BILL NUMBER: SB 413 CHAPTERED 10/14/01 CHAPTER 883 FILED WITH SECRETARY OF STATE OCTOBER 14, 2001 APPROVED BY GOVERNOR OCTOBER 13, 2001 PASSED THE SENATE SEPTEMBER 14, 2001 PASSED THE ASSEMBLY SEPTEMBER 12, 2001 AMENDED IN ASSEMBLY AUGUST 20, 2001 AMENDED IN ASSEMBLY JULY 11, 2001 AMENDED IN ASSEMBLY JUNE 14, 2001 AMENDED IN SENATE MARCH 26, 2001 INTRODUCED BY Senator Speier (Coauthors: Assembly Members Alquist, Chu, Koretz, Pavley, and Strom-Martin) FEBRUARY 21, 2001 An act to amend Sections 8547.4, 8547.8, 19682, 19683, and 19702 of, to add Section 19683.1 to, and to add Article 3.5 (commencing with Section 8548) to Chapter 6.5 of Division 1 of Title 2 of, the Government Code, relating to improper governmental activities. LEGISLATIVE COUNSEL'S DIGEST SB 413, Speier. State Auditor: whistleblowing. (1) Under the California Whistleblower Protection Act, the State Auditor is authorized to conduct an investigative audit upon receiving confirmation that an employee or state agency has engaged in an improper governmental activity. The act prohibits disclosure of the identity of the person who provided the information that initiated the investigative audit except as specified. The act further provides, among other things, that a person who intentionally engages in acts of reprisal, retaliation, threats, coercion, or similar acts against a state employee or applicant for state employment for having made a protected disclosure, as defined, is subject to civil liability and criminal penalties. However, the act provides that any action for civil damages is only available to an injured party who has first filed a complaint with the State Personnel Board and the board has failed to reach a decision pursuant to specified procedures. This bill would require the State Auditor to prepare a written explanation of the act, with specified information, no later than April 1, 2002, prepare for distribution to each state agency the explanation in electronic format, and post it on the Web site of the Bureau of State Audits. The bill would require every state agency to print and post the notice at state offices no later than July 1, 2002, and send it by electronic mail to state employees of the agency annually, and would provide instead that civil damages are available to an injured party only if the State Personnel Board has issued, or failed to issue, findings pursuant to the specified procedures. The bill would specify that its provisions shall apply to the California State University and the University of California. The bill would require that if the State Auditor, after investigating, finds that a state employee may have engaged or participated in improper governmental activities, the State Auditor shall send a copy of the investigative report to the employee's appointing power. The bill would require the appointing power to either serve a notice of adverse action upon the employee who is the subject of the investigative report or set forth in writing its reasons for not taking adverse action. The appointing power would be required to provide a copy of the notice of adverse action or written reasons why it chose not to take adverse action to the State Personnel Board and the State Auditor. The bill would require a similar procedure by the State Personnel Board whenever the board determines that a manager, supervisor, or employee, who is not named a party to the retaliation complaint, may have engaged or participated in improper governmental activities. (2) Existing law requires any state officer or employee filing a complaint of reprisal or retaliation to have also previously filed a complaint of improper governmental activity with the State Auditor, or with the Inspector General, as specified. This bill would repeal this requirement. The bill would also authorize the State Personnel Board, if the board determines after a hearing, or if no hearing is requested and the executive officer based on his or her findings concludes, that improper governmental activity has occurred, to order compensatory damages, in addition to the remedies specified in existing law. The bill would apply the procedures relative to complaints of reprisal or retaliation to violations by employees, in addition to managers and supervisors. (3) Existing law provides that a person shall not be retaliated against under the State Civil Service Act because he or she has opposed any practice made an unlawful employment practice, or made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under the act. The bill would establish that the burden of proof is on the supervisor, manager, employee, or appointing power to demonstrate by clear and convincing evidence that an alleged adverse employment action would have occurred for legitimate, independent reasons, if a person demonstrates by a preponderance of evidence that opposing any practice made an unlawful employment practice under the act, or making a charge, testifying, assisting, or participating in any manner in an investigation, proceeding, or hearing under the act, was a contributing factor in any adverse employment action taken against him or her. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares the following: (a) The State Auditor has responsibility for investigating and reporting improper state governmental activity pursuant to the California Whistleblower Protection Act (Article 3 (commencing with Section 8547) of Chapter 6.5 of Division 1 of Title 2 of the Government Code). (b) Since 1993, the State Auditor has investigated improper governmental activities costing the public more than ten million dollars ($10,000,000). (c) These investigations resulted from state employees and members of the public reporting suspected improper governmental activities to the State Auditor through the auditor's hotline. (d) To promote responsible reporting of suspected improper governmental activities, the State Auditor and state agencies shall undertake a campaign to inform state employees about the California Whistleblower Protection Act. SEC. 2. Section 8547.4 of the Government Code is amended to read: 8547.4. The State Auditor shall administer the provisions of this article and shall investigate and report on improper governmental activities. If, after investigating, the State Auditor finds that an employee may have engaged or participated in improper governmental activities, the State Auditor shall send a copy of the investigative report to the employee's appointing power. Within 60 days after receiving a copy of the State Auditor's investigative report, the appointing power shall either serve a notice of adverse action upon the employee who is the subject of the investigative report or set forth in writing its reasons for not taking adverse action. The appointing power shall file a copy of the notice of adverse action with the State Personnel Board in accordance with Section 19574, and shall submit a copy to the State Auditor. If the appointing power does not take adverse action, it shall submit its written reasons for not doing so to the State Auditor and the State Personnel Board, and adverse action may be taken as provided in Section 19583.5. Any employee who is served with a notice of adverse action may appeal to the State Personnel Board in accordance with Section 19575. SEC. 3. Section 8547.8 of the Government Code is amended to read: 8547.8. (a) A state employee or applicant for state employment who files a written complaint with his or her supervisor, manager, or the appointing power alleging actual or attempted acts of reprisal, retaliation, threats, coercion, or similar improper acts prohibited by Section 8547.3, may also file a copy of the written complaint with the State Personnel Board, together with a sworn statement that the contents of the written complaint are true, or are believed by the affiant to be true, under penalty of perjury. The complaint filed with the board, shall be filed within 12 months of the most recent act of reprisal complained about. (b) Any person who intentionally engages in acts of reprisal, retaliation, threats, coercion, or similar acts against a state employee or applicant for state employment for having made a protected disclosure, is subject to a fine not to exceed ten thousand dollars ($10,000) and imprisonment in the county jail for a period not to exceed one year. Pursuant to Section 19683, any state civil service employee who intentionally engages in that conduct shall be disciplined by adverse action as provided by Section 19572. (c) In addition to all other penalties provided by law, any person who intentionally engages in acts of reprisal, retaliation, threats, coercion, or similar acts against a state employee or applicant for state employment for having made a protected disclosure shall be liable in an action for damages brought against him or her by the injured party. Punitive damages may be awarded by the court where the acts of the offending party are proven to be malicious. Where liability has been established, the injured party shall also be entitled to reasonable attorney's fees as provided by law. However, any action for damages shall not be available to the injured party unless the injured party has first filed a complaint with the State Personnel Board pursuant to subdivision (a), and the board has issued, or failed to issue, findings pursuant to Section 19683. (d) This section is not intended to prevent an appointing power, manager, or supervisor from taking, directing others to take, recommending, or approving any personnel action or from taking or failing to take a personnel action with respect to any state employee or applicant for state employment if the appointing power, manager, or supervisor reasonably believes any action or inaction is justified on the basis of evidence separate and apart from the fact that the person has made a protected disclosure as defined in subdivision (b) of Section 8547.2. (e) In any civil action or administrative proceeding, once it has been demonstrated by a preponderance of evidence that an activity protected by this article was a contributing factor in the alleged retaliation against a former, current, or prospective employee, the burden of proof shall be on the supervisor, manager, or appointing power to demonstrate by clear and convincing evidence that the alleged action would have occurred for legitimate, independent reasons even if the employee had not engaged in protected disclosures or refused an illegal order. If the supervisor, manager, or appointing power fails to meet this burden of proof in an adverse action against the employee in any administrative review, challenge, or adjudication in which retaliation has been demonstrated to be a contributing factor, the employee shall have a complete affirmative defense in the adverse action. (f) Nothing in this article shall be deemed to diminish the rights, privileges, or remedies of any employee under any other federal or state law or under any employment contract or collective bargaining agreement. SEC. 4. Article 3.5 (commencing with Section 8548) is added to Chapter 6.5 of Division 1 of Title 2 of the Government Code, to read: Article 3.5. Whistleblower Information 8548. For purposes of this article, "state agency" means every state office, officer, department, division, bureau, board, and commission, including the California State University and the University of California. 8548.1. No later than April 1, 2002, the State Auditor shall prepare for state employees a written explanation of the California Whistleblower Protection Act contained in Article 3 (commencing with Section 8547). The explanation shall include, but not be limited to, the following information: (a) Instructions on how to contact the State Auditor by mail or telephone. (b) A general overview of improper governmental activities and examples of three of the most common types of improper governmental activities that may be reported to the State Auditor. (c) Examples of two of the most commonly reported governmental activities that the State Auditor does not have authority to investigate. (d) An explanation of whistleblower protection available to state employees who report improper governmental activities to the State Auditor. (e) The requirement that the State Auditor protect the anonymity of a person who reports improper governmental activity to the State Auditor. (f) The State Auditor's authority in connection with violations of law discovered during an investigation of improper governmental activities. 8548.2. The State Auditor shall prepare for distribution to each state agency in an electronic format a notice containing the information in the written explanation prepared pursuant to Section 8548.1. No later than July 1, 2002, each state agency shall print and post this notice at its state office or offices in a location or locations where employee notices are maintained. A state agency shall not edit the written text of the notice but it may publish the notice in a manner it chooses, and it may include its own introductory language in the notice, provided that the language and the format selected do not alter the meaning of the notice. 8548.3. On July 1, 2002, and annually thereafter, every state agency shall send the information contained in the notice by electronic mail to its employees who have authorized access to electronic mail from the agency. 8548.4. The State Auditor shall post the information described in Section 8548.1 on the Web site of the Bureau of State Audits. 8548.5. The intentional failure of a state agency to comply with any provision of this article shall constitute an improper governmental activity for purposes of Article 3 (commencing with Section 8547). SEC. 5. Section 19683 of the Government Code is amended to read: 19683. (a) The State Personnel Board shall initiate a hearing or investigation of a written complaint of reprisal or retaliation as prohibited by Section 8547.3 within 10 working days of its submission. The executive officer shall complete findings of the hearing or investigation within 60 working days thereafter, and shall provide a copy of the findings to the complaining state employee or applicant for state employment and to the appropriate supervisor, manager, employee, or appointing authority. When the allegations contained in a complaint of reprisal or retaliation are the same as, or similar to, those contained in another appeal, the executive officer may consolidate the appeals into the most appropriate format. In these cases, the time limits described in this subdivision shall not apply. (b) If the executive officer finds that the supervisor, manager, employee, or appointing power retaliated against the complainant for engaging in protected whistleblower activities, the supervisor, manager, employee, or appointing power may request a hearing before the State Personnel Board regarding the findings of the executive officer. The request for hearing and any subsequent determination by the board shall be made in accordance with the board's normal rules governing appeals, hearings, investigations, and disciplinary proceedings. (c) If, after the hearing, the State Personnel Board determines that a violation of Section 8547.3 occurred, or if no hearing is requested and the findings of the executive officer conclude that improper activity has occurred, the board may order any appropriate relief, including, but not limited to, reinstatement, backpay, restoration of lost service credit, if appropriate, compensatory damages, and the expungement of any adverse records of the state employee or applicant for state employment who was the subject of the alleged acts of misconduct prohibited by Section 8547.3. (d) Whenever the board determines that a manager, supervisor, or employee, who is named a party to the retaliation complaint, has violated Section 8547.3 and that violation constitutes legal cause for discipline under one or more subdivisions of Section 19572, it shall impose a just and proper penalty and cause an entry to that effect to be made in the manager's, supervisor's, or employee's official personnel records. (e) Whenever the board determines that a manager, supervisor, or employee, who is not named a party to the retaliation complaint, may have engaged in or participated in any act prohibited by Section 8547.3, the board shall notify the manager's, supervisor's, or employee's appointing power of that fact in writing. Within 60 days after receiving the notification, the appointing power shall either serve a notice of adverse action on the manager, supervisor, or employee, or set forth in writing its reasons for not taking adverse action against the manager, supervisor, or employee. The appointing power shall file a copy of the notice of adverse action with the board in accordance with Section 19574. If the appointing power declines to take adverse action against the manager, supervisor, or employee, it shall submit its written reasons for not doing so to the board, which may take adverse action against the manager, supervisor, or employee as provided in Section 19583.5. A manager, supervisor, or employee who is served with a notice of adverse action pursuant to this section may file an appeal with the board in accordance with Section 19575. (f) In order for the Governor and the Legislature to determine the need to continue or modify state personnel procedures as they relate to the investigations of reprisals or retaliation for the disclosure of information by public employees, the State Personnel Board, by June 30 of each year, shall submit a report to the Governor and the Legislature regarding complaints filed, hearings held, and legal actions taken pursuant to this section. SEC. 6. Section 19682 of the Government Code is amended to read: 19682. Every person who violates any provision of this chapter is guilty of a misdemeanor. In accordance with Section 19683, action may be taken by the appointing power, or the executive officer of the board may file charges, against a state employee who violates any provisions of this chapter. SEC. 7. Section 19683.1 is added to the Government Code, to read: 19683.1. The State Personnel Board shall assist the State Auditor in preparing the written explanation required by Section 8548.1 by providing the State Auditor with a written explanation of the board's role in investigating a claim that a state employee has been subject to retaliation as a result of reporting improper governmental activity. SEC. 8. Section 19702 of the Government Code is amended to read: 19702. (a) A person shall not be discriminated against under this part because of sex, race, religious creed, color, national origin, ancestry, marital status, physical disability, or mental disability. A person shall not be retaliated against because he or she has opposed any practice made an unlawful employment practice, or made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this part. For purposes of this article, "discrimination" includes harassment. This subdivision is declaratory of existing law. (b) As used in this section, the term "physical disability" has the definition set forth in Section 12926, as that section presently reads or as it subsequently may be amended. (c) As used in this section, the term "mental disability" has the definition set forth in Section 12926, as that section presently reads or as it subsequently may be amended. (d) Notwithstanding subdivisions (b) and (c), if the definition of disability used in the federal Americans with Disabilities Act of 1990 (Public Law 101-336) would result in broader protection of the civil rights of individuals with a mental disability or physical disability, as defined in subdivision (b) or (c), then that broader protection shall be deemed incorporated by reference into, and shall prevail over conflicting provisions of, the definitions in subdivisions (b) and (c). The definitions of subdivisions (b) and (c) shall not be deemed to refer to or include conditions excluded from the federal definition of "disability" pursuant to Section 511 of the federal Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12211). (e) If the board finds that a person has engaged in discrimination under this part, and it appears that this practice consisted of acts described in Section 243.4, 261, 262, 286, 288, 288a, or 289 of the Penal Code, the board, with the consent of the complainant, shall provide the local district attorney's office with a copy of its decision and order. (f) (1) If the board finds that discrimination has occurred in violation of this part, the board shall issue and cause to be served on the appointing authority an order requiring the appointing authority to cause the discrimination to cease and desist and to take any action, including, but not limited to, hiring, reinstatement, or upgrading of employees, with or without backpay, and compensatory damages, which, in the judgment of the board, will effectuate the purposes of this part. Consistent with this authority, the board may establish rules governing the award of compensatory damages. The order shall include a requirement of reporting the manner of compliance. (2) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 6 or 8. If the board finds that discrimination has occurred in violation of this part, the board shall issue and cause to be served on the appointing authority an order requiring the appointing authority to cause the discrimination to cease and desist and to take any action, including, but not limited to, hiring, reinstatement, or upgrading of employees, with or without backpay, adding additional seniority, and compensatory damages, which, in the judgment of the board, will effectuate the purposes of this part. Consistent with this authority, the board may establish rules governing the award of compensatory damages. The order shall include a requirement of reporting the manner of compliance. (g) Any person claiming discrimination within the state civil service may submit a complaint that shall be in writing and set forth the particulars of the alleged discrimination, the name of the appointing authority, the persons alleged to have committed the unlawful discrimination, and any other information that may be required by the board. The complaint shall be filed with the appointing authority or, in accordance with board rules, with the board itself. (h) (1) Complaints shall be filed within one year of the alleged unlawful discrimination or the refusal to act in accordance with this section, except that this period may be extended for not to exceed 90 days following the expiration of that year, if a person allegedly aggrieved by unlawful discrimination first obtained knowledge of the facts of the alleged unlawful discrimination after the expiration of one year from the date of its occurrence. Complaints of discrimination in adverse actions or rejections on probation shall be filed in accordance with Sections 19175 and 19575. (2) Notwithstanding paragraph (1), this paragraph shall apply only to state employees in State Bargaining Unit 8. Complaints shall be filed within one year of the alleged unlawful discrimination or the refusal to act in accordance with this section, except that this period may be extended for not to exceed 90 days following the expiration of that year, if a person allegedly aggrieved by unlawful discrimination first obtained knowledge of the facts of the alleged unlawful discrimination after the expiration of one year from the date of its occurrence. Complaints of discrimination in disciplinary actions defined in Section 19576.5 shall be filed in accordance with that section. Complaints of discrimination in all other disciplinary actions shall be filed in accordance with Section 19575. Complaints of discrimination in rejections on probation shall be filed in accordance with Section 19175.3. (i) (1) When an employee of the appointing authority refuses, or threatens to refuse, to cooperate in the investigation of a complaint of discrimination, the appointing authority may seek assistance from the board. The board may provide for direct investigation or hearing of the complaint, the use of subpoenas, or any other action which will effect the purposes of this section. (2) This subdivision shall not apply to complaints of discrimination filed in accordance with Section 19576.2. (j) If a person demonstrates by a preponderance of evidence that having opposed any practice made an unlawful employment practice under this part, or having made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this part was a contributing factor in any adverse employment action taken against him or her, the burden of proof shall be on the supervisor, manager, employee, or appointing power to demonstrate by clear and convincing evidence that the alleged adverse employment action would have occurred for legitimate, independent reasons even if the person had not engaged in activities protected under this part. If the supervisor, manager, employee, or appointing power fails to meet this burden of proof in any administrative review, challenge, or adjudication in which retaliation has been demonstrated to be a contributing factor, the person shall have a complete affirmative defense to the adverse employment action. As used in this part, "adverse employment action" includes promising to confer, or conferring any benefit, effecting, or threatening to effect, any reprisal, or taking, or directing others to take, or recommending, processing, or approving, any personnel action, including, but not limited to, appointment, promotion, transfer, assignment, performance evaluation, suspension, or other disciplinary action.