Do whistleblower protections apply when an employee complains based on a mistaken view of the law? A recent Court of Appeal decision held that Labor Code section 1102.5(b) does not require the employee to be correct, only that they had reasonable cause to believe they were reporting a statutory violation.
Background & Decision
In Contreras v. Green Thumb Produce, Inc., an employee believed he was being paid less than coworkers doing similar work. He started researching his rights and contacted the Labor Commissioner’s Office. There, he spoke with a deputy labor commissioner who told him the company might be violating the law and directed him to Equal Pay Act materials on the Labor Commissioner’s website, including a Frequently Asked Questions document. He reviewed the FAQ, concluded the employer was violating California law, and brought the materials to work intending to raise the issue with human resources and request a raise. After he presented the FAQ and pressed the issue, he was sent home and ultimately terminated.
Contreras sued, claiming whistleblower retaliation under section 1102.5(b). A jury found for the employee, but the trial court later granted judgment notwithstanding the verdict on the whistleblower claim, reasoning that the employee’s Equal Pay Act interpretation was legally incorrect and therefore could not support 1102.5 protection. The Court of Appeal reversed. It held there was substantial evidence supporting the jury’s finding that the employee had reasonable cause to believe he was disclosing a statutory violation, regardless of his incorrect understanding of the Equal Pay Act.
As the Court explained, “The employee could be mistaken about his or her understanding of (1) the law, (2) the facts, or (3) the law and the facts.”
Legal Takeaways
Section 1102.5(b) focuses on whether the employee has reasonable cause to believe they are reporting a violation, not whether an actual violation has occurred. The Court emphasized that reasonableness is generally a factual inquiry for the jury, and it rejected the idea that a lay employee’s incorrect legal interpretation is always unreasonable. Here, the Court concluded that the record contained substantial evidence to sustain the jury’s reasonable cause finding given the deputy labor commissioner’s indication of a potential violation and ambiguity in the FAQ language.
What this Means for California Employers
- Do not assume a complaint is unprotected just because the employee cited the wrong statute or misunderstood the law.
- Treat complaints about pay as a potentially protected activity, even when the employee is wrong about the law, the facts, or both.
- Slow down when the employee references an agency resource or guidance. Make sure your process, documentation, and communications are consistent and professional.
- Watch timing. An employment termination soon after a complaint can create risk of a retaliation or wrongful termination claim, even if you believe there are legitimate performance reasons.
If you have questions about handling whistleblower retaliation risk or wage complaints, please contact the blog author or your regular CDF attorney.
Thank you to our law clerk, Victor Weber, for his research and contributions to this article.
