Reporting co-worker crime

Is an employee’s report of a co-worker’s suspected crime against the employee in the workplace covered by California’s whistle-blower law?

The Fifth District Court of Appeal recently decided whether an employee’s report of a co-worker’s suspected crime against her is protected by California’s whistle-blower law. In Cardenas v. M. Fanaian, D.D.S., Inc. (Cal. App. 5th Dist. Oct. 1, 2015) 2015 Cal. App. LEXIS 872, the appellate court addressed the questions of whether the whistle-blower law requires a violation of public policy and whether the report must concern the employer’s business activity.

Ms. Cardenas worked as dental hygienist. One day at work she took off her wedding ring and left it on a breakroom table. After putting her lunch in a refrigerator and talking with a co-worker, she discovered that her ring was missing. Despite searching her work, home, and car for the ring, and asking co-workers if they had seen the ring, she was unable to locate it.

Ms. Cardenas suspected a co-worker stole her ring. She informed her boss, Dr. Fanaian, that she planned to file a police report, but he attempted to persuade her not to do so. Nevertheless, Ms. Cardenas reported a stolen ring to local law enforcement. Dr. Fanaian later met with Ms. Cardenas after the police came to the workplace a second time. He told her that the police investigation was causing tension and discomfort among the staff and that he was going to have to let her go.

Ms. Cardenas sued her employer for whistle-blower retaliation under California’s Labor Code (section 1102.5) and for wrongful termination in violation of public policy. Both of these claims were based on the allegation that the termination was in retaliation for reporting the theft to the police.

Before trial, Ms. Cardenas asked the trial court to exclude evidence that she made her police report for private or personal reasons—so that she could get the ring back or make a claim on her homeowner’s policy. The trial court agreed. The jury found in Ms. Cardenas’s favor and awarded her over $117,000 in damages.

On appeal, the court of appeal began by analyzing the relationship between Ms. Cardenas’s two claims. At the time of Ms. Cardenas’s reporting and termination, the Labor Code law protected employees who made reports to law enforcement about what they reasonably believed was a violation of state or federal law. This protection applies even when the violation was committed by a co-worker and not the employer. Furthermore, the Labor Code law—on its own—provides for a claim for damages.

Such a claim is distinct from a wrongful termination in violation of public policy claim. Consequently, a Labor Code claim does not require a violation of public policy (as would be required for the wrongful termination claim). Under the Labor Code the employee’s motives or the particular crimes at issue are irrelevant.

The court of appeal applied these principles to the case at hand. Ms. Cardenas reported a workplace theft to law enforcement. Theft is a violation of state law. Therefore, she engaged in conduct protected by the Labor Code.

The employer contended that Ms. Cardenas’s Labor Code claim failed because her report did not concern its business activity, i.e., dentistry practice. To address this contention, the court of appeal reviewed the plain language of the Labor Code law (in its pre-2014 form), which prohibited retaliation against an employee “for disclosing information … to a government or law enforcement agency … if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute.” In contrast, the language of a Government Code whistle-blower law protecting state government employees (section 8547) applies only to reports of wrongdoing arising out of the employer’s activity or another employee’s performance of job duties. The court concluded that there was no question that the broader Labor Code language applied to Ms. Cardenas’s report.

Posted by deanroyerlaw