Recently, the California Supreme Court ruled in The People ex rel. Lilia Garcia-Brower v. Kolla’s Inc. that California’s whistleblower protection statute (Labor Code § 1102.5) protects employees who disclose unlawful conduct, even when the recipient of the disclosure is already aware of the conduct. This ruling expands the definition of “disclose” such that the law now covers a wider array of employee retaliation claims against employers.
Background
Section 1102.5(b) states that employers may not retaliate against an employee for disclosing information (or because the employer believes that the employee has disclosed or will disclose information) about conduct which the employee reasonably believes is unlawful.
In Kolla’s, the complainant alleged that she complained to the owner of Kolla’s (her employer) that she had not been paid wages she was owed. Kolla’s responded by terminating the complainant and threatening to report her to immigration services. The complainant filed a complaint with the office of the California Labor Commissioner, which investigated and sued Kolla’s, including for violations of Labor Code §1102.5(b).
The trial court held that the Labor Commissioner failed to state a claim for a violation of section 1102.5(b). While the Court of Appeal found that the trial court had relied on an outdated version of section 1102.5(b), the Court of Appeal nonetheless affirmed the trial court’s judgment on different grounds, holding that the complainant’s report of unpaid wages was not a “disclosure,” because the owner of Kolla’s was already aware of the unlawful conduct.
In a unanimous decision, the California Supreme Court disagreed and reversed the Court of Appeal’s decision. The Supreme Court held that “a protected disclosure under section 1102.5(b) encompasses reports or complaints of a violation made to an employer or agency even if the recipient already knows of the violation.” Specifically, the Supreme Court rejected the reasoning relied upon by the Court of Appeal that the definition of “disclose” was “to reveal something that was hidden and not known.” The Supreme Court, on the other hand, relied on definitions of “disclose” that do not require the information in question to be unknown to the recipient. The Supreme Court held that, in the context of section 1102.5, “disclose… means bringing into view in a particular context a type of information to which the discloser tends to have special access.” The Supreme Court noted that this broader definition is supported by the text, objectives, and legislative history of section 1102.5.
Takeaways
The Kolla’s decision comes on the heels a 2022 Supreme Court decision in Lawson v. PPG Architectural Finishes, Inc., where the Court approved of a less onerous standard for proving retaliation under section 1102.5. Following these decisions, employers potentially face expanded liability under section 1102.5. Employers should review their policies and procedures regarding whistleblower protections and anti-retaliation, to ensure that complaints by employees are taken seriously and do not result in any adverse action against the reporting employee.
