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Protected Whistleblower Does Not Need to Complain of Unlawful Employer Conduct

(Photo: Whistle, adil113 flickr CC by 2.0)

In Cardenas v. M. Fanian, DDS, Inc., the California Court of Appeals recently upheld a jury’s finding that an employee was wrongfully retaliated against when the employer discharged her for filing a police report against her co-workers (not against the employer).

The employee (a dental hygienist) filed a police report – over the dentist’s objection – that a coworker may have stolen her wedding ring at work. When police officers appeared at the dentist’s office to question the coworkers, the dentist became upset. After the officers’ second visit, the dentist met with the hygienist, informed her the situation was causing “great tension and discomfort among the staff,” and stated that he had to let the hygienist go. The next day, the hygienist’s ring was found at the office.

The hygienist sued the dental practice alleging (inter alia) whistleblower retaliation. The dental practice argued that a whistleblower claim could only be made for reporting unlawful conduct of the employer (the dental practice), not a coworker. The trial court disagreed, finding the statutory whistleblower protection (Calif. Labor Code 1102.5) extended to any reports of reasonably believed unlawful conduct to law enforcement (even if not against the employer). The jury found for the hygienist, concluding her police reports were protected by the whistleblowing statute and awarding her over $115,000 in economic damages. The employer appealed.

The appellate court reviewed the statutory language, noting that it applied to any law enforcement reports based on a reasonable belief of violation of California law, and that nothing expressed or implied in the statute restricted its protections to complaints of an employer’s violation of law, or legal violations arising only out of the employer’s business activities. The court also rejected the employer’s argument that the language in the statute’s preamble (referencing protection against “corporate wrongdoing” and encouraging reporting of legal violations committed by an “employer”), finding the preamble did not limit the broad language used in the statute itself. The judgment against the employer was affirmed.

The Cardenas decision is a good reminder to tread carefully when employees allege a legal violation. Unlike California, Arizona’s Employment Protection Act (“EPA”) explicitly extends whistleblower protection to employees who, based upon a reasonable belief, complain that either the employer or another employee has violated, is violating, or will violate the state constitution or statutes. (A.R.S. 23-1501(A)(3)(c)(ii)). Thus, the Arizona statute would clearly cover whistleblower claims based upon complaints that coworkers violated the law. Notably, the portion of the EPA pertaining to who the report should be made to – including to “a representative of the employer who the employee reasonably believes is in a managerial or supervisory position and has the authority to investigate the information provided by the employee and to take action to prevent further violations …” – could suggest that Arizona’s statute may be limited to complaints of legal violations relating to the employer’s business activities (i.e., business-related violations which a supervisor could actually put a stop to). Thus, the Arizona statute could be open to the interpretation argued by the employer in Cardenas. But as Arizona courts have yet to decide this nuanced issue, employers should remain cautious when dealing with any employee complaints regarding illegal activity.