Update Applicable to:

All employers who have workers performing work in California

What happened?

On May 22, 2023, the California Supreme Court expanded whistleblower protection to include an employee’s report of a violation or suspected violation of the law regardless of whether the employer already knew of the violation.

What are the details?

California law prohibits employers from retaliating against “whistleblowing” employees for disclosing information about suspected violations of law California Labor Code Section 1102.5(b). Previously, California courts interpreted the term “disclosure” to require the revelation of something new, which effectively removed whistleblower protection for an employee who reported a violation that was already known to the employer. 

In this court case (People ex rel. Garcia-Brower v. Kolla’s Inc.), a bartender at a nightclub in Orange County complained to the club’s owner about unpaid wages for her previous three shifts. The club’s owner responded by terminating the bartender’s employment. The bartender, however, had not disclosed anything to the owner that the owner did not already know. The bartender filed a complaint against the nightclub and its owner with the Division of Labor Standards Enforcement (DLSE). After the nightclub refused to accept the DLSE’s proposed remedies, the Labor Commissioner sued the club for various violations of the Labor Code, including retaliation in violation of Section 1102.5(b). The trial court and appellate court ruled against the Labor Commissioner on the Section 1102.5(b) claim.

The California Supreme Court, however, disagreed and reversed the lower court’s decision. In alignment with the federal Whistleblower Protection Enhancement Act, which provides that an employee’s disclosure is protected even if the recipient already knew of the violation. The Supreme Court concluded that an employee’s disclosure about suspected violations of the law to their employer or a government agency is protected whistleblowing activity under California’s Labor Code, even when the disclosure relates to information already known by the employer or a government agency.

For more information, please see the links below:

Supreme Court Decision

Law Firm Articles: Link 1, Link 2, Link 3

What do employers need to do?

Based on this ruling, employers should ensure that internal reporting procedures clearly communicate the appropriate method of reporting (and elevating) suspected violations of law. Employers should consult their employment attorney when considering any adverse action involving an employee who previously reported possible violations of law, regardless of whether the employer was already aware of the alleged violation at the time of the report. 

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