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Article Summary

An examination of Oregon, New Jersey, and Delaware whistleblower laws.

This article by TELG managing principal R. Scott Oswald and TELG principal David L. Scher was published by Westlaw Journal Employment on November 11, 2014.

Reprinted from:

States have whistleblower statutes too: A look at Oregon, New Jersey and Delaware

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With recent updates to federal whistleblower laws for federal contractors, many employees and employers are unaware that there is a patchwork of state whistleblower laws as well. Not every state has a whistleblower statute, but those that do are often more fulsome than their federal counterparts.

Some of the broadest whistleblower statutes are in Oregon, New Jersey and Delaware. Each of these statutes follows a similar pattern: outlining protected conduct, defining retaliation and prescribing procedural steps for filing an action. As with most state laws that follow a pattern, there are significant differences.

OREGON

Oregon amended its whistleblower laws effective Jan. 1, 2010, expanding their protections to private employees. This is perhaps the strongest statute in the United States for protecting whistleblowers.
Or. Rev. Stat. § 659A.199 states:

It is an unlawful employment practice for an employer to discharge, demote, suspend or in any manner discriminate or retaliate against an employee with regard to promotion, compensation or other terms, conditions or privileges of employment for the reason that the employee has in good faith reported information that the employee believes is evidence of a violation of a state or federal law, rule or regulation.

The implementing regulation further explains that this statute applies to employees who have “in good faith reported information to anyone.” Or. Admin. R. 839-010-0100.

The law applies to any employer with one or more employees, and the definition of “employer” broadly includes typical legal entities engaging or using personal services directly or through an agent. Or. Rev. Stat. § 659A.001(4) & (9).

The definition of an employee explicitly does not include individuals who are employed by their “parents, spouse or child, or in the domestic service of any person.” Or. Rev. Stat. § 659A.001(3). An individual employee and supervisor may be liable for a violation of the statute if either has aided or abetted the violation. Or. Rev. Stat. § 659A.030(1)(g). Procedurally, the statute is administered and enforced by the Oregon Bureau of Labor and Industries. Or. Rev. Stat. § 659A.820.

A whistleblower can either file a complaint with the BOLI or go directly to circuit court. A complaint with either must be filed within one year after the adverse employment action. Or. Rev. Stat. § 659A.875(1). If the employee proceeds with the BOLI, he or she has 90 days from the mailing of a notice to the BOLI to file in circuit court. Or. Rev. Stat. § 659A.870. When an employee files a complaint in circuit court, he or she waives the right to proceed with the BOLI.

For Oregon whistleblower statute claims, an employee who is successful in a civil action may obtain injunctive relief and any other equitable relief that may be appropriate, including reinstatement with or without back pay, plus compensatory and punitive damages, costs and attorney fees. Or. Rev. Stat. § 659A.885(1)-(3).

NEW JERSEY

Second only to Oregon’s statute, the New Jersey Conscientious Employee Protection Act is one of the most fulsome statutes protecting whistleblowers. It protects employees in three primary categories. First, an employee is protected when he or she makes a disclosure or threatens to make a disclosure that an employer is violating a law or regulation, or is engaged in fraudulent or criminal activity. To qualify for protection, the employee must have a reasonable belief that the activity is a violation of the law or is fraudulent or criminal. N.J. Stat. Ann. § 34:19-3.

Second, when an employee provides information to a public body (federal, state or local), through testimony or otherwise, he or she is protected by virtue of participating in an investigation, hearing or inquiry into any violation of law. N.J. Stat. Ann. § 34:19-3.

Third, protection is extended to employees who object to or refuse to participate in any activity that they reasonably believe to be a violation of law; fraudulent or criminal; or “incompatible with a clear mandate of public policy concerning the public health, safety or welfare, or protection of the environment.” N.J. Stat. Ann. § 34:19-3.

The NJCEPA broadly defines an employer as “any individual, partnership, association, corporation, or any person or group of persons acting directly or indirectly on behalf of or in the interest of an employer with the employer’s consent,” and employers include the state government and local governments in New Jersey. N.J. Stat. Ann. § 34:19-2(a).

The definition of an employee is similarly broad to include more than the sometimesrestricted definition offered by courts. It includes “any individual who performs services for and under the control and direction of an employer for wages or other remuneration.” N.J. Stat. Ann. § 34:19-3(b). In a departure from prior case law, the courts have extended whistleblower protections to “watchdog” employees. Lippman v. Ethicon Inc., 75 A.3d 432 (N.J. Super. Ct. App. Div. 2013).

Retaliatory action includes discharge, suspension or demotion, or other adverse employment action. N.J. Stat. Ann. § 34:19-2(e).

A notice requirement under the NJCEPA is not found under most other statutes with employee protections. Protections do not apply under the second category of disclosures unless the employee has first brought the violation to the attention of a supervisor by written notice “and has afforded the employer a reasonable opportunity to correct the activity.” N.J. Stat. Ann. § 34:19-4.

However, such a disclosure is not required if the employee is reasonably certain that the activity is known or if the employee reasonably fears physical harm and the situation is an emergency. The employer also must designate an individual who will receive notifications. N.J. Stat. Ann. § 34:19-7.

The procedure calls for an aggrieved employee to file a civil action within one year after the adverse action. N.J. Stat. Ann. § 34:19-5. In addition, either party may request a jury trial.

Relief available to successful whistleblowers includes the following: common-law tort remedies; injunctive relief to restrain any violation of the statute; reinstatement to the same or an equivalent position; reinstatement of fringe benefits and seniority rights; compensation for all lost wages, benefits and other remuneration; and reasonable costs and attorney fees.

An employer may also be subject to civil fines. Finally, punitive damages are available when the wrongful conduct was committed by upper management and the conduct is “especially egregious.” Longo v. Pleasure Prods., 71 A.3d 775, 784-85 (N.J. 2013).

The statute differs from many others with respect to fees and costs to the employer. In short, if the court determines, after the employer’s motion, that the action was brought without basis in law or in fact, fees and costs can be assessed to the employee. N.J. Stat. Ann. § 34:19-6.

DELAWARE

As compared with other whistleblower protection statutes, the most important area for analysis of Delaware’s act is coverage for protected activity.

First, the statute’s text defines “employer” very broadly to include all typical legal entities for carrying out business as well as governmental entities. Del. Code Ann. Tit. 19, § 1702 (West). The term “employee” has a similarly broad definition, going beyond full-time and part-time employees – which it does include – but also adding independent contractors.

Under Delaware’s act, an employee must report a “violation.” Violations must fall into one of two categories.

The first category of “violations” is a report related to state or federal standards “to protect employees or other persons from health, safety, or environmental hazards while on the employer’s premises or elsewhere.” Del. Code Ann. Tit. 19, § 1702 (West).

The other category of “violations” is a report related to state or federal “financial management or accounting standards to protect any person from fraud, deceit, or misappropriation of public or private funds or assets under the control of the employer.”

One other area for coverage that is not specifically under the “violation” definition is referred to in Section 1703. That section refers to Chapter 80 of Title 15 of the Code, which is the portion of the code devoted to campaign contributions and expenditures. In sum, the subject matter for reports to be covered must relate to health, safety or environmental hazards; financial management or accounting standards; and campaign contributions and expenditures statutes.

To become protected by the statute, the employee must engage in activity specified under the act. Section 1703 identifies four categories of protected activity.

The first protected area involves cases in which an employee makes a direct report, or is about to report, to a public body. In this situation, the employee must have either actual knowledge or reasonable belief that there has been a violation or that a violation is about to occur. The employee is not protected, however, if he or she knows or has reason to know that the report is false.

Second, an employee is protected when he or she “participates or is requested by a public body to participate in an investigation, hearing or inquiry held by a public body, or a court action in connection with a violation.”

Third, there are protections for employees who “refuse to commit or assist in the commission of a violation.”

Finally, the statute defines protected activity in the interactions between an employee and an employer. It extends protections to cases in which “the employee reports verbally or in writing to the employer or to the employee’s supervisor a violation, which the employee knows or reasonably believes has occurred or is about to occur, unless the employee knows or has reason to know that the report is false.”

Actions by an employer that constitute retaliation include “discharge, threat[s], or otherwise discriminat[ory actions] against an employee regarding the employee’s compensation, terms, conditions, location, or privileges of employment.” Del. Code Ann. Tit. 19, § 1703 (West). This is a fairly expansive list of adverse actions

The burden of proof under the statute is for the “employee to show that the primary basis for the discharge, threats, or discrimination alleged to be in violation of this chapter was that the employee undertook an act protected pursuant to Section 1703.” Del. Code Ann. Tit. 19, § 1708 (West).

As for other procedural matters, the limitations period is a generous, as compared with many other whistleblower statutes: three years. Del. Code Ann. Tit. 19, § 1704 (West). And there is a broad venue provision that includes not only the county where the violation occurred or where the defendant resides or has a principal place of business but also where the employee resides.

Relief available under the statute may include reinstatement, payment of back wages, reinstatement of fringe benefits and seniority rights, expunged records, actual damages, litigation costs and attorney fees. The statute does not provide for punitive damages.

CONCLUSION

The whistleblower statutes in Oregon, New Jersey and Delaware represent patches of the quilt protecting whistleblowing employees in the United States. There are others. Employers and employees would be well served to become familiar with statutes that are applicable to them in other states.

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