Understanding the New Framework for Whistleblower Retaliation in California
Changes to the Labor Code enhance protection for employees who speak out against improprieties.
A recent legislative enactment which goes into effect on January 1, 2018 dramatically alters the framework for protecting whistleblowers in California. The new provisions were enacted via Senate Bill 306, which was signed into law by Governor Brown on October 3, 2017.
California law prohibits employers from taking any adverse action against employees or job applicants because they engage in protected conduct, including raising complaints about job safety. Currently, the state Labor Code provides that employees who allege that their employers have retaliated against them may file a complaint with the Labor Commissioner’s Office (also known as the Department of Labor Standards Enforcement) within six months of the retaliatory action. See Cal. Lab. Code §98.7(a). The Labor Commissioner is then supposed to conduct an investigation into the retaliation. The Commissioner cannot begin the investigation until the employee makes a formal complaint.
If after investigation, the Labor Commissioner determines that a violation has occurred and an employee has been retaliated against, the Office notifies the employer and directs them to cease and desist, and take actions to remedy the violation. Cal. Lab. Code §98.7(c). However, this notification is not a final order. If the employer ignores the Commissioner’s order, the Commissioner must bring a court action to seek injunctive relief. Id.
Section 98.7 has already been amended once, in 2014, by Assembly Bill 263. That law made it possible for employees to file lawsuits alleging retaliation without first filing and exhausting their administrative remedies. Prior to this law, the California Supreme Court had ruled that employees needed to exhaust all their administrative remedies before they could file a civil complaint for retaliation. See Campbell v. Regents of Univ. of Calif., 35 Cal. 4th 311, 321 (2005)
Senate Bill 306 was introduced in February 2017 and passed with a 25-14 Senate vote and a 45-29 Assembly vote. When the law goes into effect in January, it will create three big differences in how California retaliation claims are handled. See Cal. Lab. Code §§98.7 and 1102.61.
First, the Labor Commissioner’s Office will be able to begin an investigation into suspected retaliation even before an employee complaint is filed. Cal. Lab. Code §98.7(a)(2).
Second, the Labor Commissioner will have the authority to issue citations and penalize employers. Penalties may include rehiring workers or paying back lost wages, among others. Cal. Lab. Code §98.74.
Third, employees have a lowered burden of proof to seek injunctive relief to protect their jobs while a civil retaliation action is pending. Cal. Lab. Code §§1102.61 and 1102.62(c).
Once the Commissioner has issued a citation, the onus is on the employer to respond promptly. The employer must formally request review within 30 days to have a hearing before the Labor Commissioner. If they do not do so, the citation becomes final. After the Commissioner’s Office has reviewed the citation and issued an order, the employer must file a petition for writ of mandate within 45 days to get a court hearing. If the employer takes no action, the order becomes final. Penalties for failure to comply with a final order are $100/per day of non-compliance, for a maximum of up to $20,000 per violation. Additionally, if the Labor Commissioner is a prevailing party in an enforcement action, the agency is entitled to reasonable attorneys’ fees. See Cal. Lab. Code §98.7(c)(1).
Lastly, the law allows an employee bringing a civil action for a retaliation claim to seek injunctive relief from the court to keep their job. The court “shall order” injunctive relief if the employee can show reasonable cause that they were adversely affected because they raised a claim of retaliation or asserted their rights. This is a significant deviation from the general standard for injunctive relief and shifts the burden in favor of employees. The new law continues the trend in California to enhance protections for whistleblowers.
- New retaliation law (codified in Labor Code sections 98.7, 1102.61, and 1102.62) goes into effect January 1, 2018.
- The revised text of the new sections is available at the California Legislature website (https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB306)
- Employers must respond promptly to communications from the Labor Commissioner’s Office or risk an administrative decision becoming final.
- Penalties for a willful failure to comply with a final order are $100/per day of non-compliance, for a maximum of up to $20,000 per violation. (§98.74(3)(e)).
Whistleblowing is protected activity, and these new provisions demonstrate a legislative commitment to provide effective remedies for whistleblowers who are retaliated against.
Pooja S. Nair is a litigation attorney with TroyGould PC in Los Angeles. She has represented clients in the health care, life sciences, and banking industries in state and federal court, and has handled delicate employment compliance issues and internal investigations.