Preventing Unlawful Workplace Retaliation in California

January 10, 2019
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Scope—This article is an overview of the legal issues and practical challenges employers face from employee claims of workplace retaliation under California state statutes and common-law theories. It addresses the range of adverse employment actions giving rise to retaliation claims, as well as measures employers should take to minimize the risk of liability from allegations of retaliatory conduct.OverviewThis article is a general overview of retaliation claims in California, with emphasis on behaviors, remedies or other pitfalls specific to California law. For federal EEOC information on retaliation, see, "Facts about Retaliation".

The article emphasizes the importance of preventing retaliation claims through best practices and compliance programs designed to protect employees from retaliatory conduct and to provide appropriate mechanisms for internal reporting.

It includes discussion of the following matters:

  • HR's role in preventing retaliation claims.
  • Protections under the Fair Employment and Housing Act.
  • Whistle-blower protections.
  • Protections based on exercise of legal rights or status.
  • Importance of timing certain communications to avoid the appearance of retaliatory intent.

Background

Retaliation in the workplace may be defined as a form of unlawful discrimination that occurs when an employer, employment agency or labor organization takes an adverse action against an employee, applicant or other covered individual because he or she engaged in a protected activity, including filing a charge of discrimination with a fair employment practices agency or participating in an investigation of alleged workplace misconduct. Recent court cases and new laws have put retaliation on the forefront of employment law and corporate ethics risk. 

In California, preventing retaliation claims requires an understanding of the specific state laws that prohibit retaliation and protect whistle-blowers from adverse employment action. Retaliation claims may be brought under specific California statutes, or they may be brought as claims for wrongful termination or demotion in violation of public policy.

Business Case

California laws protect employees from termination and other forms of retaliation, which are meted out in violation of public policy or in response to the employee engaging in a protected activity. The California Labor Code further specifies various types of protected activities for which an employer may not retaliate against an employee for participating.

Unique to California, the state's Labor Code Private Attorneys General Act of 2004 (PAGA) allows a private citizen to pursue civil penalties on behalf of the state's Labor and Workforce Development Agency (LWDA), provided the formal notice and waiting procedures of the law are followed. PAGA gives a private citizen the right to pursue fines that would normally be available only to the state of California. Any provision of the California Labor Code that provides for a civil penalty to be assessed and collected by the LWDA or any of its departments, divisions, commissions, boards, agencies or employees for a violation of this code may be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees. For violations of statutes that do not specify a penalty, PAGA provides for penalties of $100 per employee per pay period for each initial violation and $200 per employee per pay period for each subsequent violation. Plaintiffs in PAGA actions are entitled to 25 percent of the penalties awarded. The remaining 75 percent goes to the LWDA.

Retaliation claims have become the most frequent and potentially the costliest workplace disputes. Retaliation claims lodged with the Fair Employment and Housing Council (FEHC) have increased steadily, surpassing all other types of discrimination claims filed with the agency. In fact, in 2015, 44.5 percent of all EEOC claims filed alleged retaliation, which is now the most common type of discrimination charge filed nationally.

Employees who suffer adverse employment actions for engaging in protected activity or who are terminated in violation of a public policy may be entitled to damages, including back pay, front pay, lost benefits, emotional distress damages, attorney fees and costs, and potentially other recovery as well.

HR's Role

Human resource professionals must empower employees to report complaints and to work with managers to ensure that issues are properly handled—with a zero tolerance policy on retaliation. HR professionals represent the employer's first line of defense against charges and complaints of retaliation. Conducting a thorough and fair investigation of internal complaints—with an emphasis on identifying the protected status of the complainant—is a key component of an anti-retaliation policy or program.

HR professionals can help deter retaliation by incorporating best practices that will help employers prevent or reduce the likelihood of a retaliation charge or lawsuit. To prevent retaliation, employers should take the following steps:

  • Create an anti-retaliation policy. The revised regulations of the California Fair Employment and Housing Act (FEHA) now require employers with five or more employees (including employees located outside of California) to develop a harassment, discrimination and retaliation prevention policy. Employers may also want to create a separate whistle-blower policy. The policy should make clear that the organization does not tolerate retaliatory conduct based on an employee's opposition to job discrimination or harassment, participation in discrimination complaint proceedings, or other protected conduct. See Sample California Discrimination & Harassment Prevention & Complaint Procedures Policy and Sample Whistleblower Policy.
  • Communicate with employees about the process for reporting alleged retaliation. An organization's anti-retaliation policy should state to whom employees report retaliation. For example, employers might encourage employees to go to anyone in their chain of command or to their HR office. Though employees should be encouraged to report all complaints to the employer, they may not be required to do so. Under the National Labor Relations Act (NLRA), employees have the right to bring their complaints to outside groups or individuals. 
  • Train managers and employees. It is common for individuals accused of discrimination to directly or indirectly lash out at the accuser or witnesses. Managers should be properly trained on acceptable and unacceptable responses to protected activity under state anti-discrimination laws. In California, an employer having five or more employees must provide training and education regarding sexual harassment to all employees within six months of hire or transfer and every two years thereafter. The training and education must include practical examples aimed at instructing supervisors in the prevention of sexual harassment, discrimination and retaliation and must be presented by trainers or educators with knowledge and expertise in the prevention of harassment, discrimination and retaliation. See California Government Code §Section 12950.1 and Complying with California Sexual Harassment Training Requirements
  • Remind supervisors under investigation of the organization's anti-retaliation policy that they will be subjected to disciplinary action if they retaliate against individuals who complain of discrimination or who provide information related to a discrimination complaint. 
  • Monitor the treatment of employees who file a workplace complaint or who provide information related to a complaint. Employers should carefully scrutinize any proposed adverse action against a complainant or witness to ensure that it is based on a legitimate and not retaliatory reason.
  • Investigate allegations of retaliation and take prompt corrective action when warranted. Retaliation should be stopped to prevent it from escalating even if it is not significant enough to violate California state law. 
  • Funnel all retaliation complaints to a senior group for review.
  • Review the specifics of each incident, and explore the context in which the matter arose.
  • Determine the likely existence of protected activity, and decide on an appropriate response.
  • Provide guidance and coaching to direct supervisors and managers.

Use best-practice performance management guidelines:

  • Address job expectations, evaluate job performance and offer clear feedback to employees—including any coaching, warning, discipline or discharge.
  • Communicate thoughtfully and deliberately—that is, avoid canned or formulaic appraisals and feedback.
  • Create complete and accurate assessments of employees, and honor all stages of the process.
  • Document thoroughly in writing, with records kept in a central file.

Fair Employment and Housing Act

The FEHA prohibits retaliation against any person for making a complaint under the FEHA, for assisting another in making such a complaint or for opposing any action in the workplace that would constitute a violation of the FEHA. See What is the California Fair Employment Housing Act (FEHA) and what does it cover? 

The FEHA requires an individual to show that he or she engaged in a protected activity, that the employer subjected the employee to an adverse employment action, and that a causal link existed between the protected activity and the employer's action.

Protected activity

Generally speaking, for a claim of retaliation to constitute a protected activity, an employee must complain about or oppose a practice forbidden by the FEHA (e.g., discrimination based on sex, race or age). Yet courts have held that protected activity also includes a complaint or opposition to conduct that the employee reasonably and in good faith believes to be unlawful, even if the conduct is not actually prohibited under California FEHA laws. As a result, an employer could be liable for retaliation even when the FEHA does not actually apply, based on the employee's good-faith belief in the complaint.

Certain opposition to employer conduct may not be protected even if the employee's opposition is in good faith when, for example, the employee has lied to the organization. In January 2013, a California court of appeal ruled that an employee's opposition to an employer investigation into misconduct or the failure to cooperate with the investigation is not protected conduct (McGrory v. Applied Signal Tech., Inc., Cal Ct. App. No. H036597, 2013). The decision also held that providing false information to the employer during an investigation is not protected.

Adverse action

Adverse employment actions include discharge, demotion, pay reduction and other actions commonly found to be unlawful retaliation. Furthermore, California court decisions have clarified whether adverse employment action under the FEHA should be defined using two slightly different tests: the materiality test and the deterrence test.

The materiality test asks whether the employment action taken was sufficiently material to affect a term or condition of the employee's employment. This test has been interpreted to include job transfers under certain circumstances and negative performance evaluations without other consequences such as demotion or pay reduction.

The deterrence test asks whether the employment action taken would deter a reasonable employee from engaging in the protected activity. California courts have rejected the deterrence test in determining whether an individual was subject to adverse employment action following his or her engagement in a protected activity. See Yanowitz v. L'Oreal USA Inc. (2005) 36 Cal. 4th 1028.

However, that standard has been used by the Ninth Circuit in Title VII retaliation cases under federal law. See Ray v. Henderson, 217 F.3d 1234 (9th Cir. Cal. 2000).

To be successful under the FEHA, a claim for retaliation must show a causal link between an employee's protected activity and the adverse employment action. The employee must be able to prove that the adverse action occurred because of the protected activity, not merely soon afterward. 

If a decision-maker is unaware of the protected activity when a decision is made to take an adverse employment action against an employee, the employer may not be liable for retaliation. However, a course of events leading to the adverse employment action influenced by a supervisor or manager with a discriminatory or retaliatory motive and knowledge of the protected activity may supply the causal connection for liability.

Whistle-Blower Protections

Whistle-blower laws are another form of anti-retaliation protection for individuals who report concerns about employer actions that they believe are illegal, unsafe or against public policy. Whistle-blowing is generally defined as reporting an employer's illegal acts either to an employer's internal complaint mechanism or to a government agency with oversight responsibility. A variety of state statutes prohibit employers from retaliating against employees for whistle-blowing under specified circumstances.

Whistle-blower protection under California Labor Code §1102.5 extends to employees who disclose a violation of state or federal law, or noncompliance with a state or federal rule or regulation when the employee has reasonable cause to believe such violations or noncompliance has occurred. This section also prohibits employers from taking any action to prevent an employee from disclosing such information to a government or law enforcement agency. In addition, it protects an employee from retaliation for refusing to participate in an activity that would result in such a violation.

Effective January 1, 2014, SB 496 further expanded the protections under Labor Code §1102.5(a), (b) to internal whistle-blowers. It also legislatively overturned previous case law exempting employees who have legal compliance duties. As a result, the law now prohibits an employer from adopting any rule, regulation or policy preventing an employee from disclosing reasonably believed violations of law or regulations to a person with authority over the employee or to another employee who has authority to investigate, discover, or correct the violation or noncompliance, regardless of whether disclosing the information is part of the employee's job duties. SB 496 also added additional protections to prevent retaliation against an employee 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 to another employee who has the authority to investigate, discover, or correct the violation or noncompliance, if the employee has reasonable cause to believe that the information discloses a violation of law or regulations, regardless of whether disclosing the information is part of the employee's job duties.

In addition, SB 496 makes it illegal to take specified actions designed to prevent an employee from providing information to, or testifying before, any public body conducting an investigation, hearing or inquiry in which the employee reasonably believes the information or testimony discloses a violation of law or a regulation. It also prohibits retaliation against an employee who provides such information or testimony.

Health care whistle-blower protection under California Health and Safety Code §1278.5 prohibits a health care facility from discriminating or retaliating against a patient, employee or medical staff person because the individual presented a grievance or complaint to the facility, an accrediting agency or other governmental agency, or initiated, participated in or cooperated in the investigation or administrative proceeding related to the quality of care, services or condition of a facility. A violation of this section is subject to a civil penalty of not more than $25,000.

Other Legal Rights or Protected Status

Other types of state employment laws also prohibit retaliation. Wage and hour laws, family and medical leave laws, California Family Rights Act (CFRA) leave, labor laws, and armed service members and veterans' rights laws all prohibit retaliation against individuals who exercise their rights under state statutes.

Disclosures regarding wages or working conditions

Under Labor Code §232, workplace communications concerning employees' wages and working conditions are protected. Employers may not discipline, discharge or otherwise discriminate against any employee for disclosing information about the amount of wages or other working conditions. This section also forbids an employer to require an employee to sign a waiver of the right to disclose such information as a condition of employment.

Communications regarding wages or terms and conditions of employment also constitute protected concerted activity under the NLRA. Employers that restrict such communications could face federal law liability under the NLRA in addition to liability under California law.

Labor Code §98.6 prohibits retaliation against an employee who has complained to the employer, orally or in writing, that the employee is owed unpaid wages.

Labor Code §1024.6 prohibits an employer from discharging or from discriminating, retaliating or taking any adverse action against an employee because the employee updates or attempts to update his or her personal information, unless the changes are directly related to the skill set, qualifications or knowledge required for the job. This change would appear to prohibit the discharge of an employee who had provided a false Social Security number or other information relied on by the employer to verify identity and legal authorization to work in the United States. However, the law does not address whether a discharge can be based on the falsification of a company document when an employee has falsely certified the accuracy of prior information and the employer has an established practice of discharging employees who have falsified their employment application or other company documents.

Undocumented Workers

Labor Code §1019 makes it unlawful for an employer or any other person to engage in, or direct another person to engage in, an unfair immigration-related practice against a worker in retaliation for exercising a legal right.

An unfair immigration-related practice is defined as any of the following practices when taken for retaliatory purposes:

  • Requesting more or different documents than are required under federal immigration law, or refusing to honor documents tendered pursuant to federal law that, on their face, reasonably appear to be genuine.
  • Using the federal E-Verify system to check the employment authorization status of a person at a time or in a manner not required under federal law or not authorized under any memorandum of understanding governing the use of the federal E-Verify system.
  • Threatening to file or the filing of a false police report.
  • Threatening to contact or contacting immigration authorities.

Under law, protected activity includes any of the following:

  • Filing a complaint or informing any person of an employer's or other party's alleged violation of the Labor Code or a local ordinance, if the complaint or disclosure is made in good faith.
  • Seeking information regarding whether an employer or other party is in compliance with the Labor Code or a local ordinance.
  • Informing a person of his or her potential rights and remedies under the Labor Code or a local ordinance.
  • Assisting an employee in asserting his or her rights.

Military status

Military and Veterans Code §394 prohibits discrimination against any officer, warrant officer or enlisted member of the military or naval forces of the state or of the United States because of that membership.

Workers' compensation claims

Like most other states, California law prohibits retaliation against individuals who file or who intend to file workers' compensation claims or against individuals who have received a workers' compensation award or settlement. Protection also extends to individuals who testify in workers' compensation proceedings. 

Safety claims

Employees who make oral or written safety complaints are also protected from retaliation. See  CA Codes (300-6332).

Communications

Communication is a key factor in preventing retaliation claims. Leveraging existing workplace communications systems is appropriate for anti-retaliation efforts with the following considerations.

Timing

In preventing retaliation claims, the time period after an employee engages in a protected activity, such as filing an internal complaint or participating in an FEHC investigation, is critical in minimizing the risk that the employee will perceive he or she has suffered retaliation. All communications with an employee in that protected status must be carefully considered in light of the possibility of a retaliation claim.

In addition, a complainant alleging discrimination or retaliation in violation of the laws under the jurisdiction of the California Division of Labor Standards Enforcement (DLSE) must file a complaint within six months after the occurrence of the alleged discriminatory or retaliatory action—except for complaints of retaliation for taking time off work due to being a victim of domestic violence, sexual assault or stalking, which must be filed within one year (§230 and §203.1); equal pay claims must be filed no later than two years after the cause of action occurs (§1197.5); and Health and Safety Code §1596.88 claims may not be filed later than 90 days after action as to which complaint is made. There is a different statute of limitations under the Fair Labor Standards Act (FLSA).

As part of regular anti-discrimination training, managers and supervisors must be educated about the risks of retaliation. The training should emphasize that no one should be treated differently for voicing a concern and that avoiding an employee does not prevent a retaliation claim but may create one. The training should caution managers who may feel anger at being allegedly falsely accused from expressing their feelings in e-mails or other forms of communications that could be used as evidence of retaliatory conduct. It is also important to emphasize to managers and supervisors the need for thorough and timely communications with HR as to all management actions involving employee counseling and discipline, employee complaints or other potential triggers that could form the basis for a retaliation claim.

Internal complaint system

Whistle-blower protection laws address and encourage the concept of an internal complaint mechanism for receiving employee concerns. Effectively soliciting complaints through employer-provided means is a key component of a corporate ethics and good governance program, and it fosters healthy employee relations. Because HR managers often design and implement complaint-gathering programs, such as hotlines and employee attitude surveys, they are in an advantageous position to help identify employee concerns so management can address them before they escalate into whistle-blower complaints. As noted above, employees may not be required to use such complaint mechanisms, but employers should encourage their use. 

Employers can solicit employee concerns and complaints informally by various means, including:

  • Training supervisors to listen and respond to workers.
  • Implementing new technologies (e.g., telephone and web-based hotlines).
  • Conducting employee satisfaction surveys. 
  • Hosting employee focus groups.
  • Making available ombudsmen and suggestion boxes.

Internal complaint mechanisms are an important component of a corporate initiative to prevent retaliation and whistle-blower claims. 

Although an employer is not required to tailor a complaint procedure to fit each employee, it should be reasonably accessible to the average employee to be effective.

Employers can measure the effectiveness of complaint programs by implementing a centralized process that quantifies and analyzes the complaints received and the outcomes. Employers that internally audit their hotlines to monitor call-handling, response time and reporting quality can use that information to examine their complaint process and eliminate barriers to use.

Templates and Tools

Samples

California Discrimination and Harassment Prevention and Complaint Procedures Policy

Whistleblower Policy

Harassment (Race/Color, Religion, National Origin and Disability) Training for Supervisors

Retaliation Presentation

Information tools

Preventing Unlawful Workplace Harassment in California

Preventing Unlawful Workplace Discrimination in California

Agencies and organizations

California Department of Industrial Relations

Fair Employment Housing Council (FEHC)



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