Powerful Whistleblower Statute Gets Even More Costly For Employers

California Labor Code section 1102.5 is an expansive whistleblower statute frequently used by plaintiffs’ attorneys to sue for wrongful termination.  Section 1102.5’s many protections include prohibiting employers from adopting rules preventing employees from making complaints (sub (a)), prohibiting retaliation against an employee who has “reasonable cause to believe” that an activity may be illegal (sub (b)) and prohibiting retaliation against an employee who refuses to participate in an activity that is illegal (sub (c)).  Subsection (d) also protects employees from retaliation based on conduct at prior employment.

Despite section 1102.5’s breadth, plaintiffs’ attorneys most often use section 1102.5 when the plaintiff employee does not fall into an otherwise protected category, such as under the ADA, ADEA, Title VII or the California Fair Employment and Housing Act.  From the plaintiffs’ bar, a major flaw in section 1102.5 has always been that there was no express provision that allowed for the recovery of attorneys’ fees—although they try various other theories to recover those fees. 

That will change effective January 1, 2021.  AB 1947 was introduced in January 2020 by Assembly Members Kalra and Gonzalez to amend section 1102.5 to provide that the “court is authorized to award reasonable attorney’s fees to a plaintiff who brings a successful action for a violation of these [1102.5] provisions.”  The Governor approved AB 1947 on September 30, 2020.

This attorneys’ fees clause will have substantial impact on the number of new lawsuits filed under section 1102.5.  As many employers learn at the wrong end of a jury verdict, the attorneys’ fees that have to be paid to the successful plaintiff’s attorney can well exceed the damages that must be paid to the plaintiff.  Additionally extensive litigation will likely ensue about whether this fee provision is retroactive. 

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR presentation/publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process. 

©2020 Atkinson, Andelson, Loya, Ruud & Romo

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