The Supreme Court of California provided California employers with important clarification on the standard courts will apply when analyzing an employee’s whistleblower retaliation claim arising under Labor Code Section 1102.5.Faced with a split of California authority on the correct analytical framework applicable to a Section 1102.5 claim, the U.S. Court of Appeals for the Ninth Circuit in Lawson v. PPG Architectural Finishes, Inc. sought clarification from the California Supreme Court. [1] On December 7, 2020, the Ninth Circuit certified the following question: what is the appropriate evidentiary standard for retaliation claims arising under Cal. Lab. Code § 1102.5?The California Supreme Court resolved all doubt on January 27, 2022, holding “Section 1102.6 provides the governing framework” for whistleblower retaliation claims brought under Section 1102.5, and a “plaintiff need not satisfy” the McDonnell Douglas burden-shifting framework to establish a claim for whistleblower retaliation.[2]The court’s decision clarifies that the less onerous standard for establishing a claim of retaliation set forth in Section 1102.6 applies to retaliation claims brought under Section 1102.5. Employers should be mindful of the impact the court’s decision will have on future whistleblowing retaliation claims.

[co-author: Amanda Chavez]The California Supreme Court, in a critical decision, has answered a key question regarding whistleblower retaliation claims. Last year, the Ninth Circuit Court of Appeals certified an important question to the Court regarding the proper burden of proof in cases alleging retaliation under California Labor Code section 1102.5: “Does the evidentiary standard set forth in Labor Code section 1102.6 replace the rest of test of McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792 as the relevant evidentiary standard for retaliation claims brought pursuant to Labor Code section 1102.5?” In Lawson v. PPG Architectural Finishes, Inc., 2022 WL 24473 (Case No. S266001, Jan. 27, 2022), the California Supreme Court answered the question by holding that Section 1102.6 sets forth the proper standard for retaliation claims brought under Section 1102.5. That means that employers now have the burden of proving by “clear and convincing evidence” that an adverse employment action would have occurred for legitimate, independent reasons even if the employee had not engaged in protected activities under Section 1102.5.What is Section 1102.5?Section 1102.5 prohibits retaliation in the workplace and broadly states:“An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing

Id. at 804.Roughly ten years after McDonnell Douglas, in 1984, section 1102.5 of the California Labor Code was enacted. Subsection b bars retaliation against whistleblowers, providing in part:(b) An employer . . . shall not retaliate against an employee for disclosing information . . . if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation . . . .Cal. Lab. Code § 1102.5(b).; see also Judicial Council of California Civil Jury Instructions ("CACI") 4603.Then nearly twenty years later, in 2003, the California legislature enacted section 1102.6 of the California Labor Code, providing in full:In a civil action or administrative proceeding brought pursuant to Section 1102.5, once it has been demonstrated by a preponderance of the evidence that an activity proscribed by Section 1102.5 was a contributing factor in the alleged prohibited action against the employee, the employer shall have the burden of proof to demonstrate by clear and convincing ev

The California Supreme Court issued its unanimous decision on May 22, 2023 in People ex rel. Garcia-Brower v. Kolla’s, Inc., which expanded the definition of “disclose” under California Labor Code Section 1102.5. The court held that whistleblowers are protected from retaliation under Section 1102.5 even if the alleged misconduct they are reporting is already known to the recipient of the report.Labor Code Section 1102.5 prohibits an employer from retaliating against an employee for disclosing to the government or to an employer conduct that the employee reasonably believes to be a violation of law. Prior to Kolla’s, the case law interpreting “disclose” under Section 1102.5 had defined the term as “to reveal something that was hidden and not known.” Mize-Kurzman v. Marin Cmty. Coll. Dist., 202 Cal. App. 4th 832, 858-59 (2012).Under the Mize-Kurzman standard, an employee’s reporting conduct to their employer that the employer already knew was not considered protected activity under the statute.KOLLA’S DECISIONIn People ex rel. Garcia-Brower v. Kolla’s, Inc., A.C.R. worked as bartender for Kolla’s Inc. (Kolla’s), a nightclub. A.C.R. complained to her manager, who also was the club owner, that sh

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 (California Labor Code § 1102.5(b)) even if the subject of the complaint was already known. Previous case law held that an employee whistleblower complaint regarding an alleged violation of the law that was already known to the employer that received the complaint was not protected by law. It is now clear, however, that employers may not retaliate against an employee who has made a whistleblower complaint, regardless of whether the employer or agency already had knowledge or information about the alleged violation.The Court’s decision in People ex rel. Garcia-Brower v. Kolla’s, Inc (May 22, 2023) arose from a complaint made by a bartender 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 in Orange County, California. 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

What Happened? Before last week, some courts had applied the standard in California Labor Code section 1102.6 to resolve whistleblower claims under California Labor Code section 1102.5, while other courts had applied the traditional burden-shifting framework from McDonnell Douglas Corp. v. Green. On January 27, 2022, however, the California Supreme Court issued a unanimous decision in Wallen Lawson v. PPG Architectural Finishes, Inc. confirming that the arguably more employee-favorable standard in Labor Code section 1102.6, not McDonnell Douglas Corp. v. Green, applies to whistleblower claims brought under Labor Code section 1102.5.By way of background, Section 1102.5 provides in pertinent part, that:An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information, or because the employer believes that the employee disclosed or may disclose information, to a government or law enforcement agency, to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance, or for providing information to, or testifying before, a

On January 27, 2022, the California Supreme Court, in Lawson v. PPG Architectural Finishes, Inc. (Cal., Jan. 27, 2022) __ P.3d __, 2022 WL 244731, clarified the evidentiary standard for presenting and evaluating retaliation claims under California Labor Code Section 1102.5 (“section 1102.5 whistleblower retaliation claim”). Lawson involved a workplace retaliation claim brought by a sales representative selling paint products to home improvement stores in Southern California.

While public companies and government contractors have long been accustomed to managing risks associated with whistleblower claims and employee protections against retaliation under the Sarbanes-Oxley Act and the False Claims Act, it would be a mistake for any employer to disregard these risks, as virtually any employee in almost every jurisdiction may assert some variation on such a claim.California has enacted a rather robust statute protecting employees from retaliation by an employer. Cal. Lab. Code § 1102.5. The law prohibits an employer from enacting a policy that prevents an employee “from disclosing information to a government or law enforcement agency, to a person with authority over the employee, or to another employee who has authority to investigate, discover, or correct the violation or noncompliance, or from providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee’s job duties.”

The California Supreme Court (the Court) issued a unanimous decision on May 22, 2023, in the case of People ex rel. Garcia-Brower v. Kolla’s, Inc. The ruling broadened the interpretation of “disclose” under California Labor Code Section 1102.5, which protects employees from retaliation for “disclosing information” the employee has reasonable cause to believe is a violation of a state or federal statute. The Court held that whistleblowers are protected against retaliation even when the employer to whom they report alleged misconduct is already aware of it. This protection extends to instances where an employee reports to their employer about a violation committed by the employer themselves.DLSE’s InvestigationThe Court’s ruling in People ex rel. Garcia-Brower v. Kolla’s Inc. results from a Division of Labor Standards Enforcement (DLSE) (a division of California’s Department of Industrial Relations) enforcement action brought by Labor Commissioner Lilia Garcia-Brower on behalf of the employee. The Court referred to the employee as “A.C.R.” throughout the opinion due to immigration concerns.A.C.R. was employed as a bartender at Kolla’s, Inc., a nightclub located in Orange County, California. In April 2014, she complained to th

California Labor Code Section 1102.5 protects employees from certain retaliatory acts by their employers. Subdivision (b) of the statute provides:"An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information, or because the employer believes that the employee disclosed or may disclose information, to a government or law enforcement agency, to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance, or for providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee’s job duties."