California’s SB 497 gives employees a statutory advantage in certain retaliation claims by creating a rebuttable presumption when prohibited employer action occurs within 90 days of protected activity under Labor Code sections 98.6 and 1197.5. California Legislature. For employers everywhere, however, the larger lesson is not limited to California or to a 90-day window. Retaliation claims become harder to defend whenever performance concerns first appear, escalate, or become formally documented only after an employee reports misconduct, complains about unlawful practices, discusses wages, invokes workplace rights, or engages in other protected activity.
SB 497’s New Presumption Changes the Litigation Starting Point in California
SB 497 amended California Labor Code section 98.6 to provide that if an employer takes action prohibited by that section within 90 days of protected activity, “there shall be a rebuttable presumption in favor of the employee’s claim” .California Labor Code section 98.6. Section 98.6 protects employees and applicants from discharge, discrimination, retaliation, or adverse action for exercising specified Labor Code rights, including wage complaints, Labor Commissioner proceedings, and PAGA-related activity California Labor Code section 98.6.
SB 497 also amended Labor Code section 1197.5 to apply a similar 90-day rebuttable presumption to retaliation claims involving equal pay and wage transparency rights. California Labor Code section 1197.5. Section 1197.5 prohibits retaliation against employees for invoking or assisting enforcement of California equal pay rights, and it protects employees who disclose, discuss, or inquire about wages. California Labor Code section 1197.5.
Why Post-Complaint Performance Documentation Is Risky
The most common employer defense to retaliation charges is that the challenged action was based on performance, misconduct, attendance, or business needs. That defense is strongest when the employer can show consistent documentation, prior coaching, objective standards, and comparable treatment of similarly situated employees.
It is much weaker when the record looks different before and after protected activity. If the employee had positive reviews, no written warnings, tolerated deficiencies, or informal coaching before the complaint, and then suddenly receives heightened scrutiny, a PIP, discipline, suspension, or termination afterward, the employee will argue that the employer went looking for a reason to act.
That concern is not theoretical. In Lawson v. PPG Architectural Finishes, Inc., the California Supreme Court shot down the employer’s poor performance defense. The employer cited poor performance and failure to improve under a performance improvement plan, but the California Supreme Court held that Labor Code section 1102.6 governs section 1102.5 whistleblower retaliation claims and does not require the employee to prove the employer’s stated reason was pretextual. Lawson v. PPG Architectural Finishes, Inc. Once the employee shows protected whistleblowing was a contributing factor, the employer must prove by clear and convincing evidence that the same action would have occurred for legitimate, independent reasons even absent the protected activity Lawson v. PPG Architectural Finishes,
The Same Defense Challenge Exists Outside California
Federal law does not generally impose California’s SB 497-style 90-day presumption. Still, timing remains important. The U.S. Supreme Court has recognized that temporal proximity may support causation when it is “very close,” while also holding that an employer need not suspend a previously planned action after learning of protected activity. Clark County School District v. Breeden.
Title VII retaliation claims require proof that retaliation was a but-for cause of the challenged action, not merely a motivating factor. University of Texas Southwestern Medical Center v. Nassar. Even so, close timing, shifting explanations, uneven enforcement, and documentation created only after protected activity can create the factual disputes that make retaliation claims expensive to defend.
Bottom Line for All Employers
California’s 90-day presumption makes covered retaliation claims easier for employees to frame, but it does not create the underlying problem. The real exposure arises when the employer’s performance narrative begins only after protected activity. Employers that want to preserve defensible discipline should build the record before conflict arises, apply standards consistently, and require careful HR and legal review before taking adverse action close in time to protected conduct.
Practical Steps Employers Should Take
Employers do not have to ignore performance issues because an employee complained or engaged in protected activity. They do, however, need to prove that the decision was legitimate, consistent, and independent.
- Document issues when they happen: Do not wait until after a complaint to document missed deadlines, quality issues, attendance problems, policy violations, or conduct concerns.
- Audit timing before adverse action: Before discipline, termination, demotion, schedule reduction, compensation changes, or a PIP, check whether the employee recently engaged in protected activity.
- Separate the complaint process from discipline: Where possible, keep the complaint investigator separate from the performance decisionmaker.
- Confirm decisionmaker knowledge: Identify who made the decision, what they knew, when they knew it, and what evidence supported the action.
- Use objective criteria: Tie discipline to measurable standards, written policies, documented expectations, and specific incidents.
- Compare similar cases: Review how the employer handled similar performance or conduct issues involving employees who did not engage in protected activity.
- Avoid sudden escalation: If the same issue was tolerated before protected activity, explain and document what changed.
- Review PIPs carefully: A PIP issued after a complaint should be realistic, job-related, supported by prior evidence, and free from retaliatory tone.
- Train managers: Supervisors should understand that complaints, wage discussions, whistleblower reports, accommodation requests, safety reports, and participation in investigations may be protected.
If you have questions about or need assistance with these and other risk management or compliance concerns, contact the author.
For More Information
We hope this update is helpful. For more information about the or other health or other employee benefits, human resources, or health care developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
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About the Author
A Fellow in the American College of Employee Benefits Counsel and Board Certified in Labor and Employment Law by the Texas Board of Legal Certification, Cynthia Marcotte Stamer has more than 35 years experience, advising plan sponsors, fiduciaries, service providers and others about fiduciary responsibility and other employee benefit plan design, administration, risk management and compliance. i
Ms. Stamer is a Martindale-Hubble AV-Preeminent (highest/top 1%) practicing attorney recognized as a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Health Care Law and Labor and Employment Law; among the “Best Lawyers In Dallas” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law for her experience, scholarship, thought leadership and advocacy for 35 plus years of experience advising and representing, employers, employee benefit plans and their fiduciaries and administrators, their administrative services, technology and other business associates and other vendors, managed care and insurance, health care and other clients about these and other workforce, employee benefits, internal controls and other operations and compliance concerns.
Ms. Stamer is nationally sought out for her decades of leading-edge experience in the design, sponsorship, administration, and defense of workforce, health, severance, savings retirement and other employee benefit, workforce, insurance, healthcare, data and technology, and other operations to promote legal and operational compliance, reduce regulatory and other liability, and advance other operational goals. This experience includes decades of work on ERISA, Internal Revenue Code and other related labor and employment, insurance, corporate and securities, data privacy and security, licensing and other laws. She also sought out for her extensive speaking and publications on these and related concerns.
Along with her decades of legal and strategic consulting experience, Ms. Stamer also contributes her leadership and experience to many professional, civic and community organizations including current or previous service as Employee Benefits Group Chair and a Substantive Groups Committee Member for the ABA Real Property Trusts and Estates (“RPTE”) Section and Chair of its Welfare Plan, Fiduciary Responsibility and Plan Terminations Committees; Chair of the ABA International Section International Employment Law Committee; Chair and Vice Chair of the ABA Tort Trial and Insurance (“TIPS”) Section Medicine and Law Committee, Vice Chair of its Employee Benefits and Worker’s Compensation Committees; and Chair of the ABA Intellectual Property Section Law Practice Management and Special Technologies Committees; ABA Joint Committee on Employee Benefits (“JCEB”) Council Representative and Scribe for its annual agency meetings with the Department of Health and Human Services; International Section Life Sciences Committee Chair; Health Law Section Managed Care & Insurance Interest Group Chair; Vice Chair, Tax Section Fringe Benefit Committee Chair, and in various other ABA leadership capacities. Ms. Stamer also is a former Southwest Benefits Association Board Member and Continuing Education Chair, SHRM National Consultant Board Chair and Region IV Chair, Dallas Bar Association Employee Benefits Committee Chair, former Texas Association of Business State, Regional and Dallas Chapter Chair, a founding board member and Past President of the Alliance for Healthcare Excellence, as well as in the leadership of many other professional, civic and community organizations. She also is valued and celebrated for her decades of policy advocacy and charitable, pro bono, community and other service and leadership to promote understanding and strengthening health care, workforce, saving, disability, aging and retirement and other key policies and challenges through her PROJECT COPE Coalition For Patient Empowerment initiative and many other pro bono service involvements locally, nationally and internationally.
Ms. Stamer is the author of many highly regarded works published by leading professional and business publishers, the ABA, the American Health Lawyers Association, and others. Ms. Stamer also often speaks and serves on the faculty and steering committee for many ABA and other professional and industry conferences and conducts leadership and industry training for a wide range of organizations.
For more information about Ms. Stamer or her health industry, health and other benefits, workforce and other experience and involvements, see the Cynthia Marcotte Stamer P.C. website or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
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