California Statutes Protecting Whistleblowers from Retaliation
The following is a list of the most important whistleblower statutes applicable to employees providing services in the state of California:
The California False Claims Act: Government Code Section 12650, et seq. (protects employees who complain billing fraud and other fraudulent activities towards the State or other governmental bodies). This law is also referred to as California’s Qui Tam statute. It provides for treble damages. Essentially, the False Claims Act (“FCA”) is designed to prevent private contractors from submitting false or fraudulent invoices, or engaging in other activities, to secure overpayment from the government for good or services. Actions under the FCA are filed under seal, with notice provided to the State or political subdivision. The State then has a period of time during which it may investigate the claims.
Pursuant to Government Code section 12652(c)(6), the state or political subdivision whose funds are concerned may, after investigating a claim brought by a private citizen, elect or decline to intervene in the case. In cases where the State intervenes, “the action shall be conducted by the Attorney General and the seal shall be lifted.” Gov. Code § 12652(c)(6)(A). In cases where state declines to intervene, “the seal shall be lifted and the qui tam plaintiff shall have the right to conduct the action.” Gov. Code § 12652(c)(6)(B).
Gov. Code § 12652(e)(1) governs how an action where the state has intervened is managed. It provides that “If the state or political subdivision proceeds with the action, it shall have the primary responsibility for prosecuting the action.” The statute also determines the rights of qui tam plaintiffs in cases where intervention has occurred. “The qui tam plaintiff shall have the right to continue as a full party to the action.” Id. The state also has the right to dismiss or settle claims, even where the qui tam plaintiff has objected. See Gov. Code §§ 12652(e)(2)(A), (B).
The California Whistleblower Protection Act. Government Code Section 8547.1, et seq. (Allows state employees to report waste, fraud, violations of law, or health or safety threats, and to be free from retaliation for doing so). The State Legislature enacted the California Whistleblower Protection Act based on its finding that state employees should be free to report waste, fraud, abuse of authority, violation of law, or threat to public health without fear of retribution. The Legislature further found and declares that public servants best serve the citizenry when they can be candid and honest without reservation in conducting the people’s business. Allegations of violations of the whistleblower statutes by state personnel will be investigated by the State Personnel Board pursuant to Government Code Section 19683.
- California Labor Code Section 1102.5 is the most commonly applicable retaliation/whistleblower statute. Under Labor Code Section 1102.5, employers are prohibited from retaliating against an employee for reporting information, conduct, behavior, or other activities that the employee reasonably believes may violate a local, state, or federal law, rule, or regulation. Also, pursuant to the statute, it is illegal for employers to punish an employee for refusing to participate in an activity that would result in a violation of a local, state, or federal rule or law. The requirements of a claim for violations of Labor Code Section 1102.5 are that the Plaintiff employee must prove, by a preponderance of evidence, (1) that he or she engaged in protected activity, (2) that he/she has suffered an adverse employment action (such as a demotion, negative performance evaluation, decrease in pay, benefits, or termination); and (3) that there is a causal connection between the protected activity and the adverse employment action. Where an employee brings a retaliation case under Labor Code Section 1102.5, he/she may rely on circumstantial evidence (by proving a close temporal proximity in the timing of the complaint in relationship; to the adverse employment action), or by direct evidence, such as an e-mail from a supervisor complaining about the employees reporting of illegal activities.
- Health and Safety Code Section 1278, et seq. protects employees of health care facilities from retaliation for reporting matter affecting patient safety. Health and Safety Code 1278.5(b)(1)(A) states that no health care facility shall discriminate or retaliate against any person who has “presented a grievance, complaint or report to the facility.”
- In Fahlen v. Sutter Central Valley Hospitals (2012) 208 Cal. App. 4th 557, the California Court of Appeal interpreted and applied Health and Safety Code Section 1278. Dr. Mark Fahlen was a physician practicing at defendant’s health care facility. While he was making his rounds one day, he had a heated argument with some of the nurses working under his supervision. He claimed that the nurses failed to follow his direction. He later leveled accusations to management that the nurses had been insubordinate and provided substandard medical services to patients. The hospital then terminated Fahlen’s contract. It appointed an investigative committee to review the decision and then to submit it finds to the hospital’s executive committee. After conducting an investigation, the committee recommended that Fahlen’s contract not be continued. Fahlen contested the decision. The hospital’s judicial peer review committee subsequently then reversed the decision not to reappoint Fahlen. However, the hospital’s board of trustees later reversed the judicial review committee and Fahlen was terminated.
- Fahlen chose not to seek judicial review of this decision. Rather, he decided to file a complaint in civil court against the hospital in California. He alleged many causes of action. One of the causes of action he alleged was retaliation in violation of the whistleblower statute, Health and Safety Code 1278.5. In response, the hospital filed a “demurrer” to the complaint, which is a legal pleading designed to challenge the sufficiency of the allegations of the complaint. The hospital also filed “anti-SLAPP motion” under Code of Civil Procedure § 425.16. A party may file a SLAPP case where they have been prevented from exercising their free speak rights. An anti-SLAPP lawsuit is a case alleging that the case filed by the Plaintiff was designed to prevent the filing party from exercising her/her/its free speech rights. The hospital alleged that Fahlen has failed to exhaust its internal grievance procedures because he didn’t seek judicial review of the board of trustee’s decision. The hospital made the contention that the hospital peer review proceedings were official proceedings authorized by law. Therefore, according to the arguments advanced by the Hospital, the decision not to renew the doctor’s contract was shielded from challenge and they could not be sued over it.
- The Court rejected the Hospital’s arguments. It concluded that the Health and Safety Code prevents retaliation against anyone who makes a complaint or grievance with respect to patient safety. It held that the anti-SLAPP provisions would apply to actions for defamation and abuse of process. The Court denied the anti-SLAPP motion as to the retaliation cause of action based on its findings that Fahlen had showed he could prevail on the merits of the underlying case.
- The Court held that the doctrine of administrative exhaustion was important one and that, in certain instances, it might preclude an individual from pursuing a lawsuit in court without seeking review of decision by an internal committee. However the court held that retaliation was likely to have occurred in Fahlen’s case based on the record before it. Therefore, the peer-review process may have been a quasi-judicial proceeding could be retaliatory action itself. The Court held that a reversal of o decision by the peer review committee could only occur when the underlying decision was “arbitrary and capricious,” a requirement that a party judicially challenge such decisions would narrow an individual’s right to redress under the statute if required to exhaust the administrative remedy. The Court described in detail in its decision that it was worried about construing Health and Safety Code Section 1278 in a way that would make it more difficult for a potential whistleblower to request relief under the law. The Court described in detail its fears that a different decision would result in delays caused by a requirement that the party seek judicial review of the final administrative decision when the alleged adverse decision was based on whistleblowing.
- As a result of Fahlen, a doctor or health care worker may not need to exhaust all internal review and grievance processes in order to bring a complaint for retaliation. The court held that retaliation for trying to improve the hospital’s quality of car violated fundamental public policies of the State of California.
2. What activities does California state law protect, and to whom do these protection apply?
The broad prohibitions against retaliation codified in Labor Code Section 1102.5 apply to a variety of situations. The law is very broad and may cover complaints that are also covered in other statutes, such as the Health and Safety Code, the worker’s compensation laws, and the prohibitions against reporting illegal discrimination and harassment in Government Code Section 12940, et seq, also known as “FEHA” (The Fair Employment and Housing Act).
The following would be some examples of protected complaints:
- A complaint or report to a government agency, or law enforcement, alleging illegal activities. For example, if an employee complained to an outside government agency that an employer was operating the business in violation of applicable codes, regulations, and statutes, the complaint would be protected and the employee could not be retaliated against by his/her employer for coming forward with the complaint. There is no requirement that the complaint be made to an outside agency. As long as the employee is operating under a good faith belief that the activity is illegal or non-compliant with some rule or regulation, the speech of protected. The employee is not required to prove that the activity actually violated the law.
- Refusing to participate in an activity that would violate state or federal law.
- Disclosing suspected violations of state or federal law to a person with authority over the employee or to a person with the authority to investigate, discover or correct the violation.
Discrimination: It is illegal under California’s Fair Employment and Housing Act (FEHA) to retaliate against any employee for making a complaint alleging discrimination or harassment based on a protected characteristic, such as race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation. Cal. Gov. Code § 12940. It is also illegal for an employee to retaliate against any employee for filing a complaint, testifying, or assisting in a proceeding under FEHA. FEHA prohibits, among other things, discrimination in employment on the basis of
Hazardous Substances: An employer may not retaliate against an employee for filing a complaint, instituting a proceeding, testifying in a proceeding, or exercising a right under California’s Hazardous Substances Information and Training Act. Cal. Lab. Code § 6399.7.
Health Care Facilities: An employee working for a health care provider may not be retaliated against for may not for filing a grievance/complaint, or initiating a government investigation about the operations of the health care provider that relate to patient care, service, treatment or safety. Cal. Health & Safety Code §§ 1278.5, 1432.
Occupational Safety and Health: An employer may not retaliate against an employee for making a complaint (either in writing or orally) to either (1) the California Division of Occupational Safety and Health; (2) any other governmental agency responsible for workplace safety or health; (3) the employer; or (4) the employee’s representative. Further, an employer may not retaliate against an employee for refusing to perform work under conditions in which the violate the health and safety laws. Cal. Lab. Code §§ 6310, 6311.
Workers’ Compensation: An employer many not retaliate against an employee for filing a workers’ compensation claim. An employer who retaliates in this manner is guilty of a misdemeanor. Similarly, an employer may not retaliate against an employee for testifying in a co-worker’s workers’ compensation hearing. Cal. Lab. Code § 132a.