Good Faith Mistake in the Law Still Supports Employee’s Retaliation Claim

Many federal and California employment laws have anti-retaliation provisions that protect employees from employer retaliation after employees have exercised their rights under the law, also known as engaging in a protected activity. For example, California’s Fair Employment and Housing Act (FEHA) protects employees from retaliation if they raise concerns about potential workplace harassment or discrimination or otherwise exercising their rights under the FEHA.

But what happens when the employee complains that their employer may be violating the law but turns out to be mistaken? Recently, a California Court of Appeal found that where the mistake in the law was reasonable and in good faith, the employee is still protected from retaliation for raising the issue as a protected activity (Contreras v. Green Thumb Produce Inc., No. D085440 (Dec. 15, 2025)).

An Equal Pay Complaint

From 2016 to 2020, Manuel Contreras worked for Green Thumb Produce (“Green Thumb”), primarily driving forklifts. During his employment, Contreras learned that other employees performing similar work were being paid more than him, including employees with less seniority at Green Thumb in some cases. . Contreras raised this issue several times with supervisors but no action was taken.

In August 2020, Contreras reached out to his local Labor Commissioner’s office to discuss whether Green Thumb was violating any wage and hour laws by paying him less than other employees for similar work. The deputy labor commissioner that Contreras spoke with indicated that Green Thumb might be violating California’s Equal Pay Act (EPA) and directed him to the Labor Commissioner’s website for more information about that law.

On the website, Contreras accessed a Frequently Asked Questions (FAQ) document about the EPA that provided background on the law and how to file a claim for alleged EPA violations. Based on his conversation with the deputy labor commissioner and the information in the FAQ document, Contreras believed that Green Thumb was violating the EPA by paying him less than other coworkers.

A Contentious Meeting

On September 3, 2020, Contreras brought the FAQ printout to work to share with human resources after his shift in pursuit of a pay raise. While discussing his plans with other employees during his lunch break, Contreras’ supervisor approached him and asked about the printout in his hand. Contreras told his supervisor it was a printout from the Labor Commissioner’s Office that he was going to use to get a pay raise.

Contreras’ supervisor then brought him to Sendy Ochoa, the human resources manager for Green Thumb. Ochoa asked about the paperwork in Contreras’ hand, and after he told her that it was for her, he handed the FAQ document to her and asked for a raise based on its information.

After looking over the FAQ, Ochoa returned it to Contreras. She told him he shouldn’t be showing the FAQ to other employees and asked why Contreras contacted the Labor Commissioner. Contreras replied that he believed he was being paid unfairly compared to other coworkers doing similar work and was looking for information to prove it.

Ochoa denied Contreras’ request for a raise. In response, Contreras made a statement to the effect that he would no longer be driving a forklift. This created an issue with Ochoa as Contreras’ job duties entailed driving a forklift.

Contreras was immediately sent home from work after the meeting with Ochoa. When he arrived for his shift the next day, Contreras was escorted off the premises and informed that his employment with Green Thumb was terminated. Contreras subsequently received a letter from Green Thumb asserting that his employment was terminated for a variety of reasons including:

• Violating company procedures by failing to follow the lunch schedule;
• Talking to coworkers instead of working;
• Disrupting work by showing coworkers paperwork;
• Refusing to return to work after discussing his job performance with human resources; and
• Refusing his manager’s instructions by stating “I am not operating the forklift.”

In 2021, Contreras filed suit against Green Thumb for retaliation, including whistleblower retaliation under Labor Code section 1102.5, related to his discussions about alleged EPA violations at work.

A Jury Finds for Contreras

In 2023, Contreras’ claims went through a jury trial. During the trial, Contreras denied all the reasons for termination provided in Green Thumb’s letter to him. Contreras asserted that when he said he wasn’t going to operate the forklift, he meant he wouldn’t be doing extra forklift work that he was doing to cover for an employee out on leave, but that he would still do his regular job.

 

Contreras then explained that while he knew the EPA was originally designed to protect women from pay disparity, he believed it had been expanded over time to include men. Contreras further explained that the Labor Commissioner’s FAQ document made it appear as if the only relevant issue was whether employees were paid the same for substantially similar work and that disparities didn’t need to be based on sex, race or ethnicity. Contreras did admit that he didn’t believe he was paid differently based on any protected class.

In response to Contreras’ testimony, Green Thumb’s Vice President of Human Resources, Vikita Poindexter, provided testimony that while Contreras was employed at Green Thumb, he had “an enormous amount of attendance issues,” faced several disciplinary actions and had other issues at the workplace. Poindexter suggested during the trial that Green Thumb was too lenient with Contreras’ workplace behavior and should have terminated his employment much sooner.

The jury found in Contreras’ favor that Green Thumb retaliated against Contreras for raising wage disparity issues when it terminated his employment. Green Thumb filed a motion with the court arguing that Contreras was mistaken about EPA violations and admitted that any pay disparity claim was not based on sex, race or ethnicity as required by the EPA. As a result, Contreras wasn’t actually blowing the whistle on any legal violations as required by Labor Code section 1102.5. The trial court agreed and reduced Contreras’ damages award accordingly. Contreras appealed the order that he didn’t make a valid whistleblower retaliation claim.

Whistleblower Retaliation Requires a Reasonable Belief the Law Has Been Violated

Labor Code section 1102.5 is California’s “general whistleblower statute” that prohibits an employer from retaliating against an employee for disclosing information regarding a violation of law to someone with authority over the employee, or who has the authority to investigate or correct the violation. The retaliation protection extends to the employee only if that employee has a reasonable cause to believe that the information discloses a violation of state or federal law.

With this backdrop, the Court of Appeal focused its analysis on whether Contreras had a reasonable belief that the EPA was being violated, not whether Contreras had proved an actual EPA violation. Green Thumb asserted that this opens the door for any employee to make any whistleblowing claim for any mistaken belief of any legal violations — no matter how outlandish. The court rejects this concern because the belief must be objectively reasonable.

Looking at the facts, the Court of Appeal held that a jury could find that Contreras’s belief that Green Thumb was violating the EPA by paying him less than others was objectively reasonable. Contreras’ initial discussion with the deputy labor commissioner led him to believe that Green Thumb "might have violated the law” and directed him to the FAQ document. The court found that since the Labor Commissioner enforces California’s wage and hour laws, including the EPA, a layperson like Contreras could reasonably rely on the deputy labor commissioner’s assessment.

Further, Contreras testified that the FAQ document solidified his belief that Green Thumb violated the EPA, including several questions and answers that focused only on pay rates and never mentioned a sex, race or ethnicity disparity requirement under the EPA. The court noted that more than half of the questions in FAQ omit a discussion about sex, race or ethnicity.

Based on Contreras’ testimony and the jury’s own reading on the FAQ, the Court of Appeal found that there was sufficient evidence that the jury could find Contreras’ belief that Green Thumb was violating the EPA was objectively reasonable and reinstated Contreras’ initial judgment finding a violation of Labor Code section 1102.5.

Employer Takeaways

Retaliation claims take many forms, but the basis for all of them remains the same — an employer takes negative action against an employee in response to an employee exercising their rights under the law.  Part of an employer’s evaluation into whether to terminate an employee must include whether the employee has engaged in a protected activity and, if so, whether the termination has an appearance of retaliation based on the circumstances.

 

This analysis is more important than ever for California employers because a California law that took effect on January 1, 2024, now presumes that any negative action taken against an employee within 90 days of engaging in a protected activity is retaliation. This presumption makes it easier for employees to prove their claims and puts the onus on employers to sufficiently show that their motives are not retaliatory.

To combat retaliation claims, employers must be diligent about making disciplinary decisions as well as adequately documenting those decisions over time. Green Thumb testified in this case that they had several nonretaliatory reasons to terminate Contreras’ employment, but they were too lenient on him. Failing to take timely actions to discipline Contreras where appropriate contributed to a poor result when defending against his claims of retaliation.