Recent Law Changes Protect California Whistleblowers

Whistleblowers help the federal and state government recoup billions of dollars in fraud. Employers often overcharge, submit claims for services that were never rendered, misrepresent the quality of goods and services, or commit other acts of fraud. The United States and California rely on the courage of employees and others with knowledge of the fraud to inform local and federal law enforcement

To discourage the reporting of fraud, employers often retaliate by firing or threating to fire the employees. California enacted a recent law that took effect in 2014, that gave employees added protections against retaliation. Before the law, employees were only protected from retaliation if the employee reported a federal or state offense directly to the government or to a law enforcement agency. The new law also protects employee who report fraudulent behavior:

  • Within the employer business or organization to someone with authority over the worker – or to an employee who has the authority to review the reported abuse or
  • To a public body that conducts hearing, inquiries, or investigation into government abuse.

The 2014 California law also makes an employer rule or policy that precludes the disclosure of any federal, state or even local offense unlawful. Additionally, the law makes the employer liable if anyone acting on behalf of the employer retaliates against the employee. The law applies to retaliation based on an actual disclosure or because the employer or employer’s agent believes that a disclosure has or may take place.

In retaliation lawsuits, the employee has the right, with the help of California employee counsel to demand his/her job back, lost wages, have the legal fees paid, and also to possibly get statutory additional damages which can be up to $10,000 for each violation.

The new amendment clarifies split federal decisions which were unclear as to whether an employee who reports securities fraud, under the Dodd-Frank Act (one of various types of whistleblower claims) would be protected from retaliation –  if he/she reported the offense internally or to a public body. California now does protect the latter types of disclosures as well as government or law enforcement disclosures.