House Bill 3162 Private-Employer Whistleblower Law

Transcription

1 House Bill 3162 Private-Employer Whistleblower Law WHAT IS NEW? The scope of whistleblower protections for employees of private employers is expanding in Under the current law, private employers cannot discriminate or retaliate against an employee who engages in certain protected activities: 1. making a good faith report of criminal activity by any person; 2. causing a complaint to be filed against any person; 3. cooperating with law enforcement conducting a criminal investigation; 4. bringing a civil proceeding against the employer; or 5. testifying in a civil, criminal or legislative proceeding. These activities are considered of such important social value that employees who engage in them are given special protection. This is because, by whistleblowing, i.e., disclosing information that helps protect against social ills, the employee provides a benefit to society that warrants protection against any employment-related repercussions. On January 1, 2010, the law changes significantly because the conduct of whistleblowing no longer needs to be of great social importance. Instead, any employee who has in good faith reported information that the employee believes is evidence of a violation of a[ny] state or federal law, rule or regulation, will be entitled to whistleblower protection. At first glance the new law may seem like nothing more than a frustrating annoyance for a busy HR professional. However, the change is, in reality, far more serious. The savvy employee who senses that his job may be in jeopardy will quickly realize that he or she has yet another way of creating a potential claim to ward off termination. Indeed, the employee need only find some good faith basis for believing a rule or regulation has been violated, whether related to his employer or not, report that to his employer or others in order to position him- or herself to file a whistleblower claim in the event of a discharge, demotion, or other employmentrelated change that is protected under the whistleblower law. Page 1

2 HOW MIGHT ISSUES UNDER THE NEW LAW ARISE? Example 1: The traffic infraction Iris is a sales employee who has not been performing to company standards for some time and her sales are down again this year. Iris knows her job is on the line. One day, she rides to a conference with a co-worker, Bob. On the way to the conference, Bob runs a stop sign. Iris, who has been warned of her poor performance and has been looking for a way to protect her job, seizes upon the opportunity. When she returns to work, she marches into the HR Director s office and announces that she needs to file a report that her co-worker committed a traffic violation while driving her to a conference. The HR Director nods patiently but takes no notes during the meeting and no action after to address the concern with Bob once Iris leaves. One month later, Iris is terminated as part of a lay-off that was planned prior to her report. Shortly thereafter, Iris files a complaint with the Bureau of Labor and Industries ( BOLI ) alleging the company has violated Oregon s whistleblower law because she was terminated for reporting Bob s traffic infraction. If the company has adequately documented Iris poor performance and that the decision to terminate her proceeded her protected reporting, it will likely avoid any liability, but the company may still be forced to spend time and money to defeat Iris claim. If, however, there is not sufficient and credible evidence of a legitimate, non-discriminatory/non-retaliatory reason for terminating Iris, the company may find itself in a world of trouble. Example 2: The inaccurate chart notes Gloria, a Certified Nurse Assistant, has been having difficulty getting along with Martha, her supervising nurse. Martha has reported Gloria s insubordination and other difficulties in the working relationship to her supervisor, Lucy. Martha and Lucy have decided that the best solution is to reassign Gloria to another facility that is further from her home. Then, she will be someone else s problem. In the meantime, Gloria reviews Martha s entries in several patients chart notes. She comes across one that she believes inaccurately records the time of Martha s last patient check, making it appear that the check occurred an hour earlier than it did. Gloria reports the error to Lucy, claiming that this was done to hide Martha s failure to follow the schedule of patient care. Lucy promised to discuss the issue with Martha. Lucy then shifts the discussion and tells Gloria that, in light of the difficulties she and Martha have working together, she is recommending that Gloria be transferred to the Vancouver, WA facility. The next thing Lucy knows, a whistleblowing complaint has hit her desk. Will her documentation of the ongoing conflict be enough to protect the company against potential liability? Page 2

3 Example 3: The sprinkler Frank runs a small farming operation in Eastern Oregon. Frank s residence is adjacent to the farming operation. One of Frank s employees notices that Frank is irrigating a large lawn in front of his family residence and inquires as to how he obtained the permit to do so. When Frank tells him to mind his own business, the employee reports him to the Oregon Water Resources Department. Frank s instinct is to fire the guy on the spot, but can he do so without facing liability? WHEN MUST THE UNLAWFUL CONDUCT OCCUR TO BE COVERED BY THE NEW LAW? The new law states that it applies to actions commenced on or after January 1, However, it is not clear whether the law applies to unlawful employment practices that occurred during the previous year, or in other words, the prior period under which the statute of limitations would have run. Generally, a whistleblowing claim must be brought within one year of the unlawful employer conduct. However, the one-year statute of limitations is somewhat misleading because if there is more than one alleged incident of unlawful employer conduct, the one year period runs from the date of the last incident. If the complainant alleges constructive discharge, the period to file a complaint runs from the date of discharge. To be safe, employers should assume that the law applies to employer conduct that occurred in 2009 but was reported after January 1, WHICH EMPLOYERS ARE COVERED BY THE NEW LAW? Oregon s whistleblower protection law applies to any private employer with one (1) or more employees. Therefore, unlike OFLA and similar laws, whistleblowing protections apply to all private employers. Every employer needs to be aware of the new protections and should train and educate management employees accordingly. WHAT IS A GOOD FAITH BELIEF? A good faith belief requires the employee to prove he or she had a reasonable basis for the belief. In other words, the employee must show that he or she did not report based on another motive such as malice, spite, jealously or for personal gain. However, the employee does not have to be correct that a law or regulation was violated in order to have a valid whistleblowing claim. Giving the employee room to be wrong makes sense in light of what whistleblower laws hope to achieve to encourage people to report socially important wrongdoing. However, under the new law, where social importance can have relevance to what is protected, the fact that the employee does not have to be right creates an even bigger challenge for employers and provides little deterrence to employees not to engage in frivolous reporting. WHAT DOES IT MEAN TO REPORT? So long as the employer is aware of the reporting, the employee does not need to complain to the employer directly. For example, if a nurse believes her co-worker is violating certain licensure requirements, she may report this directly to the regulatory board, rather than to Page 3

4 the employer. Reporting occurs whenever it is directed at a person or entity with authority to take on the conduct complained of, and may even extend to media reporting. Depending on the circumstance, this could be the employee s employer, the police, or state and federal agencies. The employee must, however, still show that his or her employer was aware of the reporting in order to show that it was the reporting that caused the adverse employment action. WHAT TYPE OF EMPLOYER CONDUCT IS AN UNLAWFUL RESPONSES TO WHISTLEBLOWING? It is unlawful for an employer to discharge, demote, suspend or in any manner discriminate or retaliate against an employee with regard to promotion, compensation or other terms, conditions or privileges of employment, because of an employee s whistleblowing activities. Employers should also be careful when restructuring departments, especially if such changes mean an employee who has reported conduct protected under the new law would have less supervisory authority or other indicia of a downgrade in status or responsibility. Even something as small as a change in the office the employee works in could be seen as retaliation. Losing a company parking space could raise similar concerns. While there may be legitimate reasons for these decisions it is important for the employer not only to document the decisions in writing, but to communicate them to other key personnel affected, and to the reporting employee as well. If all employees understand how employment decisions are made and how they are communicated, there is less risk that an action will be misperceived as discriminatory or retaliatory. HOW DOES THE EMPLOYEE MAKE A CLAIM? The employee may file a complaint with the Bureau of Labor and Industries ( BOLI ) or in court. If requested by a party, an action under this law shall be tried by a jury. If the employee/plaintiff prevails, they are entitled to their reasonable attorney fees. WHAT TYPES OF DAMAGES MAY BE ASSESSED? An employer may be subject to compensatory and punitive damages, in addition to reasonable attorney fees and costs, if an employee is successful in a whistleblowing action. Such actions may also be accompanied by common law claims for emotional distress or wrongful discharge. WHAT SHOULD EMPLOYERS DO TO PROTECT THEMSELVES? 1. Training There are several key tools employers must use to protect themselves: The first step in training is to identify key employees who will need to be prepared to address whistleblowing. Supervisors and HR staff are generally the employees who need to be Page 4

5 trained on the procedures the company will implement to deal with whistleblowing. They need specialized training on documentation, investigation, planning/remediation, follow-up, and revisions. Lower level employees need to be educated as well most likely through an updated employee handbook. For example, if the company decides that all employees need to report directly to HR, this must be clearly communicated to the employees. If changes are made to your employee handbook, make sure employees acknowledge receipt of the new handbook and that these records are kept in their employment files. The remaining steps/tools outlined here are what your supervisory and human resource employees need to be trained to do. 2. Documentation The first action that will trigger a whistleblowing issue is a report. You can predict but not control who an employee will report to. Setting out the reporting structure in the employee handbook is a good manner in which to channel reporting to the right person, but depending on the type of report being made, it may not always be followed. For example, if an employee is supposed to report to his supervisor but he suspects his supervisor is looking at pornography at work, he may report to an HR Director instead. Keep in mind that an employee may also file a BOLI complaint or report to an outside agency instead. This highlights why it is important to specify the company s reporting requirements in writing. If the employee s report violates the protocol, this can provide a legitimate means for disciplinary action. The person receiving the whistleblowing report must document it. Be sure the employee knows what documentation means. Explain that they should take notes during the conversation or consider creating a form to be specifically used for employee complaints. The reporting employee should review the notes and should be asked to sign off on their accuracy. It is also a good idea to ask the employee to prepare their own written statement of what occurred, to be signed by the employee. These can be good things to articulate in your employee handbook so that an employee does not feel they are being targeted by being asked to document their complaint. It is also crucial to articulate how confidentiality will be handled. For some companies, it is very important that company information be kept confidential and reporting can breach this confidentiality, even though it may be protected as whistleblowing. Educate employees on why information should be kept confidential and explain that there are procedures for bringing problems to light without disclosing private company information. The reporting employee may also want anonymity or other protections. In the heat of the moment, it can be very difficult to balance the concerns of the reporting employee and the employee they may be reporting about, especially before an investigation has been conducted. Therefore, it is a good idea to think through the response beforehand. Supervisory and HR employees should know where documentation is kept and who will review it. Any report should be documented in the employee s personnel file, as well as in the files of any other employees the report may involve. Supervisory and HR employees should also understand that any internal complaint by an employee should be evaluated to determine whether Page 5

6 it could constitute a violation of a state or federal rule, law or regulation. It is best to decide who will be doing the evaluating and make sure this person has access to legal assistance as needed. Some reports will obviously implicate a violation of a law or regulation such as the example of the employee who ran a stop sign. Other reports will be harder to evaluate for example, did Nurse Martha simply make a mistake in the chart notes or did she intentionally enter false data, exposing the hospital to losing its license. Do not guess either decide that all reports will be treated as covered violations or make sure you have made an accurate evaluation of whether whistleblowing protections have been triggered. If such a report could constitute a covered violation, this should also be documented. If the report indicates that the alleged violation is ongoing or is likely to reoccur, this should be indicated as well. Supervisory staff should understand to whom they should communicate such reports, such as to the HR department, or senior management. 3. Investigation The goal of your investigation is to determine two things: 1) was there a good faith basis for the employee report; and 2) is the report correct. Remember, even if the report is not correct, a good faith report still entitles the employee to whistleblowing protection. Your investigation should include a review of any relevant documents, the employment history of all involved employees and perhaps even interviews with employees and/or patients and customers. Take photos if necessary. Keep in mind that internal s often form plaintiff s primary evidence of unlawful employer conduct and should be reviewed carefully. You also need to determine whether any violation was an isolated incident, is ongoing or something likely to reoccur in the future. Does Nurse Martha routinely mark down incorrect times for patient checks or are there a set of special circumstances that explain the conduct that occurred? Determining whether the violation was isolated, ongoing or likely to reoccur is necessary to formulate a remediation plan and also to evaluate the bubble of protection that now surrounds the whistleblower. He or she is likely protected for as long as it takes you to fix a reoccurring problem. If the reporting employee is one you want to take action against, these facts are crucial. Lastly, the investigation only has value if it is also documented. You may want to create forms for this part of the process as well. Make sure forms and other documentation are added to employment files and reviewed by the appropriate members of your team. 4. Planning/Remediation As soon as you have determined whether there has been a violation of a state or federal law, rule or regulation, you want to begin determining how to resolve the violation that occurred and prevent it from happening in the future. There can be several aspects to a remediation plan. The first concerns fixing the practice that allowed the violation to occur. With the nursing example, this could mean that two people sign off on time entries, or that the data entry is time stamped independently, through the use of computers or time-stamping devices. The second part is fixing the relationship between employees, if necessary. The final step, which dove-tails with Page 6

7 the final tool outlined in this article, is reevaluation. Not only do you need a plan to fix the problem, you need to check back and make sure your plan works. If an allegation is incorrect, you need to determine whether it was an innocent mistake or whether the employee had an impermissible motive for the report. Remember, a false report does not mean the employee isn t protected so long as they reported in good faith. If the report was made with an impermissible motive and disciplinary action is warranted, make sure you have been exhaustive in your documentation and investigation if you have missed something, it could be a costly mistake. If the company wants to take action against the employee for reasons unrelated to the reporting, timing is key. If you can wait at least 6 months to take the action, this is preferable. Carefully consider whether the proposed employment action could appear related to the whistleblowing reporting. 5. Follow-Up It is important to discuss the investigation and any remediation plan with the affected employees. Explain what the investigation revealed and what will be done. Ask for cooperation from the team. Make sure expectations are clear and remember, putting things in writing protects the employer and helps employees understand what is expected of them. You will also want to follow up with the whistleblower. The nature of that follow-up will depend in part on the outcome of the investigation. If the investigation reveals that the whistleblower s report was correct, it is appropriate to thank the employee and acknowledge that the company takes this conduct seriously. The whistleblower should also be reassured regarding any confidentiality issues. Challenges to co-worker relationships as a result of the reporting or remediation should be addressed and resolved. If the whistleblower s report was innocent but incorrect, you will want to handle the follow-up in a similar manner with the caveat that if you sense the employee may be overly eager to report inappropriately, you should address this directly with the employee. If repeated reporting, even if in good faith, is going to be an issue with this employee, it should be dealt with early and documented, in the event that it later becomes necessary to sever the working relationship. If there is no good faith basis for the employee s report, and particularly where there is a bad motive for the reporting, this must also be addressed, albeit carefully, with the employee. If the incident justifies disciplinary action, it may be important to take the action rather than set a precedent that the company will allow reporting aimed at needlessly accusing co-workers, or badmouthing the company without cause. Depending on the seriousness of the allegation and the employee s employment history, you may want to consider merely issuing a warning and explaining the expectations moving forward. You may also want to come up with a plan to eliminate the motive for the false reporting, if possible. If CNA Gloria made a false report against Nurse Martha, perhaps the two should not work together any longer. Page 7

8 You also need to evaluate what type of a whistleblower you are dealing with is this a isolated reporting incident where the employee was looking out for the company? Or is this an employee who will continue to report to avoid any negative employment action? If it is the first type of employee, you may simply want to carefully ride out the time period to cleanse any association between future employment actions and the reporting. If it is the second type of employee, you may want to cut your losses early. Be prepared for this employee to take some kind of action against the company and be armed with your documentation. 6. Reevaluation Continue to monitor any remediation plans. You will also want to periodically review the status of any protected employees. How much time has passed since they reported? How many reporting incidents have occurred? You may also want to review your evaluation of the reporting employee. Your first impression may have been that the reporting incident was appropriate and not likely to create unnecessary problems, but first impressions can be wrong. If the employee s subsequent conduct doesn t support your initial evaluation it may be time to sever ties, or at least to document your revised revisions. Whatever your plan, be sure to document it carefully and thoroughly. And don t forget to evaluate the efficacy of your whistleblowing policies themselves. Thanks to Laura Althouse for writing this article. For more information, please contact Laura at lalthouse@dunncarney.com, Tamsen Leachman at tleachman@dunncarney.com or Jack Cooper at jcooper@dunncarney.com. Page 8