Many states protect “whistleblowers” who report illegal conduct by employers, in an effort to encourage employees to speak up. California, like New York and Florida, shields whistleblowers from retaliation under several state laws. These statutes also allow employees to sue an employer and recover significant damages as a reward for providing information on unlawful activities. Employers and employees should consult an attorney for guidance on when these provisions may apply.
California Labor Laws
California’s Labor Code prohibits employers from retaliating or discriminating against employees who engage in certain activities including the following:
- Filing or threatening to file a claim or complaint with the Labor Commissioner or exercising (on behalf of oneself or other employees) their rights provided under the Labor Code or Orders of the Industrial Welfare Commission (Section 98.6)
- Revealing information about the employer’s working conditions (Section 232.5)
- Disclosing information to a government agency or law enforcement where an employee reasonably believes that the information discloses a violation of local, state or federal law or refusing to participate in an activity that would result in a violation of such a law (Section 1102.5)
- Complaining about safety or health conditions or practices (Section 6310) or refusing to work in an environment they believe is unsafe or unlawful (Section 6311)
- Testifying or complaining about non-compliance with the Hazardous Substances Information and Training Act (Section 6399.7)
- Participating in legal off-work activities (Sections 96(k) and 98.6)
- Filing a claim for workers’ compensation after being injured in the scope of employment or testifying before an appeals board (Section 132(a))
California Fair Employment and Housing Laws
The California Fair Employment and Housing Act (FEHA) also protects employees from discrimination and retaliation if they file a complaint with a superior or personnel in Human Resources. FEHA applies when an employee reports workplace harassment, employment discrimination or failure to grant family leave or reasonable religious or disability accommodations. Prohibited retaliation includes any adverse action taken against the employee including termination of employment, demotion, reducing pay, giving less desirable work assignments or hours or any pattern of behavior that materially and adversely affects the terms, conditions and privileges of employment. Importantly, in order to prevail in a lawsuit, an employee must show that their protected activities were a “substantial motivating reason” for the retaliation of the employer. FEHA also protects employees from discrimination based on protected categories like race or religion, similarly to the Title VII of the Civil Rights Act of 1964, but adds many additional protected categories, including marital status, sexual orientation, gender identity, gender expression and military or veteran status.
California False Claims Act
California’s primary whistleblower law is known as the False Claims Act. It allows employees to file or assist in a whistleblower (or qui tam) lawsuit against their employer on behalf of the government if they know that the employer defrauded a state or local government agency. The FCA also protects whistleblowers from retaliation by the employer. Anyone can sue, but a present or former state employee cannot sue unless they first exhausted existing internal procedures for reporting and seeking recovery of the false claims and the state failed to act on the information within a reasonable period of time.
Successful whistleblowers may receive 15% to 50% of the damages recovered by the government depending on the circumstances. Further, if they suffered retaliation they can obtain reinstatement, two times their back pay plus interest, recovery of their court costs and attorney’s fees and other damages.
Federal Laws
Several federal laws also protect whistleblowers, allowing them to sue and preventing them from retaliation. Examples include the Whistleblower Protection, Sarbanes-Oxley Act, False Claims Act and other laws and Presidential executive orders.
California and New York Laws Compared
Generally, California has stronger employment laws than other states, including New York. However, with respect to whistleblower protection and anti-retaliation laws, New York has been gaining ground. Beginning in 2022, New York expanded its law to apply to current and former employees and independent contractors. Further, it covers complaints and concerns raised by employees “whether or not within the scope of the employee’s job duties.” Employees also need only have a reasonable belief that there was a violation of a law, rule or regulation rather than demonstrate an actual violation of the law. New York’s law now more closely mirrors California law, although California still gives employees more rights than New York.
Whistleblower laws can result in significant liability for employers. It is critical for employers and employees to understand their rights and responsibilities under a wide range of federal, state and local laws. If you believe your rights have been violated, contact our experienced employment attorneys to discuss how we can help.
