Darren Hager worked as a deputy sheriff for the Los Angeles County Sheriff's Department from 1988 to 2003.  In 2000, Hager worked as the Department liaison to a federal Drug Enforcement Agency (DEA) task force investigating a large methamphetamine organization in the Antelope Valley.  Hager used an informant, a felony suspect, to obtain information about methamphetamine dealers. 

In June 1998, an off-duty deputy sheriff named Jonathan Aujay had disappeared in Antelope Valley.  In December 1999, homicide detective Larry Brandenburg learned that Aujay may have been murdered and that deputy sheriff Richard Engels may have been involved.  Brandenburg received permission from his captain to reopen Aujay's case.  As part of his investigation, Brandenburg asked Hager to speak to Hager's informant about "dirty deputies."  The informant told Hager that Engels was involved in narcotics and possibly the disappearance of Aujay.

Hager reported this information up the chain of command.  Hager was ordered to not investigate deputy sheriff wrongdoing or Aujay's disappearance.  Hager was also told that any information regarding deputy wrongdoing was to be passed to Internal Affairs or Criminal Investigations and any information concerning Aujay was to be passed to Brandenburg. Despite these orders, during the course of the DEA task force investigation, Hager asked informants about Aujay and received information that Aujay was killed because he discovered a methamphetamine lab and Engels was involved.

Hager's supervisor on the DEA task force was Lieutenant Ronald Shreves.  In September 2000, Shreves met with command staff to update them regarding the DEA task force investigation and potential deputy misconduct.  Hager prepared a summary for Shreves regarding Aujay's disappearance.  Hager also disclosed this information to Brandenburg.  Brandenburg was convinced that Engels was involved in a criminal drug conspiracy and that Aujay was murdered in connection with this conspiracy.  Brandenburg prepared an affidavit for a search warrant to serve on Engels, but his captain did not allow him to take it to the judge because the captain did not believe the information was credible.  Brandenburg presented his information to his captain's superiors and was taken off the investigation.

Meanwhile, Shreves sent a memorandum to command staff addressing Brandenburg's investigation and claimed Aujay's possible murder was not being properly investigated.  Thereafter, Sergeant Joe Holmes was assigned to investigate the information compiled by Brandenburg and Hager.  Holmes interviewed Hager's informant (who admitted he lied to Hager) and 60 other people.  Holmes concluded there was no credible evidence linking Engels to drug trafficking or Aujay's disappearance. 

Thereafter, Hager became the subject of an internal affairs investigation that focused on whether Hager violated a direct order to not investigate Aujay's disappearance.  At the conclusion of the investigation, Hager was charged with conducting a personnel investigation and making false statements to his supervisors by misrepresenting wiretapped conversations to support his theory regarding Aujay and Engels.  The Department concluded the appropriate discipline was termination. 

Hager filed suit against the County of Los Angeles and the Sheriff's Department alleging whistleblower retaliation in violation of Labor Code section 1102.5.  The jury found in Hager's favor, and awarded $2,006,015 in lost earnings and $2,500,000 in non-economic damages.  The trial court denied the County's motion for new trial and Hager's request for attorneys' fees.  Both parties appealed.  After the Court of Appeal issued its opinion, both parties petitioned for rehearing.  The Court of Appeal granted the petitions so that it could clarify its opinion. 

To state a claim under Labor Code section 1102.5, an employee must establish that he disclosed a violation of federal or state law, rule or regulation to a government or law enforcement agency.  The employee must also establish that he suffered adverse action because of such disclosure.

The County argued that Hager did not "disclose" any information under section 1102.5 because the Department already knew about the allegation that Engels was allegedly involved in drug trafficking and Aujay's disappearance before Hager ever disclosed the information.  In making this argument, the County relied upon a California Court of Appeal decision from a different district, Mize-Kurzman v. Marin Community College Dist.(2012) 202 Cal.App.4th 832, in which the Court of Appeal held that reporting information already known to an employer does not constitute a protected disclosure under section 1102.5. 

The Court of Appeal rejected the County's argument.  It held that the County was attempting to create a rule that limits the protections of section 1102.5 to the first employee who discloses a violation that was not previously disclosed.  The Court held there is no "first report" limitation on the face of section 1102.5.  The Court also stated that while section 1102.5(b) refers to a "disclosure" of information; section 1102.5(e) provides that a government employee only has to make a "report" as opposed to a "disclosure," and a report does not necessarily have to reveal something unknown.  The Court noted that to the extent Mize-Kurzman highlights an inconsistency in section 1102.5, that government employees must "report" while others must "disclose," the Legislature must resolve the issue.  Finally, the Court stated that a "first report" rule would discourage whistleblowing.  Thus, the Court of Appeal rejected the County's assertion that Hager's reports fell outside the protection of section 1102.5.

Note: 

On January 1, 2014, the Legislature amended Labor Code section 1102.5 and significantly expanded the scope of that law.  This case expands that scope even more.  The Hager decision goes to great lengths to distinguish the holding of Mize-Kurzman which stated that reporting information that was already known to the employer did not constitute a protected disclosure under section 1102.5.  Since Hager was not the first person to raise issues regarding Aujay's disappearance or Engel's alleged involvement (Brandenburg made such allegations first) the Court focused on whether section 1102.5 protected subsequent reports from others, or whether only the first reporter was protected.  It concluded that others were protected as well.  In addition, the case lowered the bar for government employees to establish an 1102.5 claim by stating that a public employee does not necessarily have to report something unknown since a "report" as opposed to a "disclosure" is sufficient pursuant to section 1102(e). 

Public employers can expect the number of 1102.5 claims to increase as the threshold for establishing such a claim continues to lower.  It is imperative that any adverse action taken against an employee not be based on an employee's report or disclosure of a violation of state or federal rule, regulation or law. 

Hager v. County of Los Angeles (2014) 176 Cal.Rptr.3d 268.