Question:

I recently heard something on the news about a company being hit with a “whistleblower complaint.” Can you explain what this is, and how it affects employers?

Answer:

The term “whistleblower” was originally used to describe an individual who reported the illegal actions of a company or corporation that was defrauding the government. Over the years the definition has expanded to identify anyone who reports corporate or business crimes that are being committed without the knowledge of the victim.

A whistleblower may disclose financial fraud, health or environmental violations, or anything else that is illegal or against public policy. Examples of whistleblower cases include situations where employees have disclosed fraud in government purchasing, toxic waste disposal in violation of environmental laws and regulations, sexual harassment in the workplace, and misuse or abuse of company funds by directors and officers. However, the California courts have held that employee concerns about efficiency, monetary waste, poor management, or disruption in the quality of customer service does not qualify as a complaint about unsafe or unlawful business conditions or practices.

An employer may not adopt a policy that prevents an employee from disclosing suspected violations of state or federal law to a government agency or law enforcement agency. It is also unlawful for an employer to retaliate against an employee who makes this kind of whistleblower report. In the past, individuals who have disclosed wrongful conduct by their employers have been subjected to retaliation in their employment, including demotions, harassment and termination. In addition, whistleblowers sometimes have experienced threats or acts of physical violence. For these reasons, whistleblowers are now protected by state and federal law.

In California, Labor Code section 1102.5 provides protection for employees who complain about an employer’s violation of the law, and protects them from retaliation for having done so. While section 1102.5 states that the employee must complain to a government agency or law enforcement official, some courts have held that any complaint made to an upper level individual in the company will also qualify as “blowing the whistle” with regard to improper employer practices. In addition, California Labor Code section 6310 protects employees who make verbal or written complaints about unsafe working conditions or other unsafe practices. Whistleblower protection extends to future employment as well, precluding retaliation by future employers against individuals who have engaged in protected whistleblowing activities in an earlier job. Also, California law requires that employers post a notice informing employees of their rights and responsibilities under the state’s whistleblower laws.

It should be noted that to qualify for protection under whistleblower protection laws, an employee need only “reasonably believe” that the activity he or she is reporting is in violation of the law or public policy—the employee does not need to prove that the employer was actually violating the law. Because of this, even if it turns out that the employer was not violating the law, the employee’s rights will still be protected if his or her suspicion was reasonable.

Most employers have a policy in place to deal with everyday employee complaints. However, many employers do not know how to properly handle a whistleblower type complaint, or how to avoid a possible retaliation claim. The following guidelines can help in identifying and responding to a whistleblower complaint:

  • Identifying the Complaint—An employee has made a protected whistleblower complaint if he/she has questioned or complained about an action or practice by his/her employer that violates state or federal law, regulations, or rules. Note that the employee is not required to specifically identify the name of the law, regulation or rule at issue.
  • Documenting the Complaint—Once an employee has raised concerns about suspected violations of state or federal law, regulations, or rules, the employer should document the employee’s questions and comments so that there is a record of exactly what was complained about and when.
  • Investigating the Complaint—Once a whistleblower complaint has been made, the employer should conduct a prompt and impartial investigation into the complaint. This should be done regardless of whether the complaint appears valid or not, as the employee need only have a reasonable belief that he or she is making a legitimate complaint. In the event that a government agency or other authority contacts the employer about the complaint, the employer should work with the agency representative in resolving the complaint on its merits Depending on the circumstances, it may also be prudent for the employer to consult with legal counsel.

More information about whistleblower rights, requirements, and employer responsibilities can be found at the California Department of Industrial Relations website: http://www.dir.ca.gov/.

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