Employers, Take Note: Virginia Enacts Broad Protections for Private-Sector Whistleblowers

In our previous article—What Virginia Employers Might Have Missed While Managing COVID-19: The Silent Labor and Employment Law Revolution—we detailed some of the most impactful labor and employment law changes enacted by the Virginia General Assembly this year. These included an increased minimum wage, local-level public employee bargaining, a new cause of action for misclassification, and an overhauled employment discrimination framework. But Virginia’s labor and employment law revolution did not stop there.

Historically, Virginia provided almost no statutory protections to private-sector whistleblowers, and as a result such claimants were mostly limited to public policy-based wrongful termination claims (so-called Bowman claims). However, Bowman actions can be difficult to prove, and their stringent requirements and limited scope resulted in comparatively low rates of whistleblower litigation in Virginia.

With the recent passage of House Bill (HB) 798, that is likely to change. Effective July 1, 2020, HB 798 dramatically expands the protections afforded to private-sector whistleblowers in Virginia, and defines protected activity so broadly that complaints about nearly any perceived violation of state or federal law or regulation may be protected.

Under this law, employers may not retaliate (i.e., discharge, discipline, threaten, discriminate against, penalize, or otherwise take adverse action) against employees for:

• reporting (in good faith) suspected violations of federal or state law or regulation to supervisors, governmental bodies, or law enforcement officials;
• refusing “to engage in a criminal act that would subject the employee to criminal liability”;
• refusing to follow an employer’s order, if that action would violate any federal or state law, and the employee informs the employer that he or she is refusing to comply for that reason;
• being requested “by a governmental body or law-enforcement official to participate in an investigation, hearing, or inquiry”; or
• providing information to or testifying “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.”

However, HB 798 does not protect:

• the disclosure of data protected by law or any legal privilege;
• knowingly making statements or disclosures that are false or are in reckless disregard for the truth; or
• disclosures that would violate federal or state law or diminish or impair the rights of any person to the confidentiality protections of the common law.

HB 798 permits alleged whistleblowers to pursue civil claims (within one year of the alleged violation) seeking injunctive relief, reinstatement, back pay, lost benefits, “other remuneration,” and attorneys’ fees and costs. Damages under this law are not capped, although it is not clear if punitive damages will be recoverable.

Given its broad scope, HB 798 appears poised to create a significant amount of litigation. In contrast to many federal whistleblower statutes (which cover specific kinds of complaints, and are tethered by specific subject matter), HB 798 may be poised to offer legal protections for complaints about nearly any perceived violation of state or federal law. As a result, like many of the recent Virginia developments discussed in our previous legislative update, HB 798 creates significant, uncapped risks for Virginia employers.

Given this changing legal landscape and the risk of liability it confers, it is more important than ever for Virginia employers to be proactive and implement these developments into their ongoing compliance efforts.

Ogletree Deakins will continue to monitor these rapidly changing developments in Virginia’s legislature, and will post updates as additional information becomes available.