Timing is Everything for California Whistleblowers
If you are an employee who has reported something in the workplace that you thought broke some kind of law, this article is for you.
The Role of the “Same Decision” Defense in California Whistleblower Cases
Whistleblower cases in California differ from discrimination cases in several important ways. Among other things, Section 1102.6 of the Whistleblower Protection Act (found in the California Labor Code) provides that where an employee proves by a preponderance of the evidence that discriminatory activity was a “contributing factor” with respect to a discriminatory act, the burden then shifts to the employer. To meet that burden, the employer must prove by “clear and convincing evidence” that the action would have occurred for other legitimate, independent reasons even if the employee had not engaged in protected activity. The statute reads as follows:
In a civil action or administrative proceeding brought pursuant to Section 1102.5, once it has been demonstrated by a preponderance of the evidence that an activity proscribed by Section 1102.5 was a contributing factor in the alleged prohibited action against the employee, the employer shall have the burden of proof to demonstrate by clear and convincing evidence that the alleged action would have occurred for legitimate, independent reasons even if the employee had not engaged in activities protected by Section 1102.5.
This framework, and particularly the requirement that an employer present “clear and convincing evidence,” can be useful for employees in situation in which a number of factors contributed to the decision to discipline or terminate. Furthermore, in Lawson v. PPG Architectural Finishes, Inc. (2022) 12 Cal.5th 703, the California Supreme Court concluded that Section 1102.6 provides the “applicable substantive standards and burdens of proof for both parties in a section 1102.5 retaliation case” and is a “complete set of instructions” for adjudicating whistleblower retaliation claims.
The language in Section 1102.6 does not appear in California’s Fair Employment and Housing Act (FEHA), where many of the state’s antidiscrimination laws are found. For this reason, the FEHA treats cases in which there are multiple reasons for an adverse employment action differently. In Harris v. City of Santa Monica (2013) 56 Cal.4th 203, the California Supreme Court held that in FEHA claims, where an employer proves that it that it would have made the same decision even absent any unlawful discrimination, the employee is still entitled to declaratory or injunctive relief, as well as attorneys fees. However, to trigger this situation, an employee must show that discrimination was a “substantial factor” in the underlying decision.
In other words, the first step of the analysis under FEHA discrimination claims is more challenging for the employee to meet because the employee must show what discrimination was a “substantial factor” as opposed to just “a contributing factor”. However, once the employee meets that burden, in the second step of the FEHA analysis he or she can prevail even if there were other reasons for the discriminatory act.
A recent decision of the First District of the California Court of Appeal clarifies the ramifications of the difference in language between the FEHA and the Whistleblower Protection Act. In Ververka v. Department of Veterans Affairs (May 22, 2024), A163571, the plaintiff tried to import the Harris framework into a whistleblower case. The court rejected that effort, holding that the “same decision” defense is a complete defense in cases brought under the Whistleblower Protection Act.
If you have questions about your rights at work-either a whistleblower or under California’s Fair Employment and Housing Act, please feel free to contact the attorneys at Hunter Pyle Law and to make use of our free and confidential intake process. We can be reached at (510) 444-4400 or at inquire@hunterpylelaw.com.
California Whistleblower Protections Cover Complaints that Employers Already Know About
On May 22, 2023, the California Supreme Court issued an important decision clarifying that employers violate the law if they terminate or retaliate against employees who complain about violations that were already known to the employer. In People ex rel. Garcia-Brower v. Kolla’s (S269456), the employee worked for a nightclub in Orange County. She complained that she had not been paid for her three previous work shifts. The employer then threatened to report her to immigration authorities and fired her.
The plaintiff then filed a complaint with the Division of Labor Standards Enforcement (DLSE) of the State of California’s Department of Industrial Relations. The DLSE investigated and prosecuted her complaint. Unfortunately, the trial court held that Labor Code section 1102.5, California’s whistleblower protection law, did not apply because the employee had complained to her employer rather than to a government agency. The court of appeal affirmed on different grounds, holding that in order to be protected under section 1102.5, an employee’s complaint must report something that the employer was not already aware of. (more…)
California Supreme Court Rules that Whistleblower Protections Apply to Employees Who Disclose Illegal Conduct Already Known to an Employer
In 1984, the Legislature enacted California Labor Code section 1102.5 in order to protect whistleblowers from retaliation against their employers. The law was amended in 2003 and again in 2013, to add protections afforded to employees. In 2013, specifically, the Legislature amended section 1102.5(b), so that an employee’s disclosure “to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or non-compliance” was deemed protected activity. On May 22, 2023, the California Supreme Court addressed whether reporting a violation that is already known to an employer or agency constitutes a protected disclosure under Labor Code section 1102.5(b) in People ex. Rel. Lilia Garcia-Brower v. Kolla’s, Inc., S269456. (more…)
New Attorneys Fees Provision Should Apply Retroactively to Pending Whistleblower Cases
California’s whistleblower law, Labor Code section 1102.5, helps discourage employers from retaliating against employees who report unlawful activity in the workplace. It’s an important law because it safeguards other rights and privileges afforded to employees.
Last fall, Governor Gavin Newsom signed into law AB 1947, an amendment to Section 1102.5. The new Labor Code Section 1102.5(j) authorizes a court to award reasonable attorneys fees to a plaintiff who brings a successful action under Section 1102.5. This is an important addition to the law because it will help future whistleblowers find legal representation for their claims.
However, practitioners who filed whistleblower claims before Section 1102.5(j) became effective on January 1, 2021 might find themselves wondering if the new attorneys fee provision applies retroactively to their pending claims…
Retroactivity of Statutes, Generally
“As a general rule, statutes do not operate retroactively unless the Legislature plainly intended them to do so.” (Scott v. City of San Diego (2019) 38 Cal.App.5th 228, 236.) However, a statute that merely clarifies, rather than changes, existing law is properly applied to transactions predating its enactment. This is because “it is merely a statement of what the law has always been.” (Id.)
In determining whether a statute “clarifies” or “changes” existing law, courts consider the following factors: (1) What actions courts have previously taken in interpreting the law; (2) Whether the law was interpreted by the high or intermediate courts (once the Supreme Court “finally and definitively” interprets a statute, an amendment can’t merely clarify existing law; it necessarily changes it); (3) the Legislature’s intent as illustrated by legislative history; and (4) how quickly the Legislature acts.
As applied to AB 1947, these factors weigh against finding that Labor Code 1102.5(j) should apply retroactively. This is because the legislative history clearly shows that the purpose of AB 1947 was to change existing law:
Under existing law, workers who prevail in lawsuits alleging that their employer violated these protections … will still be stuck paying their own attorneys’ fees, unless they can find another way to convince the judge to make the employer pay those fees. This bill would alter that dynamic by authorizing courts to award reasonable attorneys’ fees to a worker that prevails on a claim of retaliation for blowing the whistle on legal misconduct at their workplace.
(California Committee Report, 2019 California Assembly Bill No. 1947, California 2019-2020 Regular Session.)
One might assume, then, that practitioners with pending whistleblower actions are flat out of luck when it comes to recovering fees for a successful claim. However, despair not…
Attorneys Fees Provisions as a Special Category
California courts treat fee statutes as a special category within the prospective/retrospective application doctrine. (See USS-Posco Industries v. Case (2016) 244 Cal.App.4th 197, 221 (“In sum, the California Supreme Court and many, many Courts of Appeal have treated legislation affecting the recovery of costs, including attorney fees, as addressing a “procedural” matter that is “prospective” in character and thus not at odds with the general presumption against retroactivity.”).)
Under this line of cases, fee statutes are procedural rules that apply to actions pending at the time of enactment.
Thus, a plaintiff who brought a whistleblower action prior to January 1, 2021 should still be awarded attorneys fees pursuant to Section 1102.5(j), so long as the case was still pending on that enactment date.
Takeaway
Although it is too early to know how courts will apply 1102.5 (j), there is a strong legal argument to be made that its attorney fee provision should apply retroactively to cases filed prior to its effective date that are still pending.
This is a good thing for California workers since, as the Legislature noted in its committee reports, it will help a greater number of whistleblowing employees find legal representation. Section 1102.5(j) should also, therefore, aid enforcement of California’s labor laws and support justice in the workplace.
California Resident Managers’ Workplace Rights
Live-in resident managers face a unique challenge: their bosses are often also their landlords.
California law requires an individual to live on the premises if a building has sixteen (16) or more units. Cal. Code Regs. tit. 25, § 42. These individuals are often referred to as resident managers. Resident managers carry out various job duties, including but not limited to, collecting rent, assisting tenants, facilitating repairs, and attending to emergencies in the building.
This makes resident managers especially vulnerable to workplace violations such as wage theft and retaliation. In most instances, when resident managers are fired, their landlord can evict them immediately.
This is because housing protections that apply to tenants do not usually apply to resident managers, who are often considered to be “licensees”.
Employers therefore often use the threat of losing one’s housing to keep resident managers from complaining about mistreatment at work. However, the law protects resident managers from this sort of retaliation.
Resident managers should be aware of the rights they have to be (1) paid correctly; and (2) protected from retaliation if they complain that they are not.
Resident Managers Should Keep Track Of All Hours Worked.
In the case of resident managers who are required to reside on the employment premises, “hours worked” means “that time spent carrying out assigned duties shall be counted as hours worked”.
Wage Order 5 § (2)(k). For resident managers, “hours worked” does not include on-call time, but only “time spent carrying out assigned duties” for resident managers. Isner v. Falkerberg, 160 Cal. App. 4th 1393, 1399 (2008).
Although resident managers generally bear the burden of proving the hours they work, the burden shifts when the employer has failed to keep accurate records. Under California law, where the employer has failed to keep statutorily mandated time records, the burden then shifts to the employee for a best faith estimate of the hours they worked. Hernandez v. Mendoza, 199 Cal. App. 3d 721, 727 (1988).
Resident managers should keep track of all time they spend working, even if their employer does not require them to complete time records.
Employers Must Pay Resident Managers For All Hours Worked.
A resident manager must be paid at least the minimum wage for all hours worked. See Lab. Code § 1197; Wage Order 5 § 4. Resident managers may not enter into an agreement to work for less than the minimum wage. Lab. Code § 1194(a).
Unique Wage And Hour Laws Apply To Live-In Resident Managers In California.
There are two common ways employers pay resident managers: (1) using the value of the resident manager’s rent to pay their wages (also called a “rent credit”); or (2) offering the resident manager reduced rent. In each case, the employer must always provide the resident manager a paystub.
However, employers often do not follow the law to pay resident managers correctly.
When an Employer Can Use the Value of Rent to Pay a Resident Manager’s Wages (Also Known as a “Rent Credit” or “Lodging Credit”).
An employer may only use the value of rent to pay a resident manager’s wages if:
- The resident manager does not pay any rent; and
- There is a voluntary written agreement between the employer and the resident manager regarding the rent credit; and
- The living accommodations are available to the employee for full-time occupancy, must be adequate, decent, and sanitary according to usual and customary standards and the resident manager shall not be required to share a bed; and
- The rent credit used to pay a resident manager’s earned wages is not more than the following (which changes every year):
Wage Order 5 § 10(C).
For example, a resident manager who works 40 regular hours in a week in San Francisco is entitled to be paid at least the minimum wage (currently $15.59 per hour) for the work performed. Therefore, in this example, the resident manager must be paid a total of $623.60 for that week (40 hours x $15.59).
However, if the resident manager is provided with a room that is occupied alone, the employer may only credit a maximum of $61.13 in rental value to the resident manager’s wages. Therefore, the employer must still pay the resident manager $562.47 in wages for their work ($623.60 – $61.13).
Legal Requirements in Order to Charge a Resident Manager Rent
Employers may charge a resident manager rent if:
- There is a voluntary written agreement between the employer and the resident manager regarding the amount of rent; and
- The rent does not exceed 2/3 of the fair market rental value of the apartment; and
- The employer does not use any value of rent to pay a resident manager’s wages.
See Lab. Code § 1182.8.
For example, if an employer charges a resident manager 2/3 of the fair market rental value, then the employer must pay the resident manager all of their wages, in full, in a separate paycheck. That means the employer cannot apply any “rent credit” to pay the resident manager’s wages, as discussed above.
- Moreover, in the event there is no written agreement, and as a condition of employment, the resident manager must live at the place of employment or occupy quarters owned or under the control of the employer, then the employer may not charge a resident manager rent in excess of the values listed in the lodging table above.
See Wage Order 5 § 10(E).
Employers May Not Retaliate Against Resident Managers Who Speak Out About Their Legal Rights
The law protects resident managers from retaliation if they complain that they are owed wages or about other workplace violations. See Lab. Code §§ 98.6, 1102.5(b). Employers are liable for penalties of $10,000 per employee per violation, and other damages, for retaliatory conduct.
If you have been subject to wage theft or retaliation in the workplace, please feel free to call the experienced workers rights attorneys at Hunter Pyle Law, and to make use of our free and confidential initial intake process. We can be reached at (510) 444-4400, or at inquire@hunterpylelaw.com.
Public Employee Whistleblowers Have Important Rights in California under Labor Code section 1102.5
Public employees who are terminated after they blow the whistle on illegal conduct often have the opportunity to appeal their termination to some type of board or officer. That entity in turn usually has the authority to either rule on their claims or to make a recommendation to a civil service agency regarding whether the termination should be upheld or not. These proceedings hold out the promise of swift justice-a hearing and a decision by an impartial fact-finder in a relatively short amount of time. In practice, however, they rarely result in any type of reinstatement or fairness.
Public employees who make use of these appeals often find that when they try to bring their claims in court, where they have a better chance of getting a fair shake, the public entity argues that they are barred (“precluded”) from suing because they already had a hearing as part of the appeal process. In other words, public entities try to block public employees from suing just because the public employees make use of the civil service appeal process (which, as described above, is rarely fair or impartial).
That was the case in Bahra v. City of San Bernardino (9th Cir. 2019) Case No. 18-55789. Mr. Bahra, the plaintiff, worked as a social services practitioner for San Bernardino County in the Department of Children and Family Services (“CFS”). He discovered that a particular foster home was abusing children, but that CFS’s database did not reflect that history because of a series or database mistakes. He then reported these errors to his manager. (more…)
PAGA, Individual Claims, Public Entities, and Section 1102.5 Whistleblower Claims
On September 8, 2019, the Court of Appeal for the Second Appellate District issued an important decision in the case of Hawkins v. City of Los Angeles (Case Nos. B279719, B282416). That decision casts light on the following questions: (1) Whether PAGA claims can be brought on behalf of an individual, as opposed to a group of aggrieved employees; (2) Whether PAGA claims can be brought against public entities; and (3) Whether attorneys’ fees are recoverable under Labor Code section 1102.5.
Whistleblower Rights under California Labor Code Section 1102.5
A whistleblower is someone who calls attention to unlawful behavior or activities in the workplace. California Labor Code section 1102.5 is one of the strongest whistleblower protection laws in the land. The recent decision of Ross v. County of Riverside (2019) 2019 WL 2537342 further strengthens that law. by clarifying that employees need only believe that some illegal activity is happening when they report it. They do not have to expressly state that the activity violates the law in order to be protected. (more…)
An Employer May be Held Liable for Whistleblower Retaliation When an Employee Reports Concerns about Compliance with Tax Laws
On January 23, 2019, the First Appellate District held that an employer may be liable for whistleblower retaliation when an employee reports concerns about compliance with tax laws. Siri v. Sutter Home Winery, Inc., 1st Appellate Dist. Case No. A141335 (filed Jan. 23, 2019). Plaintiff Says Siri, an accountant for Defendant Sutter Home Winery, Inc. doing business as Trinchero Family Estates (TFE), believed her employer was failing to comply with certain California sales and use tax laws. She consulted with the California State Board of Equalization, who confirmed some of Ms. Siri’s suspicions. Ms. Siri informed her direct supervisor, top management, and the company’s general counsel that TFE was not paying and had not paid use taxes it owed. TFE authorized some payments, but declined to let Ms. Siri pay for others. (more…)