California Supreme Court Expands Whistleblower Protection. What Employees and Employers Should Know

California courts previously had 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. 

But in a May ruling that workers and their employers should be aware of, the California Supreme Court expanded whistleblower protection beyond just the first complainant, including an employee’s report of a violation or suspected violation of the law regardless of whether the employer already knew of the violation.

The case started when a nightclub terminated the employment of a bartender and threatened to report her to immigration authorities after she told the owner she hadn’t been paid for three shifts. California’s Labor Code prohibits employers from retaliating against employees for “disclosing information” concerning suspected violations of the law either internally or to government or law enforcement agencies.

But the state Court of Appeals ruled the bartender had not made a “disclosure,” denying her whistleblower protection, because the appeals court said “disclose” means “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 appeals court ruled 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 wrongdoing is not a ‘disclosure’ and is not protected whistleblowing activity, because the employer already knows about his or her wrongdoing.”

The Labor Commissioner appealed to the state Supreme Court, arguing that whistleblowers who report “already known” violations are subject to anti-retaliation protection. In a unanimous decision, the Supreme Court agreed, ruling the word “disclose” shouldn’t be narrowly interpreted, the bartender made a protected disclosure under the Labor Code, and was wrongfully retaliated against as a whistleblower.

The Supreme Court ruling has limitations. The nightclub didn’t participate in the case, but amicus curiae contended the Court’s new reading of “disclose” threatens “to convert everyday workplace disputes into whistleblower cases.” The Court said Labor Code protections apply only where the disclosing employee “has reasonable cause to believe that the information discloses a [legal] violation. … This clause imposes a requirement of objective reasonableness and excludes from whistleblower protection disclosures that involve only disagreements over discretionary decisions, policy choices, interpersonal dynamics, or other nonactionable issues.”

Employers accused of whistleblower retaliation can also rebut the charge by, as the court wrote, “demonstrat[ing] by clear and convincing evidence that the alleged [retaliatory] action would have occurred for legitimate, independent reasons even if the employee had not” made a protected disclosure.

The employment law landscape in California is always evolving. Berman North’s employment lawyers are well aware of the latest trends and their implications for workers and employers. If you have a question or concern about how you’re being treated on the job, or employment law in general, contact Berman North’s skilled attorneys, who can help employers and employees understand their rights and options.