But the majority said a jury could determine that L'Oreal knew of Yanowitz's concerns because she repeatedly told her boss that she needed some justification for firing the associate.
The court said future cases would be decided on individual circumstances. But employees do not have to know whether a particular practice violates the law to be protected from firing for opposing it.
"A rule that would allow retaliation against an employee for opposing conduct the employee reasonably and in good faith believed was discriminatory" when the directive was in fact legal "would significantly discourage employees from opposing incidents of discrimination," George said.
Yanowitz contended that unwarranted criticism and humiliation from the company amounted to illegal retaliation. Two days before she left the firm, she was given a new travel schedule that precisely regulated how often she should visit each market in her territory, she said.
The court majority agreed that a jury could decide that the actions were retaliation. Before she refused to fire the subordinate, Yanowitz was a "highly rated and honored" employee, the court noted.
"Months of unwarranted and public criticism of a previously honored employee, an implied threat of termination, contacts with subordinates that only could have the effect of undermining a manager's effectiveness, and new regulation of the manner in which the manager oversaw her territory did more than inconvenience Yanowitz," George wrote.
Such alleged actions "placed her career in jeopardy," the chief justice said.
Quackenbush, who represents workers in employment litigation, said that even if an employee obeyed an order she thought was discriminatory, she could have a valid retaliation claim if her boss knew the order displeased her, he said.
"The court is saying that if you register your complaint in some fashion, and it can be pretty meek and mild, about what you believe is discrimination, whether or not it is, and then you get demoted or terminated, you win."