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The California Supreme Court has agreed to address whether the whistleblower statute, Labor Code section 1102.5, subdivision (b), applies to and protects from retaliation, an employee who discloses violations of law when that information is already known to the governing agency or person of authority at the employer.   This question stems from the case People ex rel. Garcia-Brower v. Kolla’s Inc. 

People ex rel. Garcia-Brower v. Kolla’s Inc.

In this case, the employee worked as a bartender at a night club.  The employee told the owner of the night club that she had not been paid wages for her previous three shifts.  The employee claimed the owner got upset after hearing her complaint, and he threatened to report her to immigration authorities, terminated her employment that same day, and warned her to never return to the establishment. 

After being terminated, the former employee filed a retaliation complaint with the Division of Labor Standards Enforcement (DLSE).  The DLSE conducted an investigation and the night club owner acknowledged that the former employee had complained to him about unpaid wages.  The DLSE determined that the employer violated the law and ordered the employer to pay the former employee lost wages among other things.  The Labor Commissioner then filed an enforcement action against the owners of the business, including a claim under Labor Code section 1102.5. 

The trial court determined, however, that the Labor Commissioner had not stated a claim under section 1102.5.  The trial court found that there could be no violation of the statute where the complainant had not approached a government agency, here the DLSE, about the employer’s conduct until after the termination.  The Labor Commissioner appealed.  The case went up on appeal following an entry of default judgment.

California Fourth District Court of Appeal

The Labor Commissioner urged the California Fourth District Court of Appeal to reverse the trial court’s conclusion regarding the section 1102.5 claim.

The appeals court found that the trial court applied an outdated version of section 1102.5.  Under the amended statute in effect at the time of the employee’s complaint, an employee was no longer limited to reporting to an agency – they could now also disclose violations to a person with authority over them.  Specifically, section 1102.5, subdivision (b) was amended to read:

An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information. . . to a government or law enforcement agency [or] to a person with authority over the employee. . . 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 appeals court agreed that reporting the violation to the night club owner would be sufficient, since the owner had authority over the employee.  However, the appeals court noted that their analysis did not end there, because they must also consider whether the Labor Commissioner adequately alleged protected activity in its showing in support of default judgment. 

For this analysis, the appeals court noted that there must be sufficient factual allegations to support each element of the cause of action.  Here, based on their analysis of the meaning of the word “disclosing,” the appeals court concluded that an essential element of the Labor Commissioner’s claim was missing.  It determined that the word “disclose” meant “to make known,” or “to reveal in words something that is secret or not generally known.”  It found that the state Legislature’s choice of the word “disclose” as opposed to “report” or “tell” was significant.  According to the appeals court, an employer’s “state of awareness” regarding a wrongdoing was “absolutely necessary to establishing a violation of the statute.”

Thus, in analyzing the Labor Commissioner complaint on behalf of the former employee, the appeals court concluded that nowhere in the complaint did the Labor Commissioner allege that the former employee “disclosed” to her employer that she had unpaid wages.  Rather, the appeals court determined that the facts of the complaint, which describe the employer’s angry reaction to the employee’s claim of unpaid wages, suggests that the employer was already aware of the non-payment of wages, if not responsible for it.  As a result, the appeals court held that there was no actual “disclosure,” because the employer already knew about his wrongdoing.  However, not all the judges agreed with the majority opinion.

Dissenting Opinion

In the dissenting opinion, the dissent took issue with the majority’s definition of a “disclosure.”  According to the dissent, the majority opinion’s interpretation of section 1102.5, subdivision (b) was contrary to the intent of the Legislature and would unduly burden an aggrieved whistleblower employee’s right to relief under the statute, among other things.  The dissent argued that section 1102.5 was intended to reflect the broad public policy interest in encouraging workplace whistleblowers to report unlawful acts without fearing retaliation and that the majority opinion’s narrow definition of “disclose” would impede this goal.  Therefore, the dissent asked the California Supreme Court to grant review.

California Supreme Court

The California Supreme Court agreed to review this issue and will decide the question: Does Labor Code section 1102.5, subdivision (b), which protects an employee from retaliation for disclosing unlawful activity, apply when the information is already known to that person or agency? 

What this means for employers

The California Supreme Court’s interpretation of “disclose” could affect the employer’s burden in defending against whistleblower claims – particularly those claims involving allegations of violations about which the employer already knew.  For instance, if the Court were to uphold the majority opinion’s definition of “disclose,” this could lead to a plaintiff having to persuade the jury of what was in the mind of the employer or person of authority who received the complaint, in order to determine if a “disclosure” was actually made. 

To date, this issue remains pending before the Court.  LCW will continue to monitor this case.

 [JP1]Footnote:

https://supreme.courts.ca.gov/sites/default/files/supremecourt/default/2023-02/pendingissues-civil%20-%20021023_0.pdf
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California public agencies often accept funds, grants, and other federal financial assistance either directly from a federal department or agency, or indirectly through a California department or agency.  Typically, when a public agency accepts federal financial assistance – either directly or indirectly – it must comply with specific obligations as a condition of receipt.  Often, one such obligation is compliance with Title VI of the Civil Rights Act of 1964 (“Act”).

What is Title VI of the Civil Rights Act of 1964?

The Act is a landmark piece of legislation that was passed in 1964 to address discrimination in a variety of circumstances.  The Act contains eleven titles, with each title focusing on combatting discrimination in a different way, such as in voting (Title I), commercial businesses (Title II), certain public facilities (Title III), public education (Title IV), federally funded programs (Title VI), and employment (Title VII).

As noted, Title VI prohibits discrimination in federally funded programs.  Specifically, Title VI prohibits any person in the United States from being excluded, being denied the benefits of, or being subjected to discrimination on the ground of race, color, or national origin under any program or activity receiving federal financial assistance. 

At the time it was enacted, the purpose of Title VI was to address the then common practice of denying individuals access to services, programs, and activities funded by federal financial assistance based on the individual’s race, color, or national origin.  In speaking about the need for Title VI in 1963, then President John F. Kennedy said:

Simple justice requires that public funds, to which all taxpayers of all races contribute, not be spent in any fashion which encourages, entrenches, subsidizes, or results in racial discrimination. Direct discrimination by Federal, State, or local governments is prohibited by the Constitution. But indirect discrimination, through the use of Federal funds, is just as invidious; and it should not be necessary to resort to the courts to prevent each individual violation.

Title VI was an affirmative step by the federal government to prevent federal funds from being used to subsidize racial discrimination.

What are a Public Agency’s Obligations under Title VI?

Each public agency that accepts certain federal financial assistance must comply with Title VI.  Title VI generally authorizes each federal department or agency that extends federal financial assistance to establish its own rules and regulations to effect the purposes of Title VI.  Accordingly, receipt of some types of federal financial assistance just requires a public agency to sign and submit a written assurance that the program funded by the federal financial assistance will be conducted in compliance with Title VI and its implementing regulations and then – of course – take care to do so.  But receipt of other types of federal financial assistance requires a public agency to also have and maintain a written comprehensive Title VI Plan that contains certain required elements and demonstrates how the public agency complies with Title VI with regard to the programs and services it provides to the public.  Some of these required elements include:

  • Designating and identifying an employee who serves as the agency’s Title VI Coordinator;
  • Maintaining and posting a non-discrimination notice to the public;
  • Maintaining a non-discrimination policy statement;
  • Maintaining a complaint and investigation procedure for complaints of discrimination from members of the public;
  • Maintaining and implementing a Limited English Proficiency (LEP) plan to assure meaningful access to services for persons with limited English proficiency; and
  • Providing a summary of public outreach and involvement activities undertaken to assure that minority persons have meaningful access to the services provided.

Sources of federal financial assistance that commonly require a written comprehensive Title VI Plan include the U.S. Department of Health and Human Services, the Federal Highway Administration, the Department of Transportation, and the Federal Aviation Administration.

In order to understand a public agency’s obligations under Title VI, the agency must undertake a careful review of the federal financial assistance it has received (both directly from various federal departments and agencies and indirectly through California departments and agencies), the source of the funding, and any documentation it signed as a condition of receipt.  Only by understanding their obligations, can a public agency take affirmative steps to comply with its Title VI responsibilities.

We are excited to continue our video series – Tips from the Table. In these videos, members of LCW’s Labor Relations and Collective Bargaining practice group will provide various tips that can be implemented at your bargaining tables. We hope that you will find these clips informative and helpful in your negotiations.

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While those of you in the public sector are accustomed to seeing salary information in job postings, now private employers who post jobs in California are required to post salary ranges in their job advertisements.  Effective January 1, 2023, California expanded its pay transparency laws.  The new law has two major components:  1) pay scale disclosure; and 2) pay data record keeping and reporting.  Read on to find out how these laws impact your organization.

Pay Scale Disclosure

Under the new law, all private employers with 15 or more employees who post jobs in California will need to include pay scale data in published job advertisements.  Moreover, if an employer uses a third party to advertise a job, the employer must provide the third party with a pay scale to include in the job posting.  The law describes the pay scale is “the salary or hourly wage range that the employer reasonably expects to pay for the position.”  However, there is no further guidance in the statute about how broad the pay scale range can be. 

While the salary disclosure requirements may be old hat for public entities, there are components of the new law that apply to both the private sector and the public sector.  For example, upon request, all employers of any size are required to disclose the pay scale for a position to both job applicants and current employees. 

Similarly, the portions of the law regarding salary determinations apply to both public and private sector employers.  Under Labor Code section 432.3, employers cannot rely on an applicant’s salary history as a factor in determining whether to offer employment or in determining what salary to offer an applicant.  In fact, employers are prohibited from seeking an applicant’s salary information.  However, nothing in the law prohibits an applicant from voluntarily disclosing salary history information to a prospective employer.  If an applicant voluntarily discloses salary history information without prompting, then the employer can consider such information in setting the salary for the applicant.  So, what can you ask an applicant when it comes to pay?  You can ask about the applicant’s salary expectation for the position for which they have applied. 

Pay Data Reporting

California’s new pay transparency law also impacts employer data reporting for both public and private sector employers.  The law also requires employers to maintain records of job title and wage history for each employee for the duration of employment plus three years.  The Labor Commissioner can inspect those records to determine if there is a pattern of wage discrepancy.  If employers violate these rules the Labor Commissioner may issue penalties up to $10,000.  Moreover, if an employer fails to keep records in violation of Labor Code section 432.3, there is a rebuttable presumption of pay disparity in favor of the employee if the employee makes a legal challenge.  This is especially important to note because the new law created a private right of action for violations of the pay transparency law, giving aggrieved parties the right to seek injunctive and “any other appropriate relief.”   

What can you do to be ready for the new law?

  • Make sure your job advertisements include salary information.
  • Be sure your hiring personnel are aware of what they can and cannot ask applicants regarding their salary history.  LCW offers training on hiring and a variety of other topics.  Contact Anna M. Sanzone-Ortiz (asanzone-ortiz@lcwlegal.com) for more information on LCW’s training programs!
  • Maintain job title and wage history information for three years after employee separation.
  • Consider a pay equity audit of current employee wages to ensure there are not any significant discrepancies or inequities. 
  • Consider developing a formalized pay equity policy.

Conclusion

The law is seen as a positive step towards achieving pay equity in California, and is a model for other states to follow. However, it remains to be seen how effective the law will be in achieving its goals, and how it will be enforced.

If you have any questions or need further guidance on how to comply with California’s wage transparency law, contact your trusted legal counsel.

This year, the California Legislature passed and the Governor approved the Contraceptive Equity Act of 2022 (Senate Bill 523 or SB 523), a piece of legislation intended to increase the ability of Californians to exercise full control over their reproductive decisions and to expand coverage and decrease access barriers to reproductive health services.

Among other things, Senate Bill 523 makes changes to the Fair Employment and Housing Act (FEHA) that take effect on January 1, 2023. Generally, the FEHA’s protections apply to all public employers.

SB 523 expands the FEHA to include “reproductive health decision-making” in the list of classifications protected by the FEHA.  Reproductive health decision-making means, without limitation, “a decision to use or access a particular drug, device, product, or medical service for reproductive health.”  As a result, beginning January 1, 2023, the FEHA will prohibit employment-related discrimination, harassment, and retaliation based on employees’ reproductive health decision-making.  SB 523 also makes it unlawful for an employer to require, as a condition of employment, continued employment, or a benefit of employment, the disclosure of information relating to an applicant’s or employee’s reproductive health decision-making.

SB 523 makes clear that the protected classification “sex” may also include reproductive health decision-making and the two classifications may overlap.  “Sex” also includes things such as (1) pregnancy or medical conditions related to pregnancy; (2) childbirth or medical conditions related to childbirth; (3) breastfeeding or medical conditions related to breastfeeding; and (4) gender, gender identity, and gender expression.

To prepare for these changes to the FEHA that take effect on January 1, 2023, we recommend that employers revise their discrimination, harassment, and retaliation policies and other relevant policies to incorporate the new protections for reproductive health decision-making, including in the list of protected classifications these policies set forth.  Employers should also advise supervisors and managers of the changes in the law, and keep in mind that these changes should be incorporated into the mandatory non-supervisory and supervisory harassment training.

The Contraceptive Equity Act of 2022 also makes various changes to the law governing health care service plans and health insurance policies intended to improve equitable access to preventive contraceptive care, which apply to health care service plan contracts and health insurance policies issued, amended, renewed, or delivered on and after January 1, 2024.

‘Tis the season to deck the halls and celebrate all things holiday!  Office holiday parties can be great fun, but they are fraught with pitfalls.  Planning an office holiday party is a daunting task!  However, with a little advance planning you can ensure a safe and happy holiday season for all of your employees!

  1. Make Sure Everyone is on the Nice List

It is important to make sure that all of your employees feel welcomed at your company holiday party.  It is important to select a theme and décor that are inclusive to all of your employees.  Opt for snowflakes over Santa Claus.  Rather than focus on a particular holiday, a year end party may be a good time to celebrate your employees and their accomplishments.  Perhaps a video montage of the past year’s activities or an award ceremony recognizing your best and brightest?  Also, when planning a holiday party, make sure that the date you select does not interfere with any religious holidays that your employees may celebrate.  Celebrating in January can avoid some of these scheduling conflicts and also be very cost-effective!

Selecting an accessible venue is also key to a safe and inclusive event.  Consider your employees’ unique needs when selecting the party location to make sure everyone can attend.  Is the venue wheelchair accessible?  Will the lighting aggravate an employee’s medical condition?  If you plan team building events or party games, be sure that the activities are accessible to all.  For example, a limbo contest may not be the best option if you have any employees who are in a wheelchair.

Finally, make sure that you express that attending the party is voluntary.  Employees may have a myriad of reasons for not attending, so make sure everyone knows that attending the holiday party is not required and there will no negative repercussion if employees opt to sit this one out.

  1. Avoid Eggnog Overload

Everyone has an embarrassing story to tell about a co-worker who had a few too many glasses of egg nog at the company holiday party.  As an employer, you can take steps to ensure that all employees have fun and avoid doing the Monday morning walk of shame past the cubicles.

You can serve alcohol even if you have a drug-free and alcohol-free workplace policy, but you should consider options for ensuring the safety of all employees.  First and foremost, you want to make sure that everyone gets home safely.  You may want to offer shuttles or ride services to all employees at the party.  Alternatively, you may be able to take some steps to limit alcoholic beverages by using drink tickets or limiting the number of hours of open bar.  It is also a good idea to serve food and water with the alcoholic beverages.  One option is to have a post-meal “midnight snack” served late in the party such as sliders or sandwiches.  Second, ensure that the bartenders will cut people off after a certain number of drinks.  If you hire bartenders for the event, be sure to speak with them in advance and empower them to stop serving anyone who has had a few too many drinks.  Third, consider planning some activities such as team-building to shift the focus away from drinking.  Perhaps a trivia game or matching baby pictures to employees.  Fourth, consider holding the party at your worksite during work hours – which tends to discourage drinking.  Alternatively, start the party immediately following the work day to eliminate any pre-party imbibing.

  1. Forego the Mistletoe

While you do want your employees to let loose at the party, you also want to make sure that everyone feels respected and safe.  In advance of the party, you should remind employees of your policies on sexual harassment and dress code.  You can also invite employees’ significant others to the party which may encourage employees to be on their best behavior.  Further, any games or team activities that you plan should not involve bodily contact or disrobing.  Avoid twister or strip poker!

  1. Gifting Guidelines

Everyone loves presents!  However, if you plan to do a holiday gift exchange, remind employees that the gifts should be work appropriate.  One option is to consider a gift card exchange or a silly sock exchange to limit the chances of a NSFW gift making an appearance at your holiday party.

  1. Create a Grinch Squad

Despite all of your planning, there is still a chance that something could go wrong at the party.  It might make sense to have a designated team who agrees to remain sober and step in if the event gets out of hand.  This does not need to be comprised exclusively employees from the Human Resources department; the team should be made up of a variety of different employees from different departments.

  1. Have fun!

Last but not least, be sure to have fun!  You and your team work hard all year and deserve to celebrate!

Happy Holidays and Happy New Year from your friends at LCW!