California Supreme Court Confirms The Broad Whistleblower Protections in Labor Code section 1102.5

At least since 2013, California Labor Code section 1102.5 has prohibited employers from retaliating against employees for "disclosing information" concerning suspected violations of law, either internally or to government or law enforcement agencies. In The People ex. rel. Lilia Garcia-Brower v. Kolla's Inc., 2023 WL 3575254 (filed May 22, 2023), the California Supreme Court made clear that this rule applies to unlawful activities of which the employer and/or the governmental agency are already aware.

In this case, a bartender complained to the owner of a nightclub about unpaid wages to which she was owed. In response, the owner fired the employee, threatened to report the employee to immigration authorities, and told her to never return to the nightclub. Relying on an earlier version of the statute, the trial court held that the Labor Commissioner did not state a valid cause of action under section 1102.5 because the employee reported her complaints to her employer as opposed to a governmental agency. While rejecting this particular part of the trial court's analysis, the Court of Appeal nonetheless affirmed the trial court's entry of judgment in favor of the employer. So doing, the Court of Appeal concluded that a report to an employer, who is also the wrongdoer, is not a protected disclosure under section 1102.5(b) because the term "disclose" requires "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." Supporting this restrictive view of the term "disclose", the Court of Appeal reasoned that the owner of the nightclub "was at least aware of -- if not responsible for -- the non-payment of wages" and that an "employee's report to the employee's supervisor about the supervisor's own wronging is not a 'disclosure' and is not protected whistleblowing activity, because the employer already knows about his or her wrongdoing."

Rejecting the narrow analysis employed by the Court of Appeal, and reversing and remanding, the California Supreme Court explained that the word "disclose", which it defined as to "make [something] openly known" or "open [something] to general knowledge" does not require that the "something" be unknown to the current recipient. The Supreme Court explained that "[t]he legislative history of section 1102.5(b), its purpose, and its placement within a larger statutory scheme designed to protect workers support a broad reading of the term 'disclose' that covers" the report made by an employee to her employer, even if the employer is already aware of the illegal conduct.