Whistleblower Can Proceed With Retaliation Claims Under the California False Claims Act and Labor Code

Last October, the Los Angeles Times article titled “Rampant recycling fraud is draining California cash,” available here, exposed one of the latest scams sweeping across California–and discussed one man’s effort to nip this fraud in the bud, at least to the extent that it involved his former employer.  Specifically, in a lawsuit filed in August 2009, Brian McVeigh alleged that after he complained to his employer that various of his coworkers were involved in recycling fraud, he was fired.  The trial court dismissed his case in its entirety, and Mr. McVeigh appealed.

On appeal, the Court concluded that the trial court erroneously dismissed one of              Mr. McVeigh’s claims under the California False Claims Act (“CFCA”), which is violated when a person “”[k]nowingly presents or causes to be presented a false or fraudulent claim for payment or approval,’ or ‘[k]nowingly makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim,'” and also erroneously dismissed his claims of retaliation in violation of Labor Code Section 1102.5 and wrongful termination in violation of public policy.  The Court determined that Mr. McVeigh presented sufficient evidence to withstand early dismissal that he was terminated on account of his whistleblowing activities, and the fact that part of his job duties involved reporting potential fraud, waste, or abuse did not change this conclusion.  In reaching its decision, the Court also reiterated the purpose of Labor Code Section 1102.5, which “reflects the broad public policy interest in encouraging workplace whistleblowers to report unlawful acts without fearing retaliation,” and stated that Labor Code Section 1102.5(b) “should be given a broad construction commensurate with its broad purpose.”

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Bernstein & Friedland, P.C. is a boutique employment law firm in Los Angeles specializing in wrongful termination, discrimination, harassment, retaliation, and unpaid wage and overtime matters.  Please visit our website at www.laemploymentcounsel.com to learn more about us.

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