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February 4, 2022

A New Standard for Whistleblower Claims

The California Supreme Court has just adjudicated a new standard for proving whistleblower liability under California’s Whistleblower Act (Act).[i] The case Lawson v. PPG Architectural Finishes, Inc. (Jan 2022) settles a long-standing conflict between California’s lower courts on the standard for proving prohibited conduct under the Act.

The Court found the proper framework for such claims is the analysis outlined in California Labor Code section 1102.6. The labor code standard requires employees bringing claims under the Act to show by “a preponderance of the evidence” that the alleged conduct was a “contributing factor in the employer’s prohibited actions” (e.g., termination, demotion, reduction in working hours; action(s) impacting the employee’s terms and conditions of employment). Once met, the burden then shifts to the employer to “demonstrate by clear and convincing evidence” that its actions “would have occurred for legitimate, independent reasons even if the employee had not engaged in” protected activities under the Act.

This statutory standard presents a significantly lower bar than the sometimes-used McDonnell Douglas standard which requires a proven prima facie case[ii] by the employee before the burden shifts to the employer to provide a legitimate, non-discriminatory business reason for their actions, and a subsequent shift back to the employee to rebut that reason as pretext.

In light of the Lawson ruling, employers should consider the following steps to evaluate current Whistleblower policies and reporting procedures:

  • Review existing policies to make sure they: 1) provide employees with adequate notice of Whistleblower protections; and 2) clearly convey the message that employees will not be retaliated against for reporting information to government agencies, refusing to participate in activities that would violate state or federal laws, or exercising their rights under the company’s policy.
  • Include training on Whistleblower protections and company policy during supervisory meetings or training sessions.
  • Make sure all employees are aware of the company’s procedures for reporting any allegedly prohibited conduct.
     

[i] California Labor Code Section 1102.5

[ii] A prima facia case is an action or defense that sufficiently establishes a party’s evidence, subject to rebuttal by the other party.