California Whistleblower Laws: Public and Private Employee Protection

California whistleblower laws are intended to prevent employers from retaliating against employees who report suspected violations of the law. The big guns in this area are: the general whistleblower protection statute in the California Labor Code and the California Whistleblower Protection Act that protects government employees. Both provide important protections to employees who “blow the whistle” on wrongdoing.

The journey from employee to whistleblower begins with a perceived violation of the law. The employee sees, hears, reads or witnesses something that leads her to believe that something is fishy in Denmark, that a violation of the law has occurred. The next step is when she tells authorities what happened – she becomes a whistleblower.

Unfortunately, whistleblowers have not always been treated like concerned citizens. People inside and outside the workplace with personal interests at stake often work to silence a whistleblower or discredit her.

California lawmakers enacted whistleblower laws to provide different types of whistleblower protection. The four principal California state whistleblower laws are:

• 1.1. Labor Code 1102.5 – provides general whistleblower protection;
• 1.2. Labor Code 98.6 – protects against retaliation for wage/hour violation reports;
• 1.3. Labor Code 6310 – protects against occupational health and safety reports; and
• 1.4. Government Code 8547 – protects public employee whistleblowers.

The state’s general law prohibiting retaliation against whistleblowers is found in Labor Code 1102.5. This statute prohibits an employer from retaliating against an employee for providing information if he reasonably believes that a law or regulation has been violated.

The employee can pass the information on to a government or law enforcement agency or to someone in his workplace who has the authority to investigate or correct the violation. He is also protected if he reveals it to any public body conducting an investigation.

If the whistleblower reasonably believes that a law was violated, she is protected under the terms of California Labor Code 1102.5. That means that an employer who retaliates against her is violating the law, even if the employee was wrong about her suspicion. As long as she has a reasonable basis for her suspicion, she can report it and will be protected.

In fact, the law protects an employee even if she never reports the suspected violation. That is, it is a violation of the law to fire an employee because the employer believes that she reported a violation whether she did so or not. She is also protected from job discrimination from having been a whistleblower at a prior job or having a member of her family who is a whistleblower.

Take the case of a John Doe working as a researcher in the office of a state senator. He finds evidence that suggests the senator is taking kickbacks from wealthy drug companies in exchange for opposing a certain bill. John considers reporting this, and he writes a draft memo to his supervisor. However, he changes his mind and decides against reporting.

Unfortunately for John, someone finds the memo and turns it in to the senator, who was not taking kickbacks at all and angrily fires John. Although there was no wrongdoing and John never reported wrongdoing, he is protected. The senator engaged in illegal whistleblower retaliation by firing John.

The California Labor Code sets out a variety of employee rights and benefits that cover minimum wage, overtime and work break laws. An employee has the right under these statutes to report any violations of the laws to the Labor Commissioner. But, of course, an employer might not like it if she does.

Protecting employees who report employer Labor Code violations is the specific purpose of California Labor Code 98.6. This whistleblower protection statute forbids any type of retaliatory action against those who file wage or hour violation complaints to the Labor Commissioner. These include complaints about underpaying employees; not giving employees overtime; misclassifying employees as exempt when they are not; and failing to provide the required work breaks in California, including meal breaks, rest breaks and lactation breaks.

Take the case of a Jane Doe who works as a food prep person in a restaurant. Jane is pressured by restaurant management to stay in the restaurant during rest breaks just in case there is a sudden rush of customers, which is a violation of labor laws.

Jane Doe files a complaint with the Labor Commission, but the employer denies that this happens. Various other employees step up and say Jane misunderstood the policy, so the Labor Commissioner rules against Jane. She quits her job and applies for a job at another restaurant, but when they call her previous manager, the entire story of the complaint comes out. The owner of the new restaurant refuses to hire her because of it.

The owner of the second restaurant’s behavior is impermissible under Labor Code 98.6. Jane is suffering retaliation for filing a wage and hour complaint with the Labor Commissioner.

This whistleblower statute is very like Labor Code 98.6, except it protects reports of violations under Occupational Safety and Health (OSHA) statutes. This law prohibits whistleblower retaliation against employees who report violations of occupational health and safety rules.

Under the OSHA laws, employees can report these violations to the California Division of Occupational Safety and Health. This California whistleblower protection statute prohibits any retaliation or discrimination against the person reporting violations or any member of his family.

State employees in California have their very own whistleblower protection statute in Government Code 8547.1. This provides whistleblower protection for state public employees. It is known as the “California Whistleblower Protection Act.”

When enacting this law, the legislature declared its intentions as follows:

“… [E]mployees should be free to report waste, fraud, abuse of authority, violation of law, or threat to the public without fear of retribution. The [California] Legislature further finds and declares that public servants best serve the citizenry when they can be candid and honest without reservation in conducting the people’s business.”

This law is different from laws protecting whistleblowers in the private sector in several ways. The most important difference is in its scope. Many more types of disclosures are covered, not just legal violations.

While private-sector whistleblower laws only protect employees who report suspected violations of law, the California Whistleblower Protection Act covers state employees who report any of a number of things. Protected activity includes reporting:

• violations of any types of laws that control conduct, like statutes, regulations, executive orders or court orders;
• any condition that might threaten the health or safety of employees or the public; or
• any economically wasteful government activity or government activity that involves gross misconduct, incompetency or inefficiency.

These disclosures are protected if made to any state agency, including the State Auditor’s Office or the Commission on Judicial Performance. They are also protected if made elsewhere. In fact, any good faith communication is protected.

Take the example of a Jane Doe who works as a budget analyst at the University of California. She notices that a colleague in her section allows expenditures to pass through that she feels are not appropriate, even if not exactly illegal. She begins to keep track of them, and after six months, she passes on a summary to the State Auditor’s Office. An investigation follows, and the colleague is fired.

Jan Doe’s supervisor was a relative of the fired colleague, and he grills her about her summary. He then tells her there is no future for her in the office and suggests she look for another job. She can bring an action for retaliation under the public-sector California Whistleblower Protection Act.

The California False Claims Act authorizes the state attorney general to sue anyone who makes a false statement or uses a false statement to obtain money or property from the state or to avoid paying money due the state. These acts are basically fraud or embezzlement. The state can recover treble damages and civil penalties if it prevails.

The “qui tam” provision in the False Claims Act allows an employee to sue their employer on behalf of the state government if the employer has committed fraud or embezzlement with respect to government funds. This happens most commonly with employers who work under government contracts. If the suit proves successful, the employee is entitled to a share of the damages.

There is whistleblower protection attached to this type of suit. If an employer retaliates against the employee for bringing a qui tam suit, the employee can sue for qui tam whistleblower retaliation.

The Fair Employment and Housing Act, a California law prohibiting workplace harassment and employment discrimination, prohibits employers from retaliating against employees who oppose or report violations of that law.

The Sarbanes-Oxley Act of 2002 was enacted to protect investors from fraudulent accounting by public companies. Employees who report suspected securities fraud under this act also have protection from whistleblower retaliation.

For an employee who has been retaliated against for acting as a whistleblower in California, her best option is to file a whistleblower retaliation lawsuit in superior court. However, if she is filing under LC 1102.5, she is required to first file an administrative complaint with the California Labor and Workplace Development Agency using an online form. The Labor and Workplace Development Agency must decide whether to investigate the complaint within 65 days. If they decide not to do so, the employee is free to file her own suit.

For violations of the whistleblower protections in LC 98.6 or 6310, the employee may go straight to superior court. If she wants to, she can first file a complaint with the California Labor Commissioner.

A state government employee suing under the California Whistleblower Protection Act must first file a complaint with the California State Personnel Board. If it is rejected, she can file a lawsuit.

Damages for whistleblower retaliation cases vary depending on the case. Court damages can include:

• back wages and benefits;
• compensation for physical pain, mental suffering, emotional distress, grief, humiliation and similar distress; and
• punitive damages to punish an employer if he is found guilty of oppression, fraud or malice.

Damages from state boards can include:

• an order to rehire the employee in his previous position;
• lost wages with interest;
• restoration of lost service credit;
• expungement of an adverse employment record;
• compensatory damages; and/or
• reasonable attorney’s fees.