On May 22, 2023, the California Supreme Court answered the following question in Former relatives Garcia-Brower v. Kolla’s, Inc.., S269456:
“Does Labor Code section 1102.5(b), which protects employees from retaliation for ‘disclosing information’ about alleged violations of the law to their employer or to a government agency, include a report of illegal activities made to an employer or agency? who already knew about the rape?
In a unanimous opinion, the court concluded that an employee’s disclosure of alleged violations of the law to his employer or to a government agency is whistleblowing activity protected by the California Labor Code, even when the disclosure relates to information already known to the employer or a government agency.
- The California Supreme Court held that an employee is protected by California’s whistleblower statute, even when the employee reports information already known to the employer or a government agency.
- The court noted that California’s whistleblower statute is in accordance with the federal Whistleblower Protection Act.
Background and Judgment of the Court
In Kolla’s, Inc.., the employee-bartender complained to the owner of the nightclub where she worked that the nightclub owed her unpaid wages. In response, the California Supreme Court stated that “her employer fired her, threatened to report her to immigration authorities, and told her never to return to the nightclub.”
The employee-bartender filed a complaint with the California Department of Industrial Relations, Division of Labor Standards Enforcement, which found that the nightclub owner’s threats and termination of the bartender’s employment violated several provisions of the Labor Code. The Labor Commissioner then filed an action against the employer under Labor Code section 1102.5(b), which prohibits employers from retaliating against employees for “reporting” alleged violations of the law to their employers or to a government agency.
The trial court and appellate court ruled against the commissioner on the Section 1102.5(b) claim. The appellate court concluded that a “disclosure” of information required “the disclosure of something new, or unless the discloser believes it is new, to the person or agency to whom the disclosure is made.” (Emphasis added). The bartender, however, had revealed nothing to the owner that the owner did not already know.
However, the California Supreme Court disagreed and overturned the appeals court’s decision. The majority opinion explained that it was undisputed that the California Labor Code prohibited the employer’s conduct. The court rejected the lower courts’ narrow reading of “disclosure” and reasoned that although the word “disclosure” sometimes “refers to sharing previously unknown information,” it “does not require the [information] be unknown to the actual addressee.” The California Supreme Court concluded that the legislative history of section 1102.5(b) supported a broad reading of “disclose.”
The court further noted that California’s whistleblower statute is consistent on this issue with the federal Whistleblower Protection Act, which protects disclosure of information regardless of whether the recipient already knows it. The court reaffirmed that employers may rebut claims of retaliation, but only if they demonstrate “through clear and convincing evidence that the alleged [retaliatory] the action would have occurred for legitimate and independent reasons”, regardless of the protected activity of the employee.
The landscape of whistleblower retaliation litigation in California continues to shift in favor of employees. Now, more than ever, employers may want to proceed with caution, as California’s whistleblower statute protects employees even if they report widely known violations of local, state, or federal laws, or disclosures previously reported by other employees. .
Ogletree Deakins will continue to monitor developments and provide updates on the California and Ethics/Whistleblower blogs.
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