Virginia Enacts New Whistleblower Law for Private Employers

Effective July 1, 2020, private employers in Virginia will have a number of new legal obligations and potential liabilities. One of these new laws is Virginia Code § 40.1-27.3, the Fraud and Abuse Whistleblower Protection Act. This new law creates several new protections for employees involved in reporting suspicious, questionable, or unlawful employer activity. The law specifically prohibits retaliation by the employer against whistleblower employees.  Retaliation includes discharging, disciplining, threatening, discriminating against, penalizing, or otherwise taking adverse action against the employee. Under the new law, employers may not retaliate against any employees who:

• report in good faith any suspected violations of federal or state law to supervisors, governmental bodies, or law enforcement officials;
• refuse to engage in a criminal act that would subject the employee to criminal liability;
• refuse 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;
• are requested by a governmental body or law-enforcement official to participate in a government investigation, hearing, or inquiry; or
• provide information to or testify 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.

This language is very broad and creates potential pitfalls for employers.  However, it is noteworthy that the new law includes three specific exceptions.  The law does not protect employees from retaliation for taking any of the following actions: (1) disclosing employer data that is protected by law or any legal privilege; (2) knowingly making statements or disclosures that are false or are made in reckless disregard for the truth; or (3) making disclosures that would violate federal or state law or diminish or impair the rights of any person to the confidentiality protections provided by the common law.

An employee alleging a violation of this new Fraud and Abuse Whistleblower Protection Act has an immediate right to file suit in court. The suit must be brought within one year. Notably, in contrast to federal anti-retaliation laws, the employee is not obligated to exhaust administrative remedies. Among the various types of relief available to the employee are lost wages, lost benefits, and other remuneration with interest.  Courts may also award the employee injunctive relief or reinstatement to a prior or equivalent position, and even reasonable attorney’s fees. The statute does not expressly authorize punitive damages.  

Based on the sheer breadth of this new whistleblower law, employers should anticipate an increased need for internal investigations of employee complaints, as well as greater scrutiny of any decisions affecting employees that might be perceived as retaliatory. The Vandeventer Black Labor & Employment team is available to assist employers in navigating these unprecedented changes to Virginia’s legal landscape.