California Company Tries to Preemptively Prevent Whistleblower Suits

784px-Fox40-black-whistleIt is no secret that employers are not particularly fond of whistleblower laws. These laws not only provide financial incentives for those employees or stakeholders who know of a company’s wrongdoing to come forward, but they also prevent an employer from discouraging whistleblowers through the use or threat of retaliation. Despite the existence of these laws, however, companies may still try to find ways to dissuade potential whistleblowers from making reports to government agencies and/or filing suits under the False Claims Act. That, at least, is what one California company is accused of doing recently.

A (Failed) Preemptive Strike Against Whistleblowers

As opposed to retaliating against employees who had filed whistleblower claims against the company or reported the company’s activities to government authorities, California-based Health Net allegedly tried to accomplish this goal before any claim had been filed. Allegations made against the company state that Health Net made employees sign an agreement in which they acknowledged that they would not receive any severance from the company if they reported the company to a governmental agency and/or participated in a whistleblower lawsuit against the company. In other words, any employee that wished to obtain any sort of severance pay or benefits from the company needed to keep quiet about any illegal or unethical behavior in which they observed the company engaged.

The company may have believed that it could effectively stop whistleblower complaints before they occurred by simply spelling out the consequences of making such claims at the outset of an employee’s employment. However, just as an employer cannot take retaliatory actions against an employee who files a whistleblower complaint or claim, an employer cannot engage in actions that are designed to prevent or discourage an employee from filing such a complaint or claim in the future if the employee believes there are grounds to support such a complaint or claim. This can include:

  • Demoting a whistleblower or reducing the whistleblower’s pay;
  • Passing the whistleblower over for a promotion if the whistleblower would have been otherwise entitled to the promotion;
  • Assigning the whistleblower menial or degrading jobs to perform;
  • Exposing the whistleblower to ridicule or harassment from coworkers or failing to take action to stop such harassment or ridicule;
  • Fostering or permitting a hostile work environment to exist such that the whistleblower feels compelled to leave.

Not only may the employer not engage in any of these (or similar) activities, the employer may not threaten to do any of these actions.

What Should Employees Do?

It is tempting for employees to believe that they are powerless and subject to the employer’s every whim. However, thanks to whistleblower protections employees need not fear being at the mercy of their employer if they believe the employer is engaging in illegal, unethical, or unsafe activities. Whistleblower protections are granted to individuals by the state, and they cannot be given up in exchange for employment benefits or perks if such is being done to prevent the individual from exercising his or her rights under whistleblower statutes.

See Related Blog Post

Protecting Whistleblowers – A Look at the Anti-Retaliation Provisions in the False Claims Act


(image courtesy of Alno)

Justia Lawyer Rating for Gregory J. Brod
Contact Information