You cannot make, adopt or enforce any rule, regulation or policy to prevent an employee from disclosing information to a government or law enforcement agency if the employee reasonably believes that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a state or federal rule or regulation. The law also prohibits retaliation against an employee for disclosing this type of information to a government or law enforcement agency if the employee reasonably believes that the information discloses a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation. Employers cannot discipline, terminate or otherwise take adverse action against an employee who engages in protected whistleblowing activity.
An employee who refuses to participate in an activity that would result in a violation of state or federal statute, or a violation of or noncompliance with a state or federal rule or regulation is also protected from retaliation. These protections apply even if the activity involved a former employer.
The protection extends to employees of:
- The state or any political subdivision of the state
- Any county, city or city and county, including any charter city or county
- Any school district or community college district
- Any municipal or public corporation
- Any political subdivision
- The University of California
A report that an employee of a government agency makes to his/ her employer is a disclosure of information to a government or law enforcement agency.
A corporation or limited liability company is liable for a civil penalty not exceeding $10,000 for each violation, in addition to any other liabilities it may incur.
The law specifically exempts rules, regulations or policies that implement the confidentiality of the lawyer-client privilege, the physician-patient privilege, or trade secret information. Also exempt are actions by employers against employees who violate these rules.
If the employee shows that his/er whistleblowing activity contributed to the alleged adverse employment action against the employee, the burden shifts to the employer to demonstrate, by clear and convincing evidence, that the alleged action would have occurred for legitimate, independent reasons even if the employee did not engage in protected activities.
The Attorney General maintains a confidential whistle-blower hotline to receive calls from people with information about possible violations of state or federal statutes, rules or regulations, or violations of fiduciary responsibility by a corporation or limited liability company to its shareholders, investors or employees. Hotline calls are referred to the appropriate government authority for review and possible investigation.
During the initial review of a call, the Attorney General or appropriate government agency must treat information that is disclosed through the whistle-blower hotline, including the caller's identity and the employer identified by the caller, as confidential.
Adverse Employment Action Defined
In Patten v. Grant Joint Union High School Dist., a California appeals court ruled that a school principal's disclosure to legislative personnel about a school district's use of blank "transfer of funds" forms was whistle-blowing. The principal was entitled to a trial to determine if her transfer from one school to another constituted a retaliatory adverse employment action.
Though the lateral transfer did not amount to an adverse employment action because both schools were middle schools and there was no change in the employee's title, wages, benefits and duties, the court was persuaded that her material responsibilities were significantly diminished when she was transferred from a challenging assignment at a large underperforming school to a small school with high-achieving students and more parental support. As a relatively young principal with her administrative career ahead of her, the transfer could be viewed unfavorably. The court found that the transfer could be an adverse employment action even though the employee's wages, benefits and duties were the same.
Required Whistle-Blower Posting
You must display a list of employees' rights and responsibilities under the whistle-blower laws. The poster must include the whistle-blower hotline telephone number, and the poster font size must be greater than 14 point type. State agencies can comply with the posting requirement by displaying a notice pursuant to Section 8548.2 of the Government Code or Subdivision (b) of section 6128 of the Penal Code.
Posted notices must contain the whistle-blower hotline number.
Health Care and Whistle-Blower Protection
The law prohibits a health facility from discriminating or retaliating against any patient, employee, member of the facility's medical staff or any other facility health care worker because that person:
- Presented a grievance, complaint or report to an entity or agency responsible for accrediting or evaluating the facility, or to any other governmental agency.
- Initiated, participated in or cooperated with an investigation or administrative proceeding related to the quality of care, services or conditions at the facility.
An employee who has been subjected to discrimination in violation of this bill is entitled to reinstatement, reimbursement for lost wages and work benefits caused by the employer or to any remedy deemed warranted by the court, as well as lost income and legal costs.
Sarbanes-Oxley Whistle-Blower Protection
The Sarbanes-Oxley Act of 2002 protects employees who provide information or assist in investigations into conduct that the employee "reasonably believes" violates federal criminal law relating to:
- Mail or wire fraud
- Bank or securities fraud
- Securities and Exchange Commission (SEC) regulations
- Federal laws protecting shareholders
The Sarbanes-Oxley Act also protects people who testify or otherwise participate in prosecuting these types of violations.
The law protects employees of publicly traded companies and brokerage firms or their contractors, subcontractors and agents. The law prohibits retaliation or discrimination in employment, discharge and demotion or discipline. It protects employees from harassment or threats of adverse employment action.
The Securities and Exchange Commission and the federal Occupational Safety and Health Administration (OSHA) enforce the Sarbanes-Oxley Act.
Sarbanes-Oxley Complaint Process
An aggrieved employee or former employee can file a complaint with OSHA within 90 days of the alleged violation of the Sarbanes-Oxley Act. An OSHA representative must conduct an investigation, hold hearings and issue an administrative decision. The decision is subject to appeal in a federal court of appeals. The final administrative decision must be issued within 180 days of filing the complaint, or the employee has the right to bring a direct lawsuit in federal district court.
Although an OSHA decision that adversely affects an employer is subject to appeal, OSHA can order an immediate reinstatement of a terminated employee, regardless of the appeal's status. OSHA may order reinstatement in a preliminary order based on finding probable cause at the conclusion of an investigation.The finding is subject to agency appeal proceedings. To avoid a reinstatement, the employer must show that immediate reinstatement would constitute a "security risk." In such a situation, OSHA can order "economic reinstatement." That is, the employer could be ordered to pay the employee's regular pay to stay away from work.
To avoid an ultimate finding of liability, the accused party must show, by clear and convincing evidence, that the adverse employment action would have occurred even if the employee did not engage in protected activities.
An employee may be awarded reinstatement, back pay with interest and other compensation to make up for damages he/she sustained. Other compensation can include attorneys' fees, expert witness fees and litigation costs. Individuals and companies may be held liable.
An employee who is found to have filed a frivolous or bad faith claim can be held liable for up to $1000 in attorneys' fees.
If an employee destroys evidence that is critical to the employer's defense of a Sarbanes-Oxley (SOX) claim, both the employee's and OSHA's prosecution of the claim is stopped.
Employees can also file a lawsuit in federal court, or the Securities and Exchange Commission can initiate an enforcement proceeding against any employer.
For more information, see this OSHA fact sheet.