Alert: New Whistleblower Posting Requirements Begin January 1, 2004
December 10, 2003
On January 1, 2004, employers will be required to post new whistleblower information intended to encourage increased reporting of unlawful activities by California businesses. The posted information must be available to all employees, and must include the phone number for the new Whistleblower Hotline, as well as a list of the new protections accorded to employees who report unlawful activities.
The new law will extend protection from retaliation to employees who report violations of state or federal law, rules or regulations, or who refuse to participate in activities that would result in legal or regulatory violations. In addition, the new legislation increases civil penalties to $10,000 per violation for any employer who retaliates against an employee for reporting legal violations, or for refusing to participate in unlawful activities. Violation of the statute also constitutes a misdemeanor.
Importantly, the new law shifts the burden of proof in retaliation claims to the employer. If an employee can demonstrate that protected whistleblower activity was a “contributing factor” in an adverse employment action, the employer must show by clear and convincing evidence that the employment action would have occurred for “legitimate, independent reasons” even if the employee had not engaged in the protected activity.
These legislative changes reflect the increased focus on corporate accountability in the wake of Enron and other corporate scandals. In order to avoid falling victim to hefty fines and protracted litigation, it remains crucial for employers to keep accurate documentation regarding personnel decisions, adequately train managers, and consult counsel when dealing with high-risk personnel decisions.
For information regarding the posting requirements, or general information on this new legislation, please contact Holly Sutton at (415) 954-4476 or at hsutton@fbm.com or any member of the Farella, Braun + Martel Employment Practice Group.