By Casey L. Helton, Esq.
Labor Code § 1102.5(b) prevents an employer from retaliating against an employee for disclosing information that the employee reasonably believes is a violation of or noncompliance with a law or regulation to a person with authority over the employee. This section applies to employees who report perceived workplace violations externally to applicable government agencies, (i.e., the Department of Industrial Regulations or OSHA), as well as employees who raise complaints internally by directly disclosing to their employer practices that the employee reasonably believes are illegal or not compliant with applicable regulations. Thus, employers and supervisors operating within the construction industry should routinely consider whether employees have engaged in activity protected by the employee whistleblower statute.
Previously, some ambiguity existed regarding the exact meaning of the term “disclosure” in this context. Courts previously interpreted this term to necessitate the sharing of new or previously unknown information. Thus, in situations where an employee reported an alleged violation of law directly to their employer, if the conduct was already known to the employer, such complaints were not clearly protected from retaliation under § 1102.5(b). However, a recent California Supreme Court opinion clarified this ambiguity explaining that the statute encompasses all reported violations even where the employer is already aware of the alleged wrongful conduct. In that particular case, the employee, a nightclub bartender, complained to the club’s owner after the club failed to pay her wages for three shifts she had previously worked. In response to her complaints regarding such non-payment, the owner threatened to report her to immigration services and subsequently terminated her. The employee later filed a complaint with the California Department of Labor Standards Enforcement, who found that the owner had engaged in unlawful retaliation. However, both the trial and appellate court initially held that that these circumstances could not support a finding of retaliation, reasoning that an employee who makes complaints about their supervisor to that same supervisor are not protected, because in such context, the employer, having been the perpetrator, is clearly aware of the alleged violation.
On review, the California Supreme Court reversed holding that although, the employer was clearly aware of the reported violation, (deliberate non-payment of wages), the employee’s complaints were still protected under the whistleblower statute. In reaching this conclusion the court considered the plain meaning of the word in the context of the underlying legislative intent of the statute. Specifically, the court ultimately reasoned that although the term “disclose” often refers to sharing new information, the word is also commonly used to describe situations where an individual shares information of which they have special access, regardless of whether the recipient may already be aware of such information.
The court also considered that following a narrower interpretation of the word “disclose” could have the effect of only providing protection to the first employee to raise concerns regarding an alleged violation and would therefore dissuade subsequent reporters of ongoing violations. This requirement would also further discourage employees from voicing concerns about potential violations that are widely known within the workplace. The court ultimately held that such implications are counteractive to the California’s strong public policy which favors protecting employee whistleblowers. Ultimately, the court, adopted an expansive interpretation of the word “disclose” to include both known and unknown reasonably perceived violations.
While this development certainly expands protections for employees, not every workplace disagreement or employee complaint necessarily constitutes a protected activity under the whistleblower statute. Remember, § 1102.5(b) still requires that the employee making the complaint reasonably believe that they are complaining about or reporting a violation of the law or applicable regulation. For example, general criticisms about the efficacy of an employer practice or policy do not trigger § 1102.5(b)’s anti-retaliation protections.
In summary, employers should craft and implement clear protocols regarding documenting and responding to employee complaints. Such policies are especially critical in the construction landscape where safety regulations are constantly evolving over the life of any given project. Additionally, companies operating within the construction realm typically primarily employe a large non-exempt workforce. It is therefore critical for such employers to have clear channels for addressing employee concerns regarding issues such as payment of over-time wages and mandatory meal and rest breaks.
Finally, employers should proceed cautiously, and talk to an attorney before taking any adverse employment actions (i.e. demotion, or termination) against an employee who has reported, or threatened to report any alleged workplace violations.
Casey L. Helton, Esq., is an associate attorney with the law firm of Dunn DeSantis Walt & Kendrick. Casey practices labor and employment law, primarily representing employers in discrimination and wrongful termination litigation as well as wage and hour disputes.
Dunn DeSantis Walt & Kendrick provides a broad spectrum of legal services to businesses of all sizes, from small, local start-ups and non-profits to large, national companies. DDWK’s real estate development and construction practice includes representing all segments of the development and construction industries on both private and public projects.
You can find additional information and resources related to helping business owners and their businesses on the DDWK website.