When it comes to defending employers in California whistleblower cases, few laws are as difficult to overcome as California Labor Code §1102.5, which governs retaliation and whistleblower protection. In this recent case, Rupal Law successfully defeated a case where the Plaintiff was asking for $3 million in damages—saving the employer from potentially devastating liability.
This outcome highlights how critical it is for California employers to understand their responsibilities under Labor Code §1102.5, document employee performance properly, and take proactive steps to prevent retaliation claims.
The Case: A Small Business Facing a Big Problem
A former assistant controller, earning over $100,000 annually, filed a lawsuit claiming wrongful termination in violation of Labor Code §1102.5, alleging that he was fired for reporting wage-and-hour violations to the Labor Department.
He demanded over $3 million in damages—including emotional distress, past wages, and three years of future lost pay. The case was especially challenging because California’s whistleblower laws strongly favor employees.
Under Labor Code §1102.5, when an employee reports a suspected legal violation, they are considered a protected employee. If they are terminated within 90 days of that report, the law presumes retaliation. The employer must then prove—with clear and convincing evidence—that the termination was for legitimate reasons completely unrelated to the report. That’s the highest evidentiary standard in civil law.
The Defense Strategy: Proving a Legitimate Business Reason
Despite the odds, Attorney Mandeep S. Rupal built a winning defense based on evidence, credibility, and careful storytelling.
Through investigation and witness testimony, the defense team proved that:
- The alleged wage complaint was originally filed by another employee who had already resigned.
- The plaintiff merely “piggybacked” on that previous complaint.
- The employee was still within his 90-day probationary period, but was terminated after only 87 days.
- Several co-workers testified that he was toxic, disruptive, and often handled personal matters during work hours.
- Management had even considered transitioning him to an independent-contractor role rather than firing him, but his erratic behavior escalated after learning about the upcoming changes.
Even though the employer did not have a formal Performance Improvement Plan (PIP) or termination letter, Rupal successfully used emails, testimony, and cross-examination to establish a consistent record of poor performance and unprofessional conduct.
“The employer didn’t have perfect paperwork,” Attorney Mandeep S. Rupal said. “But the facts were strong enough to prove he would have been fired regardless of any alleged complaint.”
The Jury’s Verdict: Performance, Not Retaliation
After a multi-day trial, nine out of twelve jurors sided with the employer, agreeing that the termination would have occurred even if the employee had never mentioned any alleged violations.
The jury acknowledged that the plaintiff’s complaint might qualify as a “protected activity,” but concluded that it was not a contributing factor in the termination. The verdict completely cleared the employer of all retaliation claims.
“We convinced the jury through detailed evidence and credible witness testimony that the decision was performance-based,” Attorney Mandeep S. Rupal said. “This outcome reinforces that when the truth is documented clearly, juries can see it.”
Key Lessons for California Employers
This case carries important lessons for any business operating in California—especially small businesses that often lack formal HR procedures.
1. Always Document Performance Issues
Emails, memory, or verbal reminders aren’t enough. Maintain written records of performance warnings, evaluations, and behavioral issues. Documentation is your best defense.
2. Treat Every Complaint Seriously
Even if an employee’s complaint seems minor or unfounded, treat it as protected activity under California law. Handle it professionally and consult counsel before taking any disciplinary action.
3. Train Supervisors on Retaliation Risks
Supervisors and managers should be trained to recognize what counts as protected activity and to avoid decisions that might appear retaliatory.
4. Don’t Avoid Confrontation
“Small-business owners often avoid confrontation,” Attorney Mandeep S. Rupal said. “They see their workplace as a family. But the law doesn’t care whether you’re Walmart or a corner-store business—the law applies equally.”
This mindset can be costly. The law treats a seven-employee business the same way it treats a Fortune 500 company.
5. Get Legal Help Early
If an employee makes a complaint, contacts the Labor Department, or references “retaliation,” you should contact an employment defense attorney immediately. Early action can often prevent full litigation or reduce exposure drastically.
The Human Side of the Case
Beyond the legal complexity, this case also reaffirmed Attorney Mandeep S. Rupal’s faith in the jury system.
“People often criticize juries as unpredictable, but when you select sensible jurors and present the facts clearly, they apply the law faithfully,” Attorney Mandeep S. Rupal said. “Every trial has its own life and rhythm. This one reaffirmed my appreciation for California juries and the importance of preparation.”
The verdict wasn’t just a defense success for the employer—it was a win for fairness and due process.
Why This Case Matters for Small Business Owners
Many entrepreneurs believe that having a “family culture” shields them from legal risk. Unfortunately, California law doesn’t distinguish between a family-owned business and a corporation.
“Entrepreneurs are optimistic by nature,” Attorney Mandeep S. Rupal explained. “But optimism isn’t a defense. The best way to protect your business is to face issues head-on, document clearly, and get legal advice before they escalate.”
Final Takeaway: Prevention Is Your Best Defense
California’s employment laws are among the strictest in the nation. Employers who ignore documentation, delay legal consultation, or overlook HR best practices put their entire business at risk.
The good news? With the right policies, training, and proactive legal guidance, most retaliation and whistleblower claims can be prevented—or successfully defended.
If your business has received a Labor Code §1102.5 retaliation claim or a PAGA notice, or if you simply want to ensure your workplace is compliant, Rupal Law can help.
Protect Your Business Today by Taking Precautions to Prevent PAGA Violations
At Rupal Law, we help California employers prevent and defend against costly employment law claims—including retaliation, wrongful termination, and PAGA actions.
Call Rupal Law today (951) 460-0830 to schedule a confidential consultation, or
Visit www.EmploymentLawWebinars.com to join our free upcoming webinars for California business owners.
Stay informed. Stay protected. And remember—prevention is your strongest defense.
