caIn Cardenas v. M. Fanaian, D.D.S., Inc., Case No. F069305 (Cal. App. 5 Dist.), a California Court of Appeal determined that Plaintiff Cardenas could pursue a California Labor Code Section 1102.5 retaliation claim against her former employer, M. Fanaian, D.D.S., Inc. (“Company”) based on her allegation that it discharged her because she reported her coworker’s alleged theft of her property to law enforcement authorities—a complaint that did not implicate any wrongdoing by the Company itself.


On October 11, 2010, Plaintiff, who was working as a dental hygienist, alleged that her wedding ring went missing at work.  She informed the Company that she planned to file a police report because she suspected that one of her coworker’s stole it.  She testified that the Company tried to dissuade her from making such a report.  On October 21, 2011, her husband filed a police report and Plaintiff provided a formal statement a few days later.  Police officers came to Company and questioned office personnel.  On November 10, 2011, after a second visit from the police, the Company told Plaintiff that the situation was causing great tension and discomfort among staff and, therefore, her employment was being terminated.

Plaintiff sued the Company in California state court alleging retaliation in violation of California Labor Code Section 1102.5 and wrongful termination in violation of public policy.  The case proceeded to trial and after Plaintiff presented her case, the Company moved for nonsuit concerning Plaintiff’s public policy claim, arguing that Plaintiff failed to prove that her termination involved a fundamental public policy.  The trial court denied the motion and the jury found for Plaintiff on both claims, awarding her $117,768 in total damages.

Appellate Court’s Decision

For the first time on appeal, the Company argued that the Legislature intended to limit California Labor Code Section 1102.5 claims to employee disclosures of “business enterprise wrongdoing” by the employer and, therefore, Plaintiff’s report of the theft of her ring was not protected activity.  The court focused on the plain language of Section 1102.5, which protects an employee from retaliation for disclosing information to a law enforcement agency that the employee reasonably believes discloses a violation of state or federal law.  The court further emphasized that Section 1102.5 does not explicitly state that the disclosure to law enforcement must relate to the employment enterprise, rather than individual concerns.  Accordingly, despite a dissenting opinion explaining that the Legislature did not intend for Section 1102.5 to encompass “private matters that are of no practical concern to anyone besides the individual who is claiming to be the victim of a criminal act,” the appellate court affirmed the trial court’s judgment.  It held that “Section 1102.5 prohibits an employer from retaliating against an employee who discloses information to law enforcement where the employee has a reasonable belief that a violation of law has occurred,” regardless of whether the alleged violation relates to the business enterprise or strictly to the employee’s personal interests.


As the dissenting opinion recognized, one would reasonably expect that an employee could not prevail on a whistleblower claim without alleging that he or she complained that the employer was engaged in unlawful conduct.  However, the Cardenas decision clarifies that in California, employers are exposed to potential liability when an employee makes any complaint to law enforcement—regardless of whether the complaint relates to the employer’s conduct or not.  This serves as yet another example of the expanding scope of whistleblower protection in California and the attendant risks for employers.

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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.