Whistleblower Protection Is Extended to Employees That Report Illegal Conduct to Their Employers.

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). 

Employers liable for wages owed to temps

One of the most notable recent trends in workplace staffing has been the increasing use by employers of temporary staffing agencies to fulfill their workforce requirements.  Unfortunately, temporary workers (or "temps") often earn lower wages and have fewer benefits. 

More troubling, the use of temp agencies can hinder the enforcement of labor laws, including overtime, minimum wage, and meal and rest break protections by creating legal separation between the company and the employee.  For example, if a manufacturer hires a staffing agency to supply temps for its warehouse, but the staffing agency fails to pay the worker’s overtime, the staffing agency is liable for the unpaid overtime (plus interest and related penalties).  But what happens if the staffing agency becomes insolvent?  Are the temps simply without recourse?

Effective January 1, 2015, AB 1897 (codified at California Labor Code §2810.3) makes certain employers liable for the payment of wages owed by labor contractors that they retain.  The law exempts business entities with a workforce of less than twenty-five (25) workers (including workers hired directly by the company and workers hired by the labor contractor) and businesses with five (5) or fewer workers supplied by a labor contractor.  This new law should help facilitate the recovery of unpaid wages for temps whose employers have failed to abide by California’s labor laws.

You May Have Earned Your Vacation Time

As many employees celebrate the New Year at home with their families, many other workers are clocking in to begin their shifts.  Employees are often surprised to learn that California law does not require that an employer provide vacation time to their employees.  However, if an employer does provide vacation to its workforce, there are certain important requirements that it must comply with. 

If the employer has established a policy providing for paid vacations, then upon the end of the employment relationship, the employer must pay out as wages, all vested vacation time.  That is, California courts consider the accrued vacation as deferred wages which vest as work is performed.

Employees may not forfeit earned vacation.  For that reason, “use it or lose it” vacation policies are not permissible.  Under a “use it or lose it” policy, vacation time cannot be carried over into a subsequent calendar year, and the employee consequently forfeits vacation time that is not used.  California law is clear – such policies are not permissible.  However, an employer may impose a reasonable “cap” on how much vacation time is accrued. 

Hopefully, you were able to take some vacation time off this holiday season.  But even if you didn’t, you may have earned vacation time nonetheless. 

Happy Holidays!

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El Bufete Legal de Miguel S. Ramirez
11801 Pierce Street, Suite 200
Miguel S. Ramirez on Google+ Riverside, California 92505
Tel: 909-494-2102


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