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.


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.


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.

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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular…

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular focus on defending companies against claims of employment discrimination, retaliation and harassment; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations. He has successfully tried cases in multiple jurisdictions, and defended one of the largest Illinois-only class actions in the history of the U.S. District Court for the Northern District of Illinois. He also secured one of only a few ex parte seizures orders that have been issued under the Defend Trade Secrets Act, and obtained a world-wide injunction in federal litigation against a high-level executive who jumped ship to a competitor.

Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Steven was recognized as Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers.  Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven has served on Law360’s Employment Editorial Advisory Board and is a Contributor to He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is regularly quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.