Legal Question in Employment Law in California

If you report your employer�s violation of wage laws to the Division of Labor Standards Enforcement (�DLSE� or �Labor Board�) and your employer fires you in retaliation for doing so, you can sue for wrongful termination. In order to prevail in the wrongful termination suit, you would have to show that (1) you reported your employer�s violation of the wage laws to the government (i.e. the DLSE/Labor Bd.), (2) that your employer knew that you reported it to the DLSE/Labor Bd. (e.g. because you told your employer, in an email, that you reported its wage law violations to the DLSE/Labor Bd.), and (3) that the employer fired you in retaliation for complaining to the DLSE/Labor Bd. If you were able to prove this, you would be entitled to lost wages and emotional distress that resulted from the termination. If you quit, rather than being fired, you could still sue your employer, but you would have to prove (1) and (2) and also what is called �constructive discharge,� which means you would have to show that as a result of your employer knowing that you reported its wage violations to the DLSE/Labor Bd., the employer created or permitted working conditions that were so intolerable that a reasonable person in your position would be compelled to resign. This is a much more difficult standard to meet. So the short answer to your question is, �yes,� in order to go forward with a wrongful termination claim under these circumstances, it is best to actually be fired as opposed to quitting.

With respect to your question about unemployment, you are similarly far more likely to be eligible for unemployment benefits if you are fired in retaliation for reporting your employer�s wage law violations to the Labor Board, than if you quit. To be qualified for unemployment benefits, you must have lost your job �through no fault of your own.� If you are fired in retaliation for reporting wage law violations by your employer to the Labor Board, you have a good argument that you were fired through no fault of your own and are qualified for unemployment. If you quit, however, you would have to convince the EDD that you quit under similar circumstances as constructive discharge � i.e. that the working conditions were so intolerable that a reasonable person in your position would be compelled to resign �which would be much more difficult to do.

So, in short, your best option in terms of being able to recover damages for loss of income resulting from your employer�s retaliation against you for reporting wage violations to the Labor Board as well as to be eligible for unemployment benefits is to actually be fired by your employer, rather than quitting.

If you would like additional guidance in this circumstance, please do not hesitate to call our office at (415) 788-0888.