The Employers Guide to California Retaliation Laws

February 3, 2017

Retaliation charges and lawsuits have steadily increased over the years, and thus it is important for employers to understand what type of employee activity is “protected” under California law and how they are limited from taking action against employees for engaging in such activity. This article summarizes several of California’s retaliation statutes and provides tips to employers to avoid retaliation claims:

Discrimination-Related Retaliation:

The Department of Fair Employment and Housing (DFEH) and the Equal Employment Opportunity Commission (EEOC) both reported that the most common charge received in 2015 was retaliation; 14,043 retaliation charges were filed with the DFEH (21.1% of all charges filed with the DFEH) and 39,757 retaliation charges were filed with the EEOC (44.5% of all charges filed with the EEOC).

California Government Code section 12940(h) prohibits employers from taking “adverse employment actions” against employees because they have complained about or opposed conduct which is forbidden by California’s anti-discrimination statute (i.e. sex, national origin or age discrimination). Employees need to only “reasonably” and in “good faith” believe the conduct is unlawful.

The California Supreme Court has taken a broad view of the term “adverse employment actions”; it held employees are protected from “the entire spectrum of employment actions that are reasonably likely to adversely and materially affect an employee’s job performance or opportunity in his or her career.” Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1053. Thus “adverse employment actions” can include the obvious, such as terminations and demotions, but also negative disciplinary write-ups or performance reviews, harassment, change in duties, decrease or increase in hours or workload, removal from meetings, and/or denial of pay raises, training or promotional opportunities.

Whistleblower Retaliation:

California Labor Code Section 1102.5 is California’s very broad whistleblower retaliation statute. From its passing in 1984, Section 1102.5 prohibited an employer from retaliating against an employee who 1) disclosed information to a governmental or law enforcement agency that the employer is violating a statute, rule, or regulation; or 2) refused to participate in an employer activity that would result in a violation of a statute, rule, or regulation.

A few years ago, the statute was amended to include whistleblower protection to those who complained: 1) internally to “a person with authority over the employee” or to another employee with the authority to “investigate discover, or correct” the reported violation; or 2) externally to any “public body conducting an investigation, hearing, or inquiry.” Additionally, the statute only requires an employee to have a “reasonable belief” that the employer’s conduct is unlawful.

In 2015, a California appellate court expanded the protections even further and held in Cardenas v. Fanaian (2015) 240 Cal.App.4th 1167 that Section 1102.5 also protects employees who disclose information about unlawful activity at work related to a personal matter. In this case, an employee told the police that she believed someone at work stole her wedding ring. Her accusation turned out to be untrue and the employer terminated her. She sued her employer, and prevailed. The jury awarded her over a $100,000 in damages.

Workers’ Compensation Retaliation:

California Labor Code 132a is the anti-retaliation provision in the workers’ compensation statute. The statute prohibits an employer from terminating or “in any manner discriminate[ing]” against an employee because he or she has a workplace injury, filed or is thinking of filing a workers’ compensation claim, or has received a workers’ compensation reward. The employer bears the burden of showing that the employee was not singled out or treated differently because of the workplace injury or workers’ compensation claim. An employee who files a Section 132a claim can receive a penalty of up to $10,000, reinstatement, and reimbursement for lost wages and work benefits.

More California Retaliation Statutes:

Equal Pay Act: Labor Code Section 1197.5 prohibits employers from retaliating against employees who exercise their rights under California’s Equal Pay Act, including disclosing wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under California’s Equal Pay Act.
Paid Sick Leave: Labor Code Section 246.5(c) prohibits an employer from denying an employee the right to use accrued sick days, attempting to take or taking an adverse employment action against an employee for using paid sick days, or filing a complaint or opposing any policy or practice prohibited by this law. The law creates a rebuttable presumption of unlawful retaliation when the employer takes an adverse action against the employee within 30 days of engaging in the protected activity.
Filing a Wage & Hour Claim: Labor Code Section 98.6 prohibits employers from retaliating, discriminating, or taking adverse actions against an employee for activities such as exercising any right under the Labor Code, filing or participating in a complaint with the California’s Division of Labor Standards Enforcement (DLSE), whistleblowing, providing an employer notice of a claim under the Private Attorneys General Act (PAGA), participating in lawsuit against the employer, or making an oral or written complaint for unpaid wages.

Tips for Employer to Avoid Retaliation Claims:

On August 29, 2016, the EEOC issued its final Enforcement Guidance on Retaliation and Related Issues. While the Guidance addresses retaliation under the federal anti-discrimination statutes, it provides employers with useful tips to avoid claims under all the retaliation statutes:

Have anti-retaliation policies in your Employee Handbook,
Train your managers/supervisors on the anti-retaliation laws and policies,
Ensure you have a written complaint policy and procedure in place so that employees can report their beliefs about unlawful conduct as well as about retaliation,
While reporting beliefs about unlawful conduct does not give the employee a “free pass”, employers should consider the following when taking an adverse action against that employee who engaged in protected activity:
Timing: Assess the timing between the protected activity and the adverse employment action as close temporal proximity will be viewed as suspicious
Consistency: Ensure you are not treating the employee who engaged in the protected activity more harshly than other employees
Basis for Action: Identify the legitimate, non-retaliatory reasons for taking the adverse action, and have it supported by policy and other relevant documentation
Periodically follow-up with the employee in a private setting to ask about and/or discuss any ongoing concerns.