by Sayema Hameed

In October 2013, California Governor Jerry Brown signed into law Senate Bill 666, Assembly Bill 263 and Senate Bill 496 to expand whistleblower protections and anti-retaliations provisions in California.  These three bills address whistleblowing, immigration status and claims regarding unpaid wages.  These bills also confirm that whistleblowers are not required to exhaust administrative remedies to pursue a civil cause of action for whistleblower retaliation.  These significant changes in the law took effect on January 1, 2014.

Whistleblower Protection

Prior to its amendment, Labor Code Section 1102.5 prohibited employers from preventing an employee from reporting reasonably-believed violations of state or federal laws or regulations to a government or law enforcement agency.  Section 1102.5 also prohibited employers from retaliating against an employee who made such a disclosure or who refused to participate in an activity that would violate state or federal laws or regulations.

SB 496 amends Labor Code Section 1102.5 to apply to local rules or regulations as well as state and federal laws or regulations.  Employers are now prohibited from preventing an employee from reporting a reasonably-believed violation of a local rule or regulation, and employers are prohibited from retaliating against an employee who has made such a disclosure or who refuses to participate in an activity that would violate a local rule or regulation.

Before its amendment, the protections of Section 1102.5 applied only to employees who reported suspected violations of the law to a government or law enforcement agency.  Now, SB 496 expands the whistleblower protections in Labor Code Section 1102.5 to employees who report suspected violations of the law internally “to a person with authority over the employee, or to another employee who has authority to investigate, discover, or correct the violation or noncompliance.”  Employers are prohibited from retaliating against an employee who reports suspected unlawful activity internally.

In addition, pursuant to AB 263, employers are now also prohibited from retaliating against an employee who provides such information or testifies before “any public body conducting an investigation, hearing or inquiry.”  Thus, employees are now protected from retaliation whether they report suspected violations of the law internally or externally.

SB 666 and AB 263 also add language to Labor Code Section 1102.5 to prohibit “any person acting on behalf of the employer” from preventing an employee from whistleblowing or retaliating against a whistleblowing employee.

Each violation of Section 1102.5 could subject an employer that is a corporation or limited liability company to a civil penalty of up to $10,000.

All of these changes are codified in the new Labor Code Section 1102.5.

Immigration Status

AB 263 adds Labor Code Section 1019, which makes it unlawful for an employer or other person to engage in an “unfair immigration-related practice” directly or indirectly against a person for the purpose of retaliating against that person for exercising an employment right under state labor and employment laws or local ordinance.

An “unfair immigration-related practice” includes:

●  Requesting more or different documents than are required to verify a person’s authorization to work in the United States, or refusing to honor documents 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 time or in a manner not required under Section 1324a(b) of Title 8 of the United States Code;

●  Threatening to file or filing a false police report;

●  Threatening to contact or contacting immigration authorities.

 AB 263 also creates a rebuttable presumption that any adverse employment action taken within 90 days of the exercise of a protected right is done for the purpose of retaliation.  Labor Code Section 1019(c).  An employee or other person who is the subject of an unfair immigration-related practice prohibited by this section may bring a civil action for equitable relief, damages or penalties.  Labor Code Section 1019(d).

AB 263 also adds Labor Code Section 1024.6, which prohibits an employer from taking any adverse action against an employee because the employee updates or attempts to update his or her personal information (such as immigration status), unless that change in information relates directly to a job qualification or skill set.

SB 666 adds Business and Professions Code Section 6103.7 to establish a cause of action for suspension, disbarment or other discipline against an attorney (who is a member of the State Bar) who reports, or threatens to report, the suspected immigration status of a witness, party, or his or her family member to a federal, state or local agency because that witness or party exercises an employment right.  A “family member” could be a spouse, parent, sibling, child, uncle, aunt, niece, nephew, cousin, grandparent or grandchild through blood, adoption, marriage, or domestic partnership.

Unpaid Wages

Before these bills, existing law prohibited an employer from terminating an employee or in any manner discriminating against an employee or job applicant because the employee or applicant made a bona fide complaint relating to the enforcement of the employee’s or applicant’s rights.

SB 666 and AB 263 amend California Labor Code Section 98.6 to prohibit an employer from retaliating or taking adverse employment action against an employee who makes an oral or written claim for unpaid wages.  This bill also provides for the reinstatement and reimbursement of lost wages of an employee who is retaliated against by his or her employer.  It also states that an employer can be liable for a civil penalty of up to $10,000 for violating this law.

Exhaustion of Administrative Remedies

These bills also explicitly provide that an employee is not required to exhaust administrative remedies before filing a whistleblower retaliation claim in court.  This legislative action overrules a recent Court of Appeal decision, MacDonald v. State (2013) 219 Cal.App.4th 67 (depublished), in which the court held that a state employee was required to exhaust administrative remedies by filing a claim with the Labor Commissioner before filing suit.  SB 666 adds Labor Code section 244, which provides that a person is not required to exhaust administrative remedies in order to file suit under the Labor Code unless a section expressly requires exhaustion of remedies.

Employers should train their supervisors and human resources personnel on these newly amended laws and be vigilant in avoiding adverse actions that can be construed as retaliation based on an employee’s whistleblower or immigration status or other protected status.