[FAQ] Whistleblower Protections and California Businesses

The topic of whistleblowers (also whistle-blowers) came to the forefront of US news with the impeachment inquiry of President Trump. The inquiry all started with a government whistleblower. But whistleblowing doesn’t just happen in government—whistleblowers exist in private business as well. 

A whistleblower is an employee who exposes an employer’s or organization’s illegal, fraudulent, and deceptive business practices, activities, or violation of the public trust. Whistleblowers are usually employees or members of the public who discover such illegal, fraudulent, or deceptive conduct and decide to report it because of their concern for the health, safety, and wellbeing of their coworkers and the community. A whistleblower can also be an employee who provides testimony about an employer’s violation of law or public trust during a current whistleblower investigation. 

Whistleblowing isn’t easy—upon discovering illegal, fraudulent, or deceptive practices, individuals are often torn between doing the right thing and reporting the act (whistleblowing) or remaining silent due to embarassment, a feeling that it is not their place to interfere, or to keep their job. No matter the case, no one should feel guilty, ashamed, embarrassed, or afraid of reporting a whistleblower act; businesses, entities, and individuals should never be engaging in illegal, unlawful, or deceptive conduct, and whistleblowing exists to hold these groups accountable. And when treated correctly, whistleblowers can help your company identify misconduct and correct it, protecting your business from future disaster.  

Below are some frequently asked questions to better understand how whistleblowing happens, how whistleblowers are protected, and how whistleblower protections affect your business.

What Actions Are Considered Whistleblowing Acts?

In order to file a whistleblower complaint, it’s important to recognize the types of misconduct that qualify as whistleblowing acts. Knowing which acts call for whistleblower action will also help businesses to implement policies to prevent those acts from occurring and protect itself.. 

There are three basic categories of whistleblowing acts:

1. Illegal Conduct: This includes violations of local, state, or federal law or regulations such as improper recording of employee hours and incorrect payment of wages, harassment, discrimination, tax evasion, and other violations of labor laws; health and safety issues, such as OSHA violations that create unsafe working conditions; and more.
2. Fraudulent Conduct: This is the most prevalent type of whistleblower act. It includes  many different things, including presenting false data about a product to consumers, such as using the labeling “100% organic,” “made from all natural ingredients” and other promises for products that are not “100% organic” or made from all natural ingredients; overbilling; overcharging; engaging in deceptive trade practices; and more. Fraudulent conduct also includes other actions intended to mislead consumers, the public, clients, or others. 
3. Deceptive Conduct: Deceptive conduct is similar to fraudulent conduct, but is not necessarily as deliberate. It may include omitting material facts, not providing the full story, or otherwise withholding important information or data from consumers, employees, or the public. 

What Should a Whistleblower Do if They Discover a Whistleblower Act?

If you have discovered illegal, fraudulent, or deceptive conduct in your workplace, the proper  thing to do is to report that misconduct. Here are some steps you can take to report a whistleblower act:

1. Make sure there is reasonable cause to believe the claims of misconduct. Whistleblowers must make claims in good faith and have reasonable cause to qualify for protection. Do you have specific evidence of the misconduct? Is this supported by evidence and/or witnesses?
2. Formally report the misconduct in writing to your supervisor and manager. If your employer has a whistleblower policy in place that dictates who to report complaints to internally, report to that authorized individual. Reporting internally gives the company a chance to correct any misconduct. Make sure this report is in writing—making a complaint orally is not enough. Many companies have anonymous reporting avenues which help promote full disclosure without repercussion
3. If an internal report does not result in correction of the misconduct, consider filing a formal whistleblower complaint with the appropriate state or federal agency. For example, employees can report labor code violations to the California Labor Commissioner. Seek legal advice from an experienced whistleblower attorney to learn where you should file. 
4. Document everything! Keep copies of emails and other documents relating to the whistleblower act. Also be sure to document the ways supervisors or managers react to the whistleblower report; were you demoted, denied a promotion, fired, or otherwise disciplined shortly after filing the report? Were you intimidated, ostracized, or otherwise harassed for making the complaint? All of these actions are considered whistleblower retaliation and are illegal under California law. 
5. Be vigilant and don’t rely solely on the system to handle the complaint and take corrective action. With the COVID-19 pandemic, the system for processing whistleblower reports is backlogged more than ever. Your report may not get the attention it needs because the system is slow and officials are busy with other matters or perhaps don’t recognize the urgency and importance of your report. 

Continue to work with the business or your employer to reform their conduct after making the initial whistleblower complaint. If the company ignores the problem, continue to complain in writing and make a case for corrective action. 

6. Consult with an employment lawyer. An experienced attorney can help you navigate whistleblower laws and defend your rights if the employer retaliates in any way. 

Which Laws Protect Whistleblowers in California? 

There are multiple laws which protect whistleblowers in California. Perhaps the most pertinent and far-reaching is California Labor Code section 1102.5. Further California labor codes extend whistleblower protections to reporters of wage and hour violations and occupational health and safety reports. These laws work together to create a strong policy in California which prohibits retaliation against whistleblowers. Employers may not retaliate against an employee for disclosing or reporting illegal conduct under California law. 

Why and How are Whistleblowers Protected? 

Whistleblowers are protected by law because they provide an important public service; they play a pivotal role in reducing corruption, improving integrity, and holding businesses accountable. To encourage whistleblowers to speak out when they see illegal, fraudulent, or deceptive activity, the law offers protection. 

Most notably, many provisions of the California labor code and California law specifically protect whistleblowers from retaliation. These laws prohibit employers from retaliating against employees who do file a whistleblower report as well as employees employers believe might report a violation of law. Unlawful retaliation may include demotions, termination, creating a hostile work environment, denial of merited promotions or wage increases, and other unwarranted disciplinary action. If an employee is reprimanded, demoted, or terminated, that retaliation provides a strong basis for a wrongful termination case in violation of public policy. 

What Can Employers Do to Minimize Damage After a Whistleblower Files a Report? 

Perhaps the best way to protect your business from whistleblower reports is to comply with federal and state laws and regulations pertaining to your business. You can regularly consult with an experienced employment attorney to ensure your business is fully compliant. 

Your business can also prepare for potential whistleblower reports and decrease the risk of retaliation suits by implementing anti-retaliation policies. Employee training programs should encourage workers to speak up about any concerns and assure employees that whistleblowers are protected from retaliation and that the company will not limit their ability to report wrongdoing. Policies should also include training for supervisors on avoiding retaliation. Businesses should also practice documenting all disciplinary action in order to track any possible retaliation. 

How Can a California Employment Lawyer Help Resolve Whistleblower Concerns? 

If faced with a whistleblower retaliation suit, employers may be liable for a multitude of damages, including lost wages and benefits, damages for pain and suffering, including physical, mental, or emotional distress, and punitive damages. 
As a qualified California employment attorney, Keven Steinberg can help you protect your business from whistleblower retaliation suits before they happen. Keven and his team at Steinberg Law can help you develop robust anti-retaliation policies and help ensure your business is compliant with local, state, and federal laws and regulations.

If a whistleblower suit does arise, the experienced lawyers at Steinberg Law will work to protect your business from harm. Contact Steinberg Law today for more information about whistleblower protection in California.