California law has long held that employers may not retaliate against employees that report illegal conduct to government or law enforcement agencies.  But what happens when employees report that conduct internally, to their own supervisors, or to other company officials?

The California Court of Appeals recently held in Ferrick v. Santa Clara University (2014) 231 Cal.App.4th 1337 that California law reflects a “broad public policy interest” in encouraging whistleblowers in the workplace to report “without fear of retaliation” information regarding conduct they reasonably believe is in violation of law.  According to Ferrick, this policy interest in whistleblower protection supports a claim for wrongful termination, even when the employee’s whistleblowing is made internally to the employer, rather than to a governmental entity or law enforcement agency.  The Court of Appeals in Ferrick overturned the trial court’s decision dismissing the Plaintiff’s claims for wrongful termination in violation of public policy, and allowed the case to proceed. 

Even before the Court of Appeals released the Ferrick decision on December 1, 2014, the California Legislature had already taken steps to extend whistleblower protection in cases such as Ferrick.  Prior to 2014, Labor Code §1102.5 held that employers could not retaliate against employees for disclosing information to a government or law enforcement agency where the whistleblower had reasonable cause to believe the information disclosed a violation of state or federal statute, or a violation or noncompliance with a state or federal rule regulation.  As amended, Labor Code §1102.5 now affords whistleblower protection to employees that report conduct they reasonably believe is illegal to government or law enforcement agencies and also to “a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation . . . .”

The Court’s decision in Ferrick, along with the changes made to Labor Code §1102.5 will make clear that whistleblower protection extends to employees who report conduct they reasonable believe violates the law – even if that report is made internally within the Company. 

The Court of Appeals decision in Ferrick v. Santa Clara University is available at: http://courts.ca.gov/opinions/documents/H040252.PDF).