California Supreme Court Expands Whistleblower Protection

Employment Law

The California Supreme Court has expanded whistleblower protections under state law, taking a broad reading of the term “disclosure.”

From May 2010 to April 2014, A.C.R. worked as a bartender at Kolla’s, Inc., a nightclub in Orange County. In April 2014, she complained to Gonzalo Sanalla Estrada, the club’s owner, that she had not been paid wages owed for her previous three shifts of work.

Estrada responded by threatening to report A.C.R. to immigration authorities, terminating her employment and telling her never to return to the club.

In June 2014, A.C.R. filed a complaint against Estrada and Kolla’s with the Division of Labor Standards Enforcement (DLSE) of the Department of Industrial Relations.

Following an investigation, DLSE determined that Estrada’s immigration-based threats and termination of A.C.R. violated California law. DLSE notified Estrada and Kolla’s of its proposed remedies, including payment of lost wages, reinstatement of A.C.R. and payment of civil penalties to A.C.R. and DLSE.

Estrada and Kolla’s declined to accept the proposed remedies and the Labor Commissioner then filed suit. The trial court entered an order granting in part the Labor Commissioner’s motion for default judgment but ruled against the Commissioner on the section 1102.5(b) whistleblower claim.

The court held that the Labor Commissioner did not state a valid cause of action under section 1102.5(b) because A.C.R. reported her complaints to her employer rather than to a government agency. An appellate panel affirmed.

But the state’s highest court reversed.

Reviewing the history of section 1102.5(b), the court explained that the provision was amended multiple times over the years, in each case expanding in scope. Most recently, in 2013, section 1102.5(b) was changed to include protections for an employee’s disclosure made “to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance.”

While the Court of Appeal took a narrow reading of the term “disclose” as “the revelation of something new, or at least believed by the discloser to be new, to the person or agency to whom the disclosure is made,” the California Supreme Court took a more expansive view.

“Although the word ‘disclose’ often refers to sharing previously unknown information, the word also means bringing into view in a particular context a type of information to which the discloser tends to have special access,” the court wrote. “The term ‘disclosure’ may reasonably encompass an employee’s report or complaint that calls attention to a legal violation or potential violation in the workplace. Workplace wrongdoing is the type of information to which an employee tends to have special access, whether or not any particular recipient of such information has prior knowledge.”

Multiple decisions from the Court of Appeal support this definition of “disclose” as the term is used in section 1102.5(b), the court said, as do parallel whistleblower protections in federal law and the legislative history of the provision.

“Moreover … providing employees with an internal disclosure option and protecting those employees who disclose wrongdoing directly to the wrongdoer further the purpose of whistleblower protection laws,” the court said. “Estrada, as the owner of Kolla’s, was a ‘person with authority’ over employee A.C.R., and he appeared well situated to ‘correct the violation’ disclosed by A.C.R. Construing [S]ection 1102.5(b) to cover A.C.R.’s complaint here is fully consistent with the statute’s text and with the legislature’s purpose in adding the internal disclosure protections to the statute in 2013.”

Applying a more narrow reading of the term “disclose” would result in outcomes contrary to the legislature’s purpose, limiting the ability of employees to report violations, to corroborate a coworker’s disclosure or to encourage their employers to remedy violations of the law.

The court rejected a floodgates argument from the amicus and reversed.

“[W]e hold that a protected disclosure under [S]ection 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,” the court wrote. “We further conclude that complainant A.C.R. made a disclosure protected by [S]ection 1102.5(b).”

To read the opinion in People ex rel. Garcia-Brower, click here.

Why it matters:

The California Supreme Court was unanimous: a report of unlawful activities made to an employer or agency that already knew about the violation is a protected disclosure within the meaning of section 1102.5(b). Employers in the state should be aware of the expanded interpretation of the state’s whistleblower protections.




pursuant to New York DR 2-101(f)

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