California Retaliation Law Altered to Favor Employees

Background

Current California law allows employees to file a complaint with the Labor Commissioner if the employee believes they have been subject to retaliation for complaining about violations of the California Labor Code. The Labor Commissioner is authorized to investigate these claims on behalf of employees and, if retaliation is found to have occurred, an injunction can be sought requiring the employer to reinstate the employee.

Summary of New Law

A new California law (SB 306) tilts the law in favor of employees when it comes to retaliation and whistleblower claims. Under SB 306, the Labor Commissioner may initiate an investigation whenever it suspects retaliation—even if the employee did not file a complaint with the Labor Commissioner. The employee, or the Labor Commissioner, may seek a preliminary injunction (ordering the employee to be reinstated while their retaliation claim is investigated) upon simply showing “reasonable cause” that a violation of the law occurred. Under this new law, employers could be forced to reinstate an employee and work with them during the many months it can take to litigate the retaliation claim.

Most concerning for California employers is that SB 306 significantly reduces the burden of proof requirement for obtaining injunctive relief for retaliation cases arising from the California Labor Code. Previously, a court would grant injunctive relief only after a showing that the employee would suffer irreparable harm without it. Now a court must grant injunctive relief upon a showing that “reasonable cause” exists to believe the employee has suffered unlawful retaliation. In addition, SB 306 instructs the court to consider the “chilling effect on other employees” when deciding whether to grant a preliminary injunction— a factor that exclusively favors the employee.

California Employers Should…

…consult with external counsel when taking adverse action against California employees who have potentially engaged in protected whistleblowing conduct or otherwise asserted rights under the California Labor Code.