When Promises Fail to Protect – California’s Whistleblower
Law (Part 2)
California’s Department
of Industrial Relations (DIR) responds to employee retaliation complaints,
including those that cited the State’s whistleblower
law. If the complainant successfully
makes a prima facie case that there
was retaliation, the company has the opportunity to convince the DIR that it acted
against the employee for non-retaliatory reasons.
Among the 126 determination
letters from 2014 that the DIR provided to me, the most
popular reason cited for firing the discloser was poor performance[1]. Nearly half the companies used it. When HomeFirst’s CEO fired me, the first
reason she gave was performance. What
else could it be? Why would a good performer be fired? And this defense works: 84% of companies who
tried it won.
The second most popular defense was an allegation of some
sort of altercation – perhaps a verbal argument, a physical threat,
intimidation, or insubordination (a special favorite that companies alleged 10%
of the time). HomeFirst
tried that, too. In addition to asserting
that I had not done my job properly, HomeFirst leaned heavily on my supposed insubordination
to justify my termination. I was not
courteous toward my boss, it said, and I had a negative attitude. About 15% of the companies employed the altercation
defense, which was successful 79% of the time.
Like the poor performance defense, the altercation defense
works because it makes intuitive sense: why should you not fire someone who is a
threat to your business. HomeFirst
contended that instead of helping the company, I had hoped to undermine its
viability. The solution seems inarguable.
Two other common company arguments – the termination was
part of a general layoff and the whistleblower actually resigned, which
together accounted for 18% of the defenses – worked less reliably because they
could actually be verified or not. Still
those defenses proved sufficient in 65% of the cases.
Only a quarter of the retaliation complaints addressed in the
DIR’s 2014 determination letters were decided in favor of the employees. Whistleblowers who dealt with wage-related
issues won 33% of the time. On the other
hand, those who disclosed suspected legal violations succeeded just 6% of the
time. This is disturbing news for us
“ethical whistleblowers,” but the letters shed light on why we seldom win.
The whistleblower who alleges a legal must take time to
understand the technical intricacies of the law and business practices and to compile
evidence in a convincing form. During
that delay, management has ample opportunity to suspect the traitor in its
midst and to assemble its own evidence of the informer’s mistakes and failure
to get along with other employees. Managers
can stage reprimands to which it can later point as proof that the whistleblower’s
misbehavior was worse than its own.
The passage of time also separates the whistleblower’s disclosure
from the alleged retaliation. Even with wage-related
complaints, the DIR looks hard for a temporal connection between the two. For example, over the course of six years Ty Horton
had complained every few months about not being paid properly by Moule’s
Foothill Glass. Since he had not been
fired for his earlier objections, the DIR decided that his final complaint did
not cause his termination but his insubordination did, even if insubordination
might be understandable given the company’s persistent screwing with his pay.
Sara
Dowell began work as a direct care staff at Terra Bella Communities in
December 2013. In January and February
2014 she made several internal complaints about client care given by other
staff members, and at the end of February she called California’s
Community Care Licensing (CCL) Division about Terra Bella. Unfortunately for her case, she should have called
her complaint to the Department of Health Services, which she did on March 5,
the day she was fired. The DIR ruled
against her, deciding there were too many, vaguely documented complaints for
them to make a clear connection to her firing.
Instead, it felt a negative performance assessment was ample cause for
her termination.
Charles
Ramsey had held commercial loan officer positions at various
banks for twenty years when he joined Exchange Bank as SBA [Small Business
Administration] Credit Analyst and Underwriter in February 2010. Exchange Bank did not operate as his prior
experience indicated it should. By
November Ramsey decided to report what he thought were violations of FDIC
regulations to the bank’s audit committee.
On December 1, he filed a complaint with the FDIC. But his boss had begun accumulating
criticisms of his job performance in June.
Ramsey was fired on December 21, 2010.
When employees complain about wage problems to company
managers, they are afforded immediate protection. Not so with legal issues in 2010. The DIR held that his report to the audit committee
did not merit protection based on then-existing law; discussions of possible infractions
with his boss didn’t matter; only the FDIC report might have protected him. When an employee begins to question
organizational decisions, as Ramsey did, management is put on alert to begin building
its defense.
Exchange Bank claimed that it had no idea of Ramsey’s FDIC
disclosure, but it’s reasonable to suppose they had their suspicions. At HomeFirst, just 13 minutes after I
admitted having previously disclosed the company’s licensing
violation to government authorities, the Board Chair
told the CEO she was not surprised. She had guessed as much following months of
my urging action before the prior month’s visit by the same CCL that Dowell
approached.
In March 2014, HomeFirst’s attorney advised Board
members to fire me immediately after I acknowledged making disclosures to CCL
and another government agency. He said
that a whistleblower suit would come even if they held off acting but I could cause
harm with more disclosures in the interim.
Their delay did give me the chance to identify and reveal more
potential violations, but it also allowed the CEO time to come up with
reprimands they would cite as support for their decision.
Whistleblowers who approach the DIR generally present small-time
problems that attract little public interest.
They fall on the far end of the spectrum from big-name whistleblowers
and multi-million dollar qui tam lawsuits. That
they seldom reflect the deep ethical ponderings recommended by academic writers[2]
does not make them unworthy of admiration. Rather it
casts the act of whistleblowing in the midst of ordinary life.
By opening consideration of whistleblowing to disclosures of
relatively small misdeeds – in the general public’ view if not that of the affected
individuals – we do not make the act less heroic. But we find those who retaliate against them
more reprehensible when they clearly stand for no high moral standard, however
much they purport to do so. They
retaliate because they think they can get away with it, as indeed they often
do.
[1]
Poor performance included a range of activities, such as failure to complete
assignments, violations of policies, poor attendance, and theft
[2] For
example, Bouville, Mathieu. “Whistle-blowing
and morality.” Journal of Business
Ethics. 81.3 (September 2008): 579-585; Bok, Sisella. “Whistleblowing
and Professional Responsibility.” New
York University Education Quarterly 11.4 (1980): 2-10; Johnson, Roberta Ann. Whistleblowing:
When It Works and Why. Boulder: Lynne Rienner Publishers. 2003; Larmer, Robert A. “Whistleblowing and Employee Loyalty.”
Journal of Business Ethics. 11.2 (Feb 1992): 125-128
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