Why it matters

Can an employee qualify for whistleblower protections where the reported disclosure did not relate to the employer, its operations, or the public interest? Yes, a California appellate panel ruled, affirming a jury verdict in favor of an employee who filed a police report after her ring was stolen at work. A dental hygienist lost an expensive ring at the office, and suspecting that a coworker stole it, she filed a police report. The police twice visited the office to interview the other employees, and the hygienist was fired for disrupting the workplace. She sued, claiming that her termination violated Labor Code Section 1102.5. The employer countered that the hygienist was not entitled to whistleblower protections because she was reporting on a matter of personal interest, but a jury awarded her almost $118,000. An appellate panel affirmed the verdict, writing that the Labor Code only required the plaintiff to prove that she reported a matter to a government authority and that she was subsequently discharged for doing so—not that the reported activity had to involve a matter of public interest or the employer's practices or business operations.

Detailed discussion

Rosa Lee Cardenas worked as a dental hygienist in the dental office of Dr. Masoud Fanaian, D.D.S. In 2010, to celebrate their 25th wedding anniversary, Cardenas' husband bought her a new, expensive ring. She always wore the ring to work but placed it in the blouse pocket of her scrubs at the start of each workday.

One day, she got home from work and realized the ring was gone. She said she had taken the ring off and placed it on the breakroom table with her cell phone and other belongings. When she picked up her things, the ring was missing but she assumed she had already put it in her pocket, as was her habit. She called her coworkers, searched the office, the parking lot, her car and home, but did not find the ring.

Cardenas suspected that a coworker had stolen the ring. She informed Dr. Fanaian that she planned to file a police report, and although he told her, "[D]o what you feel like you need to do," he seemed upset or angry and asked her not to tell the police she left the ring on the breakroom table.

She filed a police report and officers came on two occasions to the office to question her coworkers. According to Cardenas, Dr. Fanaian told her the situation was causing tension and discomfort among the staff and he was letting her go. The ring was found at the office the next day.

Cardenas filed suit against the dental office asserting two causes of action: retaliation in violation of Labor Code Section 1102.5 and wrongful termination in violation of public policy. At trial, the defendant moved for nonsuit after Cardenas rested her case in chief, arguing that she failed to prove that her termination involved a fundamental public policy. The trial court denied the motion and the jury awarded her a total of $117,768 for past economic losses.

The defendant appealed. As a matter of law, there was no fundamental public policy violation in connection with Cardenas' firing, the employer told the court.

Affirming the jury verdict, the court rejected the employer's position.

Section 1102.5 states: "An employer may not retaliate against an employee for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation." A statutory claim under this provision stands on its own, the court said, and does not require proof of a violation of public policy.

"Section 1102.5 has been broadly construed to protect an employee from retaliation by his or her employer even where the report to law enforcement concerned a violation of law committed by a fellow employee or contractor, and not the employer," the appellate panel wrote. "The jury determined that Cardenas reported a workplace theft of her property to the police. Theft is a violation of the law. The jury found that she was subsequently terminated from her employment and that her report to the police was a motivating reason for her termination. Thus, she engaged in protected activity, was subjected to an adverse employment action and there was a causal link between the two. She met all of the statutory elements of a claim under Section 1102.5. She was not required to prove anything more."

The plain language of the statute does not mandate that the violations of law reported by the employee concern the employer's business activities, the panel said. "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," the court wrote. "This we cannot do. Even if the Legislature intended to limit the statute's application to reports of wrongdoing concerning the employer's enterprise, operations or practices, courts are not authorized to disregard the plain meaning of statutory language in order to conform it to a court's opinion of legislative intent."

In a separate provision for state workers, the Legislature specifically and expressly limited whistleblower protection to reports of wrongdoing arising out of the performance of the employee's duties, the panel pointed out, demonstrating that lawmakers knew how to include such language in Section 1102.5 had they wanted to.

Language found in the statute's uncodified preamble did not sway the panel. While consideration of the preamble could help the court's review, it was not controlling and any light it shed was "at best, uncertain," the court said. "[W]e believe the plain meaning of the statute would control over a preamble that merely serves as an aid to our analysis."

A dissenting opinion argued for reversal of the jury's verdict, relying upon the preamble, which makes references to the "unlawful activities of private corporations," "corporate wrongdoing," and "laws enacted for the protection of corporate shareholders, investors, employees, and the general public."

"I do not believe the statute can reasonably be interpreted as extending protection to matters of a purely private and personal interest that have no meaningful relationship to the employer's business activities and are uniquely important to the employee who has reported a suspected violation of law," the dissent wrote. "By countenancing application of the whistleblower statute to reports of private matters which coincidentally involve an employee's coworker, the majority has created a new exception to the venerable rule of at-will employment that was never intended by our Legislature."

To read the opinion in Cardenas v. M. Fanaian, D.D.S., click here.