HR Management & Compliance

Whistleblowers: Employer Ordered To Pay $1.3 Million For Retaliating Against Complaining Worker; How To Prevent Whistleblower Lawsuits

Margaret Gardenhire was an eligibility interviewer for the Housing Authority of Los Angeles. She received outstanding performance ratings and promotions, and had even been named employee of the year. But after Gardenhire reported suspected illegal activity by a Housing Authority consultant, her performance rating plummeted and her boss threatened to fire her. She sued, and when the dust settled, the Housing Authority was left owing Gardenhire more than $1.3 million.

Employee Reports Problems To Supervisor

Gardenhire said her troubles started when she told her supervisor, Lucille Loyce, about difficulties she was having with Dwayne Williams, a Housing Authority consultant who provided various services, including resident relocation. Gardenhire charged that Williams repeatedly sought delays in moving residents and encouraged her to cause delays or authorize weekend moves so he could receive higher fees. In addition, Gardenhire said he wanted her to approve his bills before she confirmed the services were performed.Gardenhire may also have been having trouble with Loyce. On one occasion, Loyce allegedly told Gardenhire to give Williams copies of other vendors’ bids and Williams then reportedly reworked his proposal and submitted a lower bid.


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Performance Rating Sinks

Within two months of reporting Williams’ activities to Loyce, Gardenhire was stripped of her responsibilities for relocating tenants. And Loyce allegedly had Gardenhire’s office locks changed while she was on vacation. A month later, Gardenhire said Loyce accused her of failing to keep her files and office in order, called her a liar and threatened to terminate her. Gardenhire’s next performance evaluation was very negative and Loyce placed her on a 90-day work improvement plan.

Improprieties Reported To Housing Commissioners

In the meantime, Gardenhire sent the Housing Authority’s commissioners a written outline of Williams’ alleged misconduct. The commissioners ordered an investigation and interviewed Gardenhire. But the probe reportedly went no further because she couldn’t provide tangible evidence to support her charges.

Whistleblower Laws Apply

Gardenhire ultimately sued the Housing Authority for harassment and retaliation under the state whistleblower protection laws. A jury awarded her $1,318,785 and the Housing Authority appealed.The employer argued that state whistleblower statutes didn’t cover Gardenhire because she only made an internal complaint and didn’t report the alleged illegal activity to an outside government agency or directly to law enforcement.But a California Court of Appeal sided with Gardenhire and upheld the jury’s verdict. The court found that Gardenhire met the requirement to disclose information to law enforcement or another government agency when she reported it to the commissioners of the Housing Authority, a city agency that also happened to be her employer.

Preventing Whistleblower Claims

Employees don’t always have to bring their complaints to government agencies to be protected under the whistleblower laws. Other state and federal statutes, such as health and safety and anti-discrimination laws, contain their own prohibitions against retaliation that shield workers who have reported illegal conduct directly to their employer. To steer clear of potential whistleblower liability, make sure you have specific procedures for investigating employee complaints of wrongdoing. Take all reports of illegal or questionable activities seriously and investigate promptly. Even if the complaint proves unjustified, never retaliate against the complaining employee. If you have a legitimate reason to discipline a whistleblower, document the problem thoroughly and get professional advice before taking action. And let plenty of time pass between the complaint and any disciplinary measures to avoid the perception that you are retaliating.

 

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