BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
SB 220
Senator Yee
As Amended April 13, 2009
Hearing Date: April 21, 2009
Government Code
GMO:jd
SUBJECT
California Whistleblower Protection Act: State Employees
DESCRIPTION
The California Whistleblower Protection Act (CWPA) prohibits
state employees from directly or indirectly using or attempting
to use their official authority or influence for the purpose of
intimidating, threatening, coercing, or commanding any person,
or attempting any of the above, for the purpose of interfering
with the rights of an employee to make a good faith
communication that discloses information that may evidence an
improper governmental activity or any condition that may
significantly threaten the health or safety of employees or the
public. The CWPA also provides a process by which a state
employee who has made a protected disclosure may file a written
complaint alleging adverse employment actions such as
retaliation, reprisal threats, or coercion, with a supervisor or
manager and with the State Personnel Board (SPB).
This bill would:
(1) expand the application of the CWPA to former state employees
who would have been covered by the CWPA during their
employment;
(2) revise some of the provisions relating to the filing,
investigation, hearing, and processing of complaints filed by
state employees under the CWPA;
(3) authorize an administrative law judge hearing a CWPA
complaint to make any order as may appear just in order to
prevent any named party from being embarrassed, delayed, or
put to unnecessary expense; and
(more)
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(4) authorize the SPB, after a hearing and a determination that
improper activity has occurred under the CWPA, to order any
appropriate relief, including attorney's fees, for successful
prosecution of a retaliation complaint before the SPB, in
addition to other relief under existing law.
The bill would allow a state employee or applicant for state
employment to request a right-to-sue notice from the SPB, prior
to filing a complaint for damages in superior court, and require
the SPB to issue a right-to-sue notice within 10 working days of
submission of a written complaint of reprisal or retaliation for
engaging in protected activity. The bill would specify which
court has jurisdiction over these complaints for damages.
The bill contains findings and declarations relative to
protections afforded employees of the University of California
under the California Whistleblower Protection Act.
BACKGROUND
In March 2004, the Senate Select Committee on Government
Oversight held a hearing entitled "State Employee Discipline and
the State Personnel Board: Is Justice Served?" The hearing was
occasioned by reports that proposed disciplinary actions by
correctional agencies (the California Department of Corrections
(CDC) and the California Youth Authority (CYA)) were failing in
the State Personnel Board (SPB) because the departments failed
to meet their burden. Further, some employees complained of
retaliation or other adverse actions after they reported
misconduct by other employees. According to testimony given at
the Select Committee hearing, this resulted in low morale for
employees as well as a general dissatisfaction with the
disciplinary process. The Select Committee thus became
concerned about the effect of disarray in the disciplinary
process on the work environment in those departments, as well as
the chilling effect of disciplinary sanctions imposed upon
department whistleblowers on future disclosures by employees
about misconduct at the agencies.
A demonstrative case was provided by Richard Krupp, who filed a
whistleblower retaliation complaint against the Department of
Corrections after he was transferred to a do-nothing position
when he refused to provide deceptive and misleading information
to the Bureau of State Audits. According to Mr. Krupp, despite
the fact that both the State Personnel Board and the Office of
the Inspector General findings that he was in fact retaliated
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against, the Department of Corrections continued to fight the
retaliation charge in legal proceedings. Mr. Krupp stated he
was forced to finance his more than $50,000 in legal expenses,
until he finally agreed to a settlement of $500,000. When the
department's extensive legal fees are included, Mr. Krupp
asserts that the cost to the department was in excess of $1
million. It took more than four years for this case to settle.
Subsequent to the hearings, SB 165 (Speier, 2005) was introduced
to overhaul the structure by which whistleblower complaints
brought by state employees are processed, to make it more
efficient and responsive. SB 165 would have created a new
Office of Special Counsel that would receive and investigate
complaints of retaliation, report determinations, and make
recommendations to the employing agency, to the SPB or to the
Department of Personnel Administration (DPA). SB 165 died on
the Senate Appropriations Committee's suspense file.
SB 1267 (Yee, 2008) was a more modest attempt at improving the
efficiency and responsiveness of the current SPB process for
complaints of retaliatory and other adverse actions taken
against state employees who make or attempt to make disclosures
of improper or illegal activity at state agencies. SB 1267
passed this Committee, but was held in the Senate Appropriations
Committee. The contents of SB 1267 were later amended into SB
1505 (Yee, 2008). That bill was vetoed by the Governor.
On February 26, 2009, the California Supreme Court decided State
Chiropractic Examiners, et al. v. Superior Court of Sacramento
County (Carole M. Arbuckle, Real Party in Interest) (2009) 45
Cal.4th 963. While the decision does not adversely affect the
substantive changes that SB 220 would make to the CWPA, it does
address some concerns relative to an employee's right to sue for
damages in Superior Court for retaliation and other adverse
actions based on the employee's good faith disclosures of
improper governmental activity. This decision is discussed in
Comment 2b.
CHANGES TO EXISTING LAW
Existing law , the California Whistleblower Protection Act
(CWPA), protects state employees from retaliation by their
employer for reporting fraud, waste, abuse of authority,
violation of law, or activities that create a threat to public
health. (Gov. Code Sec. 8547 et seq.)
Existing law makes a person who intentionally engages in acts of
reprisal or retaliation in violation of the CWPA subject to a
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fine of up to $10,000 and up to a year in county jail, and if
that person is a civil service employee, subjects that person to
discipline by adverse action. A person injured by such acts may
bring an action for damages only after filing a complaint with
the SPB and the SPB issued, or failed to issue, findings of its
hearings or investigation. (Gov. Code Sec. 8547.12.)
Existing law provides a process by which a state employee may
file a written complaint alleging adverse employment actions
such as retaliation, reprisal threats, or coercion, with a
supervisor or manager and with the State Personnel Board (SPB).
Existing law requires the SPB to initiate an investigation or a
proceeding within 10 working days of submission of a written
complaint, and to complete findings of the investigation or
hearing within 60 working days thereafter. (Gov. Code Sec.
19683.)
This bill would require the SPB instead:
(a) to initiate a hearing or investigation within 10 working
days of submission of a complaint, as in existing law; or
(b) to issue a right-to-sue notice, upon request of the
complainant, within 10 days of submission of the written
complaint and request for the right-to-sue notice. The bill
would specify contents of the notice, identify the courts with
jurisdiction over an action for damages to be filed by the
complainant, and specify a one year statute of limitations,
commencing with the filing of the written complaint with the
SPB.
This bill would authorize the SPB, after investigation and
hearing, to order, in addition to existing appropriate relief to
a successful complainant, the transfer to or placement of the
complainant into any vacant position for which the employee is
qualified, and reasonable attorney's fees and costs for
successful prosecution of a retaliation complaint before the
SPB. This bill would further authorize the administrative law
judge presiding over the hearing to make any order as may appear
just in order to prevent any named party from being embarrassed,
delayed, or put to unnecessary expense, and any other order as
the interests of justice may require.
As to complaints of reprisal or retaliation filed on or after
January 1, 2010, this bill would:
(a) require the administrative law judge, after the complainant
has presented his or her case in chief, to find whether or not
the complainant has demonstrated by a preponderance of the
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evidence that an activity protected by the CWPA was a
contributing factor in the alleged retaliation or reprisal, at
which point the case could be closed or the burden shifted to
the respondent to prove by clear and convincing evidence that
the adverse action would have occurred for legitimate
independent reasons; and
(b) provide that where an employee proves by preponderance of
the evidence that retaliation was a contributing factor to an
adverse action taken against that employee, the employee shall
have a complete affirmative defense against the adverse
action.
This bill would make the California Whistleblower Protection Act
applicable to former state employees who would have been covered
by the CWPA during their employment.
This bill would clarify that "protected disclosure," in the
context of the CWPA, includes communication based on, or when
carrying out, job duties, that discloses information evidencing
improper governmental activity or that threaten the health or
safety of employees or the public.
COMMENT
1. Need for the bill
SB 220 contains the following findings and declarations:
(c) The practice of restraining and retaliating against
public servants by denying employment or contractual
opportunity, decreasing the job responsibilities of an
employee's normal workload, creating hostile work
environments, and discriminating in the terms or conditions
of employment or contract for these reasons foments unrest
and dissatisfaction, deprives the state of the fullest use
of its capacities for development and advancement, and
substantially and adversely affects the interest of public
employees, employers, and the public in general. ...
(e) The purpose of this act is to provide effective,
efficient remedies that will eliminate these retaliatory
practices.
The author states:
The process established in law to address these violations is
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failing. It is costing the whistleblowers excessive attorney
fees, personal time, and emotional duress. At the same time,
the taxpayer is footing the bill for the administrative costs
as well as for the attorneys that defend the alleged
retaliator during the hearings. The hearings often do not
resolve within the 60-day limit established in law. All
parties involved agree that the current process is inefficient
and that the loopholes in existing law allow these hearings to
drag out for far too long and at far too great a cost.
2. Providing complainants with litigation alternative:
right-to-sue notice to issue upon request;
SB 220 would not only preserve the existing procedure for a
written complaint filed with the SPB, but also would provide an
alternative for the complainant to go directly to superior court
for redress in the form of damages.
a. Written complaint may also request right-to-sue notice,
which SPB must issue within 10 working days of submission
Current law requires an aggrieved individual to file a written
complaint with the SPB, and the SPB to initiate an investigation
or a hearing within 10 working days of the submission of the
complaint. The investigation and/or hearing must be completed
by the end of 70 days (60 days after the initial 10 days in
which to act). This bill would require the SPB to issue a
right-to-sue notice if requested by the complainant at the time
the complaint was filed.
The bill would specify a one-year statute of limitations for the
filing of a complaint in superior court, which would start upon
the filing of the written complaint. This one-year statute of
limitations would comport with the normal 2-year statute of
limitations for filing a personal injury action in superior
court (12 months from the date of the last action of reprisal to
file a written complaint with the SPB plus one year from the
time the written complaint is filed with the SPB to file a court
action). The bill also would specify the courts that would have
jurisdiction over the complaint for damages based upon actions
of reprisal or retaliation.
According to the author and supporters, this right-to-sue notice
is crucial to the speedy resolution of their case against their
supervisors and/or agencies for reprisal or retaliation based on
protected disclosures under the CWPA. It would not only reduce
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the time spent on litigating the same issues, but would also
give them the opportunity to recover damages in full, and even
punitive damages where appropriate, as well as reasonable
attorney's fees and costs.
b. Burden of proof and burden-shifting will be established by
SB 220
Further, this bill would establish the standard of proof
(preponderance of the evidence) that a complainant must meet to
show that a protected activity (whistleblowing) was a
contributing factor to an alleged retaliation, at which point
the burden would shift to the respondent to show by clear and
convincing evidence that the alleged action claimed to be
retaliatory would have occurred for legitimate independent
reasons. This burden-setting and burden-shifting is the norm
for whistleblower cases, and is found in similar provisions in
the Labor Code. By requiring the administrative law judge to
make these findings at an evidentiary hearing early in the
process (rather than the protracted "notice of findings" process
currently in the statute), the author hopes that a case could be
closed early if there is not a preponderance of evidence on the
complainant's side.
c. Arbuckle affirms complainant's right to sue for damages in
superior court, provided a complaint was properly filed with
the SPB
In February, 2009, the California Supreme Court affirmed the
right of a state employee to sue for damages in superior court,
as a parallel action to the administrative proceeding at the
SPB. (State Chiropractic Examiners, et al. v. Superior Court of
Sacramento County (Carole M. Arbuckle, Real Party in Interest)
(2009) 45 Cal.4th 963.) While SB 220 is aimed at streamlining
the administrative process for a complaint of retaliation for
whistleblowing activity, Arbuckle leaves no doubt that an
aggrieved employee does not have to exhaust the administrative
process (i.e., complete the SPB hearing process and have an
adverse SPB ruling set aside) before going to superior court
with a complaint for damages. In other words, once a complaint
is filed with the SPB and accepted as being complete, the
employee is free to seek damages in superior court.
d. SB 220 expands list of remedies available
However, the complainant-employee may want to continue his or
her case at SPB, even with the damages lawsuit filed in superior
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court, because the remedies available to an aggrieved employee
through the SPB hearing process are extensive (reinstatement,
backpay, restoration of lost service credit, expungement of
adverse records, etc.). SB 220 would expand the available
remedies that SPB may order for an employee found to have been
retaliated against for disclosures of improper governmental
activity at work, to include a transfer or placement in any
vacant position for which the employee is qualified (if
requested and consented to by the employee).
Under existing law, the SPB has no authority to award attorney's
fees in an administrative action. In a court action, however,
an aggrieved employee could seek punitive damages, and, where
liability has been established, the injured party may be
entitled to reasonable attorney's fees. SB 220 would authorize
the SPB to award reasonable attorney's fees and costs for the
successful prosecution of the retaliation complaint before the
SPB. The author and proponents argue that the ability to
recover reasonable attorney's fees would ease the burden on
employees who are retaliated against because of their reporting
of protected activity, to prosecute retaliation actions against
their supervisors, and thereby promote the purposes of the CWPA.
Further, without the ability to recover reasonable attorney's
fees and costs at the administrative level, employees would be
forced to seek redress in superior court every time or to take
an SPB decision on appeal to superior court regardless of the
outcome for purposes of recovering reasonable attorney's fees.
e. Complete affirmative defense to adverse action if
complainant demonstrates retaliation for whistleblowing
activity
In addition to the streamlined process and expanded remedies in
a SPB action, a complainant who shows by a preponderance of the
evidence that retaliation was a contributing factor to an
adverse action by his or her supervisor, manager, or appointing
authority, would have a complete affirmative defense to an
adverse action. The adverse action could be an actual
affirmative action taken by a supervisor (such as termination,
transfer, demotion) rather than a less obvious action such as
reduction of responsibilities, change of work hours, etc.
This is a major gain for the whistleblower-employee. A complete
affirmative defense means that even if the respondent could show
by clear and convincing evidence that the adverse action would
have occurred or could have been taken for legitimate reasons,
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even if the employee had not engaged in protected disclosures
(whistleblowing), the adverse action would be struck down. It
might be a rare situation, but it is theoretically possible.
4. CWPA to apply to former employee who would have been
covered
SB 220 would expand coverage of the California Whistleblower
Protection Act to protect former employees who would have been
covered by the CWPA while they were employed by the state. This
is consistent with other whistleblower statutes, such as Labor
Code Section 1102.5, that apply to non-state agency employers.
Thus, under SB 220, an employee whose employment was terminated,
or who simply gave up and walked away because of the difficulty
and expense of prosecuting a whistleblower retaliation complaint
before the SPB, may be able to file a complaint of reprisal or
retaliation as long as the complaint is filed within one year of
the last act or reprisal.
5. Administrative law judge may issue orders to prevent
embarrassment
According to the State Personnel Board, this bill would codify a
regulation adopted by the SPB regarding the filing,
investigation, and hearing of complaints of retaliation
resulting from a state employee's whistleblowing activities, as
defined. The regulation covers even multiple complaints and/or
respondents, and cases have been consolidated for ease and
efficiency or processing. This regulation applies to cases
where an appeal from an adverse action, rejection during a
probationary period, medical action, or non-punitive action is
consolidated with a whistleblower retaliation complaint, and the
whistleblower retaliation complaint identifies specifically
named individuals against whom damages or adverse action is
sought. Named respondents are given their due process right to
participate in the consolidated hearing "in such a manner as to
reasonably defend himself or herself against the allegations
contained in the whistleblower retaliation complaint." These
rights include the ability to present a defense separate and
apart from that of the employing agency, to conduct pre-hearing
discovery, to challenge the introduction of evidence, and to
examine and cross-examine witnesses.
The regulation currently authorizes the administrative law judge
to "make such orders as may appear just in order to prevent any
named respondent from being embarrassed, delayed, or put to
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undue expense, and may order separate hearings or make such
other order as the interests of justice may require." (Title 2,
Cal. Code Regs. Sec. 56.7(b).) SB 220 adopts most of this
language and makes such orders available to all cases rather
than available only to cases involving consolidated appeals and
hearings.
Support : California Nurses Association
Opposition : None Known
HISTORY
Source : Author
Related Pending Legislation :
AB 567 (Villines) would expand the definition of improper
governmental activity reportable to the State Auditor and
specify a process for the reporting of improper governmental
activities under the CWPA. This bill is in the Assembly
Business & Professions Committee, pending a hearing on April 14,
2009.
AB 1447 (John Perez) would place the State Compensation
Insurance Fund under the jurisdiction of the State Auditor for
purposes of investigating reports of improper governmental
activities. It is pending in the Assembly Public Employees,
Retirement and Social Security Committee.
Prior Legislation : SB 1267 (Yee, 2008) and SB 1505 (Yee, 2008).
See Background.
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