Court of Appeal Holds Terminated Employee Suspected of Making Complaint to Public Agency But Did Not is Still a Protected ‘Whistleblower’ Under Cal. Labor Code section 1102.5

December 16, 2014
Paul K. Schrieffer
P. K. SCHRIEFFER LLP

Dear Clients and Colleagues,

The Court of Appeal in San Diego County has held that a preschool teacher at a church could sue her church employer under California Labor Code section 1102.5, California’s whistleblower statute, even where the employee did not make any complaint to a public agency, but where the employer mistakenly thought she did. The case is Diego v. Pilgrim United Church, decided November 21, 2014 (2014 DJDAR 15586).

In Diego, a preschool employee made a complaint to the State Licensing Board that there was a foul odor in a classroom and that there was not enough sand in the playground sandbox. The preschool director assumed and then concluded it was the plaintiff and thereupon summarily terminated her employment when in fact it was a different preschool employee who complained to the Licensing Board. The church won summary judgment at the trial level, arguing that because the plaintiff made no complaint to a public agency, she could not sue for either wrongful termination in violation of public policy nor state a claim under California’s employee whistleblower statute, California Labor Code section 1102.5. The Code section 1102.5 states that an employee making a report to a public agency cannot be retaliated against.

Previous California appellate cases have held that even a complaint to the employer’s supervisor regarding a matter that is regulated by a public agency is effectively the same as complaining directly to the public agency, notwithstanding that the language of the statute speaks only of complaints to public agencies. Here, in Diego, the Court of Appeal found that the employer’s suspecting the employee made a complaint and then terminating her was effectively the same as if the employee had complained to the public agency and was then terminated. The appellate court held the intent of the statute was to ensure employers did not terminate or otherwise retaliate against employees, and that the public good is injured when an employer retaliates against an employee when there is a belief a complaint is made to a public agency. The appellate court therefore reversed the summary judgment and ordered the trial court to deny the church’s summary judgment motion.

The Court of Appeal then held the case should proceed to trial on its facts because there was also evidence that the primary reason the preschool teacher was terminated was for independent acts of insubordination, i.e. plaintiff Diego’s alleged refusal to attend staff meetings. The appeals court held it is permissible for the church to argue that the timing of the issue of the complaint was coincidental where the evidence of insubordination appeared to be close in time to the decision to terminate following the complaint from the Licensing Board.

Overall, this case presents a strong re-affirmation of the broad interpretation of the California whistleblower statute. Employers are cautioned to be more diligent and understanding of the whistleblower law in California and to ensure employees are not punished for raising concerns about matters in which public agencies regulate the workplace.