San Francisco Court Expands Individual Liability and Reinforces Protection to Whistleblower

In an interesting recent ruling, a federal district court in California stated that individual executives and directors at companies may be held liable for alleged corporate fraud and corruption.  In this unique case, a former general counsel of Bio-Rad Laboratories was allowed to proceed with his claim against the companies and its executives for firing him in retaliation of him notifying the Securities and Exchange Commission (SEC).  The court looked to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act which protected employees from retaliation when reporting violations to the SEC.  According to the former general counsel, Bio-Rad Laboratories took part in international bribery schemes.  Although the court permitted the case to proceed, it may take several months before we learn more about the intricacies of the claims.  (See Wadler v. Bio-Rad Laboratories et al.)

Whistleblowers are also protected against retaliation under many other laws such as the Deficit Reduction Act, False Claims Act (FCA), Fraud and Enforcement Recovery Act, and the Patient Protection and Affordable Care Act. For instance, the FCA protects whistleblowers from retaliation by the employer in terms and conditions of employment as result of an employee, contractor or agent’s lawful act aimed to stop an FCA violation.  Relief may include reinstatement, two times back pay, interest, special damages, litigation costs and reasonable attorneys’ fees.  (31 U.S.C. 3730(h).) (See dol.gov/compliance/laws/comp-whistleblower.htm for list of laws protecting workers against retaliation.)

Similarly, the California FCA is modeled after the federal FCA.  In California, it is illegal to retaliate against employees who inform the government or law enforcement where those employees had reasonable cause to believe that the information revealed a violation or noncompliance with a state or federal statute or regulation. (Labor Code 1102.5.)  See the following blogs for similar cases.

California also has statutes that protect health care workers and patients by prohibiting health care facilities from retaliating or discriminating against them for complaints about premises’ safety conditions or quality of care. (Health and Safety Code 1278.5.)  The purpose of the statute is to protect those who are charged with ensuring the health and safety of the patients as well as protecting the actual patients.  The employee who has been discriminated against in employment under this section shall be entitled to reinstatement, reimbursement for lost wages and benefits caused by the acts of the employer, and legal costs, or to any other remedy deemed warranted by the court.  Finally, Health and Safety Code 1432 extends retaliation protection to workers and patients at long-term health care facilities.

If you suffered an employment-related action related to reporting illegal or discriminatory conduct to government regulators, prompt action to preserve your rights is vital.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.