Whistleblower complaints are often directed to board members or committees of the board of directors and recently, a California court ruled that whistleblowers are allowed to seek compensation from directors of a company, broadening legal protections for whistleblowers by expanding those who can be held liable in such cases. In another win for the whistleblower, the court also ruled that an employee qualifies for whistleblower protection under Dodd-Frank, even in instances that he or she does not bring a complaint to the SEC. The case significantly expands whistleblower protections for those bringing a claim against their employer.
Now is the time for California employers to review and update their whistleblower compliance and related training programs to ensure that employees at all levels, (Board members and company leaders are not exempt) understand best practices for responding to and investigating employee complaints.
This decision has an impact on individuals sitting on California boards. Not only does it expressly expand liability for whistleblower retaliation to individual members of a company’s Board of Directors, it extends protected activity under Dodd-Frank to complaints made by in-house counsel when those complaints are solely reported internally, and not to the SEC. A strongly worded whistleblower protection policy should discuss:
§ Reporting responsibility
§ Intolerance for retaliation
§ Reporting policy
§ Compliance officers
§ Accounting and auditing matters
§ Acting in good faith
§ Handling of reported violations
California employers would be well-advised to review and update their whistleblower compliance and training programs at all levels of leadership and discuss options with experienced legal counsel before disciplining or terminating any employee who has raised either internal or external complaints.
To discuss your whistleblower policy, contact business attorney Drew E. Pomerance today.