Can an employee still be protected as a whistleblower under California law if they are not the first to blow the same whistle? Per the California Supreme Court, the answer is yes: “[A] protected disclosure under [Labor Code] 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.”
Background
In The People ex rel. Garcia-Brower v. Kolla's, Inc. (Kolla’s), a nightclub worker complained to her employer that she had not been paid all of her owed wages. In response to her complaint, her employer threatened to report her to immigration authorities, terminated her employment, and told her never to return to the nightclub. After the Division of Labor Standard Enforcement (DLSE) determined that the employer’s actions violated California law, the employer refused DLSE’s proposed remedies of reinstatement, payment of lost wages, and civil penalties. The DLSE then sued the nightclub and its owner for violations of the Labor Code, including a whistleblower retaliation claim in violation of Labor Code section 1102.5(b). Both the trial court and the appellate court found that the DLSE’s section 1102.5(b) claim did not state a valid cause of action because the employer already knew of their unlawful violation and the employee did not report her complaints to a government agency.
Section 1102.5(b) prohibits an employer, or someone acting on their behalf, from retaliating against an employee who discloses information that the employee reasonably believes is a violation of the law. Prior to Kolla’s, there was a split in authority about whether the term “disclosure” required an employee to reveal something new to their employer.
In Mize-Kurzman v. Marin Community College Dist. (2012) 202 Cal. App. 4th 832, the court held that a report of known information does not constitute a “disclosure” under section 1102.5 and reasoned that since an employer already knows about their wrongdoing, California whistleblower laws should only encourage employees to disclose wrongdoing to persons who are in a position to act and remedy the wrongdoing. However, in Hager v. County of Los Angeles (2014), 228 Cal. App. 4th 1538 held that section 1102.5(b) does not limit whistleblower protection to employees disclosing unreported unlawful conduct.
The California Supreme Court sided with the Hager court, holding that the term “disclosure” does not require that the information be “unknown to the recipient.” The court also commented that finding otherwise would be contrary to the statute’s purpose in limiting opportunities for employees to corroborate other accounts of alleged unlawful conduct.
Employer Takeaways
Whistleblower protections are not new. Kolla’s merely clarifies that an employee is not precluded from qualifying as a whistleblower where they are not the first to report an alleged violation. And whistleblowers are not immune to discipline or termination. Employers can defend against whistleblower claims by showing the discipline or termination would have occurred regardless of the employee’s whistleblowing activity for legitimate and independent reasons. But Kolla’s underscores the importance to employers of seeking legal counsel before taking actions that an employee may later claim are retaliatory — especially if it is unclear whether an employee’s conduct is protected in the first place.
* The authors would like to thank Summer Associate Josephine Hall for her assistance writing this article.
