A series of recently enacted, far-reaching California laws targeting employers who retaliate against workers could subject the state’s employers and, potentially, their attorneys, to criminal penalties. So far, California—a bellwether jurisdiction—appears to be alone in enacting these enhanced employee protections, but experience indicates that other states may follow with their own laws.
The beefed-up protection and potential threat to businesses stems from three bills that became effective on January 1: AB 263, AB 524 and SB 666. Taken together, they address a broad range of situations and are crafted with the intent to inhibit employer retaliation against whistleblowers. They also stiffen penalties against employers who may attempt to use a worker’s immigration status as a tool of intimidation.
It should be noted that although there are federal laws on the books that target the twin topics of whistleblower protection and employer retaliation, the scope of the new California statutes is broader and specifically enjoins a company’s legal counsel from assisting in prohibited retaliatory activities.
The new laws prohibit retaliation against whistleblowers undertaken by any person acting on behalf of the employer. They also address employer retaliation arising from a worker’s testimony or other provision of information. A company official who violates the provisions could expose the employer to significant indemnities, including a civil penalty of up to $10,000 per employee, per instance of retaliation.
As noted earlier, the new laws also bolster the rights of immigrant workers by increasing the penalties for certain acts. For example, a threat to report an individual’s immigration status—or even their suspected immigration status—in order to obtain his or her property may now constitute criminal extortion, potentially subjecting the violator to imprisonment of up to one year and/or a fine of up to $10,000.
That’s not all. Under AB 263, AB 524, and SB 666, the company’s business license may be suspended or revoked if the California Division of Labor Standards Enforcement or a court finds that the employer retaliated against a worker by making a report to authorities concerning the citizenship or immigration status of a worker or the worker’s family member, or by threatening to make such a report.
The new statutes could also ensnare unwary attorneys.
As of the enactment date, January 1, an attorney may be subject to discipline, suspension or disbarment if he or she threatens to report immigrant status of workers who are involved in an administrative or civil employment suit.
Businesses can take steps to reduce their exposure and avoid penalties under these laws. As a start, companies should update employee handbooks as part of an overall campaign to educate and train workers and managers to understand that retaliation of any kind is prohibited. To further document compliance with the new laws, managers should sign a statement that they have received the handbook and acknowledge their awareness of the need to protect the rights of employees concerning whistleblowing, immigration status and other issues as appropriate.
With the passage of these new laws, the state of California has signaled its determination to crack down on what it perceives as abuses of employee rights. But companies that act in a timely, decisive and proactive manner will be able to limit their exposure under the new statutes, along with any potential liability.