People ex rel. Garcia-Brower v. Kolla’s, Inc., 14 Cal. 5^th 719 (2023)

The California Supreme Court has held that an employee who makes a whistleblower complaint to his or her employer may bring a retaliation claim under the whistleblower statute (Cal. Lab. Code § 1102.5(b)) even if the subject of the complaint was already known to the employer.  The employee, who worked as a bartender, complained to her employer that she had not been paid wages owed to her for three shifts she had worked at Kolla’s Inc., a nightclub.  Upon receiving the complaint, the owner of the nightclub responded by threatening to report the employee to immigration authorities, terminating her employment, and telling her never to return to the nightclub.  The employee then filed a complaint against the nightclub with the California Division of Labor Standards Enforcement (DLSE), and the DLSE concluded that the nightclub had unlawfully retaliated against the employee.  When the nightclub refused to pay damages, the California Labor Commissioner sued for various violations, including unlawful retaliation under Section 1102.5(b).

The trial court and the court of appeal rejected the Labor Commissioner’s claim for retaliation after finding that the bartender’s complaint was not a protected “disclosure” under Section 1102.5(b).  The lower courts reasoned that a “disclosure” required “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.”  Because the nightclub presumably knew that it had failed to pay the employee the wages that were due, the employee’s complaint did not qualify as a “disclosure” as required by Section 1102.5(b).

In this opinion, however, the California Supreme Court found that the term “disclosure” under Section 1102.5(b) “includes protection for disclosures made to ‘another employee who has the authority to investigate… or correct the violation,’ without regard to whether the recipient already knows of the violation.”  Because it was immaterial whether the nightclub had existing knowledge of its failure to pay the employee for wages earned, the nightclub’s actions, including its threatening to report the employee to immigration authorities, terminating her employment, and instructing her never to return to work, constituted unlawful retaliation under Section 1102.5(b).  See also Kourounian v. California Dep’t of Tax & Fee Admin., 91 Cal. App. 5^th 1100 (2023) (trial court should not have admitted evidence of employer’s alleged retaliation that predated employee’s EEO complaint or of employee’s EEO complaints themselves, which were inadmissible hearsay).