Virginia Whistleblower Protection And Expanded Anti-Discrimination Statutes Near Implementation - Whistleblowing

Highlights

Virginia's General Assembly enacted two bills that take effect on July 1, 2020, and will fundamentally alter the landscape of employment litigation in the Commonwealth.
The first is a new statute prohibiting retaliation against employees who engage in certain whistleblowing activity.
The second expands both the scope of and remedies for employment discrimination under the Virginia Human Rights Act (VHRA).

In its latest session, Virginia's new Democratic-majority General Assembly enacted two bills that will fundamentally alter the landscape of employment litigation in the Commonwealth. They take effect on July 1, 2020.

Virginia's New Whistleblower Protection Statute

The first is a new statute prohibiting retaliation against employees who engage in certain whistleblowing activity. Unlike other laws with whistleblower protection provisions, such as Dodd-Frank Wall Street Reform and Consumer Protection Act or the False Claims Act, employees need not complain about a specific, regulated subject matter or to a specific governmental agency to fall under the statute's protection. Indeed, the law encompasses complaints of illegal conduct under any federal or state law or regulation, and the employee need only raise the complaint to a "supervisor."

Specifically, the statute protects an employee who:

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
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

These protections are quite broad, although they do not include protection for an employee's refusal to participate in an action that the employee in good faith believes is a violation of law.

Employees claiming retaliation based on protected conduct do not have to first exhaust administrative remedies under this new statute. Rather, they can immediately file a civil lawsuit seeking damages for lost wages and benefits, reinstatement from termination or even an injunction. Plaintiffs also may recover reasonable attorney fees and costs. The private enforcement regime, coupled with the breadth of the statute, will provide plaintiff's lawyers and whistleblower counsel with a powerful new state-law cause of action in employment termination cases.

The statute also may impact the narrow common law Bowman doctrine. Since 1985, Virginia has recognized a limited common law action for wrongful discharge in violation of public policy. Bowman v. State Bank of Keysville, 229 Va. 534 (1985). The Bowman doctrine serves as a narrow exception to the employment at-will principle, and the Supreme Court of Virginia has limited its application to only three specific circumstances:

when the employer violates a public policy enabling the exercise of an employee's statutorily-created right
when the public policy violated by the employer is explicitly expressed in a statute and the employee is clearly a member of the class of persons directly entitled to the protection enunciated by the public policy
when the discharge is based upon the employee's refusal to engage in a criminal act

See Francis v. NACCAS, 293 Va. 167, 172 (2017). The new statute overlaps with Bowman as to employees refusing to engage in criminal acts, but also potentially expands protection from wrongful discharge to whistleblower situations where an employee complains of an employer violating state or federal law without being a member of the class of persons the law was designed to protect. Open questions remain as to whether the statute supplants Bowman entirely and limits plaintiffs to statutory remedies provided.

Virginia employers should continue to take employee complaints of wrongdoing seriously and seek the advice of employment counsel before taking any adverse action against an employee who raises such complaints.

Workplace Discrimination Protections Expanded

In addition to new protections for whistleblowers, the General Assembly also has dramatically expanded both the scope of and remedies for employment discrimination under the Virginia Human Rights Act (VHRA).

The VHRA is the Commonwealth's main anti-discrimination statute that prevents employers from discriminating against employees based on race, color, religion, national origin, sex, pregnancy, childbirth or other related medical conditions (including lactation). Many of these protected categories also are protected by analogous federal prohibitions on discrimination. The recent legislation expands the scope of the VHRA in two notable ways:

The protected classifications under the VHRA now include age, marital status, veteran status, sexual orientation and gender identity.
In furtherance of prohibiting discrimination on the basis of pregnancy, childbirth or related medical conditions, employers must reasonably accommodate employees who are limited in their ability to perform their job for these reasons. Such employees may not be required to take leave if another reasonable accommodation is available.

While broad in scope even prior to these expansions, the VHRA has rarely played a role in private employment litigation. This is mainly because it only allowed private lawsuits to enforce its provisions against Virginia employers with six to 14 employees, and even in those instances provided curtailed remedies. Most employees were thus left to bring employment discrimination suits under federal law. No longer. The Virginia Values Act, recently signed by Gov. Ralph Northam, repeals Va. Code § 2.2-3903, opening up VHRA claims to all employers with over five employees. The act also removes the limitations on damages, making a state-law claim under the VHRA potentially more lucrative for plaintiffs than federal claims subject to compensatory and punitive damage caps. Because of this, more employment litigation may shift from federal court to state court, where it can be more difficult for employers to prevail at earlier stages.

Employer Recommendations

In advance of the July 1, 2020, implementation date, Virginia employers should review existing processes for employees to report violations and suspected violations of law. Revisions should be implemented as necessary to ensure the reporting process requires notification to human resources and company leadership. Related supervisor training may be advisable. Investigation and response protocols should explicitly address nonretaliation protections for employees who raise complaints or participate in related investigations.

Virginia employers should also consider reviewing policies, practices and employee training programs relating to anti-discrimination, as well as reasonable accommodation to ensure the expanded protections provided under the Virginia Values Act are addressed, particularly with respect to the mandatory policy requirements relating to protections for pregnant employees. Workplace posters also will need to be updated.

Finally, employers should ensure they are up to speed on the broader changes to the Virginia employment law landscape. The laws described above are being implemented in conjunction with a number of other new employee-friendly laws, including those prohibiting non-competition agreements for lower-wage employees, enhancing the rights of misclassified independent contractors and increasing the penalties for employer wage violations. Employers should identify and implement steps that will position them to effectively respond to state compliance and enforcement efforts, in addition to successfully defending the inevitable increase of employee litigation.

Originally published June 5, 2020

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