HR Management & Compliance

Termination for Reporting Theft—A Big Mistake for One California Employer

By Cathleen S. Yonahara

Under California law, employers may not retaliate against employees for reporting illegal activity to law enforcement. However, an employer did just that when it fired a worker for filing a police report after the worker’s wedding ring was stolen while on the job—and that action proved to be an expensive error in judgment.

Rosa Lee Cardenas worked as a dental hygienist at M. Fanaian, DDS, Inc. Cardenas received an expensive new wedding ring for her 25th wedding anniversary, which she wore to the office each day but removed before starting work. One morning, she removed the wedding ring and placed it on the break room table with her cell phone and other belongings. A few minutes later, her wedding ring was no longer there. She searched for the ring but couldn’t find it.

Cardenas reported the theft of her ring to the Reedley Police Department on October 21, 2010. As part of their investigation, police officers came to the dental office twice and questioned the staff. On November 10, Fanaian told Cardenas that the police had been to the office a second time, the situation was causing great tension and discomfort among the staff, and he was going to have to let her go. The ring was found at the office the following day.

Almost 1 year later, on November 7, 2011, Cardenas filed a lawsuit for retaliation in violation of Labor Code Section 1102.5 and wrongful termination in violation of public policy. The jury found in her favor on both claims and awarded her $117,768 for past economic losses, including lost earnings. On January 21, 2014, the court entered judgment on the verdict in favor of Cardenas.

The employer appealed, arguing the judgment should be reversed because there was no fundamental public-policy violation in connection with Cardenas’ firing and that the police report involved a personal matter that wasn’t related to the employer’s business.

The appellate court did not agree with the employer and upheld the jury’s verdict—keep reading to find out exactly why.