Whistleblower Retaliation

Whistleblower laws prevent employees from being retaliated against after they’ve reported an employer’s wrongdoing. The most common types of whistleblower complaints are related to financial mismanagement, shareholder fraud, and health or safety code violations.

Both public and private employees who report employer wrongdoing are protected under federal and state whistleblower law. Those who believe they are the victim of retaliation can take legal action against their employer.

What Is Considered Retaliation

Retaliation is defined as adverse actions that would deter any reasonable person in the same situation from making a complaint about problems in the workplace. Forms of retaliation that are commonly listed in lawsuits filed by whistleblowers include:

  • Termination
  • Negative performance evaluations
  • Disciplinary reports
  • Demotion or reassignment to less desirable jobs
  • Reassignment to less desirable work shifts
  • Reduction in salary
  • Hostile behavior or attitudes by management or coworkers

However, this does not mean that a whistleblower enjoys complete job protection. Adverse actions, such as demotion or termination, are legal if they are taken for reasons unrelated to the worker’s whistleblower activity—such as excessive absences, tardiness, or failure to meet performance goals.

Laws Protecting Whistleblowers From Retaliation

A number of federal and state laws protect whistleblowers from retaliation by employers. Some examples include:

  • The Sarbanes-Oxley Act of 2002 protects employees who make complaints about their employer breaking federal laws related to securities, shareholder fraud, wire fraud, bank fraud, or mail fraud.
  • The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), Toxic Substances Control Act, Energy Reorganization Act, Clean Air Act, Safe Drinking Water Act, Solid Waste Disposal Act, and Water Pollution Control Act all provide protection for workers who report safety or health hazards caused by their employer.
  • The Whistleblower Protection Act of 1989 protects federal government employees who report agency misconduct.
  • California Labor Code 1102.5 LC provides general whistleblower protection for any worker who reports their employer’s violation of the law. Protections still apply even if it turns out the employee is mistaken, as long as the original complaint was based on a genuine belief that wrongdoing had occurred.

How to Handle Retaliation Complaints

Whistleblowers who believe they are victims of retaliation can seek damages that include lost wages, reinstatement, and damage to professional reputation. Depending upon the circumstances, the company and its executives may face fines and/or prison time. This makes a whistleblower lawsuit very costly for an employer, even before the effect of negative publicity surrounding the case is taken into consideration.

At Stone LLP, we encourage managers who’ve had employees file whistleblower complaints to proceed carefully. To prevent accusations of retaliation, establish a clear policy for employee discipline and keep knowledge of whistleblower complaints strictly confidential. If a whistleblower must be disciplined, thoroughly document the reason for your actions. If your company is accused of retaliation despite your best efforts, contact us to start building the strongest possible defense. Don’t risk an unfavorable judgment.

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