Whistleblower Claims
Who Can Be Sued Under California Labor Code § 1102.5? California Court of Appeal Draws the Line
In a published decision addressing a previously unresolved question under California law, the First District Court of Appeal held that individual supervisors and managers cannot be held personally liable for whistleblower retaliation under California Labor Code section 1102.5. In Chaudhry v. State of California, the court became the first California appellate court to squarely address whether the statute permits claims against individual supervisors, ultimately concluding that liability rests with the employer, not the individuals acting on the employer’s behalf. For employers, the decision provides a clear basis to seek early dismissal of supervisors named in section 1102.5 lawsuits and undercuts a tactic plaintiffs have used to keep these cases in state court. It does not, however, reduce the employer’s own exposure. The plaintiff, a state corrections employee who alleged she was retaliated against for making Cal/OSHA complaints, sued her employer and three of her supervisors. Although section 1102.5 prohibits retaliation by an employer or “any person acting on behalf of the employer,” the court held that this phrase, read in the context of the broader statutory scheme, does not authorize suits against individual managers and supervisors. In this article, we briefly summarize the court’s reasoning and focus on what the decision means in practice for California employers. The Court’s Reasoning in Brief The court found the statutory language ambiguous when read alongside related provisions, and it resolved that ambiguity against individual liability. Several factors led the court to that conclusion: Related statutory provisions, such as Labor Code sections 1104 and 1105, focus on imposing liability on employers for actions by supervisors that violate section 1102.5, rather than on the supervisors themselves. Labor Code section 1102.6, which establishes the burden-shifting framework governing whistleblower claims, places the burden of proof squarely on the employer and makes no reference to supervisors or other individuals. Legislative history regarding section 1102.5, including the 2013 amendments that added the phrase “any person acting on behalf of the employer,” reflects an intent to extend the prohibition to “all persons and entities,” but contains no indication that the Legislature intended to allow employees to sue individual managers or supervisors personally. California Supreme Court jurisprudence regarding the liability of individual supervisors under other employment statutes, such as FEHA, also points against imposing liability. The court reasoned that exposing supervisors to personal liability for necessary personnel decisions would add little to a plaintiff’s recovery while chilling managerial judgment and creating conflicts of interest between supervisors and their employers. The court noted that more than 30 federal district court decisions have reached the same conclusion, and it declined to follow the small number of federal rulings that had treated the question as open. Practical Implications for Employers The holding in Chaudhry has several important implications for California employers defending whistleblower retaliation claims. This decision removes a potentially significant source of personal exposure for individual managers and supervisors in section 1102.5 litigation. It should also reduce the defense costs and potential conflicts of interest that arise when an employer and its supervisors are co-defendants, particularly where the employer would be obligated to fund the supervisors’ defense. This opinion should meaningfully strengthen removal and fraudulent-joinder arguments in cases where individual California supervisors are named primarily to defeat diversity jurisdiction. Several federal courts had declined to find fraudulent joinder of supervisors precisely because no California court had resolved whether section 1102.5 permits individual liability; Chaudhry fills that gap. The opinion may also discourage plaintiffs from naming supervisors as defendants in future section 1102.5 actions absent another viable cause of action supporting individual liability. Employers defending existing lawsuits should evaluate whether individual supervisor defendants can be dismissed from pending section 1102.5 claims through a demurrer, a motion for judgment on the pleadings, or a summary judgment motion, and whether any other claims pleaded against those individuals (such as FEHA harassment) independently support keeping them in the case. Claims against the employer remain fully viable. The court allowed the section 1102.5 claim against the State and CDCR to proceed on a constructive-discharge theory, holding that a constructive discharge can itself be the actionable adverse action even when the underlying conduct began years earlier. The court also signaled that reversing course does not necessarily cure the harm; repeated terminations followed by reinstatement, combined with obstacles placed in the employee’s way on return, could make continued employment intolerable. Not every workplace slight is actionable. The court held that requests for doctor’s notes, a single accusation of improper mask use, and a counseling record with no alleged consequences were not adverse employment actions, individually or collectively. Even so, employers should document the legitimate, independent reasons for any discipline of an employee who has engaged in protected activity, because under section 1102.6 the employer must prove those reasons by clear and convincing evidence. Key Takeaway Chaudhry does not render supervisors wholly insulated from employment-related liability. Rather, it holds that the proper defendant in a section 1102.5 action is the employer. Supervisors may still face personal liability under other statutes, including FEHA’s harassment provisions and, for state employees, the California Whistleblower Protection Act, and plaintiffs may try to rely on other anti-retaliation statutes with “person” language that Chaudhry did not address. Employers should continue to train supervisors to recognize protected whistleblower activity and avoid retaliatory conduct because their actions may still expose the employer to liability, including under section 1102.5 itself, where the employer bears the burden of proving by clear and convincing evidence that it would have taken the same action for legitimate, independent reasons.
October 12, 2026
by Ketul D. Patel and Edward Lee
Whistleblower Claims
NEW YORK’S EXPANDED WHISTLEBLOWER PROTECTION LAW: WHAT CHANGED IN 2022?
Sweeping amendments to New York’s whistleblower law took effect in 2022. The law was amended to provide significantly greater protection from retaliation for individuals who raise concerns of employer wrongdoing. The amended New York Labor Law § 740 is now one of the broadest and most powerful whistleblower laws in the U.S. How has New York’s whistleblower law changed? New York’s whistleblower law was broadly expanded in 2022. Prior to the 2022 amendment, employees were protected from retaliation only for reporting (internally or externally) actual violations of law involving (1) “a substantial and specific danger to the public health or safety;” or (2) healthcare fraud. Now, whistleblower protections are available to both employees and independent contractors who raise concerns about any activity, policy or practice that they reasonably believe violates any law, rule or regulation. Proof of an actual violation of law is no longer necessary, and violations need not relate to public health or safety. All that is required is a reasonable belief that a violation of any law has occurred. The amendment also expands the categories of protected individuals as well as the potential remedies available to litigants. Who is protected? The amendment expanded the definition of “employee” to include “former employees” and “natural persons employed as independent contractors . . . who are not themselves employers.” What qualifies as protected activity? Under the amended statute, employers may not take retaliatory action against an “employee” for: Disclosing or threatening to disclose to a supervisor or a public body an activity, policy or practice of the employer that the employee reasonably believes violates a law, rule or regulation (including executive orders and judicial and administrative decisions), or that the employee reasonably believes poses a substantial and specific danger to the public health or safety; Providing information to, or testifying before, any public body conducting an investigation, hearing or inquiry into any such activity, policy or practice by the employer; or Objecting to, or refusing to participate in, any such activity, policy or practice. Employees are protected from retaliation for taking such actions regardless of whether they are acting within the scope of their job duties. What constitutes retaliation? The definition of “retaliatory action” was also expanded. It now encompasses adverse action taken by an employer to “discharge, threaten, penalize, or in any other manner discriminate against an employee” for exercising his or her rights under the statute, including: (i) adverse employment actions or threats to take such adverse employment actions against an employee in the terms or conditions of employment, including but not limited to discharge, suspension or demotion; (ii) actions or threats to take such action that would adversely impact a former employee’s current or future employment; or (iii) contacting or threatening to contact U.S. immigration authorities regarding the immigration or citizenship status of an employee or the employee’s family. Has the notification and cure requirement changed? The notification and cure requirement poses a significant limitation to whistleblower actions. Prior to the amendment, before seeking whistleblower protection for providing information to or testifying before a public body conducting an investigation, hearing or inquiry, the employee must have made a good faith effort to notify a supervisor and afford the employer a reasonable opportunity to correct its actions. The amendment adds numerous exceptions to the notification and cure requirement, including when: There is imminent and serious danger to the public health and safety; The employee reasonably believes that reporting the suspected violation would result in the destruction of evidence or concealment of the activity; The suspected violation could reasonably be expected to lead to endangering the welfare of a minor; The employee reasonably believes that reporting to a supervisor would result in physical injury to the employee or to others; or The employee reasonably believes that the supervisor is already aware of the activity and will not correct it. Notification is no longer required under any of the above circumstances. Is there a publication requirement? The New York State Department of Labor issued a model notice for employers. Employers are required to post a notice of employee rights under the law in a conspicuous and well-lit area of the employer’s premises that is customarily frequented by employees and applicants. For fully remote employees, this notice should be provided by email and included in remote employees’ standard onboarding documentation. Has the statute of limitations changed? Yes, the statute of limitations has been extended. Employees and contractors may now institute civil litigation under the statute within two years of the alleged retaliatory action, up from one year prior to the amendment. What new remedies are available? The amendment provides a right to a jury trial and expands the potential remedies available under the statute by adding front pay, civil penalties and punitive damages. The remedies currently available under the statute are: Injunctive relief to restrain continued violation of the statute; Reinstatement, or front pay in lieu thereof; Reinstatement of full fringe benefits and seniority rights; Compensation for lost wages, benefits and other remuneration (back pay); Reasonable costs, disbursements and attorneys’ fees (attorneys’ fees may be awarded to the employer as well, “if the court determines that an action was without basis in law or fact”); A civil penalty not to exceed $10,000; and Punitive damages for willful, malicious or wonton violations.
December 21, 2022
by Krista Bolles
Whistleblower Claims
If a Whistleblower is Just Playing the Same Old Tune, Does the Law Protect Him?
Some of the trickiest employment decisions can involve employees who have made accusatory complaints against the company they work for. Many state and federal laws protect “whistleblowers” who try to bring to light illegal behavior by their employers. But in many instances employers legitimately wonder whether the complaint was made in “good faith,” or just to stir up trouble, or even to give a soon-to-be-fired employee who was about to be fired for some other reason, an excuse to bring a lawsuit. So, is the employee’s complaint of employer wrongdoing really whistleblowing if the company already knows about the alleged wrongdoing? How can the employee really “blow the whistle” if someone else has blown it already? An opinion issued by the Minnesota Supreme Court on August 9, 2017, answers this question favorably to the employee, expands the type of complaints that will be regarded as good faith whistleblowing, and may become the basis for more lawsuits by employees accusing employers of retaliating against them for reporting alleged wrongdoing. Previously, under Minnesota’s Whistleblower Act, Minn. Stat. §§ 181.931-.935 (2016), an employee terminated for making a complaint of illegal conduct had to demonstrate that his complaint had been made in good faith, which meant not only that the employee believed in the report he was making, but also that his purpose was to “expose an illegality.” Since the you can’t “expose” something which is already known, Minnesota law did not protect employees who complained of illegal (or allegedly illegal) conduct that the employer already knew about. But in 2013, the Minnesota Legislature amended the statute to provide a specific definition of “good faith,” which focused on the employee’s belief that his report was true, but said nothing about intending to expose an illegality. In Friedlander v. Edwards Lifesciences, LLC, et al., A16-1916 (Minn. Aug. 9, 2017) (“Friedlander”), the Minnesota Supreme Court held that the Legislature intended to get rid of the requirement of exposing an illegality, and that whistleblowing activity is protected even if it is just the same old tune that the employer had heard before. Although the statute was amended in 2013, until Friedlander it was not clear whether the “expose an illegality” requirement remained part of the law, as that mandate did not appear in the text of the 2013 Whistleblower Act. In Friedlander, an employee sued his former employer in the federal court under the Minnesota Whistleblower Act, claiming that his superiors had been engaged in legal violations, which the employee had reported directly to the superiors prior to his termination. The employer moved to dismiss the lawsuit, arguing that because the employer reported the allegedly wrongful conduct to people who already knew about the conduct, he had not “exposed” the allegedly illegal conduct to anyone. The success of the employer’s motion therefore turned on whether the 2013 amendments eliminated the Whistleblower Act’s “expose an illegality” requirement. Because no court had yet addressed that issue, the Minnesota District Court referred the question to the Minnesota Supreme Court, which ruled unanimously in favor of the employee. In Friedlander, the Minnesota Supreme Court concluded that the 2013 amendments eliminated the “expose an illegality” requirement. Following Friedlander, a whistleblower’s report is made in “good faith” if the report is “not knowingly false or made with reckless disregard of the truth.” Friedlander therefore simplifies what an employee has to prove in order to sue under the Whistleblower Act. It serves as a reminder to employers that firing an employee who has complained about possibly illegal activities at the company must be addressed with care. It remains perfectly legal to fire such employees for other, legitimate reasons, but not because their whistleblowing. Employers should therefore take care to ensure that any termination, demotion, pay cut, or other personnel action being considered for an employee who has reported actual or suspected illegal conduct is taken for legitimate business reasons, not because of the employee’s report.
August 21, 2017
by Jack Sullivan
