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Whistle blower “rules of thumb”

Whistle blowers come from all industries, such as aerospace, health care, financial services, transportation, retail, you name it and we’ve probably handled it!  There are some misconceptions among the public about who may or may not be a whistle blower and recover for the wrongful termination suffered as a result of corporate retaliation. Here’s a few rules of thumb

1. The whistle blowers motivation is not relevant in considering whether or not the activity is protected. Whether it be financial gain, “setting the record straight”, not being blamed for something within the whistle blowers’ job duty, getting even with the corporate employer or gaining personal publicity. The Mize-Kurzman could actually stated that the reporting could be prompted by dissatisfaction, resentment over unfair treatment, vindictiveness or honest efforts to make sure the boss follows the law.

2. The whistle blower need not be a lawyer and “know” the law that has been violated. In fact, it is enough for the employee to reasonably believe that the law was violated, whether or not there is an actual violation. We routinely litigate numerous cases under California’s Labor Code 1102.5, which outlaws retaliation for “reasonable belief” reporting to the company or the government.  Factual disputes in federal false claims cases many times involve whether the belief is “reasonable”.   If, for example, the whistle blower relied on prior training, a corporate handbook actually outlawing the practice they now are accused of engaging in, if the alleged activity “appears” to violate common sense and a moral code of justice, then these are all facts a judge, jury or arbitrator can rely on in determining the practice was illegal.

3.  Under California law, just because an employee’s job duties involving “passing along” information to a supervisor (even specifically, the “information” of a false claim  or other illegal conduct), this is not a bar to whistle blower protection. (However, just “passing along” publicly known suspected illegal activity is not grounds for whistle blower protection.

4.  In some cases such as sexual harassment, defendants have argued on appeal that the jury was sold a bill of goods and the testimony and other evidence was “inherently improbable”. Unfortunately, for California’s corporate defendants, this does not make the verdict suspect, since inconsistencies and contradictions in trial testimony happen frequently and the jury is the best vehicle to resolve them.

5.  Punitive damages in whistle blower cases are generally based on the reprehensibility of the employment practice being sued on (such as retaliation, demotion, termination, slander of a whistle blower’s good name), not on the badness of the fraud uncovered. We recently reviewed a case in which the jury had awarded punitive damages against a company with a negative net worth!

This column is educational in nature only and legal advise can only be given by an attorney licensed in your jurisdiction and familiar with the facts of your case. We practice employment law representing employees only throughout California.  Steve Danz