New Whistleblower Law Offers Sweeping Protections to Virginia Employees

In April 2020, Virginia’s governor signed a series of laws that created a sea change in Virginia employment law. With recent legislation, Virginia is experiencing a pendulum swing from laws that heavily favor employers to those that champion the rights of employees.

In recent articles we discussed how employers may expect more discrimination claims under the Virginia Values Act, as well as the groundbreaking changes in Virginia restrictive covenant laws. In this article of our series, Sea Change in VA Employment Laws, we discuss the newly increased protections Virginia offers to whistleblowers.

New Employee Protections From Whistleblower Retaliation

In April, Virginia enacted new legislation protecting employees from whistleblower retaliation. HB 798, known as the “Fraud and Abuse Whistle Blower Protection Act,” expands the rights previously extended to Virginia’s employees and creates a private right of action against employers who violate the law. This whistleblower law becomes effective on July 1, 2020.

• What Retaliation Means - HB 798 prohibits employers from retaliating against an employee by taking action regarding an employee’s compensation, terms, conditions, location or privileges or by discharging, disciplining, threatening, discriminating against, or penalizing an employee who takes part in certain protected activities.
• What Activities Are Protected - Employers are prohibited from retaliating against an employee because:

1. The employee (or any person acting on the employee’s behalf) makes a good faith report of “a violation of any federal or state law or regulation to a supervisor or to any governmental body or law enforcement official”;
2. A government body or law enforcement official requests that the employee participate in an investigation, hearing, or inquiry;
3. The employee “refuses to engage in a criminal act that would subject the employee to criminal liability”;
4. The employee “refuses an employer’s order to perform an action that violates any federal or state law or regulation” and “the employee informs the employer that the order is being refused for that reason”; or
5. The employee provides information to or testifies before any governmental body or law enforcement official conducting an investigation, hearing, or inquiry into any alleged violation by the employer of federal or state law or regulation.”

Notably, the law provides no protection for employees who make disclosures of data which are otherwise protected by law or legal privilege. Furthermore, disclosures that would violate federal or state law or would diminish or impair a person’s right to common law protections of confidential communications are not protected. Likewise, employees are not permitted to make statements or disclosures that are knowingly false or given in reckless disregard of the truth.

• Civil Remedies - HB 798 creates a right to sue an employer who violates the statute. Should the court find that an employer violated the law, it may order an injunction, reinstatement of the employee either to his or her prior position or to an equivalent position, as well as order lost wages, benefits, and other compensation. Moreover, in a move that underscores the seriousness with which Virginia is now taking these protections, the statute does not cap the amount of damages potentially available to plaintiffs. Prevailing plaintiffs also are entitled to attorney’s fees and costs. Employees have one year from the date of the retaliation to bring such a claim.

How This Expands Employee Protections

Virginia is an employment “at-will” state, meaning that an employer may terminate an employee for any reason or no reason at all, so long as the termination is not for a prohibited reason. In Virginia, there are relatively few prohibited reasons for termination. HB 798 greatly expands the rights previously extended to Virginia whistleblowers. Prior to the law’s enactment, with very few exceptions, whistleblowers were only protected for reporting issues that specifically violated the public policy of Virginia. These common law wrongful discharge actions were known as “Bowman” claims, named after the Virginia Supreme Court decision Bowman v. State Bank of Keysville. Now, employees are protected from termination or any other retaliatory action because of undertaking any of the above identified protected activities.

For more information on the effect HB 798 may have on your business, please contact your local Quarles & Brady attorney or:

• Hans Riede: (202) 372-9529 / hans.riede@quarles.com
• Sarah Belger: (202) 372-9511 / sarah.belger@quarles.com
• Christian Yingling: (202) 780-2654 / christian.yingling@quarles.com