Retaliation Risk Even When the Employee Is Wrong About the Law: Contreras v. Green Thumb Produce
In Contreras v. Green Thumb Produce, Inc., the Court of Appeal addressed whether an employee’s mistaken understanding of the law can nonetheless support a whistleblower retaliation claim under Labor Code section 1102.5(b). The court concluded that it can, where substantial evidence supports a finding that the employee’s belief was reasonable from the perspective of a layperson.
Manuel Contreras believed his employer violated the Equal Pay Act by paying him less than coworkers performing similar work. He did not believe the wage difference was based on sex, race, or ethnicity. As the court acknowledged, that belief was legally incorrect because the Equal Pay Act prohibits discriminatory wage differentials, not wage disparities in general. The question on appeal, however, was not whether Contreras correctly understood the statute, but whether the jury reasonably could find that his belief was objectively reasonable at the time he raised his concerns.
The court framed its analysis by identifying three possible categories of mistake under section 1102.5: mistakes of law, mistakes of fact, or mistakes of both law and fact. The court rejected the idea that the type of mistake should control the outcome. Instead, the proper inquiry is whether the employee had reasonable cause to believe the reported conduct was unlawful, consistent with the Legislature’s intent to encourage employees to report perceived violations without requiring legal expertise.
The court then examined the specific evidence that informed Contreras’s belief. First, Contreras consulted a deputy labor commissioner, who told him that Green Thumb might have violated the law. Although the deputy did not make a definitive determination, the court found it reasonable for a lay employee to give weight to that assessment. The Labor Commissioner is the agency charged with enforcing California’s labor laws, and an employee is not expected to discount guidance received from that source.
Second, Contreras relied on the Labor Commissioner’s Equal Pay Act FAQ. The court closely analyzed the FAQ’s language and structure. The first questions describe the Act’s origins and later amendments, emphasizing “equal pay for substantially similar work” without clearly reiterating that a protected characteristic is a required element. Several questions, including those addressing job titles and substantially similar work, omit any reference to sex, race, or ethnicity. More than half of the FAQ’s questions similarly lack explicit reference to protected classes. The court also noted that the statute’s name itself—“Equal Pay Act”—may contribute to confusion by suggesting a general equal pay requirement.
The court acknowledged that judges, with legal training and experience, would read the FAQ in its entirety and correctly understand that the statute requires discrimination based on sex, race, or ethnicity. But the relevant perspective was that of a layperson without formal legal training, particularly one who had been told by a deputy labor commissioner that there might be a violation. Viewed in that context, the court held that a jury could reasonably conclude that Contreras’s misunderstanding of the law was itself reasonable.
Finally, the court emphasized the standard of review. Reasonableness under section 1102.5(b) is typically a question for the jury. The appellate court’s task was not to decide whether it would have reached the same conclusion, but whether substantial evidence supported the jury’s finding. Drawing all inferences in favor of the verdict, the court concluded that the deputy labor commissioner’s statements, the potentially unclear language in the FAQ, and Contreras’s testimony provided sufficient evidentiary support. The trial court therefore erred in granting judgment notwithstanding the verdict on the whistleblower claim.
Contreras confirms that section 1102.5(b) protects employees who reasonably but mistakenly believe their employer has violated the law. The statute focuses on the reasonableness of the employee’s belief rather than its legal correctness, and the determination of whether a mistaken belief is reasonable is ordinarily a question of fact for the jury.