2017 Renne Sloan Holtzman Sakai Public Law Group 1

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1 Employee as Whistleblower: How Do You Manage? CALPELRA Annual Conference, December 6, 2017 Presented By Jeff Sloan and Linda Ross How to Identify Whistleblowing Whistleblower Defined According to Merriam-Webster, a whistleblower is: an employee who brings wrongdoing by an employer or other employees to the attention of a government or law enforcement agency and who is commonly vested by statute with rights and remedies for retaliation. How to keep your agency and any of its employees from being turned into the subject of major (or even minor) motion picture. 3 Public Law Group 1

2 Protections for Whistleblowers Sources of Whistleblower Protection. Federal Law Occupational Safety and Health Act (Pub.L ) Whistleblower Protection Act legal violations, abuse of authority, danger (Pub.L ) Sarbanes-Oxley Act violations of federal securities laws (Pub.L ) Dodd-Frank Wall Street Reform and Consumer Protection Act securities (Pub.L ) 42 U.S.C. Section 1983 protected speech 5 Sources of Whistleblower Protection California Law False Claims Act (Government Code 12653) Labor Code (Labor Code 1102 et seq.) FEHA (Gov. Code 12940(h)) Safety Complaints (Labor Code 6300 et seq.) Statutes specific to certain types of employees: ostate (Gov. Code 8547 et seq.) oschool (Education Code et seq.) ohealth Facility (Health & Safety Code ) 6 Public Law Group 2

3 Whistleblowing Under the False Claims Act (Gov. Code section 12653) California False Claims Act (CFCA) State Law prohibits false claims, under a contract or otherwise, to the government for money, property or services. (Gov. Code 1250 et seq.) To qualify for protection as a whistleblower under Government Code 12653, an employee must show: 8 Sample Jury Instructions, CFCA Action 1. That plaintiff was an employee, contractor or agent of defendant; 2. That contractors were alleged to have defrauded the government of money, property, or services by submitting a false or fraudulent claim to the government for payment; 3. That plaintiff reported the alleged false claims to the defendant; 4. That plaintiff acted to stop the false claims; 5. That the defendant took an adverse employment action; 6. That plaintiff s acts to stop the false claims were a substantial motivating reason for the defendant s decision to take the adverse action; 7. That plaintiff was harmed; and 8. That defendant s conduct was a substantial factor in causing plaintiff s harm.. 9 Public Law Group 3

4 California False Claims Act, cont. Reasonable belief. The potential false claims action need not have turned out to be meritorious. Plaintiff need only show a genuine and reasonable concern that the government was being defrauded. Affirmative defense: The defendant is not liable if it proves by clear and convincing evidence that it would have taken the adverse employment action anyway at that time for legitimate, independent reasons 10 Whistleblowing Under Labor Code section Elements of Whistleblowing under Labor Code Labor Code covers a much broader range of improper conduct than CFCA, which is limited to false and fraudulent claims. In 1984, when Labor Code was enacted, in order to qualify for protection as a whistleblower, an employee had to show a disclosure to a government agency or law enforcement agency of a violation of a state or federal rule or regulation. However, in the last five years, a number legislative amendments have expanded the scope of Labor Code significantly 12 Public Law Group 4

5 Elements of Whistleblowing under Labor Code In Edgerly, the former City Administrator of Oakland, Deborah Edgerly, asserted that she refused to violated the City s Charter, Municipal Code, and Civil Service rules and regulations by denying numerous requests from the Mayor s office. Edgerly alleged that she was wrongfully terminated by the Mayor as a result of her refusals. The trial court dismissed Edgerly s claims, finding that section did not cover violations of City law. The Court of Appeals affirmed, concluding that violations of municipal law were not violations of state law for the purposes of section The legislature subsequently amended section to include violations of City rules and regulations. (Edgerly v. City of Oakland (2012) 211 Cal.App.4th 1191) 13 Elements of Whistleblowing under Labor Code Amendment to Protected Disclosures now include: Not only disclosure to a government agency or law enforcement agency, but also to persons with authority over the employee, or an employee with authority to investigate, discover, or correct legal violations/noncompliance, or testimony Not only reasonable suspicion of a violation of state and federal law, but also violation of a local, state, or federal rule or regulation. Regardless of whether disclosure of the information is part of the employee s job duties. 14 So, What Complaints Are Covered? Violations of federal law, state law, or City policy that prohibits workplace harassment, discrimination and retaliation; Theft, misuse of, or misappropriation of City resources, property, information, assets or funds; Intentional falsification of records or the willful and unauthorized destruction or mutilation of any City document.... ; Creating a specified and substantial danger to public health or safety; or Abuse of his or her City position to advance a private interest. (Examples From City of Berkeley Whistleblower Policy) 15 Public Law Group 5

6 Labor Code Sample Verdict Form See Handout 16 Whistleblowing Under FEHA and Title VII FEHA and TITLE VII FEHA and Title VII Protect: Employees who make a charge, testify, assist or participate in proceedings or hearings under the statutes ( participation ) oeeoc ofeha olawsuit Employees who oppose acts made unlawful by the statutes ( opposition ) odiscrimination oharassment oretaliation (42 U.S.C 2000e-3(a); Gov. Code 12940(h).) 18 Public Law Group 6

7 FEHA and TITLE VII An employee need only have a reasonable good faith belief that an action was discriminatory It sometimes happens more frequently than might be imagined that an employee whose primary claim of discrimination cannot survive pre-trial dispositive motions is able to take to trial the secondary claim that he or she was fired or adversely affected in retaliation for asserting the primary right. (Quinn v. Green Tree Credit Corp. (2 nd Cir. 1998) 159 F.3d 759, 762) 19 How to Manage Whistleblowing Before the Whistle Blows Develop a Whistleblowing Policy Develop Reporting Process for Employees to Raise Concerns Conduct Training for Staff and Supervisors Get Management s Buy-In to the Concept that Employee Concerns Deserve Their Attention and Action Develop Investigation Guidelines 21 Public Law Group 7

8 After the Whistle Blows Make Contact with Whistleblower Listen to Allegation by the Employee and Communicate to the Whistleblower that Concerns are Listened to and are Taken Seriously Act to Preserve Confidentiality of Whistleblower Prevent Retaliation Conduct Investigation (Internally or Retain Outside Counsel) 22 Whistleblower Confidentiality Whistleblowers often come forward anonymously or request that their identifies be concealed Complaints should be kept confidential But an employer cannot make an absolute promise of confidentiality because an investigator may need to ask questions that would allow another individual to determine the whistleblower s identity 23 Avoiding Retaliation Adverse Employment Actions (False Claims Act, Gov. Code 12653) Discharged Demoted Suspended Threatened Harassed Or in any other manner discriminated against in the terms and conditions of his or her employment 24 Public Law Group 8

9 Avoiding Retaliation Adverse employment actions Title VII Title VII: actions materially adverse to employee; likely to deter a reasonable worker from making or supporting a charge Possibilities: Reassignment of duties Exclusion from meetings Smaller raise Harassment Demotion, Suspension, Termination 25 Avoiding Retaliation Burden on employer: The burden is on the employer to show that the employer would have taken any adverse employment action, for legitimate nonretaliatory reasons, in the absence of the employee s complaint. False Claims Act and Labor Code: employer must provide clear and convincing evidence. 26 Avoiding Retaliation Challenging Situations Employees who blow the whistle after being charged with misconduct Employees who blow the whistle and the employer then later discovers past misconduct Employees who blow the whistle and subsequently commit misconduct 27 Public Law Group 9

10 Q&A Public Law Group 10