California employers could be blindsided in coming months and years by a blitz of new lawsuits, after California lawmakers rewrote the law to require courts to presume employers are at fault when they are accused of retaliating against workers for "whisteblowing" or other kinds of so-called "protected activity."
The new law, known as SB 497, doesn't add new conduct that’s protected, rather it takes away a barrier to establishing retaliatory conduct, said Jared Slater, an attorney with Ervin Cohen & Jessup, in response to questions from the Southern California Record.
Slater said that before SB 497, the employee needed to establish a so-called "causal connection" between the employee’s action -- whether whistleblowing or other protected activity – and then the employer’s allegedly adverse reaction.
Jared Slater
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“There had to be some connection,” Slater said. “What SB 497 does, is there’s an automatic presumption of retaliation.”
Workers no longer need that causal connection, as long as they can show they suffered adverse action within 90 days, Slater said.
“And very likely there will be an increase in litigation because it's now much easier to bring these types of claims," Slater said.
Further, Slater noted employers now risk further financial pain from such lawsuits, as violations of Labor Code Section 98.6 and/or Section 1102.5 carry an additional $10,000 penalty.
“Now more than ever it’s important to carefully document the reasons for any adverse employment action,” Slater said. “So that if it ever comes to it, an employer can rebut the presumption that the alleged action was retaliation.”
Slater noted there is likely to be further expansion of these protections and more lawsuit risks in coming months and years.
“Yes, because the causal connection barrier is gone,” Slater said. “All the employee has to do is show the adverse action happened within 90 days of engaging in protected activity – and boom – you have a claim. So yes, there’s going to be increase in litigation, to detriment of employers who have to work under all these new rules while trying to maintain a productive business.”
While union organizing is covered by a different section of the Labor Code, Slater noted it’s possible that with Labor Code sections 1102.5 and 1197.5, one could complain to an outside agency or Labor Commissioner that they’re not being able to organize like they’re supposed to.
“It could be an employee attempting to resist an employer’s effort to prevent protected activities and then going and whistleblowing about it,” Slater said.
Gov. Gavin Newsom signed SB 497 on Oct. 8.
Business community representatives, cited in in the state Assembly Floor Analysis, said the new law will allow frivolous claims to not only be filed, but move forward, because of the new presumption that employers are at fault.
"[This bill] creates a presumption in favor of an employee retaliation claim under Labor Code sections 98.6 and 1197.5 where the alleged adverse action took place within 90 days of the alleged protected activity," business advocates said.
"Courts already take timing into account when evaluating a retaliation claim. While sometimes 90 days may be sufficient to show retaliatory motive, that is not always the case. Depending on the facts of the case, courts have found that 90 days is not sufficient to infer causation.
"There is no justification for creating a presumption in these two code sections. Courts already take temporal proximity into account when evaluating retaliation claims and the courts should be allowed to consider other factors relevant to the specific case. Creating a presumption simply allows claims to proceed that should not be moving forward, which wastes valuable court and litigant resources."
The expansiveness of SB 497 could catch employers unawares, Slater said.
“I would absolutely agree that it will catch a lot of employers off-guard,” Slater said. “Because it's the only law that I've seen, in recent years, that essentially removes or redefines an element for a cause of action in the employment context.”