New Oregon law has ramifications for employers
By Matt Lowe,
Odonnell and Clark and Crew,
Portland law firm
Do you have, or do you know of, an employee who always seems to complain about company policies and how those policies violate the employee’s “right” of free speech, or her “right” to privacy, or some other “right” of the employee? Often this employee is not one of the best employees of the company and, at some point, the employer may get fed up and decide to fire, demote, or take some sort of action to try to get the employee shut up and to actually devote his or her energy to work-related activities. If you do this, you might very well get sued under a new Oregon law which substantially strengthens the protections for employees who report a private employer’s violations of a state or federal law, rule or regulation. This new law has significant ramifications for all private employers in Oregon.
The new law will go into effect on January 1, 2010, and states:
It is an unlawful employment practice for an employer to discharge, demote, suspend or in any manner discriminate or retaliate against an employee with regard to promotion, compensation or other terms, conditions or privileges of employment for the reason that the employee has in good faith reported information that the employee believes is evidence of a violation of a state or federal law, rule or regulation.
An employer who is found to have violated this new law by discriminating against an employee who has reported a violation of state or federal law, rule or regulation will be subject to a claim for both compensatory and punitive damages. Additionally, an employee who prevails in such a claim will be entitled to an award of attorney fees.
To understand how this new law will work in practice, we can look to a recent Oregon Court of Appeals decision involving a hotel employee who sued his employer alleging that the employer had wrongfully discharged the employee after the employee filed a claim with the Oregon Liquor Control Commission (OLCC) alleging that the employer violated OLCC rules. The Oregon Court of Appeals held in favor of the hotel employer on the employee’s wrongful discharge claim on the basis that reporting OLCC violations “was not a job-related right of the nature sufficient to support a claim for wrongful discharge.” Under the new law just passed by the Legislature, this outcome would likely have been different, in that instead of claiming that the reporting of the OLCC violations constituted a wrongful discharge claim, the employee would have filed the same claim under the new whistleblower protections described above. Whether the employee would have prevailed on this claim would have depended on the facts and circumstances of the case, but this example illustrates the impact that this new law will have on claims raised by employees who have reported violations of Oregon law.
In short, the new whistleblower substantially broadens protections available to an employee from any adverse employment action or retaliation by an employer in response to the employee’s report of a violation of any state or federal law, rule or regulation. While we have long recommended that all businesses implement an effective whistleblower policy, such a policy is now more crucial than ever. Owners and managers of businesses of all sizes simply must know how to properly respond to allegations or reports of legal or regulatory violations by the employer. The failure to properly advise and train your managers and implement such a policy could expose your property to significant financial risk. Should you have any questions or need assistance in preparing a whistleblower policy for your business, you can reach the author at [email protected] or 503-306-0224.