diff --git a/src/karapace/backup/backends/v3/schema_tool.py b/src/karapace/backup/backends/v3/schema_tool.py
index 65a3ea2bf..340be2477 100644
--- a/src/karapace/backup/backends/v3/schema_tool.py
+++ b/src/karapace/backup/backends/v3/schema_tool.py
@@ -86,7 +86,7 @@ def check_compatibility(git_target: str) -> None:
 
     for file in schema_directory.glob(f"*{extension}"):
         relative = relative_path(file)
-        if source_layout:
+        if not source_layout:
             relative = pathlib.Path(*relative.parts[1:])
         with subprocess.Popen(
             ["git", "show", f"{git_target}:{relative}"],
diff --git a/src/karapace/kafka/common.py b/src/karapace/kafka/common.py
index 5df9838a2..add44eea3 100644
--- a/src/karapace/kafka/common.py
+++ b/src/karapace/kafka/common.py
@@ -6,7 +6,14 @@
 from __future__ import annotations
 
 from aiokafka.client import UnknownTopicOrPartitionError
-from aiokafka.errors import AuthenticationFailedError, for_code, IllegalStateError, KafkaTimeoutError, NoBrokersAvailable
+from aiokafka.errors import (
+    AuthenticationFailedError,
+    for_code,
+    IllegalStateError,
+    KafkaTimeoutError,
+    KafkaUnavailableError,
+    NoBrokersAvailable,
+)
 from collections.abc import Iterable
 from concurrent.futures import Future
 from confluent_kafka.error import KafkaError, KafkaException
@@ -52,6 +59,8 @@ def translate_from_kafkaerror(error: KafkaError) -> Exception:
         return KafkaTimeoutError()
     if code == KafkaError._STATE:  # pylint: disable=protected-access
         return IllegalStateError()
+    if code == KafkaError._RESOLVE:  # pylint: disable=protected-access
+        return KafkaUnavailableError()
 
     return for_code(code)
 
diff --git a/src/karapace/schema_reader.py b/src/karapace/schema_reader.py
index 01f07f379..cd04944dc 100644
--- a/src/karapace/schema_reader.py
+++ b/src/karapace/schema_reader.py
@@ -11,6 +11,7 @@
     InvalidReplicationFactorError,
     KafkaConfigurationError,
     KafkaTimeoutError,
+    KafkaUnavailableError,
     LeaderNotAvailableError,
     NoBrokersAvailable,
     NodeNotReadyError,
@@ -250,6 +251,8 @@ def run(self) -> None:
                 except ShutdownException:
                     self._stop_schema_reader.set()
                     shutdown()
+                except KafkaUnavailableError:
+                    LOG.warning("Kafka cluster is unavailable or broker can't be resolved.")
                 except Exception as e:  # pylint: disable=broad-except
                     self.stats.unexpected_exception(ex=e, where="schema_reader_loop")
                     LOG.warning("Unexpected exception in schema reader loop - %s", e)
diff --git a/stubs/confluent_kafka/cimpl.pyi b/stubs/confluent_kafka/cimpl.pyi
index 74760897c..6936d10f0 100644
--- a/stubs/confluent_kafka/cimpl.pyi
+++ b/stubs/confluent_kafka/cimpl.pyi
@@ -11,6 +11,7 @@ class KafkaError:
     _UNKNOWN_PARTITION: int
     _TIMED_OUT: int
     _STATE: int
+    _RESOLVE: int
     UNKNOWN_TOPIC_OR_PART: int
 
     def code(self) -> int: ...