California Labor Code 1102.5 Overview & Example Scenarios
Legally reviewed by: Jessica Anvar Stotz, JD, MBA
California Labor Code 1102.5 pertains to employers and their ability (or lack thereof) to stop employees from sharing certain information about violations or noncompliance of the law with their superiors or government agencies. It also creates a civil penalty for corporations or limited liability companies who fail to comply with Labor Code 1102.5.
California Labor Code 1102.5 Explained in 90 Seconds
The first three sections of California Labor Code 1102.5 outline three things that employers cannot do with respect to employees sharing information about their employer violating the law. The first section says that employers cannot create policies or rules that keep employees from reporting these violations to superiors, government agencies, or investigators under the same employer. The same is true for policies or rules that would prevent an employee from testifying regarding the violations. An employee only needs reasonable cause to believe a violation is taking place to be protected.
The second section states that an employer cannot retaliate against an employee for disclosing the information relevant to Labor Code 1102.5 to the listed parties.
The third section says that employers cannot retaliate against an employee for refusing to engage in conduct that would violate a state or federal statute, or violate some other regulation imposed by a local, state, or the federal government. An employer may also not retaliate against an employee who has done any of the protected actions at previous places of employment. The same is true for the family members of the employee.
If an employer which is a corporation or a limited liability company violates California Labor Code 1102.5, they are subject to a $10,000 civil penalty for each violation. Finally, if an employee brings an action against their employer for a violation under this Labor Code, they will receive reasonable attorney’s fees.
Labor Code 1102.5 According to the California Government
(a) An employer, or any person acting on behalf of the employer, shall not make, adopt, or enforce any rule, regulation, or policy preventing an employee from disclosing information to a government or law enforcement agency, to a person with authority over the employee, or to another employee who has authority to investigate, discover, or correct the violation or noncompliance, or from providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee’s job duties.
(b) An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information, or because the employer believes that the employee disclosed or may disclose information, to a government or law enforcement agency, to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance, or for providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee’s job duties.
(c) An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation.
(d) An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for having exercised their rights under subdivision (a), (b), or (c) in any former employment.
(e) A report made by an employee of a government agency to their employer is a disclosure of information to a government or law enforcement agency pursuant to subdivisions (a) and (b).
(f) In addition to other penalties, an employer that is a corporation or limited liability company is liable for a civil penalty not exceeding ten thousand dollars ($10,000) for each violation of this section.
(g) This section does not apply to rules, regulations, or policies that implement, or to actions by employers against employees who violate, the confidentiality of the lawyer-client privilege of Article 3 (commencing with Section 950) of, or the physician-patient privilege of Article 6 (commencing with Section 990) of, Chapter 4 of Division 8 of the Evidence Code, or trade secret information.
(h) An employer, or a person acting on behalf of the employer, shall not retaliate against an employee because the employee is a family member of a person who has, or is perceived to have, engaged in any acts protected by this section.
(i) For purposes of this section, “employer” or “a person acting on behalf includes, but is not limited to, a client employer as defined in paragraph (1) of subdivision (a) of Section 2810.3 and an employer listed in subdivision (b) of Section 6400.
(j) The court is authorized to award reasonable attorney’s fees to a plaintiff who brings a successful action for a violation of these provisions.
Employee Rights under California Labor Code 1102.5
What activities are protected under Section 1102.5?
Employees are protected by California Labor Code 1102.5 when they report violations of the law committed by their employer. These violations could be anything from a failure to follow safety codes to wage theft. Any time an employee reports a violation to a superior or a government agency, they are protected from retaliation from their employer by Labor Code 1102.5.
Different Ways Employees Can Make Reports
Employees can discuss the violations they want to report with several different groups and be protected. The first group is a superior or supervisor of the employee; the Code calls this a “person with authority over the employee.” The second is a government agency, like the Occupational Safety Hazard Administration (OSHA). The third is another employee who is authorized to investigate and correct violations within the company. Any of these people are protected under California Labor Code 1102.5.
Protection From Retaliation for Reporting Violations
Employers are not permitted to retaliate against employees who report violations according to Labor Code 1102.5. Retaliation can take many forms but is generally something negative that the employer imposes onto the employee. It can be a demotion, outright termination, or movement to a less favorable or otherwise lesser position. Retaliation might also not be any particular action, instead manifesting as general harassment or chilling of the relationship between employer and employee. Any of these would be considered retaliation and would result in a civil penalty of $10,000 for the employer engaging in that behavior.
Potential Remedies Available to Employees who Experience Retaliation
An employee who experiences retaliation from their employer after reporting a violation of the law has several remedies available to them depending on what kind of retaliation they suffered. If they were fired, the employee might be rehired. They might also receive backpay for the time they were improperly not working, which is also the case if demoted to a lesser position. Otherwise, the employee can sue their employer and attempt to seek relief through the legal system. Civil penalties may also be assessed against the employer, though these do not always go to the employee themselves.
Employer Responsibilities Under California Labor Code 1102.5
What Constitutes Retaliation Under Section 1102.5?
As mentioned already, retaliation can take many different forms. Under Labor Code 1102.5 specifically, the retaliation would be in response to an employee reporting the employer’s violation of the law. An employee who is fired, demoted, or harassed in any way for reporting a violation would be being retaliated against.
Importance of Fostering a Safe Environment for Employees to Report Wrongdoing
Employees should feel safe to report wrongdoing by their employer. A workplace that fosters good relationships between the employee and employer will generally function better than one that does not, and trusting employees to report violations of the law could result in the violation being addressed more accurately and less detrimentally for all parties involved.
Best Practices to Avoid Retaliation Claims
To avoid employee retaliation claims, employers can take several steps. Having clear reporting procedures in place ensures that employees feel safe and confident in reporting violations, potentially making it less likely that they will seek external remedies like lawsuits. Companies should also have anti-retaliation policies to build trust with their employees and provide a remedy for them. Finally, in the event that a retaliation claim is raised, fair investigations are crucial for maintaining a good employee-employer relationship.
Example Scenarios
Example 1: Falsifying Safety Records
- Scenario: An employee at a manufacturing plant observes their supervisor pressuring workers to ignore safety protocols and then falsifying safety records to avoid fines from regulatory agencies.
- Illegal Activity: Falsifying safety records is a violation of state and federal regulations.
- How Section 1102.5 Protects: The employee can report the falsification to the Occupational Safety and Health Administration (OSHA) or the California Division of Occupational Safety and Health (Cal/OSHA) without fear of retaliation from their employer. Section 1102.5 prohibits the employer from retaliating against the employee for reporting safety violations.
Example 2: Environmental Violations in a Restaurant
- Scenario: A line cook at a restaurant notices improper disposal of hazardous waste like used cooking oil, potentially harming the environment.
- Illegal Activity: Improper hazardous waste disposal violates environmental regulations.
- How Section 1102.5 Protects: The employee can report the issue to the Department of Toxic Substances Control (DTSC) anonymously or with their identity protected. Section 1102.5 ensures the employer cannot retaliate for reporting the environmental violation.
Example 3: Wage Theft by a Construction Company
- Scenario: A construction worker witnesses the company classifying employees as independent contractors to avoid paying overtime and other benefits.
- Illegal Activity: Misclassifying employees as independent contractors to avoid wage and hour obligations can be illegal.
- How Section 1102.5 Protects: The employee can file a complaint with the Division of Labor Standards Enforcement (DLSE) about the wage theft. Section 1102.5 protects the employee from retaliation for reporting potential wage and hour violations.
Important Note: These are just a few examples, and Section 1102.5 covers a wide range of illegal activities. If an employee witnesses something suspicious, they should consult with an employment attorney to understand their rights and reporting options.
What Isn’t Protected by Labor Code 1102.5
Some activities are not covered by California Labor Code 1102.5. Generally speaking, if no violation of local, state, or federal law is taking place, Labor Code 1102.5 will not apply. Things like personal disputes between employees and superiors or other employees are not covered, for example. Violations of internal employer regulations also would not be covered. Lastly, an employee making malicious and faulty reports would not be protected from action taken by the employer in response, like demotion or other penalty.
Resources for Employers and Employees
- California Labor Code 1102.5
- California Department of Industrial Relations
- California Department of Industrial Relations – Division of Labor Standards Enforcement
- California Department of Industrial Relations – Division of Labor Standards: Laws that Prohibit Retaliation and Discrimination
- Occupational Safety and Health Administration – File a Complaint
Connect with an Attorney
Labor codes like California Labor Code 1102.5 play vital roles in protecting employees from being retaliated against when they properly report workplace violations of the law. Unfortunately, many employers still retaliate against their employees when the employees engage in behavior approved by California law. If you are an employee who reported a violation of the law to your employer but were retaliated against, you may be eligible to receive compensation.
LawLinq can help connect you to a talented and experienced employment attorney who can help you parse your case and bring a claim against your employer. Let us fight for your rights as an employee and get you the compensation you deserve. Contact us by calling (855) 997-2588 today or fill out our online form for a free case evaluation today!