Employees are protected from retaliation for reporting theft, even if the theft is an entirely private matter


California Labor Code section 1102.5 (Section 1102.5) protects employees in reporting information that they have reasonable cause to believe discloses a violation of the law, and prohibits employers from retaliating against such employees.  The anti-retaliation prohibition applies even when the information reported by employees does not arise out of the employer’s business, and even if the information relates to private matters.  As one employer recently learned, violating Section 1102.5 can be costly.

In Cardenas v. Fanaian, 2015 WL 5734835 (Cal. Ct. App., Oct. 1, 2015, F069305), a dental hygienist left her ring on the breakroom table.  It was not on the table when she returned, and she eventually came to suspect that it had been stolen.  The employee filed a police report, and the police came to the dental office on multiple occasions to investigate.  After the second time that the police visited, the employer fired the employee because the situation was negatively affecting the workplace.  The former employee sued for retaliation under Section 1102.5, and was awarded $117,768  in damages related to her termination, including lost earnings.  The employer appealed, and argued that Section 1102.5 did not protect the employee because her report to the police was an entirely private matter (e.g., so that the employee could either get the ring back or file an insurance claim) unrelated to employer wrongdoing.  The court of appeal rejected the employer’s argument, and determined that an employee is protected in reporting information concerning a violation of the law.  Period.  The court of appeal, therefore, upheld the award because theft is illegal, and the employee was terminated for reporting what she reasonably believed was a theft.

This decision is a reminder of the costly mistake of retaliating against employees who engage in activity protected under California law.   Employers need to make sure that the grounds for taking any adverse employment actions against their employees are lawful, and should scrutinize the basis for their proposed conduct before implementing any course of action.  This is particularly true when employees have made complaints near in time to any proposed adverse employment action.


Employees can bring representative actions under the Private Attorneys General Act (“PAGA”) on behalf of themselves and current or former employees for violations of California Labor Code provisions that provide for civil penalties.  When an aggrieved employee brings a PAGA claim, that claim cannot be divided into an individual claim and a representative claim because PAGA claims are representative actions, brought by the employee as the agent for the State.  As a result, the employee cannot be compelled to arbitrate any portion of the PAGA claim.  Williams v. Superior Court, 237 Cal.App.4th 642, 649 (2015).