California High Court Defines Protected āDisclosureā Under Whistleblower Law
In an employee-friendly published Monday, May 22, 2023, the California Supreme Court held that an employee may be protected by the stateās whistleblower law, even when reporting unlawful activities that the employee already knows.
The whistleblower (found at Labor Code section 1102.5) ā a subject of other recent Supreme Court reflectionĀ ā protects employees from retaliation against employers āfor disclosing information.ā In the recent case, the Court was tasked with deciding whether the operative activity ā ādisclosingā ā warranted a broad or narrow reading. The Court opted for the former.
In the case, titled People ex rel. Garcia-Brower v. Kollaās, Inc., a bartender reported her unpaid wages to the owner of the nightclub where she worked. The owner, already aware of the unpaid wages, terminated the bartenderās employment in response to her complaint. The Labor Commissioner sued on the bartenderās behalf, claiming violation of the whistleblower law. The trial court found for the owner and the court of appeal affirmed, reasoning that the term ādiscloseā requires āthe revelation of something new.ā Applying this reasoning, because the nightclub owner already knew about the unpaid wages, the bartender wasnāt revealing anything new, and thus didnāt make a disclosure that would provide whistleblower protection.
The Supreme Court disagreed with this interpretation, finding legislative support for concluding that ādiscloseā means ābringing into view in a particular context a type of information to which the discloser tends to have special access.ā In reaching this conclusion, the Court shifted focus from what the employer knows (or does not know) to what the employee brings to the employerās attention, whether or not there was prior knowledge of the alleged wrongdoing.
The Court went on to raise policy concerns that a narrow reading would prevent multiple disclosures, leaving employers without corroborating information that could help in investigations and leaving subsequent reporting employees outside the statuteās protection.
This opinion brings a significant expansion of whistleblower protection in the Golden State. California employers seeking to comply with these fresh boundaries or facing whistleblower actions should contact counsel for guidance.