PA Whistleblower Law Expands Application to Private Employers

by Renee Mielnicki, Esq.

You may not be familiar with Pennsylvania’s Whistleblower Law since, until recently, it applied only to government entities. The Whistleblower Law was originally enacted in 1986 to protect government employees from wrongful discharge and retaliation where the employee, in good faith, reported an instance of waste or wrongdoing, or participated in an investigation pertaining to such a report.

Private employers in Pennsylvania should now quickly familiarize themselves with this law because Governor Tom Corbett just signed an amendment expanding its application to private businesses that receive public contracts or funding from Commonwealth entities. These amendments, which take effect on August 31, 2014, now give whistleblower protection to employees who work for any business that receives money from a public body to perform work or provide services. Essentially, private employers who receive government funds cannot discharge, threaten or otherwise discriminate or retaliate against an employee because the employee makes a good faith report, or is about to make such a report, to the employer or an appropriate authority, regarding an instance of wrongdoing or waste. These protections also apply to an employee participating in an investigation, hearing or inquiry held by an appropriate authority or in a court action.

“Waste” and “wrongdoing” have very specific definitions under this law. “Waste” is defined as an abuse, misuse, destruction or loss of government funds. “Wrongdoing” is a violation of a federal or state statute or regulation, or of a municipal ordinance or a code of conduct or ethics designed to protect the interests of the public or the employer. Given these very specific definitions, not every act of “waste” or “wrongdoing,” in the sense of the everyday meaning of these words, will invoke Whistleblower protections.

Many of our blog followers who provide construction, maintenance and other related services to Pennsylvania government agencies will now fall under the widened wing span of the Whistleblower Law. One of the most important reasons to familiarize yourself with this law if it applies to you is because it provides an exception to the “at-will” employment status in Pennsylvania. In other words, if an employee is terminated or retaliated against for “blowing the whistle” on an employer by reporting waste or wrongdoing, the employee can assert a claim for wrongful discharge in addition to asserting a Whistleblower Claim. This distinction is important because a claim for wrongful discharge can increase the amount of damages that an employee can recover against an employer if successful in a lawsuit.

Compensatory damages available under the Whistleblower Statute include reinstatement to the job, payment of back wages, fringe befits and seniority rights. If a court deemed appropriate, the previous version of the law allowed an award for the costs of litigation, including attorney’s fees and witness fees. An enforcement penalty was also available for wrongful retaliation of up to $500. An eye widening aspect of the new amendment increases this penalty significantly to $10,000. Another painful new addition to this law takes away the court’s discretion to decide whether or not to award litigation costs and attorney’s fees. Instead, courts are now required to award these costs if the employee prevails in the court case.

It may seem that employees are gaining more and more workplace rights and protections leaving employers helpless when dealing with poor performance and misconduct. However, keep in mind that the statue protects only a “good faith report” which means they must have reasonable cause to believe the report is true and must make the report without malice or motivation for personal gain. This may be hard to determine, but if the employer can make such a case, the employer can clearly take a disciplinary action, including termination, against an employee if they submit a report of waste or wrongdoing in bad faith.

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