Whistleblower Protections

I. Introduction

California and federal laws protect employees who report—or “blow the whistle”—on their employers. This is commonly known as “whistleblowing.” These laws reflect a broad public policy interest in empowering employees to report an employer’s illegal acts without fear of termination, demotion, pay reduction, or other forms of employer retaliation. These protections are meant to protect employees who refuse to participate in illegal activities, and are also meant to prohibit employers from enforcing policies that prevent employees from disclosing violations of laws to authorities.

II. The Activities Protected Under California’s Whistleblower Protection Law

The California Whistleblower Protection Act is the primary statute that protects California employees who act as whistleblowers. The statute is codified as California Labor Code § 1102.5. California Labor Code § 1102.5 contains three primary protections.

The first primary protection that California Labor Code § 1102.5 provides is that an employer may not make, adopt, or enforce any rule “preventing an employee from disclosing information to a government or law enforcement agency, to a person with authority over the employee, or to another employee who has authority to investigate…”[1] This primary protection extends to all employees that have “reasonable cause to believe that the information discloses a violation of [or noncompliance with a] state or federal statute…”[2]

The second primary protection that California Labor Code § 1102.5 provides is that an employer may not “retaliate against an employee for disclosing information…to a government or law enforcement agency, to a person with authority over the employee, or to another employee who has authority to investigate…if the employee has reasonable cause to believe that the information discloses a violation of or noncompliance with a local, state, or federal rule or regulation…”[3]

The third primary protection that California Labor Code § 1102.5 provides is that an employer may not “retaliate against an employee for refusing to participate in an activity that would result in a violation of [or noncompliance with] a [local,] state, or federal rule or regulation.”[4]

III. Employees Covered Under California’s Whistleblower Protection Law

California’s whistleblower protections cover employees of private employers, and also specifically include 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.”[5] However, elected officials are not protected by the whistleblower protection laws.[6]

IV. Activities Protected by the Whistleblower Protection Laws

California Labor Code § 1102.5(b) states that:

A. California’s Whistleblower Protection Laws Apply, Even When an Employer Has Not Actually Violated the Law

An employee is covered by California’s whistleblower protection laws when an employee believes that the employer violated the law (regardless of whether the employer actually violated the law),[8] as long as the employee has “reasonable cause” to believe they are disclosing a violation of the law. Similarly, employees do not need to know exactly which law is being broken to be protected from retaliation for reporting a problem—“reasonable” suspicion that something is against the law is enough.[9] An employee engages in protected activity under § 1102.5 when they disclose “reasonably based suspicions” of illegal activity.[10] Because the focus of whistleblower law is what the employee reasonably believed and disclosed—not whether the law was actually broken—courts often do not even have to look at whether the employer was actually doing something wrong.[11]

B. California’s Whistleblower Protection Laws Apply, Even When an Employer Already Knows About the Violation of the Law

An employee is covered by California’s whistleblower protection laws when an employee reports a violation of the law, even when the employee is not the first to report the violation, and even when the employer is already aware of the violation.[12] Even if an employee thinks the company is already aware of the violation, the employee can report a violation of law and still be protected from any retaliation that results.[13] “[T]here is no indication that an employee must…have reasonable cause to believe that he or she is the first to report the alleged violation.”[14]

C. California’s Whistleblower Protection Laws Apply When an Employer Believes That the Employee Disclosed or May Disclose Information, Regardless of Whether the Employee Actually Disclosed or May Disclose Information

An employee is covered by California’s whistleblower protection laws when an employer believes that the employee disclosed or may disclose information, regardless of whether the employee actually disclosed or may disclose information.[15] In other words, even if the employee did not actually disclose information, an employer is prohibited from retaliating against the employee if the employer believes that the employee did disclose information.

D. California’s Whistleblower Protection Laws Apply Even When Disclosing Information Is Part of an Employee’s Job Duties

California Labor Code § 1102.5 provides that a whistleblower’s disclosures are protected “regardless of whether disclosing the information is part of the employee’s job duties.”[16] An employee’s report of illegal activity can constitute protected conduct under Labor Code § 1102.5(b) even if the employee was simply performing their regular job responsibilities.[17]

E. California Whistleblower Protection Laws Apply Even When an Employer Is Not Intentionally Violating the Law

California Labor Code § 1102.5 is not limited to cases of intentional employer misconduct.[18] An employer may still be liable even if they made concerted and reasonable efforts to avoid violating the law.[19] Thus, an employee who reports their employer’s wrongdoing does not have to believe that their employer is intentionally breaking the law.[20] Under Section 1102.5, an employee may prevail even if the employer had good reason to believe the activity it directed the plaintiff to engage in was lawful, as long as a court later determines the activity was actually unlawful.[21]

V. Exceptions to California Whistleblower Protections

Labor Code § 1102.5 does not protect disclosures that do not pertain to violations of state or federal statutes or violations of local, state, or federal rules or regulations.[22] Complaints about internal personnel matters or personal grievances without alleging legal violations do not qualify for protection.[23]

VI. Adverse Employment Actions

The California Whistleblower Act protects employees from the employer’s retaliation or “adverse employment actions.”[24] Under the statute, an “adverse employment action” is any action taken against an employee by their employer that “materially affects the terms, conditions, or privileges of employment.”[25]

“The term ‘adverse employment acts’ encompasses not only ultimate employment actions, such as hiring, firing, demotion or failure to promote, but also the entire spectrum of employment actions that are reasonably likely to adversely and materially affect an employee's job performance or opportunity for career advancement.”[27]

However, “[m]inor or relatively trivial adverse actions or conduct by employers or fellow employees that, from an objective perspective, are reasonably likely to do no more than anger or upset an employee cannot properly be viewed as materially affecting the terms, conditions, or privileges of employment and are not actionable...”[28] To “materially affect” a person’s employment, an employer’s action has to be more than just a rude comment or series of minor social slights.[29] Minor or trivial adverse actions that are reasonably likely to do no more than anger or upset an employee do not meet this threshold under California whistleblower laws.[30] Even so, courts give employees the benefit of the doubt when they claim their working conditions were materially affected.[31] Further, the California Supreme Court indicates that a series of retaliatory acts by the employer that may not rise to the level of “materially affecting” a person’s employment individually can, in combination, meet this threshold. “[T]here is no requirement that an employer's retaliatory acts constitute one swift blow, rather than a series of subtle, yet damaging, injuries.”[32]

The following examples are types of adverse employment actions. These examples are not exhaustive; in other words, there are many other examples of types of adverse employment actions – these are just a few.

1. Termination

A wrongful termination, in relation to California’s whistleblower law, is when an employer fires an employee for whistleblowing. For example, a court found that a manager who was fired after reporting his employer’s illegal activities related to government contracts was wrongfully terminated.[33] Another case, involving protected conduct, shows that a reasonable juror could find that an employer wrongfully terminated a nurse for refusing to perform cardiac stress testing that failed to comply with the legal safeguards in place.[34]

2. Constructive Discharge

“Constructive discharge occurs when the employer’s conduct effectively forces an employee to resign.”[35] If an employer creates a working environment that essentially forces an employee to quit, this may be prohibited if done in retaliation to the employee’s whistleblowing.[36]

The employer’s conduct that forces the employee to resign must be “due to actions and conditions so intolerable or aggravated at the time of his [or her] resignation that a reasonable person in the employee’s position would have resigned.”[38] “[A]n employee cannot simply “quit and sue,” claiming he or she was constructively discharged. The conditions giving rise to the resignation must be sufficiently extraordinary and egregious to overcome the normal motivation of a competent, diligent, and reasonable employee to remain on the job to earn a livelihood and to serve his or her employer. The proper focus is on whether the resignation was coerced, not whether it was simply one rational option for the employee.”[39]

3. Impaired Advancement

“Where an employer reacts to a discrimination complaint by eliminating a reasonable potential for promotion or materially delaying the promotion, there is a legally tenable basis for a jury to find the employer substantially and materially adversely affected the terms and conditions of the plaintiff.”[40] Actions that impair an employee’s job performance or prospects for advancement are considered adverse.[41]

4. Unfavorable Employee Review

“Although written criticisms alone are inadequate to support a retaliation claim, where the employer wrongfully uses the negative evaluation to substantially and materially change the terms and conditions of employment, this conduct is actionable.”[42]

5. Harassment or Hostile Work Environment

When an employee exposes wrongdoing, they often are vulnerable to adverse actions such as intimidation, threats, or workplace harassment intended to punish the whistleblower for their actions.[43] California whistleblower protections ensure that such retaliatory actions are illegal, allowing employees to report misconduct without fear of reprisal.

6. Reporting or Threatening to Report an Employee to the Immigration Authorities.

California law has codified by statute that if an employer reports—or threatens to report—an employee’s suspected citizenship or immigration status to a government body because the employee exercised their rights under California’s whistleblower laws, it is an adverse action.[44] This protection includes an employer threatening to report an employee's, former employee's, or prospective employee's suspected citizenship or immigration status, or the suspected citizenship or immigration status of a family member of the employee, former employee, or prospective employee.”[45]

VII. Employee’s Potential Recovery Against Employer

California whistleblower employees can file a retaliation claim with the Labor Commissioner or can otherwise file a lawsuit in civil court. The statute of limitations for a civil lawsuit in court—or filing deadline—is three years.[46] In addition to a longer filing deadline, an employee pursuing a civil lawsuit for employer retaliation can seek a wider range of damages than what is typically available through the Labor Commissioner. In order to establish a whistleblower claim:

The protected activity doesn’t have to be the only cause of the employer’s adverse action. “Section 1102.6 requires whistleblower plaintiffs to show that retaliation was a ‘contributing factor’ in their termination, demotion, or other adverse action. This means plaintiffs may satisfy their burden of proving unlawful retaliation even when other, legitimate factors also contributed to the adverse action.[48]

An employee who prevails in a whistleblower case against their employer under California Labor Code § 1102.5 may be entitled to recover:

• Job reinstatement with backpay and benefits.[49]
• Actual damages.[50]
• A civil penalty paid by the employer of $10,000 per employee for each violation.[51]
• Punitive damages.[52]
• Attorney’s fees.[53]

VIII. Conclusion

An employee who reports their employer’s unlawful actions to government authorities is commonly known as a “whistleblower.” Several laws—both state and federal—focus on protecting whistleblower rights. An employee’s right to these whistleblower protections depends on the specifics of each case.