California Labor Code Section 1102.5(b) prohibits employers from retaliating against “whistleblowing” employees for disclosing information about suspected violations of law to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation. Previously, California courts interpreted the term “disclosure” to require the revelation of something new, which effectively removed whistleblower protection for an employee who reported a violation that was already known to the employer. This week, the California Supreme Court expanded whistleblower protection to include an employee’s report of a violation or suspected violation of the law regardless of whether the employer already knew of the violation.

In People ex rel. Garcia-Brower v. Kolla’s Inc., a bartender at a nightclub in Orange County complained to the club’s owner about unpaid wages for her previous three shifts. The club’s owner responded by terminating the bartender’s employment and threatening to report her to immigration authorities. The bartender filed a complaint against the nightclub and its owner with the Division of Labor Standards Enforcement (DLSE). After the nightclub refused to accept the DLSE’s proposed remedies, the Labor Commissioner sued the club for various violations of the Labor Code, including retaliation in violation of Section 1102.5(b). 

The trial court and appellate court ruled against the Labor Commissioner on the Section 1102.5(b) claim. The Court of Appeal reasoned that a “disclosure” under Section 1102.5(b) only affords protection when an employee reveals something new to the recipient of the information. In this case, the Court of Appeal reasoned that the nightclub owner was clearly aware of (if not responsible for) the unpaid wages violation, and thus there was no protected “disclosure.”

The California Supreme Court reversed the lower court's decision, finding that a “disclosure” under Section 1102.5(b) encompasses an employee’s complaint of a potential violation of law “without regard to whether the recipient already knew of the violation.” This definition aligns with the federal Whistleblower Protection Enhancement Act, which provides that an employee’s disclosure is protected even if the recipient already knew of the violation.

Based on this ruling, employers should ensure that internal reporting procedures clearly communicate the appropriate method of reporting (and elevating) suspected violations of law. Employers should consult their employment attorney when considering any adverse action involving an employee who previously reported possible violations of law, regardless of whether the employer was already aware of the alleged violation at the time of the report.