The year 2020 saw Virginia usher in several paradigm-shifting employment laws which expanded protections for employees. One such law, Virginia's whistleblower protection law (Va. Code § 40.1-27.3), has arguably made the most significant short-term impact. In the nearly four years since its enactment, Virginia Code § 40.1-27.3 has become an effective and frequently-used weapon in the plaintiff 's lawyer's arsenal. In fact, since 2020, there have been nearly 100 lawsuits filed in federal court alleging claims under the statute, and, while not publicly available, the number of state court lawsuits alleging such claims surely tracks or exceeds that number.
The reason may be simple—it is an incredibly easy tag-along claim for employees to make. As written, the statute virtually acts as a proxy retaliation claim under the Virginia Human Rights Act—which before 2020, only provided relief for discriminatory discharge to a relatively small group of covered employers. In addition to discrimination and harassment claims, claims under Virginia Code § 40.1- 27.3 have been paired with breach of contract claims, tort claims, defamation claims, Bowman claims for wrongful termination under the common law, qui tam actions under the False Claims Act, business torts, defamation claims, and various other federal and state laws.
Considering that claims under Virginia Code § 40.1-27.3 are reaching near-ubiquitous status in employment law circles, it is helpful to review what legal issues have arisen thus far, how courts have ruled and interpreted the statute,1 and what questions still need to be resolved.
I. Virginia Code § 40.1-27.3
Virginia Code § 40.1-27.3 prohibits employers from retaliating against employees who engage in at least one of five categories of protected conduct. It states, in pertinent part:
A. An employer shall not discharge, discipline, threaten, discriminate against, or penalize an employee, or take other retaliatory action regarding an employee's compensation, terms, conditions, location, or privileges of employment, because the employee:
- Or a person acting on behalf of the employee in good faith reports a violation of any federal or state law or regulation to a supervisor or to any governmental body or law-enforcement official;
- Is requested by a governmental body or law-enforcement official to participate in an investigation, hearing, or inquiry;
- Refuses to engage in a criminal act that would subject the employee to criminal liability;
- 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
- 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.
Va. Code § 40.1-27.3(A).
If successful, an aggrieved employee is entitled to recover (i) injunctive relief; (ii) reinstatement to the same or an equivalent position; and (iii) lost wages and benefits, and reasonable attorneys' fees. Va. Code § 40.1- 27.3(C).
II. What the Existing Reported Decisions Teach Us
There Must Be an Actual Good Faith Report of a Violation of Law to Make a Claim under Subsection (A)(1); Vague Objections or Formulaic Recitations of “Reports” Do Not Suffice.
In Chenault v. RBI Corporation,2 a sales manager alleged he was terminated after objecting to his employer's alleged “cavalier attitude” toward COVID-19 and voicing concerns about the employer's alleged lack of compliance with the relevant CDC and other COVID-19 guidelines. The employer demurred and the Henrico County Circuit Court sustained the demurrer, finding that “allegations of ‘voicing concerns' or ‘objecting to a cavalier attitude' are simply not enough to support a claim that Plaintiff in good faith reported a violation to a supervisor.”3
A similar decision was reached in Foster v. Fraternal Order of Eagles.4 Although the Court found that the employee's claim was viable under subsection (A)(3) (refusal to commit a crime) where she claimed she, a bartender, was terminated after refusing to sell alcohol to an intoxicated member, the Court held that the bartender did not adequately show she made a report about a violation of law, as she merely alleged that the intoxicated member's “behavior put her and other bartenders in an impossible situation.”5
Likewise, in Colquitt v. Bon Secours Mercy Health,6 a former hospital employee, appearing pro se, alleged that he was terminated after reporting the employer's alleged “misconduct” and “unethical practices,” but provided no specifics as to what alleged misconduct or unethical practices allegedly took place. Accordingly, the Court granted Bon Secours' motion to dismiss, and the Fourth Circuit affirmed on appeal.7
In Markley v. Liberty University,8 a former employee of Liberty University claimed he was terminated after reporting a host of improprieties, including fraudulent management of charitable organizations and corporate subsidiaries, improper use of university assets (including a jet plane), improper financial transactions and fraudulent concealment of university assets for financial gain, improper acts to thwart Title IX investigations, improper compensation schemes for university executives, and other similar alleged improprieties.9 The plaintiff, however, failed to allege any specifics regarding when or to whom these many reports were made, and did not identify who at the university acted improperly.10 In granting the university's demurrer, the Court reiterated that while “Virginia is a notice pleading jurisdiction,” a complaint “must still ‘contain[] sufficient allegations of material facts to inform a defendant of the nature and character of the claim.'”11
Virginia Code § 40.1-27.3 prohibits employers from retaliating against employees who engage in at least one of five categories of protected conduct.
The Employee's Subjective Belief Is What Matters for Purposes of Establishing Protected Activity Under the Statute.
In Wood v. Bristol Va. Util. Auth.,12 a wastewater authority employee complained that he was terminated in retaliation for complaining to his safety manager and filing an OSHA complaint after contracting COVID-19 from a co-worker who had reported to work while infected—a violation of the Virginia Department of Labor and Industry's then-effective COVID-19 regulations. The plaintiff alleged that the employer discouraged employees from complying with the relevant regulations and encouraged employees to report to work even if they or close family members tested positive.13 Shortly thereafter, the employee alleged he received negative performance reviews and was eventually terminated.14 On the employer's motion to dismiss, the district court found that he had sufficiently engaged in protected conduct, and it reiterated that a plausible claim for retaliation under Virginia Code § 40.1-27.3 only requires a subjective belief on the part of the employee that he is engaging in protected conduct—irrespective of whether that underlying report of unlawfulness is meritorious.15
If Relying on the Good Faith Report Subsection of the Statute (Subsection (A)(1)), the Report Must Be to a Supervisor, Governmental Body, or Law Enforcement Official.
In *Crews-Sanchez v. Frito-Lay, Inc.,*16 the plaintiff was an environmental health and safety manager who was terminated in the height of the pandemic after she sent an email to a third party disclosing confidential employee information (regarding COVID-19 exposure) and by mispresenting important facts during the subsequent investigation into the unauthorized disclosure.17 The Court found that Plaintiff had not engaged in a protected activity based on the evidence—she disclosed confidential employee health information to a party that was not Plaintiff 's supervisor or a government or law enforcement official—thus there was no genuine issue of material fact that she was terminated in retaliation for any protected activity.18
...the statute virtually acts as a proxy retaliation claim under the Virginia Human Rights Act—which before 2020, only provided relief for discriminatory discharge to a relatively small group of covered employers.
Protected Conduct Does Not Insulate Employee From Termination, Particularly in the Absence of a Casual Connection to the Protected Conduct; There Must Be Good Faith.
In Cook v. Roanoke Elec. Steel Corp.,19 a millworker was terminated after he falsified a communication with his supervisors in order to posture a future retaliation claim. The employee was asked by his supervisors to work near, but not inside, an enclosed building separate from the main plant that contained hazardous materials and required the use of a HAZMAT mask.20 After the employee expressed concerns about being exposed to contaminants and his outdated training for working in that building, his supervisors confirmed to him that he would be working inside the building and therefore would not be exposed to any hazardous materials.21 Nevertheless, following the discussion, the employee sent an email to his supervisors as a “CYA in case the company tried to fire him” which stated that they had authorized him to work in the building at issue even though he did not have a respirator and had lapsed training.22 Because the employee had “materially misrepresented” his assignment and made the report “in a manner that made it seem as though [his supervisor] had asked him to violate core safety protocol,” the Court found that the employee had not established good faith protected activity and granted summary judgment in favor of the employer.23 In other words, despite his complaining of a perceived safety violation, the facts were undisputed as to the lack of any nexus between the complaints, and summary judgment was proper.24
The Commonwealth and Public Bodies Are Not “Employers” For Purposes of the Statute.
In Moschetti v. Office of the Inspector General, 25 the plaintiff was an investigator for the Office of Inspector General (“OSIG”) who conducted an investigation of the Virginia Parole Board and reported that the board had violated internal policies and laws, which were later leaked to the media.26 After the employee released files about her investigation to the General Assembly, she was terminated.27 The federal court dismissed her claim, however, as it found that Virginia Code § 40.1-27.3 excluded OSIG from coverage insofar as it was an agency of the Commonwealth and likewise held that the claim could not proceed against the employee's supervisor because he did not “employ” her for purposes of the statute.28
A similar result was reached just a few months later in Jordan v. School Board of the City of Norfolk,29 which rejected a school principal's Virginia Code § 40.1-27.3 claim on account that the school board was exempt under the Title 40.1's general exclusion of “the Commonwealth or any of its agencies, institutions, or political subdivisions, or any public body….”30
Immunity of certain municipal entities under the statute, however, may hinge on whether the conduct alleged occurred in the performance of a governmental function. For example, in Baka v. City of Norfolk,31 the federal court held that a fire department was not immune from suit under the statute when a fire inspector filed suit after complaining about gender discrimination because the harms alleged related to and derived from the terms and conditions of employment which are private benefits; there was no benefit to the general public.32
Virginia Code § 40.1-27.3 Cannot Be Used as a Back Door Entry into Federal Court.
In Hinchman v. Performance Food Grp., Inc.,33 an employee claimed she was terminated in retaliation for reporting the employer's practice of recording goods as present in a warehouse when they had not yet in fact been received, a violation of the federal Sarbanes-Oxley Act. Because the underlying policy violation she was reporting was a purported violation of federal law, the defendant removed the case to federal court on the ground that the Complaint raised a federal question. The plaintiff moved to remand. Looking toward relevant Fourth Circuit law and how other jurisdictions had handled similar situations, the court granted the motion to remand, determining that the plaintiff 's claim was a state law claim, regardless of whether the plaintiff honestly believed the defendant had violated federal law and regardless of whether the defenses to the claim were federal in nature.34
Only Virginia Employers Can Be Held Liable Under Virginia Code § 40.1-27.3.
A recent case out of the Western District of Virginia, Singleton v. Int'l Bus. Sales & Servs. Corp.,35 presented a novel choice of law issue as an apparent matter of first impression. In Singleton, the plaintiff was a Virginia cyber-security coach who worked remotely for a Maryland corporation who alleged he was terminated after raising concerns regarding employment classification of apprentices.36 The corporation filed a motion for judgment on the pleadings, arguing that Virginia Code § 40.1-27.3 was inapplicable to it as a non- Virginia entity. Finding that the “Virginia's whistleblower statute sounds in tort,” Chief Judge Michael F. Urbanski applied Virginia's choice of law rules and the doctrine of lex loci delicti.37 The Court held that “[w]hen the parties are in different states, the location of the harm is the location of the employer.”38 So while the employee was terminated over the phone while sitting in Virginia, he had no redress against his employer who was located in Maryland.39 In the absence of any wrongful termination action under Maryland law, the claim failed and judgment on the pleadings was granted in favor of the employer.40
Remedies Under Virginia Code § 40.1-27.3 Are Limited to Those Specified in Subsection (C).
In Markley, the former university employee who allegedly reported numerous improprieties about how the university was being run, filed suit seeking “$20,000,000.00 and for lost wages and benefits, equitable relief to include front pay, other remuneration….”41 The university demurred to the employee's claim for relief, arguing that the damages sought exceeded those set forth in Virginia Code § 40.1-27.3(C), which do not expressly provide for the recovery of compensatory or punitive damages. Rejecting the idea that subsection (C)'s inclusion of the word “remuneration” contemplates the recovery of compensatory or other damages, the Court determined that the General Assembly's use of “remuneration” instead of “damages” was intentional and precluded recovery of compensatory or other damages not expressly outlined in the statute.42
III. Judicial Conflicts Needing Resolution
While federal and state courts alike grapple with the influx of lawsuits brought involving claims under Virginia Code § 40.1-27.3, two of the primary issues which caused a divergence of opinion requiring resolution are: (A) when does a cause of action accrue under Virginia Code § 40.1-27.3, and (B) does a perceived violation of Virginia Code § 40.1-27.3 give rise to a separate Bowman claim?
When Does a Cause of Action Accrue Under Virginia Code § 40.1-27.3?
Virginia Code § 40.1-27.3(C) provides that an aggrieved employee “may be a civil action in a court of competent jurisdiction within one year of the employer's prohibited retaliatory action.”43 Based on this language, one would expect that a cause of action would accrue upon the happening of the challenged retaliatory act. One federal court has decided just that, while another state court did not.
In Kulshrestha v. Shady Grove Reproductive Science Ctr., P.C.,44 a physician received notice on August 30, 2021, that her employment would be terminated on February 27, 2022, because she was not a “good fit.”45 She filed her claim under Virginia Code § 40.1-27.3 on December 5, 2022—within one year of when her termination went into effect but more than a year after learning she would be terminated. 46 The district court found that the statutory language “makes clear that the relevant focus . . . is the employer's ‘retaliatory action,' not the later consequences of that action.”47 Therefore, the physician's claim was untimely because her notice of termination, not the termination itself, triggered the one-year statute of limitations.
The litigation which has ensued in the three-and-a-half years following Virginia Code § 40.1-27.3's enactment has made one thing clear—the statute is here to stay and will be a major player in Virginia employment law going forward.
Just prior to Kulsrhrestha, however, the Henrico County Circuit Court took a different view in a similar case. In Michele H. Hollis, M.D. v. Ingleside Emergency Group, LLC et al.,49 a physician was permanently removed from the hospital's April schedule on March 2, 2021, but did not file her lawsuit until April 1, 2022—more than a year later. The defendant filed a plea in bar, arguing that her removal from the schedule was a retaliatory action that triggered the statute of limitations. The Court, however, denied the plea in bar, adopting the physician's point of view that her claim under Virginia Code § 40.1-27.3 did not accrue until she felt the economic impact of her removal (i.e., in April 2021, she otherwise would have worked shifts had she not been removed). The Court therefore denied the plea in bar. The Court thereafter denied a motion to reconsider but granted the defendants' alternative motion to certify the issue to the Court of Appeals of Virginia for interlocutory review under Virginia Code § 8.01-675.5. The Court of Appeals granted the defendants' petition for interlocutory appeal on October 4, 2023, and the parties are currently briefing the issue on appeal.
Does a Perceived Violation of Virginia Code § 40.1-27.3 Give Rise to a SeparateBowmanClaim?
There is also an apparent disconnect as to whether Virginia Code § 40.1-27.3 provides an exclusive remedy for violations under the statute, or whether the statute can be used to support a Bowman claim for wrongful termination under the common law.
For example, in Chenault, the Hanover County Circuit Court rejected the argument that the remedies in subsection (C) exclude relief under a common law Bowman claim, finding that while the employee failed to state a claim under Virginia Code § 40.1-27.3, he “stated a claim for retaliatory discharge in violation of the public policy embodied by that statute.”50
In Moschetti, however, the employee asserted a Bowman claim citing eight Virginia statutes that purportedly created the right to be protected from termination, including Virginia Code § 40.1-27.3.51 After observing that the majority of the statutes cited endorsed a public policy that could be vindicated through a Bowman claim, the Court specifically rejected the employee's reliance on Virginia Code § 40.1-27.3, on the grounds that the statute provides for its own exclusive remedy which cannot therefore be used to support a separate Bowman claim.52
Last summer, Judge Urbanski authored another opinion in line with Moschetti. In Tattrie v. CEI-Roanoke, LLC,53 the plaintiff brought a Bowman claim based off the public policy underlying the Virginia Human Rights Act, which has its own statutory remedy. Relying on the same Supreme Court of Virginia case law that the Chenault court disregarded, the Court found that “where a statute creates a right and provides a remedy for the vindication of that right, then that remedy is exclusive unless the statute says otherwise.”54 Because the Virginia Human Rights Act prescribed an “extensive remedial scheme that employees must follow,” permitting a separate Bowman claim would undermine the congressional intent set forth in the Act.55
Shortly after Tattrie, Judge Thomas T. Cullen of the Western District of Virginia authored a separate opinion in line with Moschetti and Tattrie, rejecting the plaintiff 's Bowman claim for the same reasons—i.e., that the Virginia Human Rights Act provided the plaintiff 's exclusive remedy.56
Thus, despite the Chenault opinion, there appears to be a developing trend against the notion that an employee may assert a Bowman claim from an alleged violation of Virginia Code § 40.1-27.3. Nevertheless, the issue will likely remain unsettled until there is binding guidance from an appellate court.
IV. Conclusion
The litigation which has ensued in the three-and-a-half years following Virginia Code § 40.1-27.3's enactment has made one thing clear—the statute is here to stay and will be a major player in Virginia employment law going forward. Practitioners on both sides of the “v.” should keep a close eye on the various issues which remain outstanding and how the jurisprudence develops in the months and years to come.
Footnotes
1 It bears noting that this is an ever-evolving body of law. This article does not purport to be an exhaustive recitation of all the relevant cases addressing Virginia Code § 40.1-27.3. Moreover, additional case law or developments most certainly arise between submission of this article and its publication, which would not be addressed herein.
2 108 Va. Cir. 529 (Hanover Cnty. 2021).
3 Id. at 531.
4 108 Va. Cir. 409 (Rockingham Cnty. 2021).
5 Id. at 413-14.
6 No. 4:21-cv-53, 2022 U.S. Dist. LEXIS 28308 (E.D. Va. Feb. 16, 2022).
7 Id. at *11-12, aff'd, No. 22-1288, 2022 U.S. App. LEXIS 35453, at *1 (4th Cir. Dec. 22, 2022) (per curiam).
8 2023 Va. Cir. LEXIS 63 (Lynchburg Apr. 17, 2023).
9 Id. at *3-5.
10 Id. at *5-6.
11 Id. at *5 (quoting Preferred Systems Sols., Inc. v. GP Consulting, L.L.C., 284 Va. 382, 407 (2012)) (other citation omitted).
12 No. 1:22CV00018, 2023 U.S. Dist. LEXIS 41666 (W.D. Va. Mar. 13, 2023).
13 Id. at *2.
14 See Id. at *2-5.
15 Id. at *21-22 (citations omitted).
16 No. 6:21-cv-00030, 2022 U.S. Dist. LEXIS 125901 (W.D. Va. July 15, 2022).
17 Id. at *4-11.
18 Id. at *35-37.
19 No. 7:22-cv-00040, 2023 U.S. Dist. LEXIS 70946 (W.D. Va. Apr. 24, 2023).
20 Id. at *3-5.
21 Id.
22 Id. at *5-6.
23 Id. at *17-19.
24 Id. at *23.
25 No. 3:22-cv-24-HEH, 2022 U.S. Dist. LEXIS 144143 (E.D. Va. Aug. 11, 2022).
26 Id. at *4-5.
27 See Id. at *7-9.
28 Id. at *26-27.
29 No. 2:22cv167, 2022 U.S. Dist. LEXIS 204871 (E.D. Va. Nov. 9, 2022).
30 Id. at *38-42 (quoting Va. Code § 40.1-2:1) (citations omitted).
31 No. 2:21-cv-419, 2022 U.S. Dist. LEXIS 43559 (E.D. Va. Mar. 11, 2022).
32 Id. at *13-20.
33 Hinchman v. Performance Food Grp., Inc., No. 1:23-cv-594, 2023 U.S. Dist. LEXIS 122088 (E.D. Va. July 14, 2023)
34 Id. at *8-15.
35 No. 5:22-cv-070, 2023 U.S. Dist. LEXIS 215189 (W.D. Va. Dec. 4, 2023).
36 Id. at *2-6.
37 Id. at *8-10.
38 Id. at *10.
39 Id. at *10-11 (citing Mullins v. Int'l Union of Operating Engineers Loc. No. 77 AFL—CIO of Washington, D.C., 214 F. Supp. 2d 655, 666 (E.D. Va. 2002), aff'd sub nom. Mullins v. Int'l Union of Operating Engineers, Loc. No. 77, 60 F. App'x 510 (4th Cir. 2003)).
40 See Id. at *11-12.
41 2023 Va. Cir. LEXIS at 12 (emphasis in original).
42 Id. at *12-23.
43 Va. Code § 40.1-27.3(C) (emphasis added).
44 No. 1:23-cv-00042-TSE-IDD, 2023 U.S. Dist. LEXIS 61283 (E.D. Va. Apr.
6, 2023).
45 Id. at *4-5.
46 Id. at *5-6.
47 Id.; see alsoId. at *10 (“[T]he VWPL provides that the statute of limitations begins to run not when the plaintiff suffers damages, but when the ‘employer's prohibited retaliatory action' occurs.”) (citing Va. Code § 40.1-27.3).
48 See also generally Vinayagam v. Malpani, No. 3:22cv6 (DJN), 2022 U.S. Dist. LEXIS 167261, at *30 (E.D. Va. July 29, 2022) (claim under Virginia Code § 40.1-27.3 untimely because while it was mailed it within one year of the prohibited retaliatory action, it was not received by the Court and filed until after the one-year mark).
49 Henrico County Circuit Court, Case No. CL22-2102.
50 108 Va. Cir. at 533.
51 2022 U.S. Dist. LEXIS 144143, at *23-24.
52 Id.; see also Singleton, 2023 U.S. Dist. LEXIS 215189, at *8 (reflecting that the plaintiff voluntarily dismissed his Bowman claim after the employer moved to dismiss the claim on the grounds that Virginia Code § 40.1-27.3 provided the exclusive statutory remedy).
53 No. 7:23-cv-079, 2023 U.S. Dist. LEXIS 109674 (W.D. Va. June 26, 2023).
54 Id. at *12-13 (quoting Sch. Bd. of City of Norfolk v. Giannoutsos, 238 Va. 144, 147 (1989)).
55 Id. at *13.
56 Hairston v. Nilit Am., Inc., No. 4:23-cv-00011, 2023 U.S. Dist. LEXIS 149187, at *15-20 (W.D. Va. Aug. 24, 2023).
Originally published by Virginia State Bar
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