Remedies for Violation: Employees subjected to retaliation can seek remedies, including reinstatement, back pay, damages for emotional distress, and attorneys’ fees—the latter of which puts significant pressure on employers in any dispute.

In 2022, the California Supreme Court, in the case of Lawson v. PPG Architectural Finishes, Inc., made an important clarification regarding the standard of proof required for retaliation claims under Labor Code Section 1102.5. Essentially, workers are protected for acting as whistleblowers, regardless of whether they have actually reported any legal violations or just have reasonably based suspicions of such violations. Key points from this clarification include:

• Protection for Perceived Whistleblowers: An employee doesn’t need to have made an actual report to be protected under this statute. If an employer perceives an employee as a whistleblower and takes adverse action based on that perception, the employee may have a claim for wrongful termination in violation of public policy.
• No Need to Prove an Actual Violation: For an employee to be protected as a whistleblower, they only need to have a reasonable basis for suspecting illegal activity. They do not need to prove that their employer was actually violating a law.
• Evidentiary Standard for Retaliation Claims: The Supreme Court specified that to prove retaliation, plaintiffs must show that their whistleblowing was a contributing factor to any adverse employment action against them, using a “preponderance of the evidence” standard. This means that it must be more likely than not that their protected activity contributed to the adverse action.
• Burden Shifts to the Employer: Once the employee has shown that their whistleblowing activity was a contributing factor to the adverse action, the burden shifts to the employer. The employer must then prove, with “clear and convincing evidence,” that they had legitimate, independent reasons for the adverse action, unrelated to the employee’s protected activity.

This ruling emphasizes the protection of employees who speak out against unlawful practices within their organizations, encouraging a culture of compliance and accountability. It underscores the importance of employers having solid, non-retaliatory reasons for taking adverse actions against employees, especially those who have engaged in protected whistleblowing activities. If you recently reported activity that you thought was unlawful, and your employer retaliated against you in any way, please contact us immediately.