In People ex rel. Garcia-Brower v. Kolla’s, Inc., the California Supreme Court resolved a split between the Courts of Appeal for the First and Second Districts over whether a protected “disclosure” under Labor Code section 1102.5(b) includes a report of unlawful activity made to an employer or agency that already knew about the reported unlawful activity. The Supreme Court held that it does.
Background
In June 2014, the Department of Labor Standards Enforcement (DLSE) filed a complaint against Kolla’s Inc., a nightclub in Orange County, California, and its owner. The DLSE alleged that after an employee complained that she was not paid for three shifts, Kolla’s owner fired her and threatened to report her to immigration authorities. Because Kolla’s and its owner refused to accept the DLSE’s proposed remedies, the Labor Commissioner sued them in Superior Court for various Labor Code violations, including retaliation in violation of section 1102.5(b).
Kolla’s and its owner did not appear in the lawsuit. Thus, the trial court entered default judgment against them on most of the Labor Commissioner’s claims. But the trial court held that the Labor Commissioner did not state a claim under Labor Code section 1102.5(b) because the employee reported her complaints to her employer rather than a government agency.
The Labor Commissioner appealed. On appeal, the Court of Appeal affirmed the trial court’s judgment on the section 1102.5(b) claim. But it did so for a different reason. In...
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