California
California: Whistleblower Protections for Misunderstandings of the Law
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APPLIES TO All Employers with Employees in CA |
EFFECTIVE DEC 15, 2025 |
QUESTIONS? Contact HR On-Call |
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Discussion
In Contreras v. Green Thumb Produce, Inc., the California Court of Appeal said that an employee may receive whistleblower protection even if they are mistaken about the law. Labor Code § 1102.5 merely requires that an “employee has reasonable cause to believe that the information discloses a violation of state or federal statute.”
In this case, an employee believed he was being paid less than other employees for similar work, although not on the basis of any protected category. He presented his case to his employer, but was sent home and ultimately terminated. A lower court dismissed his whistleblower claim because of his misunderstanding of the Equal Pay Act. The Equal Pay Act does not prohibit pay variances, only discriminatory variances in pay.
For purposes of whistleblowing protection, “the relevant inquiry is not whether the conduct ‘actually violated’ any specific statute or regulation, but whether the plaintiff ‘reasonably believed that there was a violation.’” The court specifically said, “The employee could be mistaken about his or her understanding of (1) the law, (2) the facts, or (3) the law and the facts.” Ultimately, the court found that there was sufficient evidence presented at trial for the jury to find that the employee reasonably believed that a legal violation occurred, notwithstanding his misunderstanding of the law.
This case highlights the caution employers must take when terminating an employee who believes they are reporting a legal violation. Even if the employee is incorrect about the law, they may still receive whistleblower protections. Employers should consult with legal counsel before taking adverse action against an employee under these circumstances.
Action Items
- Implement an internal process for managing whistleblower claims.
- Have appropriate personnel trained on managing whistleblower complaints.
- Review whistleblower complaints with legal counsel for compliant management.
California: Outdated Agreement Terminology was Not Intended to Follow Current Arbitration Enforcement
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APPLIES TO All Employers with Employees in CA |
EFFECTIVE DEC 24, 2025 |
QUESTIONS? Contact HR On-Call |
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Discussion
In LaCour v. Marshalls of CA, LLC, the California Court of Appeals looked to the intention of the parties in an arbitration agreement to determine its enforceability. There, the court reviewed an arbitration agreement from 2014, which preceded much of the Private Attorneys General Act (PAGA) waiver analysis in arbitration agreements that employers must navigate today. This meant that the age of the agreement was determinative of the parties’ intent, in that they could not have intended compliance with court rulings that had not yet been issued.
There, an employee brought representative-only PAGA claims in court. In response, the employer attempted to compel the employee’s individual PAGA claims in arbitration in light of Viking River’s rule allowing the split of individual versus non-individual PAGA claims in arbitration. However, the agreement had older terminology, stating broadly that the parties agreed to bring individual claims in arbitration and waived class, collective, or PAGA representative claims, and a provision severing invalid portions of the agreement and requiring in that instance that PAGA claims be brought in court. The court said that the parties could not have intended to distinguish individual and non-individual PAGA claims for purposes of arbitration based on a legal standard that did not yet exist, and therefore found that the employee’s individual PAGA claims could not be compelled to arbitration.
This case highlights the need for employers to periodically have employees sign updated arbitration agreements to indicate their intent to comply with the latest court rulings and interpretations of enforceability of arbitration agreements.
Action Items
- Have arbitration agreements regularly reviewed and updated by legal counsel for employees to sign.
California: New Paid Sick Leave Poster 2026
Governor Gavin Newsom signed AB 406 in 2025, which made technical updates to California’s paid sick leave law to clarify that employees may use paid sick leave during certain types of leave. California employers must now update their workplace postings to include the newly revised Healthy Workplaces/Healthy Families Act (HWHFA) paid sick leave poster issued by the DLSE in January 2026. This new poster reflects recent legislative changes clarifying that paid sick leave may be used during victims’ leave, court-related leave, and jury duty. It also reiterates employees’ rights to use paid sick leave for their own or a family member’s health care and confirms that retaliation or discrimination for using paid sick leave is prohibited. Employers should ensure that the updated poster is displayed in a conspicuous place where employees can easily see and read it.
REMINDER | California: Know Your Rights Act Notice Required as of February 1, 2026
As of February 1, 2026, pursuant to SB 294, all employers must provide employees with a stand-alone written notice of rights to each current employee through personal service, email, text message, or other method if it can reasonably be expected to be received by the employee within one business day of sending. The written notice must also be provided to each new employee upon hire and annually to existing employees. Employers must keep records of compliance for three years, including the date that each written notice is provided or sent.
California: Pay Data Reporting for Year 2025
California Gov’t Code § 12999 requires employers with 100 or more payroll or labor contractor employees, with at least one employee in California, to annually submit data on the pay, hours worked, and demographics of their employees to the California Civil Rights Department (CRD). The reporting portal opened on February 2, 2026, with a deadline for submission by May 13, 2026. In anticipation of this year’s reporting cycle, the CRD has released updated Excel templates, instructions, user guide, employer handbook, and FAQs.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase