On September 15, 2021, a divided panel of the Ninth Circuit Court of Appeals decided…
WHISTLE BLOWERS – A SHRILL SONG
From the Archives
The author presently represents an oral surgeon in Southern California who was recently sued by a 17-month employee. The whistle-blower plaintiff, a high-school graduate, alleges that the surgeon failed to comply with accepted medical practices in his administration of general anesthesia and various surgical procedures, thus substituting her judgment as a lay-person for that of a licensed physician/surgeon in relation to matters requiring substantive medical knowledge and expertise. When the surgeon expressed impatience with the assistant’s unsolicited medical advice as he was completing the suturing of a reviving, but still-unconscious patient, the plaintiff became enraged and later quit. She is suing for constructive wrongful termination and retaliation, among other alleged violations, claiming $13.9 million in damages. Fortunately, a properly-drafted arbitration policy allowed a successful petition to compel arbitration, sparing the employer the ordeal of a jury trial.
A whistle-blower claim arises when an employee is discharged or suffers other adverse employment action in retaliation for his/her disclosure of information of (or refusal to participate in) unlawful acts.
California’s primary whistle-blower protection statute, Labor Code, section 1102.5, prohibits retaliation against an employee who discloses information to those with authority to investigate or correct the employer’s alleged violation or noncompliance, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or noncompliance with a local, state, or federal rule or regulation.
As the underscored portion of the immediately preceding sentence suggests, a claim of retaliation can be based on information an employee mistakenly believes is indicative of illegality, if the belief was a reasonable one.
To be actionable, the employee must have a reasonable belief that the employer’s policies violated federal, state or local statutes, rules or regulations. It is the content of the disclosure, not the motivation for the disclosure, that determines whether a disclosure is protected.
“Adverse employment action” is that which materially affects the terms and conditions of employment. Applying this standard, one court held that it was a triable issue whether a school principal’s transfer to a small year-round school from a much larger, diverse school with broader administrative challenges “constituted sufficient adverse employment action” to qualify for whistle-blower protection under section 1102.5(b) Patten v. Grant Joint Union High School Dist. (2005) 134 CA4th 1378, 1387
The law reflects a “broad public policy interest in encouraging workplace whistleblowers to report unlawful acts without fearing retaliation.” Diego v. Pilgrim United Church of Christ(2014) 231 CA4th 913, 922 In the Diego case, the court held a terminated employee was protected under the statute even where employer was mistaken in believing employee made a complaint to licensing authorities.
Under some circumstances, a whistleblower may be entitled to use confidential company documents to expose employer wrongdoing. In one 2017 case, the court adopted a qualified public policy exception to confidentiality agreements to protect whistleblowers who appropriate company documents to substantiate their allegations.
Under section 1102.5, the employee’s precipitating disclosure of information must indicate a violation of local, state or federal law, rule or regulation. An indication of improper conduct is not enough to invoke the statute’s protections. In Patten v. Grant Joint Union High School Dist. (2005) 134 CA4th 1378, 1387, a school principal’s report to the school district regarding “inappropriate conduct” by two teachers and related safety concerns were held not protected.
The statute protects employees who disclose reasonably-based suspicions of illegal activity or noncompliance with rules or regulations either to a government or law enforcement agency or directly to another employee of the employer, so long as the employee to whom the report is made has authority over the disclosing employee or has authority to investigate, discover or correct the violation or alleged noncompliance.
Section 1102.5 protects employees who provide information to, or testify before, any public body conducting an investigation, hearing or inquiry, regarding reasonable suspicions of illegal activity or noncompliance with rules or regulations. It also protects employees who report unlawful activity by third parties (e.g., contractors and fellow employees).
If a whistleblower has a reasonable suspicion that a violation of a constitutional, statutory or regulatory provision has occurred, his/her motivation for reporting that conduct is irrelevant to whether the disclosure is a protected activity.
The Bottom Line
Based on the above, employers are well-advised to bring special precautions to the termination or other discipline of employees who have recently complained of working conditions.
Jay G. Putnam is a Petaluma labor lawyer who has specialized in representing California employers for over 37 years. His practice is devoted to preventing lawsuits against his clients, without sacrificing workplace authority or management prerogatives. He has a remarkable record of success: Not one employer-client acting on his advice has been sued in over 37 years.
For those clients who have arrived with pending lawsuits, Putnam has established an excellent track record of success as well.
You are invited to visit Mr. Putnam’s website, where you will find in-depth discussion of the most common mistakes made by California employers, and how to avoid them. http://www.jaygputnam.com/newsletter/
Heads Up! Is not intended as a substitute for legal advice and its content is provided for discussion purposes only. Any suggestions or recommendations must be assessed by competent legal counsel to be sure the unique requirements of each workplace are properly considered.