Whistleblower Protections Bill Signed into Law

The law is limited to public health emergencies, protects workers who report health and safety violations

An 8th Circuit Court of Appeals ruling held up a lower court’s award of $106 million in a decades-long case involving bad actors and a bank's involvement in a Ponzi-like scheme.

Governor Jared Polis on June 11 signed whistleblower protections into law to prohibit retaliation against workers who speak out about unsafe work conditions during a public health emergency. 

The law prohibits a “principal” from taking adverse action or retaliating against a worker for raising any “reasonable concern” in good faith about workplace violations of government health or safety rules or about an “otherwise significant workplace threat to health or safety.” related to a public health emergency declared by the governor or state or local public health agencies. 

The definition of “principal” extends to private employers, government agencies and entities that contract with five or more independent contractors in the state, and the protections cover employees and contractors. 

Aggrieved workers who have exhausted administrative measures through the Division of Labor Standards and Statistics will be able to sue a principal in state court to recover damages and attorney fees. 

The bill’s sponsors say the protections are needed for a safe reopening of businesses in the state. “People need to feel safe going to their employers about workplace safety concerns,” said co-sponsor Sen. Brittany Pettersen, a Democrat from Lakewood, in a news release. 

“Unfortunately, during the COVID outbreak, too many workers experienced retaliation when they spoke up. This new law will ensure that all Coloradans can return to work safely without being forced to choose between risking their life or losing their job.”

Ogborn Mihm partner Clayton Wire, a plaintiff-side employment attorney who specializes in representing whistleblowers, said the law “really does fill a gap,” particularly for health industry workers

“I listened to the committee hearings on this bill, and the testimony was overwhelmingly by nurses and other health workers who were being put in extremely dangerous situations by employers who are not providing adequate PPE and were violating public health orders,” said Wire, who worked on the language of the bill with proponents of the legislation. 

“And when they reported their concerns internally, they were either ignored or, in a lot of cases, retaliated against and either demoted or pushed out entirely,” he said, adding he also expects the law to help workers in retail, hospitality and other industries that require indoor interaction with a lot of people.

The good news for employers, according to Fisher Phillips partner Kristin White, is that the law is limited to situations where a public health order is in place or a public health emergency has been declared. Public health orders in the past have been pretty limited, she said, and in “the immediate past there was not this kind of broad public health order like we’re dealing with right now.”

“So, I think that does limit [the impact], assuming that we’re not dealing with pandemics all the time moving forward,” she added.

 “My concern with the bill… is that it is really duplicative of rights that already exist under the federal [Department of Labor] system,” White said, adding that instead of keeping workplace health and safety complaints within the federal system, the claims might find their way into state court. “So that, to me, was most problematic in that you may be raising these issues in a forum that’s not used to hearing safety and health concerns,” she said.

But Wire said the state courts’ experience handling anti-retaliation claims, such as under the Colorado Anti-Discrimination Act, is more relevant than their experience interpreting safety provisions.

“It’s not a safety provision enforcement act, it’s an anti-retaliation act,” he said. “And state courts are more than equipped to handle employment claims.” 

Wire added that remedies under federal law, such as retaliation claims under the Occupational Safety and Health Act, were “severely lacking” due to tight timelines for filing, limited damages and, perhaps most notably, a lack of a private right of action.

“From a practitioner standpoint, that is a big difference,” White said. “Because here, if the division chooses not to move forward or time expires, the employee can then pull it out and go to court on their own.”

The new law prohibits a principal from requiring a worker to sign an agreement that would limit or prevent the worker from disclosing workplace health and safety practices or hazards related to a public health emergency. 

Sherman & Howard associate Joe Hunt said that, practically speaking, the provision means principals should exclude health and safety practices from confidentiality provisions in contracts, releases and separation agreements. 

Likewise, Hunt said, the right to bring a whistleblower claim cannot be waived by agreement, so “effective immediately, whistleblower claims should be excluded from releases and settlement agreements for Colorado employers.”

The whistleblower protections also prohibit a principal from discriminating, taking adverse action or retaliating against a worker for wearing their own PPE if the protective gear “provides a higher level of protection” than workplace-issued equipment and is recommended by public health authorities, so long as the worker’s equipment “does not render the worker incapable” of doing their job or fulfilling the duties of their position. 

Hunt noted that more clarification will probably be needed as to where to draw the line on whether worker-supplied equipment prevents a worker from doing their job and whether the worker’s equipment provides a higher level of protection than the principal-provided PPE. 

“There are a number of types of masks out there that employees and everyone else should be using,” he said, “and the science behind this is developing, so the agency probably needs to work that out.”

Employers and contractors should also be aware that the law “defines a principal to include supervisors and other employer agents,” he said, and its definition of worker “may reasonably cover volunteers and subcontractors.” 

The statute specifies that if the rights of multiple workers have been violated, the violation as to each worker is distinct for the purposes of fines, penalties and other remedies, potentially leading to a large amount of damages, Hunt added. 

Wire pointed out the law’s qui tam provision, which allows a whistleblower who has exhausted administrative remedies to bring a civil action against a principal on behalf of the state. The provision states that 75% of the proceeds of any judgment will be distributed to the division and the first whistleblower to file the action may keep the rest.

“The qui tam portion is pretty unique in this context in that it allows the whistleblower to step into the shoes of the state and essentially prosecute the defendant as if it were the state in civil court for the penalties that would be imposed for the defendants’ violation of the statute, and then collect 25% of those penalties,” Wire said. 

Wire said he’d like to see similar provisions adopted for other statutes, both to incentivize whistleblowers to report violations, but also because “it’s a very efficient way to enforce these statutes,” since it saves the state resources while potentially resulting in a payoff for the enforcement division. 

According to Hunt, a whistleblower may be any worker with knowledge of a violation, even if the worker has not suffered an adverse action, and a whistleblower could also be a representative of a worker.

“Consequently, we should expect unions and worker associations to take advantage of this provision to bring claims as what is known as private attorneys general on behalf of the state,” Hunt said. “And because the law anticipates that plaintiffs will bring both individual claims and also whistleblower claims, the law is likely to lead to multiplication of lawsuits.”

— Jessica Folker

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