Can an employee who reports crime personal to her in the work place but neither against employer nor concerning employment operation be afforded “whistleblower” protection?

Posted in: Appellate Practice, Employment Law by Steven Vartabedian on

Commonly referred to as a “whistle blower” statute, Labor Code Section 1102.5 (b) provides in part that an employer “shall not retaliate against an employee for disclosing information . . . to a government or law enforcement agency . . . if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute.”whistle-1419514

In Cardenas v. M. Fanaian, D.D.S., Inc. (filed 10/1/15) F069305, plaintiff, a dental hygienist in defendant’s dental office, having reason to suspect her wedding ring had been stolen by a coworker at work, reported the theft to the local police department.  She informed her boss, Dr. Fanaian, of her decision to make this report. He was upset she was reporting this as having occurred at his office, but told her to do what “you need to do.”  He was additionally upset when police came to his office to investigate. When officers made a second visit, he told her that the situation was causing great tension and discomfort among the staff, and that he was going to have to “let her go.” She received her last paycheck that day. The ring was found at the office the next day.

Plaintiff sued on two separate causes of action: (1) retaliation in violation of 1102.5, and (2) wrongful termination in violation of public policy. In the trial court, defendant argued that the causes of action should not even reach a jury because (1) a report against a coworker was insufficient to trigger 1102.5 in the first cause of action, and (2) no fundamental public policy was involved in the second cause of action because the police report was filed for personal reasons to either get the ring back or file an insurance claim. Not only did the trial court deny the motion for judgment on the pleadings, it excluded defendant’s evidence that the report was made for these reasons, ruling that the focus here is not on the specific police report, but on the broader policy of encouraging the report of criminal conduct. The jury found liability on both causes of actions and awarded damages.

Defendant appealed, solely on the ground that plaintiff could not prevail, as a matter of law, because no fundament public policy was abridged by her firing. The Court of Appeal, Fifth Appellate District, noted defendant’s failure to address the independently viable first cause of action under 1102.5. That failure alone was a sufficient basis to affirm. However, the court chose to allow further briefing by posing additional question to the parties: whether 1102.5 (b) depends on whether the report concerns conduct related to the employment operation and whether it applies to an employee’s private matter. After considering the parties’ further briefing and arguments, the court agreed with plaintiff that 1102.5(b) did apply, and affirmed the judgment.

The appellate court determined the statute to be unambiguous in that the Legislature did not choose to insert additional, limiting language stating that the report must relate directly to the employment enterprise and not private or individual matters. The court was unwilling to insert such language. And certainly, the Legislature knows how to use such language in light of the example of the whistle blower statute for state employees (Government Code section 847): protection is limited expressly to wrongdoing “arising out of the performance of employee’s duties.

Of course, this opinion does not mean that any report of a crime in the workplace insulates the reporting employee from adverse employment actions, should the sole substantial reason for such adverse action be permissible. The jury here found plaintiff’s firing was directly caused by the employer’s reaction to the filing of the report; thus she was retaliated against due to her exercise of this protected activity, which was exercised base on her reasonable belief a crime had been committed.

Also, I wish to note that the appellate court here, prior to its directing further briefing, could have simply dismissed the appeal because defendant/appellant failed to demonstrate potential grounds for reversal. This was generous to defendant, and appellate counsel in future cases should be careful not to fail to assert sufficient arguments to result in a potential reversal.  There certainly should have been adequate motivation to attack the 1102.5 cause of action, which initially was unchallenged on appeal by defendant, as attorney fees are awardable on that claim, while attorney fees are not awardable on the common-law wrongful termination claim.

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