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SB 496 expands whistleblower protection

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An employee informs his boss that the company's new and wildly successful marketing campaign violates a local ordinance -- is he safe from being fired? In 2013, California statutes would not have prohibited retaliation against this whistleblowing employee, but starting in 2014, state law changed to further protect employees who disclose their employer's unlawful activity.

Approved by Governor Jerry Brown, SB 496 amends California’s whistleblower statute, Labor Code § 1102.5., to expand whistleblower retaliation protection.

Section 1102.5 generally prohibits employers from preventing employees from disclosing the employers’ unlawful activity and prohibits retaliation against employees who make such disclosures or refuse to participate in such unlawful activity. Section 1102.5 “reflects the broad public policy interest in encouraging whistleblowers, who may without fear of retaliation report concerns regarding an employer’s illegal conduct.” (Collier v. Superior Court (1991) 228 Cal.App.3d 1117, 1123). SB 496 expands the protection in several significant ways.

Previously, section 1102.5 protected disclosures of an employer’s violations of or noncompliance with state or federal rules or regulations. However, prior to Jan. 1, 2014, an employee that disclosed a violation of a local rule or regulation would not have been protected under the statute. Section 1102.5 now affords employees protection for disclosure of violations or noncompliance with local, state and federal rules or regulations.

Protection was also previously only afforded for disclosures made to government or law enforcement agencies. Section 1102.5 now protects disclosures made by an employee to his or her supervisor, manager or other person with authority over the employee, or to another employee that has authority to investigate, discover or correct the violation or noncompliance. Similarly, an employee who provides information to or testifies before a public body conducting an investigation is also protected from retaliation.

The expanded law prohibits employers from retaliating against an employee not only for making actual disclosures, but also where the employer believes the employee has disclosed or may disclose information. Thus, employees are protected from retaliation even if they have not yet made any actual disclosures or have any intent to do so.

SB 496 clarifies that the employer may be liable under section 1102.5 for its own conduct and also for the conduct of anyone acting on its behalf.

In light of the expanded scope of whistleblower protection under California law, employers should take measures to educate their supervisors, managers and employees about the new provisions. In particular, employees should be made aware that they can report violations to their superiors without fear of retaliation. Also, it is important that employers recognize that they may now be liable for those acting on their behalf, such as supervisors they have hired, who retaliate based solely on the belief that an employee has disclosed or might disclose unlawful activity; an employee’s actual disclosure is no longer necessary.

-Wright is a partner with Kirby Noonan Lance & Hoge, LLP and specializes in business litigation and employment law.

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