It’s well known that California is an employee-friendly state. The California Supreme Court has recently affirmed this truth in a decision that makes it easier for employees to prevail on employee-whistleblower claims.
Background
California law prohibits employers from retaliating against employees who disclose or report an employer’s non-compliance—or alleged non-compliance—with federal, state, or local law. This law is codified in California’s Labor Code and is designed to encourage those with knowledge about an employer’s affairs (i.e., employees) to speak openly about a business’s legal deviations, or perceived legal deviations, even if those allegations turn out to be inaccurate.
Whistleblower Lawsuits: No Consensus As to the Burden of Proof
Until recently, California courts were divided on the burden of proof that a plaintiff (an employee or former employee) had to meet in order to prevail on a whistleblower claim in California.
Some courts (like judges) favored business interests and set the bar fairly high; other courts favored employees’ interests and set the bar fairly low. In the first camp were courts that required a plaintiff to provide concrete evidence proving that an employer’s professed reason(s) for an employee’s adverse action was demonstrably false (in legal jargon, “pretextual”). In the latter camp were courts that simply required a plaintiff to show that an employee’s whistleblowing conduct was just one of many contributing factors leading up to the employee’s termination, demotion, discipline, or other adverse action.
The California Supreme Court’s Ruling
The California Supreme Court has settled this debate once and for all, issuing a definite ruling in favor of employees. Noting that California’s law was designed to “encourage[] earlier and more frequent reporting of wrongdoing,” the Court ruled that employees asserting a whistleblower claim need not prove that their employer’s professed reason (or explanation) for an adverse action was pretextual. Rather, the Court said, employees need only to show their whistleblowing activity was a contributing factor to their termination, demotion, or similar action.
Where Does This Leave Employers?
Simply put, the California Supreme Court’s decision puts the onus on employers to ensure that they do not act in a manner that subjects them to a potential whistleblower claim. In this way, timing will be critical, and employers must act cautiously and prudently in administrating or coordinating any termination, demotion, or disciplinary action after an employee has alleged even a single workplace violation. Employers must now, more than ever, engage in a calculated analysis of potential risks and benefits of taking action now versus at some point in the future—or none at all.
If you need assistance to further understand how this impacts your business, please contact us at info@mnklawyers.com.
This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between MNK Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.
