When Promises Fail to Protect – California’s Whistleblower
Law (Part 1)
Stories about whistleblowers in mainstream media tend to
describe big cases. Think of famous
lawbreakers like Edward Snowden or the few individuals -- William
LaCorte, for example -- who win huge lawsuits.
Employees of public agencies sometimes enter the news when their
lawsuits threaten taxpayers’ pocketbooks.
Occasionally employees of private companies attract passing local interest if they
stoke controversy involving a well-known institution, such as the Fine
Arts Museums of San Francisco, but non-disclosure agreements work to keep
their resolutions secret.
Other whistleblowers stay out of sight entirely after
agreeing to private settlements like the one that HomeFirst
offered me. Finally, some file
retaliation complaints with government agencies responsible for enforcing laws
intended to protect whistleblowers. In
December 2014, I filed my complaint with California’s
Department of Industrial Relations (DIR), which enforces California
Code 1102.5.
The DIR issues annual Retaliation Complaint Reports to the
California legislature describing its activities and opening a window on
small-time whistleblowers and the techniques companies use against those who
disclose their misdeeds. The reports
describe a growing business: in 2015 the DIR received
1,696 complaints per California Code 1102.5 versus 409 in 2013, just before
the law was amended to protect internal disclosures of suspected misdeeds.
In
2014[1]
DIR issued 227 determination letters, which described the DIR’s decisions concerning complaints of retaliation. Following
my FOIA request for copies of those letters, the DIR sent
me 156, the other 71 having been destroyed according to the DIR. Among these 156, DIR investigations were
briefly described in 126 of the letters, which appear to be fairly
representative of California workers.
They came from nearly every industry, roughly in proportion with their participation
in the overall California economy[2].
In
addition, 10% of the complaints came from nonprofit employees, generally in line with the 8% of California employees working in the nonprofit sector[3].
The retaliation complaints came from small-time
whistleblowers. The 25% of claimants who
were successful[4]
received awards, on average, of less than $30,000. We probably all think our case is uniquely
significant, but mine fits into that pack nicely: if I had accepted HomeFirst’s
settlement offer, I would have netted $24,000.
I am also similar to the others in that the DIR moves slowly for
me, too. On average, the DIR takes more
than two years to decide the cases it accepts for consideration, and it has been
working mine for more than two-and-a-half years so far.
Of the 126 alleged retaliations, 68% related to wage-related
issues – such as not being paid at all, not being paid for overtime, not receiving
meal or rest breaks, or participating in a State investigation of a wage
issue. Another 13% related to workplace
safety problems. Thus, nearly
three-quarters of the whistleblowing here related not to abstract ethical
questions, but to bread-and-butter issues that directly affected the
whistleblowers. Just 13% of the cases
involved disclosures of other suspected legal misdeeds, like those I charged against
HomeFirst, that might be viewed as unethical behavior without personal
consequence. We who approach DIR are not
junior Snowdens or Ellsbergs, but ordinary people.
In order to be successful in her retaliation complaint under
California law, the complainant must establish three things: (a) she disclosed[5]
an employer’s action that she believed was illegal, (b) the employer knew about
her disclosure, and (c) a connection can be demonstrated between her disclosure
and the alleged retaliation. After she
has plausibly shown each of these – thus making her prima facie case – the employer will seek to prove that it had other non-retaliatory reasons for
firing her.
The company’s first strategy, then, is to undermine the
whistleblower’s contentions on these three points. In its defense against my
complaint, for example, HomeFirst
stated that some of the deeds that I disclosed were not even illegal. It admitted that I had made disclosures but
said that my obligation as a company executive was to fix the problems, not
merely disclose them to others. Then it
rephrased the requirements of California law, asserting that I could not prove
that my termination was because of
my disclosures (rather than that my disclosures were a contributing factor in its decision to fire me, as current law
provides).
Cases involving wage issues, in particular, are usually clear
cut: easily obtained documentation can show whether the individual was paid the
right amount on time; and employees normally voice their complaints when they are
not paid properly. As a result, these
whistleblowers did well in establishing their prima facie cases: 84% were successful at that first stage.
Legal infractions are more difficult to prove. Of the 17 legal disclosures that were alleged
to trigger retaliatory acts, 5 related to possible harm to clients of the
companies. Other alleged violations
included misuse of government grant money, regulatory violations, illegal test
proctoring practices, failure to monitor student visas, and orders to make
false statements to government agencies.
Each of the legal disclosures involved technical understanding of
detailed legal requirements and business practices. The company might plausibly claim that no
violation existed, it had nothing to gain from the alleged violation, and it
had no reason to fire the individual for her so-called disclosure. Consequently, a lower percentage of these complainants
– 69% with legal-related complaints and of non-wage-related complaints in
general – were successful in making their prima
facie cases.
While, overall, 79% of the whistleblowers made their prima facie cases of plausible
retaliation, those who did won just 31% of the time because their employers were
able to convince the DIR that they had an even more plausible reason for firing
the complainants independent of the whistleblowing. Part 2 will discuss why companies are so
successful before the DIR.
[1] The
DIR released its 2015 report only in the past few days.
[2] Summary
derived from U.S. Bureau of Labor Statistics
and analysis
of 2014 DIR determination letters.
[4]
The DIR’s 2014 Retaliation Complaint Report indicated that 21% of the 227
determination letters supported the complainant. In addition, 401 cases were settled prior to
issuance of a determination letter.
[5]
Wage violations may be disclosed to the employer, but before the October 2013
amendment to California code 1102.5 most other violations had to be disclosed
to a legal authority in order to merit protection.
No comments:
Post a Comment