BILL ANALYSIS Ó SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 496 Jim Beall, Chair HEARING DATE: April 22, 2013 SB 496 (Wright) as amended 4/15/13 FISCAL: YES WHISTLEBLOWER PROTECTION ACT: ADMINISTRATIVE PROCEDURES HISTORY : Sponsor: Author Other legislation:AB 263 (Hernandez), 2013 Currently in Assembly Judiciary Committee AB 921 (Jones-Sawyer), 2013 Currently in Assembly Judiciary Committee AB 2700 (Comm. on Accountability and Administrative Review), 2012 Died at Assembly Desk SB 1505 (Yee), 2008 Vetoed sustained 11/30/08 SB 1267 (Yee), 2008 Died in Senate Appropriations Committee SUMMARY : SB 496 codifies a California Supreme Court decision governing the State Personnel Board's (SPB) administrative procedures for appeals from state employee whistleblowers alleging retaliation. The bill also clarifies that a whistleblower's civil action does not preclude a parallel administrative appeal by the alleged retaliating manager. BACKGROUND AND ANALYSIS : 1) Existing law : a) protects the right of state employees to report improper government activity, as defined, without fear of retribution through the California Whistleblower Protection Act ("the Act"). b) prohibits any state employee from using his or her official authority for the purposes of interfering with another's right to report improper government activity, as defined. Glenn A. Miles Date: 4/15/13 Page 1 c) requires a whistleblower who alleges retaliation for reporting improper governmental activity to file a written complaint with his or her appointing power and authorizes the whistleblower also to file a copy of the complaint with the SPB. d) requires SPB to initiate an investigation or hearing within 10 days of receiving the complaint and requires SPB's Executive Officer to complete findings of the investigation or hearing within 60 working days thereafter (i.e., 70 days total). e) permits the Executive Officer to consolidate the retaliation claim with other related claims by the whistleblower such as an appeal of adverse action, in which case, the 70-day time frame for initiating the investigation or hearing and completing findings is not applicable. f) subjects any person found to have intentionally engaged in retaliation prohibited by the Act to penalties, including a fine not to exceed $10,000, imprisonment not to exceed one year, and, if a civil service employee, adverse action, as defined. g) provides a whistleblower alleging retaliation a right to bring a separate civil action for damages in superior court independent of the SPB administrative process provided that the whistleblower has filed a written complaint with the SPB and the Executive Officer has issued findings or time for issuing findings has expired. h) permits a state employee who is found in an investigation or informal hearing by the SPB to have illegally retaliated against a whistleblower to request a hearing before the SPB regarding the finding of the Executive Officer. 2) This bill : a) clarifies that there are two different administrative hearings contemplated by the Act, an initial informal or preliminary hearing and an evidentiary hearing. The bill Glenn A. Miles Date: 4/15/13 Page 2 also clarifies that the Act intends for the procedural guarantees and independent factfinding of a civil action to inure to the whistleblower after the mandated 60 day period for a preliminary hearing, whether or not there are findings and whether SPB skips a preliminary hearing or investigation and refers the matter directly to an evidentiary hearing. b) removes ambiguity about when and whether the whistleblower has a right to seek an independent civil action against alleged retaliation by clarifying that the whistleblower may file the civil action 70 working days after submitting his or her complaint to SPB irrespective of SPB's progress in hearing, investigating the complaint, or referring it directly to an evidentiary hearing. The whistleblower could file the civil action sooner than 70 days if SPB's Executive Officer issues findings before the end of the 70 days or refers the matter directly to an evidentiary hearing before the 70 days. c) provides that a civil action filed by the whistleblower does not preclude an accused manager from requesting an evidentiary hearing through the administrative process, nor does the request of an accused manager for an evidentiary hearing under the administrative process preclude a whistleblower from filing a civil action. d) clarifies that SPB's findings from the preliminary hearing or investigation are not binding on an evidentiary hearing whether the hearing is requested by the complainant, by the accused manager, or results from the SPB's referral of the complaint to an evidentiary hearing. e) specifies that the SPB may consolidate different complaints or appeals by the same complainant arising from the same set of facts and authorized by different statutory rights or causes of action. The bill also clarifies that while the time limits for SPB to make findings in a preliminary hearing or investigation are waived if the SPB consolidates the complaints, the right of the complainant to pursue an independent civil action is not changed in such cases and the complainant may do so 70 days after initially submitting his or her whistleblower complaint to SPB. Glenn A. Miles Date: 4/15/13 Page 3 f) provides that for the purposes of appealing a decision in an administrative evidentiary hearing separate and apart from a whistleblower's civil action, the SPB shall issue a decision which any party, if aggrieved, can appeal by filing a petition for writ of mandate with the Superior Court. The bill provides that this process does not apply with respect to the complainant's independent civil action and the bill does not intend to specifically authorize that findings from the administrative evidentiary hearing collaterally estop, preclude issues, or otherwise affect the factfinding in a complainant's separate civil action. COMMENTS : 1)The Arbuckle case. This bill seeks to codify and clarify the California Supreme Court's holding in Arbuckle 45 Cal. 4th 963 and is consistent with the Act's intent, as cited by the Court, that the Act creates two parallel processes. "The Legislature expressly authorized a damages action in superior court for whistleblower retaliation (citation), and in doing so it expressly acknowledged the existence of a parallel administrative remedy." (see Arbuckle 45 Cal. 4th 963 at 976) According to the Court, the Act "?authorizes not an action to review the decision of the State Personnel Board, but a completely separate damages action in the superior court in which the employee will enjoy all the procedural guarantees and factfinding that generally accompany such actions. Exhaustion of every possible stage of an administrative process is not particularly necessary where the civil action that the Legislature has authorized is not one to review the administrative decision, but rather a completely independent remedy." ( Arbuckle at 973) Thus, the normal administrative procedure requirement to exhaust all administrative remedies and to challenge administrative findings through the harder burden of the judicial writ of review process rather than a de novo review by the court does not apply to whistleblower claims. In Arbuckle , the Court rejected the State's argument that a Glenn A. Miles Date: 4/15/13 Page 4 whistleblower employee should be compelled to exhaust all administrative and judicial remedies before being permitted to bring a civil action for retaliation. The Court held that the Act's only requirements to file a whistleblower civil action were for an employee to submit his or her retaliation complaint to the SPB and for findings to be issued within 70 days (i.e., 10 days to commence an informal or preliminary hearing and 60 days to issue findings) or for the deadline for issuing findings to pass. 2) Arguments in Support The author's office has indicated that this bill is necessary to codify the California Supreme Court's holding in Arbuckle and to eliminate confusion regarding a whistleblower's right to have the procedural guarantees and independent factfinding of the superior court. Furthermore, the author's office states that this bill is necessary to strengthen the Act and ensure that whistleblowers do not become "trapped in a bureaucratic limbo" of the administrative process which would create disincentives for public employees to report waste, fraud, and abuse by public agencies. 3) SUPPORT : Union of American Physicians and Dentists (UAPD)/AFSCME Local 206 4) OPPOSITION : None to date ##### Glenn A. Miles Date: 4/15/13 Page 5 Glenn A. Miles Date: 4/15/13 Page 6