In Diego v. Pilgrim United Church of Christ, — Cal.Rptr.3d —-, 2014 WL 6602601 (Cal. App. 4 Dist.) (available here), the California Court of Appeal determined that Cecilia Diego (Plaintiff) could pursue a common law public policy retaliation claim against her former employer, Pilgrim United Church of Christ (the Church), based on her allegations that the Church discharged her because it believed she complained of public safety issues to a government agency, even though she never actually complained.

Background

In August of 2011, Plaintiff was working as Assistant Director of the Church’s preschool when another employee called the Community Care Licensing Division of the California Department of Social Services (Licensing Division) to report potential violations of the California Child Day Care Act.  On August 23, Plaintiff’s supervisor, Anne Lewis, asked Plaintiff “why she was doing this” and whether Plaintiff “wanted Lewis gone.”  Based on this conversation, Plaintiff alleged that Lewis blamed her for registering a complaint with the Licensing Division.  Plaintiff’s employment was subsequently terminated, and she alleged that Lewis discharged her in retaliation for what she thought was Plaintiff’s complaint to the Licensing Division.  The Church, on the other hand, maintained that it discharged Plaintiff for insubordination.

Trial Court’s Decision

Plaintiff filed suit against the Church in California state court for wrongful termination in violation of public policy.  The trial court determined that Plaintiff could not meet her burden of implicating an important public policy because she never actually filed a complaint.  Therefore, the trial court granted summary judgment in favor of the Church, ruling that a wrongful termination in violation of public policy claim could not be based upon an employer’s mistaken belief that an employee reported a violation.

Appellate Court’s Decision

The appellate court reversed and ordered the trial court to deny the Church’s motion for summary judgment with respect to Plaintiff’s whistleblower claim.  The court focused on California Labor Code Section 1102.5(b), which precludes an employer from retaliating against an employee for disclosing a violation of state regulations to a governmental agency, and determined that its purpose is to “encourage workplace whistle-blowers to report unlawful acts without fearing retaliation.”  Although no court had previously applied Section 1102.5(b) to perceived whistleblowers, the court reasoned that discharging workers who are mistakenly suspected of registering complaints could discourage others from actually filing complaints.  Therefore, the court ruled that discharging an employee based on the mistaken belief that he or she filed a complaint violated an important public policy.

Implications

It is of course surprising, and arguably counter-intuitive, that a plaintiff can prevail on a whistleblower claim where she never blew a whistle in the first place.  This is a cautionary tale for employers that the tripwire has gotten even lower in the whistleblower arena.  Based on the Diego decision and the recent amendment to Labor Code Section 1102.5(b) (which we reported on here), it is clear that the scope of whistleblower protection in California is significantly expanding and the attendant risks for employers are increasing.