May 26, 2023
The California Supreme Court issued its unanimous decision on May 22, 2023 in Former relatives Garcia-Brower v. Kolla’s, Inc., which expanded the definition of “disclose” in California Labor Code Section 1102.5. The court held that whistleblowers are protected from retaliation under Section 1102.5, even if the recipient of the report already knows about the alleged misconduct they are reporting.
Labor Code Section 1102.5 prohibits an employer from retaliating against an employee for revealing the government or an employer conduct that the employee reasonably believes is a violation of the law. Before of kolla, the case law interpreting “disclose” under Section 1102.5 had defined the term as “disclose something that was concealed and unknown”. Mize-Kurzman v. Marin Cmty. Col. Dist., 202 cal. application. 4th 832, 858-59 (2012).
Under the Mize-Kurzman Standard, an employee’s reporting conduct to his employer that the employer already knew about was not considered protected activity under the statute.
of kolla Decision
In Former relatives Garcia-Brower v. Kolla’s, Inc.ACC He worked as a bartender for Kolla’s Inc. (Kolla’s), a nightclub. ACR complained to his manager, who was also the owner of the club, that he was owed the wages of his previous three shifts. Her manager responded by threatening to report her to immigration authorities, firing her, and telling her not to return to the nightclub. ACR filed a complaint with the California Labor Commissioner in the Division of Labor Standards Enforcement (DLSE).
After Kolla rejected the DLSE’s proposed resolution, the Labor Commissioner filed a lawsuit alleging violations of the California Labor Code, including Labor Code Section 1102.5. Kolla’s was not involved in the process. The trial court granted the Labor Commissioner a default judgment against Kolla in part, but held that the Labor Commissioner failed to establish a cause of action under Section 1102.5(b).
In a split decision, the California Court of Appeals affirmed, reasoning that ACR’s report of illegal activity to the nightclub owner was not a “disclosure” under the law because the owner was already aware of the wrongdoing. Depend on Mize-Kurzmanthe appeals court found that the term “disclose” requires “the disclosure of something new, or at least believed by the discloser to be new, to the person or agency to whom the disclosure is made.”
The California Supreme Court later granted the review.
California Supreme Court Analysis
In the unanimous opinion drafted by Justice Liu, the California Supreme Court held that “a disclosure protected under section 1102.5(b) covers reports or allegations of a violation made to an employer. . . even if the recipient already knows of the breach.”
The court reasoned that Mize-KurzmanThe definition of “disclose,” which reveals something not previously known, was too narrow and inconsistent with the purpose of Section 1102.5, which is to “protect workers, encourage disclosure, and promote compliance with related laws and regulations.” with employment.” .” As the court noted, construing “disclose” in such a way would amount to a “first known report rule,” which would exclude from whistleblower law protections an employee who was the second to report an issue of on-site misconduct. work, regardless of whether the employee knew that the employer had prior knowledge of the problem.
Instead, the court found that the term “disclose” is also defined as “bringing to view in a particular context a type of information to which the disclosure tends to have special access.” The court reasoned that interpreting “disclose” in this way is consistent with the text of the statute and with the legislative purpose and history of Section 1102.5.
Practical implications for employers
Following in the footsteps of the California Supreme Court decision last year in Lawson v. PPG Architectural Finishes, Inc.that relaxed the burden of proof for employees seeking retaliation under Section 1102.5, the court’s decision in of kolla represents another expansion of employers’ potential liability under Section 1102.5 claims.
in the light of the of kolla decision, employers must continue to take allegations of misconduct seriously, including investigating and considering whether adverse action has been taken against the complaining employee, regardless of whether the employee is the first to make the complaint or whether the employer already knows of the reported information. .