Employee claims of retaliation in the workplace have been on an upward trend since the California Legislature amended Labor Code section 1102.5 to include protections for whistleblower complaints made directly to a person with authority over the complaining employee or to another employee with authority to investigate the claims alleged. Senate Bill 497, which goes into effect on January 1, 2024, will serve to permit claims for employees alleging retaliation in the workplace under not only Labor Code section 1102.5, but also sections 98.6 (engaging in protected activity related to specified rights under the jurisdiction of the Labor Commissioner) and 1197.5 (engaging in protected activity regarding the payment of wages at lower rates for substantially similar work based on sex, race or ethnicity).
Under existing California law, to establish a claim for retaliation, an employee has the initial burden of demonstrating: (1) the employee engaged in a protected activity; (2) the employer engaged in an adverse action against the employee; and (3) there was a causal nexus between the protected activity and the alleged adverse action. Before SB 497, California followed the common law rule that temporal proximity alone is not sufficient to establish a causal nexus between a protected activity and an adverse employment action. SB 497 effectively eliminates this rule by amending Labor Code sections 98.6, 1102.5, and 1197.5. Each of these statutes now establish a rebuttable presumption that the employer has retaliated against the employee if the employer takes an “adverse employment action” within 90 days of the employee engaging in the protected activity.
Under the amended statutes, temporal proximity will satisfy the “causal nexus” requirement for employees seeking to establish a claim of retaliation. If this lowered threshold is satisfied, the burden of persuasion will then shift to the employer to identify a legitimate, non-retaliatory reason for the alleged adverse employment action. If the employer does so, the burden of persuasion will shift back to the employee to prove that the employer’s proffered reason was in fact pretext, and the true motive was to retaliate against the employee.
SB 497 does merely make it easier for employees to establish retaliation claims, it serves to increase the penalties for such claims. The bill further provides that, in addition to other remedies already available, an employer will also be liable for a civil penalty of $10,000.00 if the employer violates either Labor Code section 98.6 or 1102.5, with the penalty being paid directly to the employee.
