California Whistleblowers’ Most Lethal Tool against Retaliation – Health and Safety Code 1278.5 – Developments in 2018
Brief overview and Unresolved issues
The State of California provides the most protection in the nation to whistleblowers via a complex legal net of anti-retaliation laws. Primary among these is California’s Health and Safety Code Section 1278.5 (“H&S 1278.5”) which has been around since the late 1980s. H&S 1278.5’s protection goes beyond another long-standing anti-retaliation statute in the form of California’s Fair Employment and Housing Act (“FEHA”). FEHA’s Section 12940(h) specifically prohibits retaliation against any person that engages in protected activity in the workplace. Similar to H&S 1278.5, to establish retaliation under FEHA, the plaintiff must prove that: (1) He or she engaged in a protected activity; (2) He or she was thereafter subjected to an adverse employment action by the employer; and (3) There was a causal link between the two incidents. (Passanto v. Johnson & Johnson Consumer Products, Inc. (2000) 212 F.3d 493, 506.) Although the formidability of H&S 1278.5 remains intact, its applicability has experienced recent modifications such as the arena where claims may be brought and the extent of recoverable damages.
Ever since its implementation, H&S 1278.5 has provided California whistleblowers with increasing protections. In fact, within California’s civil jury instructions guidance, this statute is characteristically referred to as “the whistleblower’s protection.” Specifically, H&S 1278.5 begins with a declaration of public policy in order to encourage healthcare professionals to report unsafe patient care and conditions. It then continues with the creation of a cause of action against health care facilities that discriminate or retaliate against whistleblower health care professionals who report patient safety concerns.
Plaintiffs utilizing H&S 1278.5 may be employees, members of the medical staff, rank and file workers, and even patients. Defendants are typically entities that own and operate health care facilities where medical treatment is provided. Actions that are prohibited may best be summarized as any (discrimination or) retaliation against a patient, employee, medical staff member or worker of the health care facility based on his or her (i) complaint or report to an agency responsible for evaluating that facility or (ii) initiation, participation or cooperation in an investigation or proceeding related to the quality of care, services, or conditions at the facility to an agency responsible for evaluating that facility.
Once protected status attaches to an individual, the health care facility may not discriminate or retaliate against that individual. Common types of prohibited actions include discharge, demotion, suspension, unfavorable changes in the terms and conditions of employment or contract, or even the threat of any of these actions. For years, the penalty for such violations of the statute was a civil fine of $25,000. However, as of January 1, 2018, A.B. 1102 amended H&S 1278.5 by increasing the civil penalty for a willful, or intentional, violation of the whistleblower law from $25,000 to $75,000. In addition, a defendant may also be guilty of a misdemeanor. Importantly, a health care professional who is harmed can be reinstated, reimbursed for lost wages or benefits, paid legal costs associated with bringing the case, and any other remedies deemed fair by the court.
Plaintiff’s Right to Jury Trial
Even though H&S 1278.5 has been widely used for years to protect California’s health care whistleblowers from retaliation, it has nonetheless experienced lingering issues. One of these is that the statute itself is silent on whether the plaintiff has a right to jury trial. Further, its legislative history makes no mention of this right. In the Shaw Supreme Court case decided on April 10, 2017, a California based plaintiff sued her former employer, Kindred Hospital, for wrongful termination and retaliation after she complained about aspects of the hospital’s operations that negatively affected the quality of care and services provided to the patients. Chief among her complaints was that the hospital was employing professionals who were not licensed or competent. In reprisal, the defendant hospital allegedly took adverse employment actions against plaintiff leading up to her termination. (Shaw v. Superior Court Case No. S221530 2 Cal. 5th 983 (Cal. 2017)). The Court held that a health care whistleblower action under H&S 1278.5 does not provide a right to jury trial, though a jury trial may be obtained for related claims of wrongful termination in violation of public policy.
Plaintiff’s Right to Recover Attorney’s Fees
Another unresolved issue has been whether plaintiffs have the right to attorney’s fees. H&S 1278.5 provides that an employee, health care worker, or member of the medical staff shall be entitled to “the legal costs associated with pursuing the case.” (1278.5(g).) However, courts and cases such as Shaw have neglected to provide direction on whether legal costs include attorney’s fees. In fact, the Shaw decision states that “The prayer in section 1278.5(g) cause of action also seeks an award of ‘attorneys’ fees pursuant to Health and Safety Code 1278.5 and civil penalties allowed thereunder. We have no occasion in this case to determine whether either of the latter two items is recoverable in a section 1278.5 action.” (Shaw at note 19.)
Subsequently, the different attorney bars have wrangled over this ambiguity. Plaintiff’s firms argue that the policy behind the statute favors attorneys’ fee awards and that the wording of the statute creates a comprehensive remedy. They also reference other statutes such as Government Code Section 77204(b)(3) that define “legal costs” to include attorneys’ fees. On the other hand, defense firms subscribe to a “textualism” theory and argue that the way to interpret the law should be based on the ordinary, plain meaning of the text rather than non-textual sources. They also rely on the lack of clear legislative intent to award the attorneys’ fees. Further, defense attorneys make a compelling argument that not all retaliation statutes include attorney’s fees. For instance, Labor Code Section 1102.5 includes the causes of action but does not create attorneys’ fees recoverable. Similar to H&S 1278.5, Labor Code Section 1102.5 is a California whistleblower law intended to prevent retaliation against those who expose employer violations. It also prohibits workplace policies that prevent employees from disclosing information exposing the employer’s violation of state or federal statute or a local, state, or federal rule or regulation to such entities as government or law enforcement agencies, i.e. the police, to individuals with the authority to investigate or correct the non-compliance, or through testimony before a public entity. It is safe to say that these lingering interpretative issues will continuity to arise in courts throughout California in 2018 and beyond. Nonetheless, they play a critical role in mitigating employer wrongdoing and fraud while giving employees the proper protection for exposing non-compliance in the workplace.