Accusing Co-Worker of Stealing Deemed Protected Activity

By May 1st, 2018HR Blog

By Chris Olmsted, Esq., Ogletree DeakinsHandprints

It is generally understood that an employer may not retaliate against an employee for “whistleblowing” that the business has engaged in unlawful activity. Is an employee also protected against retaliation where the employee reports a co-worker to the police for suspected theft of personal property? A recent California Court of Appeals decision in Cardenas v. M. Fanaian, D.D.S., Inc. concluded that the California Labor Code does protect such activity.

Ms. Cardenas worked as a dental hygienist for Dr. Fanaian’s dental office. While at work, Cardenas lost an expensive ring gifted by her husband in celebration of their 25th wedding anniversary. Cardenas suspected that a co-worker had stolen the ring. She and her husband filed a police report. The police visited the office twice to interview employees. According to Cardenas, the dentist terminated her because the police investigation was disrupting the workplace. Cardenas’s ring was found at the office shortly after the termination.

Cardenas sued her employer, alleging a wrongful termination in violation of public policy and a violation of Labor Code section 1102.5. Among other things, Labor Code Section 1102.5(b) prohibits an employer from retaliating against an employee for disclosing information to a government or law enforcement agency.

After a trial, the jury ruled in Cardenas’s favor.

On appeal, the defendant argued that filing a police report accusing a co-worker of the theft of personal property is not protected activity under Labor Code 1102.5 because it did not concern wrongdoing by an employer, its operations or practices, and because it had nothing to do with protecting public interests.

The appellate court reviewed the code section and concluded that nothing in it required a finding that the reported illegal activity involve a matter of public rather than personal interest. Cardenas was only required to prove that she reported a matter to a government authority, and that she was subsequently terminated for doing so.

The appellate court rejected the defendant’s argument that the activity reported to government authorities must relate to employment practices or business operation. The court wrote: “Defendant would have us insert additional, limiting language into the statute, namely, that the report to law enforcement must relate directly to the employment enterprise and not private or individual matters. This we cannot do. Even if the Legislature intended to limit the statute’s application to reports of wrongdoing are not authorized to disregard the plain meaning of statutory language in order to conform it to a court’s opinion of legislative intent. That would convert our judicial function into that of a legislative one.”

In a dissenting opinion, one justice disagreed with this conclusion. The justice pointed out that in the preamble to Labor Code section 1102.5, the legislature expresses concern about the need to deter “corporate wrongdoing” and also expresses that the public policy of the state is to “encourage employees” to inform law enforcement when they have reason to believe “their employer” is violating the law. The majority opinion noted the preamble language, but concluded that it could not override the broader language in the code section itself.

Practical Tip

This court found that Labor Code 1102.5 broadly protects employees from retaliation for making reports to law enforcement agencies. Where an employer has knowledge that an employee has filed a complaint with a government agency, it should carefully consider the potential for liability before taking adverse action, even when the employee’s report does not relate to any unlawful activity by the employer.

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