Cal. Supreme Court: Whistleblower Statute Shields Employees Reporting Known Unlawful Activities
In a landmark ruling that represents a significant victory for California employees, the California Supreme Court has provided an important clarification of Labor Code section 1102.5(b). This important statute, often referred to as California's whistleblower statute, is designed to safeguard employees who blow the whistle on unlawful activities within their workplaces. The court's recent ruling affirms that these protections apply even if the recipient of the report is already aware of the misconduct, thus expanding the scope of protections for whistleblowers and ensuring a more accountable work environment.
The case in question, People ex rel. Garcia-Brower v. Kolla’s, Inc., involved a bartender who was terminated from her job after complaining about unpaid wages. The club owner, already aware of the issue, retaliated by threatening to report the bartender to immigration authorities, then later terminated her employment. The bartender then complained to the Labor Commissioner, which in turn filed an action under Labor Code section 1102.5(b) - prohibiting employers from retaliating against employees for disclosing suspected legal violations to their employers or a government agency.
Initially, the Court of Appeal ruled against the bartender's claim under section 1102.5(b), contending that a "disclosure" of information necessitated revealing something new or, at the very least, something believed by the person making the disclosure to be new to the recipient. However, the California Supreme Court overturned this decision, asserting that the term "disclosure" does not require the information to be unknown to the current recipient. The court further argued that the legislative history of 1102.5(b) supported a broad interpretation of "disclosure."
The Supreme Court disagreed with the holding Mize-Kurzman v. Marin Community College Dist., where an appellate court previously held that a Plaintiff whistleblower must show that the report or protected activity involved a disclosure of an unknown fact. The court reasoned that refusing protection for corroborating disclosures would compromise the purpose of section 1102.5(b).
Multiple disclosures could offer potentially corroborating information that could be invaluable in investigating and confirming violations of the law. The court also pointed out that the protections of section 1102.5(b) apply only when the disclosing employee has reasonable grounds to believe that the information reveals a legal violation. This provision imposes a requirement of objective reasonableness and excludes from whistleblower protection disclosures that involve only disagreements over discretionary decisions, policy choices, interpersonal dynamics, or other non-actionable issues. An employer accused of retaliation in violation of section 1102.5(b) can counter the accusation by demonstrating with clear and convincing evidence that the alleged retaliatory action would have occurred for legitimate, independent reasons even if the employee had not engaged in activities protected by Section 1102.5.
This ruling aligns California's whistleblower statute with the federal Whistleblower Protection Act, which was amended to protect the disclosure of information regardless of the recipient's prior knowledge. Consequently, employees are now protected under California's whistleblower statute even if they report widely known violations of local, state, or federal law, or disclosures previously reported by other employees.
However, the court also reaffirmed that employers can counter retaliation claims if they can convincingly demonstrate that the alleged retaliatory action would have occurred for legitimate reasons unrelated to the employee's protected activity.
This ruling underscores the importance of whistleblowers in maintaining transparency and accountability in the workplace. It also serves as a reminder to employers to ensure fair treatment of employees who voice concerns about unlawful activities, regardless of whether those concerns are new or already known.